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Agenda 02-24-2026 Regular
mom CITY OF DUNN NORTH CAROLINA Gdlc essiowat4 A / CITY COUNCIL REGULAR MEETING 6:30pm, Tuesday, February 24, 2026 Dunn Municipal Building 401 East Broad Street Dunn, North Carolina 28334 -AGENDA- CALL TO ORDER—William P. Elmore, Jr., Mayor INVOCATION—Reverend Jason Williams, Hood Memorial Christian Church PLEDGE OF ALLEGIANCE—April Gaulden, Mayor Pro Tern CONSIDERATION&APPROVAL OF THE AGENDA PRESENTATIONS 1. Retirement Resolution—Patty Rowland 2. Oath of Office—Chief of Police PUBLIC COMMENT PERIOD CONSENT AGENDA Consent Agenda items are considered and approved by a single motion and vote. Any member of the City Council may request an item be removed,without a motion or a vote,from the Consent Agenda for separate consideration. If an item is removed from the Consent Agenda,that item will be placed under the Items for Discussion&Possible Action section of the agenda. 3. Approval of Minutes January 27, 2026- Regular Minutes 4. Approval of Budget Amendments—Various Operating Accounts 5. Acceptance of Animal Shelter Donations 6. Consideration of Resolution Declaring Certain Property Surplus & Authorizing the Disposition through GovDeals.com 7. Contract Award for FY26 Audit Services 8. Alley Encroachment Agreement for 203 E Broad Street Fire Escape 9. Extension of On-Call Services Agreements with Davis-Martin Powell & Associates, Inc. and WithersRavenel ITEMS FOR DISCUSSION&POSSIBLE ACTION 10. Authorize and Approve Water Treatment Plant Land Purchase Financing Page 1 of 2 wag CITY OF DUNN1887 NORTH CAROLINA GtIlu ceoracAir.4 kgb c/ 11. Capital Project Ordinance Amendment II — Tart Park Improvement Project (Close- Out) 12. Acceptance of NCDEQ OSG Funding—Juniper Creek Area Stormwater 13. Acceptance of AKC Reunite, K-9 Cop Grant REPORTS&UPDATES 14. City Manager's Report a. Budget Retreat Summary Report b. 2026-2027 Budget Planning Retreat—Facilitator Slide Presentation 15. Financial Report 16. Departmental Reports & Project Updates a. Code Enforcement b. Probation Office 17. ANNOUNCEMENTS 18. INFORMATION CLOSED SESSION If called, the motion to enter closed session must cite the North Carolina General Statute that authorizes the closed session. ADJOURNMENT The City of Dunn is an equal opportunity provider and employer. Page 2 of 2 CITY OF 1 1887 NORTH CAROLINA Gtiltet&wirtoatit4,6egc s/ Regular Meeting, February 24, 2026 Agenda Item(s): Retirement Resolution- Revenue Manager, Patty Rowland Presenter(s): Cary McNallan, Finance Director Responsible Staff: Cary McNallan, Finance Director Action Item: No Attachment(s): None PURPOSE: This is a Retirement Resolution of Appreciation for Revenue Manager, Patty Rowland for thirty (30) years of service to the City of Dunn from June 14, 1996 to March 1, 2026. Retirement Date: March 1, 2026 RECOMMENDED MOTION/ACTION: Motion to adopt the Retirement Resolution in Recognition and Appreciation of Revenue Manager, Patty Rowland's service with the City of Dunn from June 14, 1996 to March 1, 2026. Page 1 of 1 mum CITY OF 8� DUNN grafi,/ • _n • ,8NORTH CAROLINA 'Mere cammuni 6 mst fje9" . Ceapet(4412, gffreViaii0a 49, gilahy gr011rigia q/(0649/n. EYJAmnt WHEREAS, Patty Rowland will retire on March 1, 2026 as Revenue Manager specializing in utility billing and customer satisfaction in the Finance Department with 30 years of service to our City; and WHEREAS, Patty began her career with the City working as the Accounting Supervisor with the Finance Department June 14, 1996, and WHEREAS, Patty was promoted to Utility Services Specialist on July 1, 1998. During her tenure with the City, she implemented the famous blue paper and received several letters of commendation for her customer service relations with customers. She attended Johnston Community College and UNC School of Government; and WHEREAS, Patty not only found a career with the City, but she also found her husband, Dunn Police Sergeant Rodney Rowland and they were married on September 19, 2004; they have two boys William (15), and Daniel (12); and WHEREAS, Patty exceeded her job performance expectations and was promoted to Revenue Manager on May 11, 2016. During her tenure with the City, she has been the go-to person when finding outstanding balances, using the "old" system, and providing account histories. She was nominated for and received the NC RWA Outstanding Administrative Personnel Award in 2010; and WHEREAS, Patty has proven herself to be a resolute and efficient public servant who has gained the admiration and respect of her fellow workers and the residents of the City of Dunn, faithfully and diligently working extra-long hours when necessary and being someone that all could depend upon to do whatever it took to get the job done; and WHEREAS, the Mayor and City Council of the City of Dunn are desirous on behalf of themselves, the other City officials and employees, and the residents of the City of Dunn, of expressing to Patty Rowland their deep appreciation and gratitude for the service rendered by her to the City and the community throughout her years of service. NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council that we offer Patty our absolute best wishes for success, happiness, prosperity, and good health in her future endeavors. This Resolution shall be incorporated into the official Minutes of the City of Dunn and shall be in full force and effect from and after the 24`h day of February, 2026. William P. Elmore, Jr., Mayor Attest: Melissa R. Matti, City Clerk pair CITY OF DuNN1887 NORTH CARO LI NA Niter&c,&ototzift4 Xe1rnts/ Regular Meeting, February 24, 2026 Agenda Item(s): Oath of Office-Chief of Police Presenter(s): Justin Hembree, City Manager Responsible Staff: Justin Hembree, City Manager Action Item: Yes Attachment(s): None PURPOSE: Dunn City Clerk Melissa R. Matti will administer the Oath of Office to Police Chief Timothy Lynn Gay. Page 1 of 1 CITY OF 11.17 NORTH CAROLINA NA ter&cek ,6e�ins Regular Meeting, February 24, 2026 Agenda Item(s): Approval of January 27, 2026 Regular Meeting Minutes Presenter(s): Melissa Matti, City Clerk Responsible Staff: Melissa Matti, City Clerk Action Item: Yes Attachment(s): 1) January 27, 2026 Regular Meeting Minutes Background None Budget Impact None Staff Recommendation(s) Approval of Minutes as presented. Suggested Motiori(s) Motion to approve January 27, 2026 Regular Meeting Minutes as presented. Page 1 of 1 Dunn City Council Regular Meeting Tuesday,January 27,2026 6:30 p.m.Dunn Municipal Building Minutes PRESENT: Mayor William P.Elmore Jr.,Mayor Pro Tern April Gaulden,Council Members J.Wesley Sills, Raquel McNeil,Billy N.Tart,Alan Hargis,and Dr.David L. Bradham. ALSO PRESENT: City Manager Justin Hembree,Assistant City Manager Billy R. Godwin, Finance Director, Cary McNallan, Interim Police Chief Nick Simmons, Captain Matt Smith, Administrative Support Specialist Christy Sweeney, City Attorney Tilghman Pope and City Clerk Melissa Matti. CALL TO ORDER Mayor William P.Elmore,Jr.called the Dunn City Council Regular Meeting to order at 6:30 p.m.on January 27, 2026. The Mayor noted the passing of Joy Williams last week. He explained that Ms.William had worked tirelessly with Wilkins Cemetery over the years and asked for prayers for her family during this difficult time. INVOCATION Reverend Cameron"Cam"Thomas from First Presbyterian Church gave the invocation. PLEDGE OF ALLEGIANCE Council Member Wesley Sills led the Pledge of Allegiance. ADJUSTMENT OF THE AGENDA Motion by Council Member Hargis,seconded by Council Member Bradham to adopt the January 27, 2026 regular meeting agenda as presented with the following changes: By reordering items for Discussion and Possible Action#s 7,8,and 9 as follows: 7. Rezoning Request(RZ-25-04) Dogwood Knoll Street and Fairground Road a. Public Hearing b. Decision 8. Ordinance to Extend the Corporate Limits,Voluntary Annexation Petition(ANX-07-25),Vann Lane(Step#3) a. Public Hearing b. Decision 9. Rezoning Application(RZ-25-03)-Vann Lane a. Public Hearing b. Decision Motion carried unanimously. PRESENTATIONS City of Dunn FY25 Financial Audit Presentation Austin Eubanks,Audit Manager at Thompson Price,Scott and Adams from the Wilmington office,presented the audit for the fiscal year ending June 30, 2025. He reported that the audit was conducted in accordance with generally accepted auditing standards,government auditing standards,and the uniform guidance. Key findings included: • No deficiencies in Internal Control were found • The Financial Statements were free of material error • A new Accounting Policy(GASB 101)was implemented,which now requires sick leave to be included in compensated absences • No significant audit adjustments or unrecorded differences were noted • No disagreements with management occurred during the audit • Financial highlights included: • General Fund had Revenues of$14,286,000 and Expenditures of$15,061,000,resulting in a negative Net Change of$775,240. • Unassigned Fund Balance was$3,400,000,which is 27.97%of Expenditures(above the 25% minimum threshold). • Tax Collection Rate was 98.98%. • Top Revenue source was Ad Valorem Taxes at 42% ($5.9 million). • Public safety was the largest Expenditure category at 35% ($5 million). Mr. Eubanks noted that despite the slight decrease in Fund Balance availability compared to previous years, the City remains in good financial position. He also commended Finance Director McNallan and his team for their outstanding management of the City's finances,particularly given the large number of Capital Projects.A copy of the slideshow is incorporated into these minutes as Attachment#1. Mayor Elmore thanked Mr.Eubanks for the presentation and congratulated Mr.McNallan and his team for their excellent work. Recognition of Butch Halpin Hometown Hero Award Interim Police Chief Simmons introduced Butch Halpin, who works in the Criminal Investigations Division overseeing Property and Evidence,and serves as the Crime Stoppers Coordinator. John Riley,CFO of Bleecker Automotive,presented the award,explaining that Butch began his public service at age 17 with the Dunn Rescue Squad and later became one of the first EMTs at Harnett County Emergency Services before transitioning to law enforcement.Mr. Riley noted that Mr. Halpin is well-respected in his field and currently serves as President of the North Carolina Association of Property and Evidence. Mr. Riley presented Halpin with the 2025 North Carolina Hometown Hero Award from the North Carolina Automobile Dealers Association,noting this was the culmination of 10 years of nominations.The award honors first responders who protect and serve North Carolina communities. Mayor Elmore thanked Mr.Halpin for his service to the community. Recognition of Michael Godfrey Officer of the Year Award Interim Police Chief Simmons recognized Officer Michael Godfrey,who recently received the Police Officer of the Year Award during the inaugural Everyday Heroes Award Ceremony hosted by the Dunn Chamber. Officer Godfrey was nominated for his response to a traffic accident on September 12,2025,where he was first on the scene of a serious collision between a cement truck and a passenger vehicle.Officer Godfrey immediately rendered aid to multiple injured individuals, including removing a juvenile from the vehicle, determining the driver was deceased,and performing life-saving measures on an infant who was initially unresponsive. Interim Chief Simmons commended Officer Godfrey's courageous and selfless actions,noting that despite the tragic outcome(the infant later succumbed to injuries),his immediate response provided the victims with their best chance for survival. Mayor Elmore thanked Officer Godfrey on behalf of the Council for his service to the City and expressed appreciation to all Police Officers working to make Dunn a better place. PROCLAMATIONS 2026 Black History Month Proclamation Assistant City Manager Godwin read the 2026 Black History Month Proclamation, noting this year's theme is "A Century of Black History Commemorations," recognizing celebrations stretching back to Dr. Carter G. Woodson's inaugural week-long Black History observance in 1925.The proclamation encouraged all residents to participate in educational and celebratory events honoring the contributions of African Americans.A copy of the 2026 Black History Month Proclamation(P2026-3)is incorporated into these minutes as Attachment#2. PUBLIC COMMENT PERIOD Seth Gunderson Owner of Coffee on Broad at 111 East Broad Street, Mr. Gunderson thanked the City for writing a letter to the County regarding issues with the Probation Office. He expressed concerns about people urinating on the side of his building and noted that while Police have responded multiple times, the problem persists. Mr. Gunderson stated he would be attending the County Commissioner Meetings to maintain pressure on them to address the issue,as the County had voted to move the Probation Office in May,but had yet to act. CONSENT AGENDA The Consent Agenda included two(2)items: • Approval of January 13,2026 Work Session Minutes • Budget Amendments-Various Operating Accounts Motion by Council Member Bradham, seconded by Mayor Pro Tern Gaulden to approve the Consent Agenda. Moved unanimously approved.A copy of the Budget Amendments(BA-2026-16) is incorporated into these minutes as Attachment#3. ITEMS FOR DISCUSSION AND POSSIBLE ACTION Rezoning Application(RZ-25-04) Dogwood Knoll Street&Fairground Road PINs being 1517-62-6194.000,1517-62-8128.000, 1517-61-6938.000, 1517-62-8110.000, 1517-61-8939.000,and 1517-61-7939.000 A Public Hearing was opened at 7.02 p.m. Interim Planning Director Deaton Mr.Deaton presented Rezoning Application RZ-25-04 for six(6)parcels,PINs being 1517-62-6194.000, 1517- 62-8128.000, 1517-61-6938.000, 1517-62-8110.000, 1517-61-8939.000, and 1517-61-7939.000 (approximately 2 acres) located at Dogwood Knoll Street and Fairground Road. The applicant requested rezoning from C-2 (commercial)to R-7 (residential)to potentially develop single-family homes. Don Bird(Applicant) Mr. Bird stated that he believes residential is the logical use for the property rather than commercial development,which would be inconsistent with the surrounding neighborhood. He mentioned he had tried to market it commercially without much interest.When questioned about access,Mr.Bird indicated there would likely be 2-3 driveways on Fairground Road and 2-3 on Dogwood Knoll. Council Member Hargis expressed concern about the already high volume of traffic on Fairground Road. Council Member Sills asked if DOT had approved three (3) street accesses on Fairground, to which Mr. Bird responded that driveways typically need to be at least 100 feet apart, but that formal approvals had not yet been obtained. After the Public Hearing was closed at 7:05 p.m.,the Council discussed the application. Motion by Council Member Sills,seconded by Council Member Bradham to deny Rezoning Application RZ-25-04 as presented in the agenda packet. Motion unanimously approved to deny application. Ordinance to Extend City Limits Voluntary Annexation Petition (ANX-07-25)- Vann Lane PINs 1517-37-0736.000,1517-37-9653.000, and 1517-47-0665.000 A Public Hearing was held at 7:07 p.m.with no members of the public speaking. City Manager Hembree presented the Voluntary Annexation Petition for Vann Lane, explaining this was the third and final step in the process.The Council had previously directed the Clerk to investigate the petition at their November 18th meeting,and the Clerk certified the petition's sufficiency.A Resolution Fixing the Date of the Public Hearing was adopted at the December 9th meeting,and the Public Hearing was properly advertised. Motion by Council Member Sills,seconded by:Mayor Pro Tem Gaulden to adopt the Ordinance to Extend the Corporate City Limits of Dunn by the Voluntary Contiguous Annexation of 74+ acres with the PIN numbers listed in the packet as presented and assigned to Ward 1. Motion unanimously approved to adopt.A copy of the Ordinance to Extend the Corporate City Limits of Dunn(02026-01)is incorporated into these minutes as Attachment#4. Rezoning Application(RZ-25-03)- Vann Lane PINs being 1516-37-0736.000, 1517-37-9653.000, and1517-47-0665.000 A Public Hearing was held at 7:10 p.m. Interim Planning Director Deaton Mr. Deaton presented Rezoning Application RZ-25-03 for the recently annexed 73+ acres at Vann Lane. The applicant requested rezoning from Harnett County Residential Agriculture(R-20M)to City of Dunn R-7 zoning for single-family residential development.The Land Use Plan for this area calls for medium density residential, and the request would be consistent with the existing Seasons Subdivision. Kelly Latham Green 2343 Chichapin Lane,Angier Mr. Green spoke during the Public Hearing,stating that while he and his family were not opposed to growth, they were concerned about the lack of a specific development plan for the property.He noted that the 73-acre parcel could potentially see up to 173 homes, and there were unanswered questions about road layouts, buffering,traffic impacts,and overall density. Seth Thompson, RP Wellons Land and Development • Mr. Thompson explained they had conducted extensive studies including boundary surveys, wetland delineation,and feasibility studies for water and sewer.He stated that the development would be several years away and they did not yet have a specific plan,noting that market conditions would influence what is ultimately built. Mr.Thompson referenced the Wellons family's history of quality development in Dunn and assured the Council they would maintain buffers and follow all regulations when development does occur. Council Member Sills noted that this was a difficult vote given the concerns of neighbors but acknowledged the Wellons family's track record of quality development in Dunn.Council Member Hargis expressed confidence in the Wellons'reputation for quality development. Motion by Council Member Hargis,seconded by Mayor Pro Tern Gaulden to approve Rezoning Request RZ-25-03 to rezone 3 parcels (PIN numbers 1516-37-0736.000, 1517-37-9653.000, and 1517-47- 0665.000)totaling 73.32 acres from Harnett County Residential Agriculture (R-20M) district to City of Dunn R-7 district as presented. Motion unanimously approved. Capital Project Ordinance Amendment II(Close Out) Tracy Lane Water and Sewer Extension Project Finance Director McNallan presented a Capital Project Ordinance Amendment to close out the Tracy Lane project,which was approved in FY24.The project came in under budget,resulting in savings of approximately $80,000,which would be returned to the General Fund as a prepayment on the loan that funded the project. Council Member Hargis commented that this was good news,as projects rarely come in under budget. Motion by Council Member Tart, seconded by Council Member McNeil to approve the Capital Project Ordinance Amendment and Budget Amendment for Tracy Lane Water and Sewer Extension Project and authorize the partial repayment of funds that were borrowed from the General Fund. Motion unanimously approved. Copies of the Capital Project Ordinance Amendment (02026-02) and Budget Amendment(BA-2026-17)are incorporated into these minutes as Attachment#5. Pearsall Street Project NCDEQ Additional Funding Finance Director McNallan presented a Request to Approve a Grant Offer of $1.6 Million from the North Carolina Department of Environmental Quality (NCDEQ) for the Pearsall Street Project. The grant would replace funds previously allocated from the General Fund,Water&Sewer Fund,and Stormwater Fund,allowing those funds to be returned to their respective accounts. Mr.McNallan noted that approximately$1 million came from the General Fund,$230,000 from Water&Sewer Funds,and$499,000 from Stormwater Funds,totaling about$1,680,000. City Manager Hembree confirmed that paving for the street was in progress and would be completed once weather permitted. Motion by Council Member Hargis seconded by Mayor Pro Tem Gaulden to adopt the Resolution Accepting $1,673,969 of the SRP-SW-AARP-0030 Grant Funds from NCDEQ for the Pearsall Street Culvert Project. Motion unanimously approved.A copy of the Resolution Accepting$1,673,969 of the SRP-SW- AARP-0030 Grant Funds from NCDEQ for the Pearsall Street Culvert Project(R2026-03)is incorporated into these minutes as Attachment#6. CITY MANAGER'S REPORT City Manager Hembree reminded the Council of the upcoming Budget Retreat scheduled for February 6-7. He explained that the retreat would focus on three (3) main areas: Capital Projects, Spending Priorities, and Revenue Philosophy. Mr.Hembree announced the selection of Timothy Lynn Gay as the new Chief of Police for the City of Dunn.Chief Gay began his law enforcement career with the North Carolina State Bureau of Investigation in 1996,where he worked his way up to become the Assistant Director of Field Operations.Most recently, he served as Deputy Chief of Police with the City of Rocky Mount, leading uniform patrol operations and criminal investigations. Chief Gay has extensive experience combating drug distribution networks and leading complex investigations and has taught law enforcement and ethical principles internationally. Mr. Hembree also thanked Interim Chief Nick Simmons and the command staff for their leadership during the transition period. FINANCIAL REPORT Finance Director McNallan presented the Financial Report as of December 31,2025: • Cash and investments totaled$6.1 million(compared to$8.4 million the previous year) • The City received a$6 million grant reimbursement on January 9 • Property Tax Collections for November were$1.2 million(compared to$1.3 million the previous year) • Year-to-date Property Tax Collections were$2.5 million • Sales Tax received for October was$334,000 (up$58,000 from the previous year) • Year-to-date Sales Tax Collections were$1.3 million(38%of budget) • Building Permits for December were$8,876,with year-to-date collections at$99,000 (54%of budget) Mr.McNallan recommended renewing the contract with Thompson Price Scott Adams for the FY26 audit, which the Council supported. DEPARTMENTAL REPORTS&PROJECT UPDATES Code Enforcement Code Enforcement Officer Hodges announced that the City was advertising for contractors to perform grass cutting and debris removal,with applications due around March 1. Code Enforcement Officer Canady presented updates on two (2) properties: • 405 Greenwood Street:The owner quickly complied with violation notices and fixed missing siding. The property is now for sale. • 1007 East Broad Street:The property owner,who lives in Charlotte and is a building inspector, corrected the rotted siding issues and plans to eventually demolish the property. Mr.Canady also mentioned that Code Enforcement was working with Public Works to address right-of-way issues throughout the City. Council Member McNeil asked about the timeline for demolishing condemned houses on South Washington Street. Mr. Canady responded that they were working on tracking down the heirs of the deceased property owners and would likely bring the matter back to Council for a decision. Probation Office City Manager Hembree updated the Council on ongoing issues with the Probation Office, noting significant impacts on Police operations.He explained that officers frequently respond to calls at the Probation Office and are being used as prisoner transport by the Probation Office staff.Interim Chief Simmons reported that in 2024, Police responded 99 times to the Probation Office,95 times in 2025,and already 3 times in the current year. Interim Chief Simmons noted that these calls take officers off patrol for extended periods (1.5-2 hours minimum) as they must drive prisoners to the jail in Lillington. With typically only 4-5 officers on duty, this significantly impacts their ability to serve the community. Mr. Hembree informed the Council that neither the County,nor the State had responded to letters requesting action on this issue.Council members expressed frustration with the situation,with some suggesting exploring options to declare the office a public nuisance or seeking media attention to apply pressure. Local business owner Seth Gunderson raised additional concerns about safety, noting that sex offenders on probation visit the office, creating potential risks for nearby businesses, including those employing young people. Right-of-Way Maintenance Public Works Director Williams presented updates on right-of-way maintenance activities: • Crews have been trimming tree limbs up to 16 feet high on City streets,working block by block from west to east • They've been removing debris and trash from rights-of-way • Work is progressing on removing the Cotton Gin remnants,with a contractor removing concrete at no charge • Once completed,the area will be graded and seeded ANNOUNCEMENTS Mayor Elmore announced: • There would be no Work Session in February due to the Budget Retreat • The next Regular Meeting is scheduled for February 24th. Several council members welcomed the new Police Chief and thanked the Police Department for their service. ADJOURNMENT Motion by Council Member Hargis, seconded by Council Member Sills to adjourn the meeting. Motion unanimously approved. The meeting adjourned at 8:10 p.m. William P Elmore,Jr. Mayor Attest Melissa R.Matti City Clerk CITY OF DUNN1887 NORTH CAROLINA Gtll er&co 4eg/ Regular Meeting, February 24, 2026 Agenda Item(s): Approval of Budget Amendments-Various Operating Accounts Presenter(s): Cary McNallan, Finance Director Responsible Staff: Cary McNallan, Finance Director Action Item: Yes Attachment(s): 1) Budget Amendment Background These Budget Amendments are requested for the following reasons: 1. Appropriation of insurance proceeds received for the roof repair for the Head Start building. 2. Appropriate Harnett County funds that were received for the Diamond Youth Baseball tournament security. 3. Shift budgeted Police payroll funds to police professional services to fund the contract for the Police Chief applicant search. Savings from lapsed salaries due to the vacant chief position are to be used for this purpose. Staff Recommendation(s) Staff are recommending that these Budget Amendments be approved. Budget Impact The overall budget for the General Fund will increase by$105,661. Suggested Motion(s) Motion to approve the attached Budget Amendments for the General Fund. Page 1 of 1 CITY OF DUNN BUDGET ORDINANCE AMENDMENT Department: Various Budget Amendment#: 18 FISCAL YEAR ENDING: 6/30/2026 Date: 2/24/2026 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment 1 General 010-0500-7400 Capital Outlay 67,427.41 65,661.00 $ 133,088.41 2 General 010-0620-4500 Contract Services 197,040.00 8,100.00 205,140.00 2 General 010-0620-0300 Contract Labor 36,000.00 930.00 36,930.00 2 General 010-0620-3501 Athletic Tournaments 3,340.00 3,340.00 6,680.00 2 General 010-0620-0201 Salaries-Overtime 18,661.00 3,671.00 22,332.00 2 General 010-0510-0201 Salaries-Overtime 88,124.00 23,959.00 112,083.00 3 General 010-0510-0200 Salaries&Wages 2,916,938.00 (30,000.00) 2,886,938.00 3 General 010-0510-4510 Professional Services - 30,000.00 30,000.00 EXPENDITURE TOTAL: $ 3,327,530.41 $ 105,661.00 $ 3,433,191.41 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment 1 General 010-0395-0800 Insurance Proceeds $ 5,000.00 $ 65,661.00 $ 70,661.00 2 General 010-0359-0004 Harnett County funds $ - $ 23,959.00 $ 23,959.00 2 General 010-0367-0004 Harnett County funds $ - $ 16,041.00 $ 16,041.00 $ - $ - REVENUE TOTAL: $ 5,000.00 $ 105,661.00 $ 110,661.00 CERTIFICATION: I certify this requested budget amendment was approved by the City Council on: City Manager: 2/24/2026 Finance Director: 2/24/2026 JUSTIFICATION: 1.Appropriate insurance funds for the repair of the Head Start building roof. 2.Appropriate Harnett County funds for the DYB tournament security. 3. Shift police salary budget savings to professional services for police chief applicant search consultant. FUNDING SOURCE: 1. Insurance reimbursement 2. Harnett County funds 3, Reallocation of expense budgets p.m CITY OF 1 ss7 NORTH CAROLINA tl/ere coormax.4 X egchs/ Regular Meeting, February 24, 2026 Agenda Item(s): Acceptance of Animal Shelter Donations Presenter(s): Police Chief, Lynn Gay Responsible Staff: Police Chief, Lynn Gay Action Item: Yes Attachment(s): Budget Amendment Background The Dunn Animal Control Facility received two donations in memory of Brenda Joy Williams. A donation of $100 was received from Leigh-Ann Merwarth Gallucci, and another donation of $250 was received from Dahnelle and Steven Payson. The donations did not include a specific use. These funds will be appropriated to the Animal Control operating budget and be used for supplies and equipment related to the facility. Budget Impact These donations will increase the Animal Control budget by$350. Staff Recommendation(s) Approve the acceptance of the donations and the related Budget Amendment. Suggested Motions) Motion to approve the acceptance of the donations and the attached Budget Amendment. Page 1 of 1 CITY OF DUNN BUDGET ORDINANCE AMENDMENT Department: Animal Control Budget Amendment#: 21 FISCAL YEAR ENDING: 6/30/2026 Date: 2/24/2026 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment General 010-0514-7000 Non-Capital Equipment - 350.00 $ 350.00 EXPENDITURE TOTAL: $ - $ 350.00 $ 350.00 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment General 010-0360-0004 Animal Control Donations $ 750.00 $ 350.00 $ 1,100.00 $ $REVENUE TOTAL: $ 750.00 $ 350.00 $ 1,100.00 CERTIFICATION: I certify this requested budget amendment was approved by the City Council on: City Manager: 2/24/2026 Finance Director: 2/24/2026 JUSTIFICATION: Appropriation of donated funds. FUNDING SOURCE: Donations in memory of Brenda Joy Williams IN CITY OF 1887 NORTH CAROLINA t1/tete wotna4.4,6egiii.s1 Regular Meeting, February 24, 2026 Agenda Item(s): Consideration of Resolution Declaring Certain Property Surplus and Authorizing the Disposition through GovDeals.com Presenter(s): Justin Hembree, City Manager Responsible Staff: Joe Jones, Garage Fleet Mechanic Action Item: Yes Attachment(s): 1) Resolution The City Council is being asked to adopt the attached Resolution Declaring Property Surplus and Authorizing the City Manager to dispose of personal property by electronic means through www.GovDeals.com. Background The City of Dunn wants to surplus the following items that are no longer in use. • Coats tire balancer • Aluminum dogbox • 2005 Chevrolet Trailblazer • Leeboy asphalt roller • 2010 Freightliner Grapple Truck 2007 Mercury Grand Marquis, 2012 Dodge Charger, 2014 Dodge Charger 2010 Ford Ranger,2015 Dodge Charger, 2018 Dodge Charger Budget Impact The City would receive payment for the items that no longer hold any value to the City. Staff Recommendation(s) Adoption of resolution and authorize City Manager to dispose of personal property. Suggested Motion(s) Motion to adopt the Resolution Declaring Property Surplus and authorizing the City Manager to dispose of personal property by electronic means through www.GovDeals.com. Page 1 of 1 Mayor William P.Elmore,Jr. CITY OF Mayor Pro Tem April Gaulden UNNCouncil Members J.Wesley Sills 887 Raquel McNeil NORTH CAROLINA Billy Tart 401 E Broad St . PO Box 1065 .Dunn,North Carolina 28335 A m Hargis (910)230-3500 • CityofDunn.org Dr.David L..B radha y � City Manager Justin Hembree A RESOLUTION OF THE DUNN CITY COUNCIL DECLARING CERTAIN PROPERTY OF THE CITY TO BE SURPLUS AND AUTHORIZING THE DISPOSITION OF SAID PROPERTY WHEREAS, the City Council of the City of Dunn, North Carolina, has determined that the City owns certain personal property that is no longer needed or useable by the City; and WHEREAS, each of the items described below, is declared to be surplus to the needs of the City: ITEM MODEL VIN#or SERIAL# MILEAGE 2014 Dodge Charger 2C3CDXAT9EH121281 112,887 2015 Dodge Charger 2C3CDXAT3FH925190 113,842 2012 Dodge Charger 2C3CDXAT6CH282846 105,741 2010 Freightliner pac-mac 1FVACXDTOADAP8496 141,386 grapple truck 2010 Ford Ranger 1FTKR1AD4APA52620 105,317 2018 Dodge Charger 2C3CDXKT6JH323603 unknown 2005 Chevrolet Trailblazer 1GNDS13S452312386 113,275 2007 Mercury Grand Marquis 2MEFM75V27X643830 98,801 Leeboy Roller N/A N/A Coats Tire Balancer N/A N/A Aluminum Dogbox N/A N/A NOW,THEREFORE, BE IT RESOLVED by the Dunn City Council that the City Manager is hereby authorized to dispose of the listed items by electronic means through www.GovDeals.com. With appropriate notice, the date, place and time of the sale will be announced by the City Manager or his designee. The City Clerk shall publish at least once and not less than ten (10)days before the dates of the auctions, a copy of this Resolution or a notice summarizing its contents as required by North Carolina General Statute 160A-270(b). Adopted this 24th day of February, 2026. ATTEST: CITY OF DUNN Melissa Matti, City Clerk William P. Elmore, Jr., Mayor CITY OF 1887 NORTH CAROLINA Mier&ulirknaut4,Begins! Regular Meeting, February 24, 2026 Agenda Item(s): Contract Award for FY26 Audit Services Presenter(s): Cary McNallan, Finance Director Responsible Staff: Cary McNallan, Finance Director Action Item: Yes Attachment(s): 1) Resolution 2) Contract Document Background The Local Government Budget and Fiscal ControlAct(LGBFCA) requires each local government to prepare an annual financial report on their financial position and results of operations at the end of each fiscal year. The LGBFCA also requires that this financial report be audited by an independent certified public accountant. In March 2023, the City issued a request for proposal for audit services for fiscal years ending 2023 through 2025. On May 9, 2023, the City Council approved a three-year commitment with the audit firm Thompson, Price, Scott, Adams & Co., P.A. (TPSA). Staff is recommending that we extend the services from TPSA to include the FY26 audit. The proposal for FY26 auditing services and financial preparation is$36,000. If a single audit is necessary, each single audit would cost $3,000 up to a maximum charge of $9,000 for the estimated three required single audits. All independent audit contracts must be approved by the staff of the Local Government Commission. Budget Impact The total cost for the FY26 audit (including three single audits) is $45,000. These funds will be included in the FY27 Finance budget. Page 1 of 2 Staff Recommendation(s) Approve the TPSA audit contract. Suggested Motion(s) Motion to approve the attached resolution awarding the FY26 audit contract to TPSA and authorize the Mayor and Town Manager to execute the contract, engagement letter, and related documents. Page 2 of 2 CITY OF ri 1887 DUNN NORTH CAR LI NA RESOLUTION TO AWARD A CONTRACT FOR INDEPENDENT AUDIT SERVICES FOR FISCAL YEAR ENDING JUNE 30, 2026 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUNN THAT: Section 1:A contract for the fiscal year ending June 30, 2026 is awarded to Thompson, Price, Scott, Adams & Co., P.A. (TPSA) for a total cost not to exceed $36,000 to perform an independent audit and prepare annual financial statements. If a single audit is required,the cost of each single audit will be $3,000, up to a maximum of fee of$9,000 for all required single audits. Section 2: The Mayor and City Manager are authorized to execute the Contract to Audit Accounts (form LGC-205 or equivalent), engagement letter and/or additional items not addressed in the LGC-205. Section 3: This contract is not a multi-year contract and is only for the FY26 financial audit and financial report preparation. Section 4: This resolution is effective upon adoption by the City Council. Section 5: Within five (5) days after adoption of this resolution the City Clerk shall file a copy of this resolution with the Finance Officer. Adopted this 24th day of February 2026. William P. Elmore Jr. Mayor ATTEST: Melissa R. Matti City Clerk 71JI ere community 6 jins! LGC-205 Form A CONTRACT TO AUDIT ACCOUNTS Rev.02/2026 The Governing Board Board of Directors of Primary Government Unit City of Dunn and Discretely Presented Component Unit(DPCU)(if applicable) NA Primary Government Unit, together with DPCU(if applicable), hereinafter referred to as Governmental Unit(s) and Auditor Name Thompson, Price, Scott, Adams & Co., P.A. Auditor Address 4024 Oleander Dr., Suite 103, Wilmington,NC 28403 Hereinafter referred to as Auditor for Fiscal Year Ending Date Audit Will Be Submitted to LGC 06/30/26 12/31/26 Must be within six months of FYE hereby agree as follows: 1. The Auditor shall audit all statements and disclosures required by "U.S. Auditing Standards—AICPA (Clarified)," referred to as generally accepted auditing standards (GAAS) and additional required legal statements and disclosures of all funds and/or divisions of the Governmental Unit(s). The non-major combining, and individual fund statements and schedules shall be subjected to the auditing procedures applied in the audit of the basic financial statements and an opinion shall be rendered in relation to (as applicable) the governmental activities, the business-type activities, the aggregate DPCUs, each major governmental and enterprise fund, and the aggregate remaining fund information (non-major government and enterprise funds, the internal service fund type, and the fiduciary fund types). Budgetary comparison information shall be prepared in accordance with applicable GASB standards. Budget-to-actual comparisons at the level of the legally adopted budget ordinance shall be presented as required supplementary information and shall not be included in the basic financial statements. Any other budgetary comparison information shall be presented only as supplementary information for funds required to be budgeted under NCGS Chapter 159, Article 3. 2. At a minimum, the Auditor shall conduct the audit and render the report in accordance with GAAS. If the Governmental Unit expended $100,000 or more in combined Federal and State financial assistance during the reporting period, the Auditor shall perform the audit in accordance with Generally Accepted Government Auditing Standards(GAGAS). The Governmental Unit is subject to federal single audit requirements in accordance with Title 2 US Code of Federal Regulations Part 200 Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F (Uniform Guidance) and the State Single Audit Implementation Act. Currently the threshold is $1,000,000 for federal and state single audits, or such other threshold as applicable for the fiscal year under audit. This audit and all associated audit documentation may be subject to review by federal and State agencies in accordance with federal and State laws, including the staff of the Office of State Auditor(OSA) and the Local Government Commission (LGC). If the audit requires a federal single audit in accordance with the Uniform Guidance (§200.501) the Auditor and Governmental Unit(s) should discuss, in advance of the execution of this contract, the responsibility for submission of the audit and the accompanying data collection form (form SF-FAC) to the Federal Audit Clearinghouse as required under the Uniform Guidance (§200.512) to ensure proper submission. If the audit and Auditor communication are found in this review to be substandard, the results of the review may be forwarded to the North Carolina State Board of CPA Examiners (NC State Board). Page 1 LGC-205 Form A CONTRACT TO AUDIT ACCOUNTS Rev.02/2026 3. If an entity is determined to be a component of another government as defined by the group audit standards, the entity's auditor shall make a good faith effort to comply in a timely manner with the requests of the group auditor in accordance with AU-6 §600.41 - §600.42. 4. This contract contemplates an unmodified opinion being rendered. If during the process of conducting the audit, the Auditor determines that it will not be possible to render an unmodified opinion on the financial statements of the unit, the Auditor shall contact the LGC Staff to discuss the circumstances leading to that conclusion as soon as is practical and before the final report is issued. The audit shall include such tests of the accounting records and such other auditing procedures as are considered by the Auditor to be necessary in the circumstances. Any limitations or restrictions in scope which would lead to a qualification should be fully explained in an attachment to this contract. 5. If this audit engagement is subject to the standards for audit as defined in Government Auditing Standards (2018 revision or subsequent revisions, as applicable) issued by the Comptroller General of the United States, then by accepting this engagement, the Auditor warrants that he or she has met the requirements for a peer review and continuing education as specified in Government Auditing Standards. The Auditor agrees to provide a copy of the most recent peer review report to the Governmental Unit(s) and to the Secretary of the LGC prior to the execution of an audit contract. Subsequent submissions of the report are required only upon report expiration or upon the Auditor's receipt of an updated peer review report. If the audit firm receives a peer review rating other than pass, the Auditor shall not contract with the Governmental Unit(s) without first contacting the Secretary of the LGC for a peer review analysis that may result in additional contractual requirements. If the audit engagement is not subject to Government Auditing Standards or if financial statements are not prepared in accordance with U.S. generally accepted accounting principles (GAAP) and fail to include all disclosures required by GAAP, the Auditor shall provide an explanation as to why in an attachment to this contract or in an amendment. 6. It is agreed that time is of the essence in this contract. All audits are to be performed, and the report of audit submitted to LGC Staff, within six months of fiscal year end. At the time of the execution of this contract, if the parties know that the anticipated submission date of the audit exceeds six months after fiscal year end, a • written explanation shall be provided to the Secretary of the LGC on this contract form (see the space provided on Page 7). If it becomes necessary to amend the audit fee or the date that the audit report will be submitted to the LGC, an amended contract along with a written explanation of the change shall be submitted to the Secretary of the LGC for approval. 7. It is agreed that GAAS include a review of the Governmental Unit's (Units') systems of internal control and accounting as they relate to accountability of funds and adherence to budget and law requirements applicable thereto; that the Auditor shall make a written report, which may or may not be a part of the written report of audit, to the Governing Board setting forth the Auditor's findings, together with his or her recommendations for improvement. That written report shall include all matters determined to be "significant deficiencies and material weaknesses" in accordance with AU-C §265 "Communicating Internal Control Related Matters Identified in an Audit" of GAAS. The Auditor shall file a copy of that report with the Secretary of the LGC. For GAAS or Government Auditing Standards audits, if an Auditor issues an AU-C §260 report, "Auditor's Communication With Those Charged With Governance," commonly referred to as a "Governance Letter," LGC staff does not require the report to be submitted unless the Auditor cites significant findings or issues from the audit, as defined in AU-C §260 paragraphs 12 - 14. This would include issues such as difficulties encountered during the audit, significant or unusual transactions, uncorrected misstatements, matters that are difficult or contentious for which the Auditor consulted outside the engagement team and, in the Auditor's judgment, are significant and relevant to those charged with governance, and other findings or issues that the Auditor believes are significant and relevant. If matters identified during the audit were required to be reported as described in AU-C §260 paragraphs 12 - 14 and were communicated in a method other than an AU-C §260 letter, the written documentation must be submitted. Page 2 LGC-205 Form A CONTRACT TO AUDIT ACCOUNTS Rev. 02/2026 8. All local government and public authority contracts for audit or audit-related work require the approval of the Secretary of the LGC. This includes annual or special audits, agreed upon procedures related to internal controls, bookkeeping or other assistance necessary to prepare the Governmental Unit's records for audit, financial statement preparation, any finance-related investigations, or any other audit- related work in the State of North Carolina. Approval is also required for the Alternative Compliance Examination Engagement for auditing the Coronavirus State and Local Fiscal Recovery Funds expenditures as allowed by US Treasury. Approval is not required on audit contracts and invoices for system improvements and similar services of a non-auditing nature. 9. Invoices for services rendered under these contracts shall not be paid by the Governmental Unit(s) until the invoice has been approved by the Secretary of the LGC. This also includes any progress billings [G.S. 159-34 and 115C-447]. All invoices for audit work shall be submitted in PDF format to the Secretary of the LGC for approval. The invoice marked 'approved' with approval date shall be returned to the Auditor to present to the Governmental Unit(s) for payment. This paragraph is not applicable to contracts for audits of hospitals. 10. In consideration of the satisfactory performance of the provisions of this contract, the Governmental Unit(s) shall pay to the Auditor, upon approval by the Secretary of the LGC if required, the fee, which includes any costs the Auditor may incur from work paper or peer reviews or any other quality assurance program required by third parties (federal and state grantor and oversight agencies or other organizations) as required under the Federal Single Audit Act and the State Single Audit Act. This does not include fees for any pre-issuance reviews that may be required by the North Carolina Association of Certified Public Accountants (NCACPA) Peer Review Committee or North Carolina State Board of CPA Examiners (see Paragraph 13). 11. If the Governmental Unit(s) has/have outstanding revenue bonds, the Auditor shall submit to LGC Staff, either in the notes to the audited financial statements or as a separate report, a calculation demonstrating compliance with the revenue bond rate covenant. Additionally, the Auditor shall submit to LGC Staff simultaneously with the Governmental Unit's (Units') audited financial statements any other bond compliance statements or additional reports required by the authorizing bond documents, unless otherwise specified in the bond documents. 12. After completing the audit, the Auditor shall submit to the Governing Board a written report of audit. This report shall include, but not be limited to, the following information: (a) Management's Discussion and Analysis, (b) the financial statements and notes of the Governmental Unit(s) and all of its component units prepared in accordance with GAAP, (c) supplementary information requested by the Governmental Unit(s) or required for full disclosure under the law, and (d) the Auditor's opinion on the material presented. The Auditor shall furnish the required number of copies of the report of audit to the Governing Board upon completion. 13. If the audit firm is required by the Secretary of the Local Government Commission to obtain a pre- issuance review or take corrective action as a result of peer review findings or quality control deficiencies, such corrective action shall be consistent with the authority and requirements of the North Carolina State Board of Certified Public Accountant Examiners, the AICPA Peer Review Program, and established Local Government Commission practice, including the use of report addenda or other remedial measures, as appropriate. Page 3 LGC-205 Form A CONTRACT TO AUDIT ACCOUNTS Rev.02/2026 14. In accordance with G.S. 159-34, the Finance Officer of the Unit is responsible for filing the audited financial statements with the Secretary of the Local Government Commission. The Auditor may upload the audit report and related documents through the LGC's electronic submission system; however, submission shall not be deemed complete until the Finance Officer has reviewed and certified the submission. The Auditor, Finance Officer, other Unit staff member designated by the Finance Officer, or a third party approved by the Unit may enter all Data Input Report information except the information on the "transmittal doc info" tab. The "transmittal doc info" tab must be completed by the Auditor. The Finance Officer shall review, approve, and certify the accuracy and completeness of the Data Input Report (DIR) in the LGC's LOGOS system prior to LGC review, regardless of whether the DIR is prepared by the Auditor or the Unit. Finance Officer certification is required for any corrected or revised submissions. Finance Officer certification of the DIR shall be completed in a timely manner following notification that the DIR is ready for review and within time frames prescribed by the LGC. Failure to complete certification in a timely manner may result in the audit being considered late due to unit action rather than auditor performance The Auditor shall conduct the audit in accordance with generally accepted auditing standards and shall ensure that the financial statements are prepared in accordance with generally accepted accounting principles as of the fiscal year end. Budget-to-actual comparisons at the level of the legally adopted budget ordinance shall be presented in required supplementary information, separate from the basic financial statements, and shall not be included in the audit opinion. The Auditor shall confirm that such information reconciles to the financial statements and is consistent with applicable accounting guidance and any LGC reporting requirements. The Finance Officer shall certify in a timely manner that all data inputted in LOGOS used for preparation of the financial statements and required supplementary information is complete and accurate. For audits of units other than hospitals, the audit report should be submitted when (or prior to) submitting the final invoice for services rendered. The report of audit, as filed with the Secretary of the LGC, becomes a matter of public record for inspection, review and copy in the offices of the LGC by any interested parties. Any subsequent revisions to these reports shall be sent to the Secretary of the LGC. These audited financial statements, excluding the Auditors' opinion, may be used in the preparation of official statements for debt offerings by municipal bond rating services to fulfill secondary market disclosure requirements of the Securities and Exchange Commission and for other lawful purposes of the Governmental Unit(s) without requiring consent of the Auditor. If the LGC Staff determines that corrections need to be made to the Governmental Unit's (Units') financial statements and/or the compliance section, those corrections shall be provided within three business days of notification unless another deadline is agreed to by LGC Staff. Page 4 LGC-205 Form A CONTRACT TO AUDIT ACCOUNTS Rev. 02/2026 15. Should circumstances disclosed by the audit call for a more detailed investigation by the Auditor than necessary under ordinary circumstances, the Auditor shall inform the Governing Board in writing of the need for such additional investigation and the additional compensation required therefore. Upon approval by the Secretary of the LGC, this contract may be modified or amended to include the increased time, compensation, or both as may be agreed upon by the Governing Board and the Auditor. 16. If an approved contract needs to be modified or amended for any reason, the change shall be made in writing and preaudited if the change includes a change in audit fee (preaudit requirement does not apply to hospitals). This amended contract shall be completed in full, including a written explanation of the change, signed and dated by all original parties to the contract. It shall then be submitted to the Secretary of the LGC for approval. No change to the audit contract shall be effective unless approved by the Secretary of the LGC. 17. A copy of the engagement letter, issued by the Auditor and signed by both the Auditor and the Governmental Unit(s), shall be attached to this contract, and except for fees, work, and terms not related to audit services, shall be incorporated by reference as if fully set forth herein as part of this contract. In case of conflict between the terms of the engagement letter and the terms of this contract, the terms of this contract shall take precedence. Engagement letter terms that conflict with the contract are deemed to be void unless the conflicting terms of this contract are specifically deleted in Paragraph 30 of this contract. Engagement letters containing indemnification clauses shall not be accepted by LGC Staff. 18. Special provisions should be limited. Please list any special provisions in an attachment. 19. A separate contract should not be made for each division to be audited or report to be submitted. If a DPCU is subject to the audit requirements detailed in The Local Government Budget and Fiscal Control Act and a separate audit report is issued, a separate audit contract is required. If a separate report is not to be issued and the DPCU is included in the primary government audit, the DPCU shall be named along with the primary government on this audit contract. DPCU Board approval date, signatures from the DPCU Board chairman and Finance Officer also shall be included on this contract. 20. The contract shall be executed, preaudited (preaudit requirement does not apply to hospitals) and physically signed by all parties including Governmental Unit(s) and the Auditor, then submitted in PDF format to the Secretary of the LGC. 21. The contract is not valid until it is approved by the Secretary of the LGC. The staff of the LGC shall notify the Governmental Unit and Auditor of contract approval by email. The audit should not be started before the contract is approved. 22. Retention of Client Records: Auditors are subject to the NC State Board of CPA Examiners' Retention of Client Records Rule 21 NCAC 08N .0305 as it relates to the provision of audit and other attest services, as well as non-attest services. Clients and former clients should be familiar with the requirements of this rule prior to requesting the return of records. Page 5 LGC-205 Form A CONTRACT TO AUDIT ACCOUNTS Rev.02/2026 23. This contract may be terminated at any time by mutual consent and agreement of the Governmental Unit(s) and the Auditor, provided that(a) the consent to terminate is in writing and signed by both parties, (b) the parties have agreed on the fee amount which shall be paid to the Auditor(if applicable), and (c) no termination shall be effective until approved in writing by the Secretary of the LGC. 24. The Governmental Unit's (Units') failure or forbearance to enforce, or waiver of, any right or an event of breach or default on one occasion or instance shall not constitute the waiver of such right, breach or default on any subsequent occasion or instance. 25. There are no other agreements between the parties hereto and no other agreements relative hereto that shall be enforceable unless entered into in accordance with the procedure set out herein and approved by the Secretary of the LGC. 26. E-Verify. The Auditor shall comply with the requirements of NCGS Chapter 64 Article 2. Further, if the Auditor utilizes any subcontractor(s), Auditor shall require such subcontractor(s) to comply with the requirements of NCGS Chapter 64, Article 2. 27. For all non-attest services, the Auditor shall adhere to the independence rules of the AICPA Professional Code of Conduct and Government Auditing Standards, 2018 or 2024 Revision (as applicable). Preparing financial statements in their entirety shall be deemed a "significant threat" requiring the Auditor to apply safeguards sufficient to reduce the threat to an acceptable level. If the Auditor cannot reduce the threats to an acceptable level, the Auditor cannot complete the audit. If the Auditor is able to reduce the threats to an acceptable level, the documentation of this determination, including the safeguards applied, must be included in the audit workpapers. All non-attest service(s) being performed by the Auditor that are necessary to perform the audit must be identified and included in this contract. The Governmental Unit shall designate an individual with the suitable skills, knowledge, and/or experience (SKE) necessary to oversee the services and accept responsibility for the results of the services performed. If the Auditor is able to identify an individual with the appropriate SKE, the Auditor must document and include in the audit workpapers how the Auditor reached that conclusion. If the Auditor determines that an individual with the appropriate SKE cannot be identified, the Auditor cannot perform both the non-attest service(s) and the audit. See "Fees for Audit Services" page of this contract to disclose the person identified as having the appropriate SKE for the Governmental Unit. 28. Applicable to audits with fiscal year ends of June 30, 2021 and later. The Auditor shall present the audited financial statements including any compliance reports to the Government Unit's Governing Board or audit committee in an official meeting in open session as soon as the audited financial statements are available but not later than 45 days after the submission of the audit report to the Secretary of the LGC. The Auditor's presentation to the Governing Board or audit committee shall include: a) the description of each finding, including all material weaknesses and significant deficiencies, as found by the Auditor, and any other issues related to the internal controls or fiscal health of the Government Unit as disclosed in the management letter, the Single Audit or Yellow Book reports, or any other communications from the Auditor regarding internal controls as required by current auditing standards; b) the status of the prior year audit findings; c) the values of Financial Performance Indicators based on information presented in the audited financial statements; and d) notification to the Governing Board that the Governing Board shall develop a "Response to the Auditor's Findings, Recommendations, and Fiscal Matters," if required under Rule 20 NCAC 03 .0508. Page 6 LGC-205 Form A CONTRACT TO AUDIT ACCOUNTS Rev.02/2026 29. Information based on the audited financial statements shall be submitted to the Secretary of the LGC through the LGC's LOGOS system, including completion of the Data Input Report(DIR). Submission is not complete and shall not be accepted by the LGC until the Finance Officer has reviewed and certified the DIR in accordance with Paragraph 14 of this contract. 30. All of the above paragraphs are understood and shall apply to this contract, except the following numbered paragraphs shall be deleted (See Paragraph 17 for clarification). 31. The process for submitting contracts, audit reports and invoices is subject to change. Auditors and Units should use the submission process and instructions in effect at the time of submission. Refer to the N.C. Department of State Treasurer website at https://www.nctreasurer.com/state-and-local- government-finance-division/local-government-commission/submitting-your-audit. 32. All communications regarding audit contract requests for modification or official approvals will be sent to the email addresses provided on the signature pages that follow. 33. Applicable to audits with fiscal year ends of June 30, 2025, and later. The Unit authorizes the LGC to grant access to the LGC's LOGOS system, including the Data Input Report (DIR), to employees of the contracted audit firm who are associated with and acting on behalf of the firm for purposes of performing audit and reporting services under this contract. Such access shall be limited to the scope necessary to perform contracted services and shall not relieve the Auditor or the Unit of their respective responsibilities under this contract. 34. Changes or edits to the text of this contract form are not permitted, except for the Secretary's authority to revise or update this contract form pursuant to LGC Rule 20 NCAC 03. 0502. For contracts with an anticipated audit submission date exceeding six months after fiscal year end, please use this space to explain the reason for the late submission, as required by Paragraph 6 of this contract form: Page 7 LGC-205 Form B CONTRACT TO AUDIT ACCOUNTS Rev. 02/2026 FEES FOR AUDIT SERVICES 1. For all non-attest services, the Auditor shall adhere to the independence rules of the AICPA Professional Code of Conduct (as applicable) and Government Auditing Standards,2018 Revision. Refer to Paragraph 27 of this contract for specific requirements. The following information must be provided by the Auditor; contracts presented to the LGC without this information will be not be approved. Financial statements were prepared by: DAuditor ❑Governmental Unit ['Third Party If applicable: The individual at the Governmental Unit designated to have the suitable skills, knowledge, and/or experience (SKE) necessary to oversee the non-attest services and accept responsibility for the results of these services: Name: Title and Unit/Company: Email Address: Cary McNallan Finance/City of Dunn cmcnallan@dunn-nc.org OR Not Applicable ❑ (Identification of SKE Individual on the LGC-205 Contract is not applicable for GAAS-only audits or audits with FYEs prior to June 30, 2020.) 2. Fees may not be included in this contract for work performed on Annual Financial Information Reports (AFIRs), Form 990s, or other services not associated with audit fees and costs. Such fees may be included in the engagement letter but may not be included in this contract or in any invoices requiring approval of the LGC. See Paragraphs 8 and 13 for details on other allowable and excluded fees. 3. The audit fee information included in the table below for both the Primary Government Fees and the DPCU Fees (if applicable) should be reported as a specific dollar amount of audit fees for the year under this contract. If any language other than an amount is included here, the contract will be returned to the audit firm for correction. 4. Prior to the submission of the completed audited financial report and applicable compliance reports subject to this contract, or to an amendment to this contract (if required) the Auditor may submit interim invoices for approval for services rendered under this contract to the Secretary of the LGC, not to exceed 75% of the billings for the Unit's last annual audit that was submitted to the Secretary of the LGC. All invoices for services rendered in an audit engagement as defined in Rule 20 NCAC .0503 shall be submitted to the Secretary of the LGC for approval before any payment is made. Payment before approval is a violation of law. (This paragraph not applicable to contracts and invoices associated with audits of hospitals). Primary Government Unit City of Dunn Audit Fee (financial and compliance if applicable) $ 36,000 Fee per Major Program (if not included above) $ 3000.00 if applicable Additional Fees Not Included Above (if applicable): Financial Statement Preparation (incl. notes and RSI) $ All Other Non-Attest Services $ TOTAL AMOUNT NOT TO EXCEED $ 45,000 Discretely Presented Component Unit NA Audit Fee (financial and compliance if applicable) $ Fee per Major Program (if not included above) $ Additional Fees Not Included Above (if applicable): Financial Statement Preparation (incl. notes and RSI) $ All Other Non-Attest Services $ TOTAL AMOUNT NOT TO EXCEED • $ Page 8 LGC-205 Form B CONTRACT TO AUDIT ACCOUNTS Rev.02/2026 SIGNATURE PAGE AUDIT FIRM Audit Firm* Thompson,Price, Scott,Adams&Co.,P.A. Authorized Firm Representative (typed or printed)* Signature* Gregory S Adams,CPA Date* Email Address* gadams@tpsacpas.com GOVERNMENTAL UNIT Governmental Unit* City of Dunn Date Governing Board Approved Audit Contract* (Enter date in box to right) Mayor/Chairperson (typed or printed)* Signature* William P Elmore Jr.,Mayor Date Email Address* welmore@dunn-nc.org Chair of Audit Committee (typed or printed, or"NA") Signature Date Email Address GOVERNMENTAL UNIT— PREAUDIT CERTIFICATE Required by G.S. 159-28(al) or G.S. 115C-441(a1). Not applicable to hospital contracts. This instrument has been preaudited in the manner required by The Local Government Budget and Fiscal Control Act or by The School Budget and Fiscal Control Act. Sum Obligated by This Transaction: $ 45,000 Primary Governmental Unit Finance Officer*(typed or printed Signature* Cary McNallan Finance Officer Date of Preaudit Certificate* Email Address* cmcnallan@dunn-nc.org Page 9 LGC-205 Form B CONTRACT TO AUDIT ACCOUNTS Rev. 02/2026 SIGNATURE PAGE — DPCU (complete only if applicable) DISCRETELY PRESENTED COMPONENT UNIT DPCU* NA Date DPCU Governing Board Approved Audit Contract* (Enter date in box to right) DPCU Chairperson (typed or printed)* Signature* Date* Email Address* Chair of Audit Committee (typed or printed, or "NA") Signature Date Email Address DPCU — PREAUDIT CERTIFICATE Required by G.S. 159-28(al) or G.S. 115C-441(a1). Not applicable to hospital contracts. This instrument has been preaudited in the manner required by The Local Government Budget and Fiscal Control Act or by The School Budget and Fiscal Control Act. Sum Obligated by this Transaction: $ DPCU Finance Officer (typed or printed)* Signature* Date of Preaudit Certificate* Email Address* Remember to print this form, and obtain all required signatures prior to submission. PRINT Page 10 Thompson,Price, Scott,Adams&Co.,P.A. E 4024 Oleander Drive Suite 103 t . Wilmington,North Carolina 28403 Telephone(910)791-4872 Fax(910)239-8294 OIMI/1[O ry�1p AOGOV Mt11M January 1,2026 City of Dunn,NC To Management and Those Charged with Governance We are pleased to confirm our understanding of the services we are to provide for City of Dunn for the year ended June 30,2026. Audit Scope and Objectives We will audit the financial statements of the governmental activities,the business-type activities,each major fund, and the aggregate remaining fund information,and the disclosures,which collectively comprise the basic financial statements of City of Dunn as of and for the year ended June 30,2026.Accounting standards generally accepted in the United States of America (GAAP) provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement City of Dunn's basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,economic,or historical context.As part of our engagement,we will apply certain limited procedures to City of Dunn's RSI in accordance with auditing standards generally accepted in the United States of America(GAAS).These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient appropriate evidence to express an opinion or provide any assurance. The following RSI is required by GAAP and will be subjected to certain limited procedures,but will not be audited: 1) Management's Discussion and Analysis. 1) Net Pension Asset/Liability RSI 2) OPEB We have also been engaged to report on supplementary information other than RSI that accompanies Dunn's financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures,including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves,and other additional procedures in accordance with GAAS,and we will provide an opinion on it in relation to the financial statements as a whole in a separate written report accompanying our auditor's report on the financial statements. 1) Schedule of expenditures of federal awards. 2) Budgetary Comparison Statements 3) Combining Statements 4) Individual Fund Statements The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and issue an auditor's report that includes our ALG-CL-1.2 opinions about whether your financial statements are fairly presented, in all material respects, in conformity with GAAP, and report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole.Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists.Misstatements,including omissions, can arise from fraud or error and are considered material if there is a substantial likelihood that, individually or in the aggregate,they would influence the judgment of a reasonable user made based on the financial statements. The objectives also include reporting on: • Internal control over financial reporting and compliance with provisions of laws,regulations,contracts,and award agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards. • Internal control over compliance related to major programs and an opinion(or disclaimer of opinion) on compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Auditor's Responsibilities for the Audit of the Financial Statements and Single Audit We will conduct our audit in accordance with GAAS; the standards for financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States;the Single Audit Act Amendments of 1996;and the provisions of the Uniform Guidance,and will include tests of accounting records,a determination of major program(s)in accordance with Uniform Guidance, and other procedures we consider necessary to enable us to express such opinions.As part of an audit in accordance with GAAS and Government Auditing Standards,we exercise professional judgment and maintain professional skepticism throughout the audit. We will evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management.We will also evaluate the overall presentation of the financial statements,including the disclosures,and determine whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We will plan and perform the audit to obtain reasonable assurance about whether the fmancial statements are free of material misstatement,whether from(1)errors,(2)fraudulent financial reporting,(3)misappropriation of assets, or(4)violations of laws or governmental regulations that are attributable to the government or to acts by management or employees acting on behalf of the government. Because the determination of waste and abuse is subjective, Government Auditing Standards do not expect auditors to perform specific procedures to detect waste or abuse in financial audits nor do they expect auditors to provide reasonable assurance of detecting waste or abuse. Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions, there is an unavoidable risk that some material misstatements or noncompliance may not be detected by us,even though the audit is properly planned and performed in accordance with GAAS and Government Auditing Standards. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements or on major programs.However,we will inform the appropriate level of management of any material errors, any fraudulent financial reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. We will include such matters in the reports required for a Single Audit.Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. We will also conclude,based on the audit evidence obtained,whether there are conditions or events,considered in the aggregate, that raise substantial doubt about the government's ability to continue as a going concern for a reasonable period of time. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, tests of the physical existence of inventories,and direct confirmation of receivables and certain assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will also request written representations from your attorneys as part of the engagement. We have identified the following significant risk(s)of material misstatement as part of our audit planning: • Improper revenue recognition • Management override of controls We may, from time to time and depending on the circumstances, use third-party service providers in serving your account. We may share confidential information about you with these service providers but remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal information. In addition,we will secure confidentiality agreements with all service providers to maintain the confidentiality of your information and we will take reasonable precautions to determine that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the event that we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. Furthermore, we will remain responsible for the work provided by any such third-party service providers. Our audit of financial statements does not relieve you of your responsibilities. Audit Procedures—Internal Control We will obtain an understanding of the government and its environment, including internal control relevant to the audit,sufficient to identify and assess the risks of material misstatement of the financial statements,whether due to error or fraud, and to design and perform audit procedures responsive to those risks and obtain evidence that is sufficient and appropriate to provide a basis for our opinions.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion,forgery,intentional omissions, misrepresentation, or the override of internal control. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed,will be less in scope than would be necessary to render an opinion on internal control and,accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. As required by the Uniform Guidance, we will perform tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal award program.However,our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly,no opinion will be expressed in our report on internal control issued pursuant to the Uniform Guidance. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. Accordingly, we will express no such opinion. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards, Government Auditing Standards, and the Uniform Guidance. Audit Procedures—Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of Dunn's compliance with provisions of applicable laws, regulations, contracts, and agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance,and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance about whether the auditee has complied with federal statutes,regulations, and the terms and conditions of federal awards applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures described in the OMB Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of Dunn's major programs. For federal programs that are included in the Compliance Supplement, our compliance and internal control procedures will relate to the compliance requirements that the Compliance Supplement identifies as being subject to audit. The purpose of these procedures will be to express an opinion on Dunn's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to the Uniform Guidance. Other Services We will also assist in preparing the financial statements, schedule of expenditures of federal awards, and related notes of Dunn in conformity with accounting principles generally accepted in the United States of America and the Uniform Guidance based on information provided by you. These nonaudit services do not constitute an audit under Government Auditing Standards and such services will not be conducted in accordance with Government Auditing Standards. We will perform the services in accordance with applicable professional standards. The other services are limited to the financial statements, schedule of expenditures of federal awards, and related notes services previously defined. We, in our sole professional judgment,reserve the right to refuse to perform any procedure or take any action that could be construed as assuming management responsibilities. You agree to assume all management responsibilities for the financial statements, schedule of expenditures of federal awards,and related notes,and any other nonaudit services we provide.You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements,the schedule of expenditures of federal awards,and related notes and that you have reviewed and approved the financial statements, the schedule of expenditures of federal awards, and related notes prior to their issuance and have accepted responsibility for them.Further,you agree to oversee the nonaudit services by designating an individual,preferably from senior management,with suitable skill,knowledge,or experience; evaluate the adequacy and results of those services;and accept responsibility for them. Responsibilities of Management for the Financial Statements and Single Audit Our audit will be conducted on the basis that you acknowledge and understand your responsibility for(1)designing, implementing, establishing, and maintaining effective internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error,including internal controls over federal awards, and for evaluating and monitoring ongoing activities to help ensure that appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring that there is reasonable assurance that government programs are administered in compliance with compliance requirements; and (4) ensuring that management and financial information is reliable and properly reported. Management is also responsible for implementing systems designed to achieve compliance with applicable laws,regulations,contracts, and grant agreements. You are also responsible for the selection and application of accounting principles; for the preparation and fair presentation of the financial statements, schedule of expenditures of federal awards, and all accompanying information in conformity with accounting principles generally accepted in the United States of America; and for compliance with applicable laws and regulations (including federal statutes), rules, and the provisions of contracts and grant agreements (including award agreements). Your responsibilities also include identifying significant contractor relationships in which the contractor has responsibility for program compliance and for the accuracy and completeness of that information. You are also responsible for making drafts of financial statements, schedule of expenditures of federal awards,all financial records,and related information available to us and for the accuracy and completeness of that information (including information from outside of the general and subsidiary ledgers). You are also responsible for providing us with(1)access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements,such as records,documentation,identification of all related parties and all related-party relationships and transactions, and other matters; (2) access to personnel, accounts, books, records, supporting documentation, and other information as needed to perform an audit under the Uniform Guidance; (3) additional information that we may request for the purpose of the audit; and (4) unrestricted access to persons within the government from whom we determine it necessary to obtain audit evidence.At the conclusion of our audit,we will require certain written representations from you about the financial statements; schedule of expenditures of federal awards; federal award programs; compliance with laws, regulations, contracts, and grant agreements; and related matters. Your responsibilities include adjusting the financial statements to correct material misstatements and confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate,to the financial statements of each opinion unit taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (1) management, (2) employees who have significant roles in internal control,and(3)others where the fraud could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees,former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the government complies with applicable laws, regulations, contracts, agreements, and grants. You are also responsible for taking timely and appropriate steps to remedy fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements that we report. Additionally, as required by the Uniform Guidance, it is management's responsibility to evaluate and monitor noncompliance with federal statutes, regulations, and the terms and conditions of federal awards; take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings;promptly follow up and take corrective action on reported audit findings; and prepare a summary schedule of prior audit findings and a separate corrective action plan.The summary schedule of prior audit findings should be available for our review by August 1,2026. You are responsible for identifying all federal awards received and understanding and complying with the compliance requirements and for the preparation of the schedule of expenditures of federal awards(including notes and noncash assistance received, and COVID-19-related concepts, such as lost revenues, if applicable) in conformity with the Uniform Guidance.You agree to include our report on the schedule of expenditures of federal awards in any document that contains, and indicates that we have reported on, the schedule of expenditures of federal awards.You also agree to[include the audited financial statements with any presentation of the schedule of expenditures of federal awards that includes our report thereon OR make the audited financial statements readily available to intended users of the schedule of expenditures of federal awards no later than the date the schedule of expenditures of federal awards is issued with our report thereon]. Your responsibilities include acknowledging to us in the written representation letter that(1)you are responsible for presentation of the schedule of expenditures of federal awards in accordance with the Uniform Guidance;(2)you believe the schedule of expenditures of federal awards, including its form and content, is stated fairly in accordance with the Uniform Guidance;(3)the methods of measurement or presentation have not changed from those used in the prior period(or,if they have changed,the reasons for such changes);and(4)you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the schedule of expenditures of federal awards. You are also responsible for the preparation of the other supplementary information,which we have been engaged to report on, in conformity with U.S.generally accepted accounting principles(GAAP). You agree to include our report on the supplementary information in any document that contains,and indicates that we have reported on,the supplementary information.You also agree to[include the audited financial statements with any presentation of the supplementary information that includes our report thereon OR make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon].Your responsibilities include acknowledging to us in the written representation letter that (1)you are responsible for presentation of the supplementary information in accordance with GAAP;(2)you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) the methods of measurement or presentation have not changed from those used in the prior period(or,if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations.Management is also responsible for identifying and providing report copies of previous financial audits,attestation engagements,performance audits,or other studies related to the objectives discussed in the Audit Scope and Objectives section of this letter. This responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits,or studies.You are also responsible for providing management's views on our current findings, conclusions,and recommendations,as well as your planned corrective actions for the report,and for the timing and format for providing that information. Engagement Administration,Fees,and Other We understand that your employees will prepare all cash, accounts receivable, or other confirmations we request and will locate any documents selected by us for testing. At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection Form that summarizes our audit findings. It is management's responsibility to electronically submit the reporting package (including financial statements, schedule of expenditures of federal awards, summary schedule of prior audit findings, auditor's reports, and corrective action plan) along with the Data Collection Form to the federal audit clearinghouse.We will coordinate with you the electronic submission and certification. The Data Collection Form and the reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's reports or nine months after the end of the audit period. We will provide copies of our reports to the Board; however, management is responsible for distribution of the reports and the financial statements.Unless restricted by law or regulation,or containing privileged and confidential information,copies of our reports are to be made available for public inspection. The audit documentation for this engagement is the property of Thompson, Price, Scott,Adams, & Co., P.A. and constitutes confidential information.However,subject to applicable laws and regulations,audit documentation and appropriate individuals will be made available upon request and in a timely manner to Oversight Agencies,a federal agency providing direct or indirect funding,or the U.S.Government Accountability Office for purposes of a quality review of the audit,to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request.If requested,access to such audit documentation will be provided under the supervision of Thompson, Price, Scott,Adams, & Co., P.A. personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others,including other governmental agencies. The audit documentation for this engagement will be retained for a minimum of five years after the report release date or for any additional period requested.If we are aware that a federal awarding agency or auditee is contesting an audit finding,we will contact the party(ies)contesting the audit finding for guidance prior to destroying the audit documentation. Gregory Adams,CPA is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them. We expect to begin our audit on approximately July 1,2026. Our fee for these services is stated in the LGC approved contract. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with our firm policies,work may be suspended if your account becomes 60 days or more overdue and may not be resumed until your account is paid in full.If we elect to terminate our services for nonpayment,our engagement will be deemed to have been completed upon written notification of termination,even if we have not completed our report(s).You will be obligated to compensate us for all time expended and to reimburse us for all out-of- pocket costs through the date of termination. The above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the engagement. If significant additional time is necessary,we will keep you informed of any problems we encounter and our fees will be adjusted accordingly.If more than two additional funds are added to the current fiscal year Trial Balance over prior years Trial Balance,there will be an additional charge of$500 per fund added onto the total price of the audit. Reporting We will issue a written report upon completion of our audit of City of Dunn's financial statements.Our report will be addressed to management and those charged with governance of City of Dunn.Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit.Depending on the nature of these circumstances, it may be necessary for us to modify our opinions, add a separate section, or add an emphasis-of-matter or other-matter paragraph to our auditor's report, or if necessary, withdraw from this engagement.If our opinions are other than unmodified,we will discuss the reasons with you in advance.If,for any reason,we are unable to complete the audit or are unable to form or have not formed opinions,we may decline to express opinions or issue reports,or we may withdraw from this engagement. The Government Auditing Standards report on internal control over financial reporting and on compliance and other matters will state that(1)the purpose of the report is solely to describe the scope of testing of internal control and compliance and the results of that testing,and not to provide an opinion on the effectiveness of the entity's internal control or on compliance,and(2)the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. The Uniform Guidance report on internal control over compliance will state that the purpose of the report on internal control over compliance is solely to describe the scope of testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.Both reports will state that the report is not suitable for any other purpose. We appreciate the opportunity to be of service to Dunn and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter,please sign the attached copy and return it to us. Very truly yours, Thompson,Price, Scott,Adams,&Co.,P.A. RESPONSE: This letter correctly sets forth the understanding of City of Dunn. Management signature: Title: Date: Governance signature: Title: Date: Auditor Signature: Title: Date: CITY OF boo 1887 NORTH CAROLINA PIAet&comoafft4 kg1, Regular Meeting, February 24, 2026 Agenda Item(s): Alley Encroachment Agreement for 203 & 205 E Broad Street Presenter(s): Billy Godwin, Assistant City Manager Responsible Staff: Stephanie Goodrich Action Item: Yes Attachment(s): 1) Encroachment Agreement with Exhibits Background As part of a renovation project, the owners of 203 & 205 E Broad Street are seeking an Encroachment Agreement from the City to construct a fire escape from the second floor of 203 E. Broad Street that would extend down into a non-vehicular City owned alleyway property behind both 203 and 205 E. Broad Street. The fire escape is required by the State Fire Code and would allow for emergency egress from the second floor of 203 E. Broad Street. Budget Impact None Staff Recommendation(s) Approval Suggested Motion(s) Motion to approve Encroachment Agreement as presented. Page 1 of 1 Prepared By and Mail To: P. Tilghman Pope, Esquire Pope Law Group,P.A. Post Office Box 928 Dunn,North Carolina 28335 NORTH CAROLINA HARNETT COUNTY ENCROACHMENT AGREEMENT This Encroachment Agreement ("Agreement") is made and entered into by and between the City of Dunn, North Carolina, a North Carolina Municipal Corporation (hereinafter called the "City") and James D and Betty G West of Coats, North Carolina, owners of 203 and 205 East Broad Street, and its successors,assigns, and grantees (hereinafter called the"Property Owner"). WITNESSETH: WHEREAS,the City owns property in the City of Dunn in Harnett County,North Carolina with Parcel Identification Number (PIN) being 1516-67-7196.000 (hereinafter called "the Alley"); and WHEREAS, the Alley is open to the public, is 12.5-feet wide, and connects the rear of 203 and 205 East Broad Street to a public alley with the same parcel number that runs from E Broad Street to East Edgerton Street in the north; and WHEREAS,the Alley runs between private property with zero setback on both sides; and WHEREAS, the Property Owner owns the property on the south side of the Alley, PIN numbers being 1516-67-6174.000, addressed as 203 East Broad Street, Dunn, NC 28334; 1516-67- 6192.000, addressed as 205 East Broad Street, Dunn,NC 28334, hereinafter called the "Buildings;" and WHEREAS, the Buildings are each two-story brick structures on the parcel without access to the ground from the upper floor; and WHEREAS, the Building requires a fire escape in order to be improved to State Building Code. NOW, THEREFORE, in consideration of the request of the Property Owner to allow encroachment upon the Alley with the fire escape to make possible ingress and egress from the second story of the Building, the City hereby consents to the Approved Encroachment listed below within the legally described area described in Exhibit A of this Agreement, graphically depicted in Exhibit B of this Agreement, and subject to the terms and provisions of this Agreement. TERMS AND PROVISIONS Preambles. The preambles to this Agreement are incorporated herein by reference the same as if fully set forth herein. Approved Encroachment. The Property Owner is hereby allowed to construct and maintain a fire escape encroaching up to six-feet into the Alley legally described in Exhibit A of this Agreement and graphically depicted in Exhibit B of this Agreement (the "Approved Encroachment"). Construction of the fire escape must meet all applicable laws and ordinances, including State Building Codes, Fire Codes, and Local Ordinances. No Other Encroachment Allowed. Except for the Approved Encroachment as defined in this Agreement, The Property Owner shall not create, erect, or construct any other encroachment on, above, or below the surface of the ground on the Alley, or change the grade or elevation of the ground surface of the Alley, or cause or permit any of these to be done by others, without the express prior written authorization of an authorized agent of the City of Dunn, which authorization may be withheld in the sole and absolute discretion of the City. Maintenance. The Property Owner shall be responsible for maintaining the Approved Encroachment in a safe condition at all times, and shall assume and be responsible for all risks, costs, and expenses in any way connected to or arising out of the Approved Encroachment. Removal. The City reserves the right to require the removal of the Approved Encroachment or to remove or cause the Approved Encroachment to be removed if the City determines at any time that removal is in the best interest of the public, including but not limited to, at any time the City determines the Approved Encroachment is not properly maintained, creates a public nuisance or safety hazard, or that the Approved Encroachment impedes the City's general use and maintenance of the Alley, or the Approved Encroachment impedes the installation,restoration, or maintenance of any public improvement. Indemnification. The Property Owner shall indemnify, defend, save, and hold harmless the City, its elected officials, employees, consultants, agents and contractors from all liabilities, losses, costs, damages, expenses, fees (including reasonable attorneys' fees and costs), fines, penalties, claims, demands, causes of action, from the Property Owner's breach of the Agreement or caused by or as a result of the construction, use, maintenance, existence or removal of the Approved Encroachment and Other Encroachments located in the Alley. Recording. This Agreement shall be recorded among the land records of Harnett County, North Carolina. The provisions of this Agreement shall run with subject property and shall be binding upon the Property Owner and their assigns or successors in interest. Notwithstanding the foregoing, no conveyance of the Property Owner's property or any part thereof shall relieve the Property Owner or their assigns or successors of their liability for full performance of this Agreement unless the City expressly so releases the Property Owner in writing. THE CITY OF DUNN By: William P. Elmore, Jr., Mayor ATTEST: Melissa R Matti, City Clerk State of North Carolina County of Harnett The foregoing instrument was acknowledged before me this day of , 2026, by William P. Elmore, Jr. Mayor, as attested to by Melissa R. Matti, City Clerk on behalf of the City of Dunn. Notary Public My Commission Expires: (Seal) (SEAL) James D.West (SEAL) Betty G.West State of North Carolina County of Harnett I,the undersigned Notary Public certify that James D West and Betty G West personally appeared before me this day and acknowledged that they are the owners of 203 and 205 E Broad Street, they signed the foregoing instrument in name on act and deed. WITNESS my hand and notarial seal this day of , 2026. (NOTARIAL SEAL) NOTARY PUBLIC MY COMMISSION EXPIRES: EXHIBIT A Commencing at the intersection of the northern right-of-way of E Broad Street and the eastern right-of-way of N Wilson Avenue, said point being the southwestern most point of ONH Properties LLC as recorded in Deed Book 3069, Page 661, in the Harnett County Register of Deeds; THENCE running with the eastern margin of N Wilson Avenue North 34 degrees 41 minutes 11 seconds East for a distance of 70.00 feet; Thence leaving said right-of-way and running parallel to E Broad Street South 55 degrees 14 minutes 12 seconds East for a distance of 57.50 feet to the point and place of BEGINNING, a common corner between ONH Properties LLC (Deed Book 3069, Page 661), James D. West et ux(Deed Book 2188, Page 262), and an alley established by the Commissioners; THENCE running parallel to N Wilson Avenue North 34 degrees 41 minutes 11 seconds East for a distance of 10.00 feet to a point and common corner with ONH Properties LLC (Deed Book 4096, Page 985) and the alley; THENCE running parallel to E Broad Street South 55 degrees 14 minutes 12 seconds East for a distance of 55.00 feet to a point in the line with ONH Properties LLC and the alley; THENCE cutting across the alley parallel to N Wilson Avenue South 34 degrees 41 minutes 11 seconds West for a distance of 10.00 feet to a point and a common corner between The Stewart Theater LLC (Deed Book 4269, Page 2628), James D. West et ux(Deed Book 2188, Page 262), and the alley; THENCE running parallel to E Broad Street North 55 degrees 14 minutes 12 seconds West for a distance of 55.00 feet to the point and place of BEGINNING. Together with and subject to covenants, easements, and restrictions of record. Said property contains 550 square feet(0.013 acres)more or less. EXHIBIT B: ILLUSTRATION OF APPROVED ENCROACHMENT 4' f^ STATE OF NORTH CAROUNA COUNTY OF HARNETT '' F ,REVIEW OFFICER EW OF HARNETT COUNTY, d may CERTIFY I,CERTIFY THAT THE MAP OR PUT TO WHICH THIS CERTIFICATION IS + AFFIXED MEETS ALL STATUTORY REQUIREMENTS FOR RECORDING. y t R,,,_ ' RENEW OFFICER DATE s y , VICINITY MAP(NTS) State of North Carolina,Wake County Course Bearing Distance E z 4 James W.Mauldin,codify that We map was drown under LI N 34°41'11.E 10.00' Sn Ty171 n my mi...from an whiol surreymac under my mmendemn, L2 S 34°41.11°W 10.00' =N 90 that the,atlo of preembn as adeukmd by kdlades and eNn I o departures is 1/10.000+Heat the baudaries nth(gummed are R. Moen as boa.Ones plot.from...Son m book_Si._, g i O pope IM that ehla map woe prepared m aaoordan.with / G.S.47-30 as amaded. WWpn my hand and seal We_day of 2023. / i IA SIGNATURE / / aua Number L-3247 / N !mv PRELIMINARY PLAT / Av 7�, NOT FOR RECORDATION / l A' , yyY. / /` / OA3'Up , oy y / V �� a,44 o9s Fp�r $l / \\ I.Janes 11..1111.. s�arenead lad zu�ysr. N.W2{].arah m ono r yy \\*.\\,,,,..4,44:24;73:,..e../.„\4.a. wee® / �B'O.4 ,.test es.plea m a a w ay Wet weame a,Welk*at tad eaii M \ / .�O,o,p, , .l�. S1 area of a may r fn..y that hes on wWrao that roper pro.of / S94.7 / I 4 41 O• qe rtD�rues 'nal MY Pal;m.o.1.1 of In°anoree t to on*no Pal parlSon a rapi•.00mly pod*of \mnd \ / / '0Css 4C / 1,yl h;'R!,);f,1J, / _en�(5�, G4 1 �eyy� ®a rhat m,peat N a e w.y a n r.W.,par n pae.Ir w ewd . / \\ / .Ljryro, / 00 .: ry.. d]hat sup ptat h at a wmy a aathn paereaY.r a er reo.nbkratNn \ / 33t„ 1, V C\ at.dine par.a oe.-a...wpe/'r than mom.m.dellnam J\ .That am NamMNn rvf m No.•pw.er Y w.h and I an mums m ` / \ N N // Y 1.�°U,�• / �'J b / , ` ..�•Ni .. m mhos a detennmInform. al m eo mat at oo pnfrWd I ar•m pra°mmw anew n(e1 a.aadi(p ma,. 1 \ ~ Jwrr N.mw+s.na.rwd tad!..gees Ma.laa4] / // \ ,./\ / , ry¢l, / 4- / \\ // (). // ry /........ r'0• .p \\ / eQ7 / cam\ \\ REFERENCES: \\ \ D.8.3069,PG.661 D.B.2188,PG.262 . D.B.4096t PG.985 BOOK'J,PAGE 598 OTHER REFERENCES AS SHOWN NN.. . NOTES: (A.)THE PROPERTY SHOWN HEREON IS SUBJECT TO ALL EASEMENTS OF RECORD AFFECTING SAME. \ (B.)NO TITLE SEARCH HAS BEEN PERFORMED BY THIS FIRM DURING THE COURSE OF THIS SURVEY. (C.)THIS SURVEYOR DOES NOT CERTIFY TO THE EXISTENCE OR NON—EXISTENCE OF ANY UNDER GROUND UTILITIES THAT MAY OR MAY NOT BE PRESENT ON THIS SITE THE SURVEYOR RELIED UPON THE CITY OR COUNTY FOR APPROVAL OF ALL APPUCABLE ORDINANCE AND HAS MADE NO INTERPRETATIONS OF THE ORDINANCES. OWNER: CITY OF DUNN P.O.BOX 1065 DUNN,NC 27335 k.': kon (aabw pad) EASEMENT MAP FOR: GYon StaExisting �t`te Mo ment(Ce neat.d, JAMES D. & BETTY G. WEST .Odstlnq Concrete Yenumm�d(Centrol Point) O Concrete Yon..Seat x Campo.Point ONr AVERASBORO TOWNSHIP, HARNETT COUNTY, NORTH CAROLINA All measurement.shown are horizontal d SCALE 1" = 30' AUGUST 13, 2025 meaAr.a noted. ground MAULDIN —WATKINS SURVEYING, P.A. 2eae, C-1 Flnj:1516-67-7198,000 30 0 30 60 90 P.O.BOX 444/139 N. MAIN ST. 2025565-55 FUOUAY MARINA, NORTH CAROLINA 27526 RECORDED HARNETT COUNTY MAP NUMBER PAGE GRAPHIC SCALE— FEET (919) 552-9326 C-929 JOB#5363 Nw. DOOR SCHEDULE °.`/ : DOOR 3 DOOR SIZE fly••''Y - e0oo REMARKS —.__- ------- I i p NO. MOE HIGH THICK. I ..._. " TAl�`l�-...... -�--1I-� �C71 _J ®' 3'-0• 7-0• 1 3/4" EAST.EXMOOR GUS6 STaNE111oNT DOOR 61111101 PRAM I R1 y'w�..XC 2' ® Y-0• 7'-0• 1 3/4 EXISTING ETODOC11 CLASS STOEHIOIT DOOR MTH IQ FRAME ! / � �+'� ® .7-0" r-r 1 5/6• NE++2[17160R V10OD DOOR PRE NMa.2-I/4"CASING:H.O 6 PA.. ii ® 3'-0" 6'-r 1 5/r NEW INTERIOR MOOD DOOR PRE NUM 2-1/4"CAOM HA 6 PANEL j I 6'-10�" flE5TR00N ® 1-0• C-6• 1 5/r NEW NTORO WOOD DOOR PRE HUN%2-1/4"%ARM H.G 6 PANEL i LP = • S-r Y-o• 13/4" NEW E%1E]OOR METAL 000R 011HMPRAIAE ' .- I I�•-- ® 3'-0" 7-0" I 3/4" NEW EXTERIOR METH.D00R w01 HM FMNE 6/PANIC HARDWARE I 1 r-5i" ® 3'-0. 6'-r 1 5/r taw MINOR WOOD DOOR.PRE HUNG;2-1/4 CASINO;TLC;6 PANEL ® I 6-21' I-I r-1" am 3'-r -r 15/r 1Ew 0110 R WOOD 00101 PRE HUM 2-1/4"CASINO;H.O.6 PANEL ® 3'-0. r-r 1 sir NEW NEM 10R WOOD DOOR:PRI M IR 2-1/4"MS.;ILO 6 PANEL S SR UP---.1PUP---.14'-3 am 3'-0• C-6• I S/r NOV NRMOR WOCO DOOR;PPE HNOO.2-1/4"CA9N01 NOT 6 PANEL I ®�\ '- .. 0m 3'-r r-r 1 5/r mai N1EwoR moo DOOR PINE Hung 2-1/4•CASINO;HA 6 PANEL I 1'w i — t • ® Y-r 6'-6" 1 S/6" NCR N7F]OOR.00 DOOR PRE HUM 2-1/4"CAME N.0 6 PNEL' SALON 1 -L-1G-JIam ® 3-r r-r 15/r NEN TIMOR W000 DOM PRE AUNT;;2-1/4"CA9Na HAT 6 PANEL I I R•n11N0 AREA ® 7r1 .7•-i4• 1 r . ® Y-C r-r 1 3/4• COMPS NIO6M WOOD 0001 w1H 6000 FRAME I , I T T ® r-r r-r 1 3/4" 1-1/2 HOUR RAIm woo PM CLOSURE VWTET TIM AND MES w01 ORM DOME ORDEN. I 6ASH1a STATCN5 - E • r MONDE AIL 11 ROWARE AO rU6ED.ALL HARDWA,REE T T R A0.A 00WIANT, , VFJVI'HA706ARE FW6EE5!6TV1.E5 W11N OMNEII 1EFOIIE MOVING PROVIDE CLOSERS ON ALL INRIDCR DOORS 4 RUMOR DOORS IIy MICHEIETIE • 3....4i. II 14•_1• O LIT/ II12 2CD1 4 WINDOW DOW.SCHEDULE v - b _� , T-'1' i ® ' WINDOW WINDOW SIZE ° ® O REMARKS NO. NOE HIGH,THICK. ° • �� ® Y-6• I., - EILMI0 cow ONE WSg06 Iy •��-S-1_L.... n I -r•-"+ U ® Y-r r " - coma Dome PANE meow 6 -''�`. /////� - -0 • ® - - - A,LRMD GTORErROR GAS __..',._:� .f aim •g _o PROPOSED FLOOR PLAN (FIRST FLOOR) a a - ." SCALE:1/4" 1'-0"R E SPa OW N ER N NNEO E >NOTES: � 1.waM W/EMITaWnLL-Mc rof20 SN0:.METAL STUDS•1r o.c •B0 o . 2WMBTHEHE -OCEDOOWMa0. roAN M cNL7WC1OR HAVE PUN[CIMIN% _4 Y-16,�" CC • KEY NOTES: °POLL WALL-MAMTAN 2 HOUR RARN0.SEE GL DETAL OI 9EET PIE-1 — I I I OdJ I 2_i�• ®r-C•NOE%LIED mow I I 4'-1" ® AHD ROOT al OOM FOR wain..1101MICE ACCESS TN.1'.DOOR 70 ROOM LODOO. - °.....DOOR'01FII ow Errr GR.Y 0 I STORAGE ..., REVISIONS 10'-2a" YASSAOE.BOON/I I I 6-1•asps. �1 I+ -1— N0. • �- \ I I -1 -coma MOUSER °._7i" —RESIROOA 1-1/i•GW • 13•-1.1" __..I.... IO-2L• I 4.-G• I. I 7nlFli ill 3/4'H.W. I I I I I G-6" FM-Ott WARNS !' g.. (. .SS MUM 26'-10• E'-5•I —SRP I I-}—GTFPI OP - •• I, ® 13•-°i• —1 I_ ',-7�• I 4.-'• I I 9.-5" STORAGE III +0'• te II- PIM ODw/CAM,o I 11 ( �' a WALL— CONCEAL H1O M,EA rr j I..-. r-9 a• r—I0' 1 l Hi F. 10•-2"1I 1/X16E uASSACA I I 6•-24" �. .Fj I ROOM n Roou p I y_y ED.� t © I - _ rn CEILING FUR -DOWN DETAIL i.,. ° ° ® �'� �. P/ 4 PROPOSED FLOOR PLAN (SECOND FLOOR) +Wn - INSTALL Dom AT TOP O•amps LEM OT 10t4t MO AS SON SCALE: 1/4"=1•-0" WEY WRR Iw.Emrr.Alm MS.aaRY19 PRISOw MAW DC TOMMY Or RE EXI EErn rmo.a1 arum THE OR..011 MGM olar r1u RE EN1rOI • • - ©Espy wart .-•• DATE 12-8-21 , DRAWN BY BAM JOB NO. 21-52 SHEET NO. F-1 OF 3 ,s .•���'�ykf'a EQUIPMENT LIST I1f^/ m watt mom Num mon HARM PROCESSOR y,. Q HANWAWWN SIMON -.._........... I I C q J. m STYHST!TARO/ - -- I 1Lj ,-.'.-.1-� -.. I I FfkitlF.�'f`` m ICl•JTQRSf DESK - m_- I�m m L 1® m /I�`(� '' ,y Y'� L m IDORW lII�JJJJJJ «l---I�� m ODRO MOIR RESI IGGM m WADING M.ORNE aiim REFRIOa MASSAGATAR TAKE . ..... \ /I . • (' •}'Mi1RNG ARCH m twr —1 L�f• t; CY m WRC/JNOW�" m RLTRIG. • • _— D) 11 pamAile� _ 11 a § a 8 1-1 4-1:,,,•::71-, — 1 ' IN it. < cc ////A PROPOSED EQUIPMENT (FIRST FLOOR) --j\- Pui.o SCALE: 1/4'-1'-0" < cal . z i . • • • —_...._. • V REVISIONS . I No. MASSAGE ROOM fi f_ I I AHD ROOM STORAGE I.„___ . • .....=r �COS1NG SKYLIGHT RFSMOOM 3 __ I �l . I I i I STORAGE a., - . . .-=.._.- II ' t-V �._ a)b5 1 1 GE ROOM nEl pm BOOMls ,N..,IMAMS...mw- !./77/ ///,' W ZZ/Z/Z7 mos mom.Mu.me NmR 4.ME RS IRGp ROM.....11T1 Of Mt scWu..aa OR ROPUtAK PROPOSED EQUIPMENT (SECOND FLOOR) ©mar moI. ' ' - SCALE 1/4"m 1.-0" DATE 12-8-21 • DRAWN BY BAM JOB NO. 21-52 '•• SHOOT NO. • F-3 OF 3 - ""Nnn 09 )E ',NKO O CORNER 40171,,�,.��11;; NOTES-LIVAL FABRICATION / •. ITCODES AND STN/410S MSC•PEOFICARMII FOR SC OEM,FABRICATIE.AND '� YL.0 'li\ ERECT.Of STRUCTURAL STEEL TOR MIILDINOI:ASS'STRUCTURAL SEEDING COOM 12• 17Y1�A COWPLY WM APPU:ABIE PROHSDNS UNLESS OTIEAWSE NOICAT[D, 1•%I.X VIVO Y O.C. PLATFORM 1/{'CHECK PUTS 2)SIOP P"r"S:SNOR COWPEEIE D[TAILS AID BISTRUCTLXIS FOI1 F re.A.T 10N PI OTMY.AND NURNISH TEMPLATES SI R BOLT BOLT!A1101.D Fq1 FgTAlU1NN .- W OMFR VT,FURNISH 1EWPLAlES FOR DOLT 1RTALU1fON. •.T BII J)WS[1115 AHD ANCHORAGES:NRNIlN NlD1T9 AND ANCHORNO DENat TO B[[VLi 1'%1•ST.- . NT0 O1 11 TOSS 119T • .r.=OF YIICONEOU9 SETAE IT[1A3I COCIAMATE S•_B. NO7G FELO VERIFY H[DNT BEFORE =VERY TO JOS STE TO MOO DEUY. 9_E. FABRICATION. {SIE0.PLATES,91ME14 BARk AS1W A JS. ' ell! I . G33 CCLO-fORWEO!IEEE 1lAW1N ASM A 600,611AD[B. NOTE ADJUST HDaHT AND NUN m WATCH • B)STEEL PIPE.AS1N A BJ,TYPE E OR S.GRADE B. ` .-•--. ACTUAL DOOR IEIGNT AND FINAL 7 SIIIUCTUNAL COLD-ROl.EE7 STEEL SHEETIR ASTN A 670, t3•RAIL HEIGHT 1//•61[EL PULE 1R[A03(E •BOLT 10 GRAO[A9 D[i[C1ID BY 01'M[I1. . B CONCR[lE INSE11T4 UALLFARE IRWI(ASTW A 47)OR CASE STE11(AS1Y A 27) JS•HANDRAIL HEIGHT 11 SAE%N'LONC(1/Y NOS[D 1111111101;11111141.1 MALL UyNRMO -. WBERTIL WM STEEL BOLTS,MASK.MDDUNS;NOT DM MU/AM7[0.B)]NW PAWT:FS TT-P-BB.117E 1,fIR,SlPC-0AWT 1{.AIKY TD0.FANFn ANO 1/2X B•LADS OEOREA9F0 STEEL 9.IIIFAGES AT RATE TO PM1OHOE A 2.0-1R1.BRY iLY RSLTIIESS. • ' ");(.1 CATION,GENERAL•USE Y rAr.4 S12E AND 7I4%,"?1 910831 011,Y MOT• 910WL R REIXREO SZE,g1ADE AND TMOWElS TO PRCOUCFlRIMOMAND .•r }}ppEE• DURABWIY N FNIMED PRODUCT.S10P-PAINT ALL I1EMS NOT SPEW.M BE 1/2•L1/2'•AR•B'O.C. 2 X tOB .'/"�rCDLI1WI 0:VANZm AFTER FABRICATION. 11110k 12'-0•(WA%) RUSN. 12• Y)FURY E%POBED Cg11JECDON!W711 HA1RU E.FLUSH J011111 USE CONCEALED FASiFNE115 WERE POSSIBLE. 11)RdNbl IIAROW g falt PTSIW fABRMAIED BOLT!.PUTES,MLCM0113,IUIIKR9, '2 I,I 111 OOWO.S,AND OILIER NISCELLANEOUI STE6 AND t10N!HURLS Iql fRAlJ1A AND SUPP TA•DUD NICHORNO YMODW011N. I 12)EMICr BEARWG PUTTS:PROWOE F011 O RIC MR BEARWD LT MASONRY BR LI 1,„..,4):,..., - yA COINJIC7[,A!BNOW1.DRILL PLAT[!TO flEmVE ANG TOR BOLTS, �i�UryI`{Tp(p'�p CIXARkI TJ))L005[STEEL LINTELS:FABRCATE TO ALES SHORN A9 APPLICABLE. • {)AND NOTIEW9 INCLUDE,MTH MA CRMAL ST PROVAE AS R.FABRICATE RI TO COMPLETE WORN _- � _yq yy,},}UW_Sry,yT - CONSTRTRUCTIA1 N AS URGE IN1SI AS POSSS..DRILL MID TAP AS AEOURED TO 0j.•1 2119EIRC�•,"� •'y.5f r--------`(11st .x— �B%+�✓Z1E27L1FTJ:� 1' 1'UN. EN 13)NM OTHER DWARF A SIMILAR 11E111.EWCLUOE IDGLARED ANCHORS FCR IMMO '., 1}�^ 1 11'I _2• -10' I'-B t._7. 11_B t._7. '1 {.-[• �_ L'RI/2•WA%. V J .. 13)PROVI AN0.CS D KBESIT RECEIVE STOW!FOR T.SPACED TO SUPPORT T fN 11.F. I^I. TT"" ---"'777--- I ^J PROMO[SLOTTED MOLES TO RECf1YE ANCNW SOLT[SPACED NOT YWE MAN S'FROM 2{'-2' ENDS AND 2{'0.C. 1 8. Q 17)ENOS DUPE 4.0C.S:FABRICATE TO gWFMBIQI[SIIOMI,WM lJOOM BENDS A1A 2-I{BURS,6 LOCAe0N5 . WOMD JOINTS USWO 1-IR SIIEL g4.UI TI OMERW]E S/0W1..11LI POSTS AND RAIL ENDS TO BUILDING CONSTRUCT.AS RAICATED, 7•MATL•r--_.-- 13)NSTAIURONt PERFORM CUTTNO pULL11a AND fITRNG flE01111ED FOI SECTION Fir O WETALLAROW SET EZIT OtgA ELY N LOCATIMT,AUDNWN{T ND YFVADOH, N[ASUR[D FR04 E9TAMJl11ED lMF!ND LEVELS PROVBE ANCHORAG[0[NCLf AND FASmER9 WHERE NECESSARY F011 INSTALLATION TO OMER 1DRc SCALE: 1/4° = 1'-0" 0 SET LOOSE HTO{S q{CLEtd.1 BEARWO tro i,WWO 17 Ce OTHER AOJU97WEITTS AS RLWIREO. 6IX10LY PACX WEN SPADE!WM BlDOIHO ENOUGH,WATER FOR CF,PINT PDNTLMA CDAENT TO J PM73 SNA AND ONLYp LLI WIDTH WATER FOR PAWNG ANO NYOMIAN{OR USE COYYEROM NON-SHRINK RISER D ETAI L TOUCH MARSHAL b)TOUCH-UP SHOP PANT OWAFTERA 11lTALLA7101T.CLEAN FIELD TIRO!,SCUM CpRECIIV ANC ABRADED AREAS,'ANO APPLY SURE TYPE PAINT A6 LED M SCALE: 1" = 1.-0" •; (N.) 5l1W,USE CALVARLNO REPAIR PNNT ON DAWAGEO GALVAMtI'D SURFACES. B•WAIL Z . .DOOR FILLY WEN 1-I,{NIL • C 121S - " _ • :soIooaIahIIn :ifr I..., �I.I I/7 ABR1G QI.VEPIfY NEDIIT BEFORE 1 4-[• •. �[(A. REVISIONS PUTFORW NO. 'DESIGN LOAM. WOTx CONCENTRATED LOAD•QTREAD.300/ L. UNWORN Lit.100 P.S.P. • �- IRE OF STAIRS SCALE: 1/4" = 1!-0" NIS, I b i HAND RAIL DETAIL =icy SCALE: 1/2" = 1'-0" ' J'%J•LI/{•PLATE Q( 0) • 0 *N b 1 1/2'ROD COWr Tifl o B•x1/2•AA ec111(t PER 2A•E) --I f--10" 1 �'CI rn (1) • B _L ik.... 10" r.,, T . �s�'r — 3N_' f {•IAN, 2p SAR 1/2" PLATE TM MOM,Me 1.1"1- ' S'-0•- InR,N Nmse RD MR. BASE PLATE DETAIL 'RD[MOM R1.[.�RAN•• 1mR1 MM. 00011N NOM WARM.0 1E x COLUMN BRACING DETAIL SCALE: 1/4" = 1'-0" TM Olt,And SCALE: 1/2" = 1'-0" MUM Of INC DANA ®C0P110414T • DATE 12-8-21- ORAWN BY BAM JOB No, 21-52 SHEET • NO. - F-2 OF 3 CITY OF DuNN1887 NORTH CAROLINA Gtlhet&ceptfrfracit4 legiits/ Regular Meeting, February 24, 2026 Agenda Item(s): Extension of On-Call Services Agreements with Davis-Martin-Powell & Associates, Inc. and WithersRavenel Presenter(s): Billy Godwin, Assistant City Manager Responsible Staff: Alexander Abling, Special Projects Manager Action Item: Yes Attachment(s): 1) Amendment to On-Call Services Agreement— DMP 2) Master Agreement for On-Call Professional Svc. —DMP—3/21/23 3) Term Extension Amendment (WithersRavenel) 4) Master Agreement for On-Call Professional Svc. —WithersRavenel 3-15-2023 Background On March 14th, 2023, City Council approved the authorization of nine (9) Master Services agreements for on-call professional services with engineers, surveyors, and other firms that offered professional services. These agreements were set for a period of three (3) years with two (2) years of extensions. Of these nine (9) agreements, there are two (2) in active use for ongoing projects with Davis-Martin-Powell & WithersRavenel. Recently, both firms have provided two-year extensions to these agreements extending these agreements until 3/21/2028. Budget Impact None Staff Recommendation(s) Approval of both extension agreements and let the other seven (7) expire. Issue Request for Qualifications for Professional Services in March and collect qualifications from professional services firms to develop another batch of on-call agreements. Suggested Motion(s) Motion to authorize the City Manager to execute extensions to the on-call agreements with Davis-Martin-Powell &WithersRavenel. Page 1 of 1 AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT FOR ON-CALL SERVICES BETWEEN THE CITY OF DUNN AND DAVIS-MARTIN-POWELL&ASSOCIATES, INC. The ON CALL SERVICES AGREEMENT signed by the parties on the 21st day of March, 2023, is hereby AMENDED as follows: The City exercises the option in accordance with Section 3, Duration of Contract to extend the Agreement for one additional year. This Amendment also serves as a Notice of Renewal Letter extending the Professional Services Agreement for On-Call Services to March, 21, 2027. It is expressly agreed by the parties that this Amendment is supplemental to the Agreement of March 21, 2023, which is made a part by reference, and all terms, conditions, and provisions of the original contract, unless specifically modified, are to apply and are made a part of this Amendment as though expressly rewritten, incorporated, and included herein. In the event of any conflict, inconsistency, or incongruity between the provisions of the amended Agreement and any of the provisions of the original Agreement, the provisions of the amended Agreement shall in all respects govern and control. In witness whereof the parties hereto have executed this Amendment, this the 25th day of February, 2026. DAVIS-MARTIN-POWELL&ASSOCIATES, INC. By: Michael L. Slusher, PE Title: President Attest: John W. Willis, Secretary CITY OF DUNN By: Justin Hembree Title: City Manager Attest: Melissa Matti, City Clerk STATE OF NORTH CAROLINA Contract Identification # COUNTY OF HARNETT MASTER AGREEMENT FOR ON-CALL PROFESSIONAL SERVICES THIS MASTER AGREEMENT FOR ON-CALL PROFESSIONAL SERVICES ("Agreement") is entered into this the 21st day of March , 23, by and between, Davis Martin • Powell & Associates, Inc; a North Carolina Corporation with its principal business offices located at 6415 Old Plank Road High Point, NC "Professional"),(the Professional„), and the City of Dunn, a municipal corporation of the State of North Carolina, (the"City"). City and Professional may collectively be referred to as "Parties"hereinafter. WITNESSETH: WHEREAS, the City of Dunn is engaged in activities and services which from time to time require a wide range of professional services including, but not limited to: design, preparation of feasibility studies,preliminary reports, grant writing, land use planning, cost estimating, building architecture, landscape architecture, geotechnical investigations, construction materials testing, facility systems engineering, mechanical, electrical,plumbing, structural design and analysis, geomatics surveying/mapping, construction management services inspection, testing, disaster response monitoring and record keeping,permitting, information technology support, and other related professional services; and WHEREAS, pursuant to N.C.G.S. 143-64.31, it is the public policy of the State of North Carolina that municipalities announce all requirements for architectural, engineering, and surveying services, and select forms qualified on the basis of demonstrated competence and qualifications, and negotiate contracts for services at a fair and reasonable fee with the best qualified firm; and WHEREAS, Professional provides certain of the professional services of the nature required by the City and employs trained and experienced technical personnel possessing adequate knowledge, skills, and experience to provide such professional services to the City; and WHEREAS,pursuant to N.C.G.S. 143-64.31 the City announced to various competing firms its need for on-call professional services of the nature described in this Agreement through a"Request for Letters of Interest and Statements of Qualifications for On-Call Professional Services"dated December 30. 2022, and the Professional provided a submittal, dated February 3. 2023, and is willing to serve as one of the City's professionals in one or more of the following areas: 1. Preliminary engineering studies &reports. 2. Grant writing, applications,and administration. 3. Design including field surveys,plan and specification preparation. Page 1 of 8 02/13/23 4. Permitting. 5. Construction services including bidding, contract administration and observation. 6. Asset and records management(GIS, web hosting, etc.). 7. Environmental engineering. 8. Sanitary sewer evaluation surveys. 9. Land surveying& geomatics. 10. Transportation. 11. Land Development and Planning. 12. Water Resources Planning. 13. Financial Analysis and Rate Studies. 14. ADA Transitioning. 15. Pavement Condition Surveys. Davis • Martin • Powell & Associates, Inc. (FIRM) is on an on-call basis for each project/task order authorized under this Agreement; and WHEREAS,the Parties contemplate that the services of the Professional will be performed in various stages in accordance with Task Orders submitted by the Professional followed by separate authorizations to be issued by the City, and the Parties desire to set forth the basic terms of their agreement in this Agreement rather than in the separate authorizations issued by the City; and WHEREAS,the Parties agree that this Agreement is non-exclusive and does not require or commit the Professional to being available to perform services until a Task Order is submitted, and does not preclude the City from hiring other vendors or professionals to perform the same or similar work. NOW,THEREFORE, in consideration of the foregoing recitals, and the premises and mutual covenants herein contained, the receipt and adequacy of which is hereby acknowledged, the Parties,intending to be legally bound hereto, do contract and agree as follows: 1. REQUEST FOR TASK ORDER.Professional is qualified and able to provide one or more of the following specific categories of on-call services for the City: • Preliminary engineering studies&reports • Grant writing, applications, and administration • Design including field surveys,plan and specification preparation • Permitting • Construction services including bidding, contract administration and observation • Asset and records management(GIS, web hosting, etc.) • Environmental engineering Page 2 of 8 02/13/23 • Sanitary sewer evaluation surveys • Land surveying&geomatics • Transportation • Land Development and Planning • Water Resources Planning • Financial Analysis and Rate Studies • ADA Transitioning • Pavement Condition Surveys As the need for professional services contemplated by this Agreement arise,the City will request a Task Order for said services from Professional which shall describe the scope of work, specifications, estimated schedule and the City's requirements. If the Professional employs the qualified personnel that meet the City's requirements to perform the requested services, Professional may submit to the City within the time specified a written Task Order describing the professional services to be provided. The Task Order shall set forth in general terms the Professional's recommendations to carry out the work.Professional shall list the background and experience of Professional's personnel to be assigned to the project as requested by City. The Task Order shall contain a project scope, schedule, and fee schedule setting forth the fees for the scope of services of the various categories of personnel to be assigned to the project. 2. ACCEPTANCE OF TASK ORDER. The City and the Professional contemplate certain discussions, negotiations and possible changes to the Task Order submitted by the Professional. Upon a meeting of the minds, Professional shall submit the final Task Order which shall set forth the agreement of the Parties; in the event of a conflict between the terms of the Task Order and this Agreement,this Agreement shall control unless the Task Order specifically notes the agreement of the parties that the conflicting term therein controls. If said Task Order is acceptable, the City shall accept the same in writing by a duly authorized officer or agent of the City. The City and the Professional agree that such written acceptance may be provided by electronic mail. Professional's fee schedule shall remain in effect during the term of this Agreement, unless modified by the Parties in writing. The Professional is entitled to request an annual review of the firm's fee schedule by the City. Acceptance of an annual fee schedule increase will be subject to approval by the City. The City shall provide Professional with a specific Authorization to Proceed for each Task Order accepted by the City. 3. DURATION OF CONTRACT. This Agreement shall be for an initial period of three(3) years,with the option of two (2) one (I)year extensions. Professional shall continence and complete the work required by a Task Order as expeditiously as is in keeping with the applicable standard of care and will, consistent therewith, endeavor to continence and complete the work in accordance with the dates provided in the Task Order(s)as agreed upon by the Parties. Professional shall immediately notify the City of any event or circumstance that may, immediately or in the future, impede the proper and timely execution of any work so that remedial action may be taken. Professional shall not begin any work pursuant to this Agreement Page 3 of 8 02/13/23 or a Task Order until written confirmation has been provided by the City. If Professional has not commenced or completed the work or a schedule to commensurate with the applicable standard of care, the City may declare such delay a material breach of contract and may pursue all available legal and equitable remedies. There shall be a presumption that the Professional can complete the work specified in the Task Order within the time specified therein, using the applicable standard of care,unless the Professional shall notify the City, in writing why additional time is required to complete the work using the applicable standard of care. Any changes to the schedule(s)provided in the Task Order must be agreed to in writing by the City and the Professional. 4. PAYMENT OF SERVICES. Professional shall submit to the City monthly invoices for the services performed during that month, calculated based on the approved Task Order.The City has the right to require the Professional to produce for inspection all of Professional's records related to the Task Order, billing rates of personnel,and charges for direct expenses for which cost-plus compensation is provided to verify the accuracy of all invoices. The City shall pay Professional's invoices within thirty(30) days of receipt unless a bona fide dispute exists between the City and Professional concerning the accuracy of said invoice or the services covered thereby, in which event the City shall pay any undisputed amounts within thirty(30) days of receipt of said invoice. Adjustments to an invoice for billing errors may extend the time for payment. 5. PROFESSIONAL STANDARDS AND DUTIES OF PROFESSIONAL. Professional shall be held to the same standard and shall exercise the same degree of care, skill, and judgment in the performance of services for the City as is ordinarily provided by a similar professional under the same or similar circumstances under the laws of the State of North Carolina. 6. CONSULTANT AS CONSTRUCTION ADMINISTRATOR. In the event the City contracts with the Professional to provide construction observation services the Professional shall be responsible for determining that the construction observed by the Professional is in general conformity with the quality level specified and in accordance with the plans and specifications. City agrees that such observation of construction work or documents by Professional shall not relieve any contractor from liability in regard to its duty to comply with the standards for the Project, shall not give rise to a claim against Professional for a contractor's failure to comply with the applicable plans, specifications or standards, and that Professional is not responsible for the means, methods, sequencing, safety, or other operations of any contractor. 7. TIME AND COST ESTIMATES. Professional's cost estimates and time estimates for construction, if required as part of a Task Order, shall be made on the basis of current labor and material prices and the Professional's experience and qualifications. Professional's estimates shall represent its judgment as an experienced and qualified professional familiar with water and sewer utility projects, or other projects for which Professional is employed under the terms of this Agreement. Although Professional has no control over the resources provided by construction contractors to meet contract schedules, Professional's estimates or forecast of schedules shall be made on the basis of its experience and qualifications and shall represent Professional's judgment as an experienced and qualified professional familiar with water and sewer utility projects or other projects for which Professional is employed under the terms of this Page 4 of 8 02/13/23 Agreement, but the Professional cannot and does not guarantee the proposals, bids or actual costs or schedules will not vary significantly from opinions of probable costs or time prepared by it. If at any time the City wishes greater assurances as to the amount of any costs,they shall employ an independent cost estimator, scheduling consultant, or other third party to make such determination. 8. INDEMNIFICATION. To the extent permitted by law, the Professional agrees to defend, pay on behalf of, indemnify and hold-harmless the City, its elected and appointed officials, and employees against any and all claims, demands, suits or losses,including all costs connected therewith, for any damages which may be recovered against or from the City, its elected or appointed officials, or employees by reason of personal injury, including bodily injury or death and/or property damage, including loss of use thereof, resulting from the sole actual negligence of the Professional. 9. APPLICABILITY OF LAWS AND REGULATIONS. Consistent with the applicable standard of care,the Professional shall adhere to all applicable laws, ordinances,and regulations of the United States, the State of North Carolina, the County of Harnett, and the City of Dunn, in the performance of the services required by a Task Order. The Parties agree that this Agreement shall be governed and construed in accordance with the laws of the State of North Carolina and all disputes hereunder shall be resolved in accordance with the laws of the State of North Carolina with jurisdiction and venue in the state courts of Harnett County and all parties hereby consent to the jurisdiction and venue of such courts. 10. E-VERIFY COMPLIANCE. The Professional shall comply with the requirements of Article 2 of Chapter 64 of the North Carolina General Statutes (E-Verify). Professional shall require all of the Professional's subcontractors to comply with the requirements of Article 2 of Chapter 64 of the North Carolina General Statutes(E-Verify). 11. QUALITY AND WORKMANSHIP. All work performed pursuant to a Task Order shall be performed by the Professional consistent with the applicable standard of care. The "applicable standard of care" shall be the same degree of care, skill and judgment in the performance of services for the City as is ordinarily provide by similar professionals under the same or similar circumstances at the time in North Carolina. Professional shall provide services in accordance with applicable federal, state and local law and in accordance with applicable governing agency regulations. 12. INSURANCE. The Professional shall maintain valid general liability insurance in the minimum amount of$1,000,000, commercial automobile liability insurance in the minimum amount of$1,000,000, and provide certificates of such insurance naming the City of Dunn as an additional insured by endorsement to the policies. If the policy has a blanket additional insured provision,the Professional's insurance shall be primary and non-contributory to other insurance. Additionally, the Professional shall maintain and show proof of workers' compensation and employer's liability insurance in the minimum amount of$1,000,000; and shall show proof of professional liability coverage in a minimum aggregate amount of $2,000,000. The Professional shall provide notice of cancellation,non-renewal or material change in coverage to the City within ten(10) days of their receipt of notice from the insurance Page 5 of 8 02/13/23 company. All required certificates of insurance, endorsements, and blanket additional insured policy provisions are attached and considered part of this document. Notwithstanding the foregoing, neither the requirement of Professional to have sufficient insurance nor the requirement that the City is named as an additional insured, shall constitute waiver of the City's governmental immunity in any respect, under North Carolina law. 13. DEFAULT. In the event of substantial failure by Professional to perform in accordance with the terms of this Agreement, the City shall have the right to terminate Professional upon seven (7) days written notice in which event Professional shall have neither the obligation nor the right to perform further services under this Agreement. 14. TERMINATION FOR CONVENIENCE. The City shall have the right to terminate this Agreement for the City's convenience upon thirty (30) days written notice to Professional. Professional shall terminate performance of services on a schedule acceptable to the City, provided that in no event shall Professional be required to perform services after the effective date of termination. In the event of termination for convenience, the City shall pay Professional for all services performed in accordance with the terms of this Agreement and each Task Order prior to the effective date of termination. 15. NOTICE.Any formal notice, demand, or request required by or made in connection with this Agreement shall be deemed properly made if delivered in writing or deposited in the United States mail,postage prepaid, to the address specified below. TO PROFESSIONAL: Davis • Martin • Powell & Associates, Inc. 6415 Old Plank Road High Point, NC 27265 mslusher@dmp-inc.com TO CITY: Steven Neuschafer, City Manager City of Dunn PO Box 1065 Dunn,NC 28335 seuschafer a,dunn-nc.org WITH A COPY TO: P. Tilghman Pope Pope Law Group, P.A. Post Office Box 928 Dunn.North Carolina 28335 tilghman(a,plgpa.com 16. DELAY BEYOND THE CONTROL OF THE PARTIES.Neither Professional nor City shall be in default of the provisions of this Agreement for delays in performance due to forces beyond the control of the parties. "Forces beyond the control of the parties"shall mean, but is not limited to, delay caused by fire, acts of God, flood, earthquakes, storms,lightning,epidemic, war,riot, and/or civil disobedience. 17. NONWAIVER FOR BREACH. No breach or non-performance of any term of this Agreement shall be deemed to be waived by either party unless said breach or non-performance Page 6 of 8 02/13/23 is waived in writing and signed by the parties.No waiver of any breach or non-performance under this Agreement shall be deemed to constitute a waiver of any subsequent breach or non- performance and for any such breach or non-performance each party shall he relegated to such remedies as provided by law. 18. CONSTRUCTION. Should any portion of this Agreement require judicial interpretation, it is agreed that the Court or Tribunal construing the same shall not apply a presumption that the terns hereof shall be more strictly construed against any one party by reason of the rule of construction that a document is to be more strictly construed against the party who prepared the documents. .19. NO REPRESENTATIONS. The parties hereby warrant that no representations about the nature or extent of any claims, demands, damages, or rights that they have, or may have, against one another have been made to them, or to anyone acting on their behalf, to induce them to execute this Agreement, and they rely on no such representations;that they have fully read and understood this Agreement before signing their names; and that they act voluntarily and with full advice of counsel. 20. SEVERABILITY. In the event for any reason that any provision or portion of this Agreement shall be found to be void or invalid, then such provision or portion shall be deemed to be severable from the remaining provisions or portions of this Agreement, and it shall not affect the validity of the remaining portions,which portions shall be given full effect as if the void or invalid provision or portion had not been included herein. 21. COUNTERPARTS. This Agreement may be executed in two (2)or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. 22. MODIFICATION. This Agreement contains the full understanding of the parties. Any modifications or addendums to this Agreement must be in writing and executed with the same formality as this Agreement. 23. BINDING EFFECT. The terms of this Agreement shall be binding upon the parties'heirs, successors, and assigns. 24. ASSIGNMENT. Professional shall not assign, sublet, or transfer any rights under or interest in (including, but without limitation, monies that may become due or monies that are due)this Agreement without the written consent of the City, which may be withheld in the sole and absolute discretion of the City. Nothing contained in this paragraph shall prevent Professional from employing such independent consultants, associates, and sub-contractors as it may deem appropriate to assist Professional in the performance of services rendered. 25. INDEPENDENT CONTRACTOR. Professional is an independent contractor and shall undertake performance of the services pursuant to the terms of this Agreement as an independent contractor. Professional shall be wholly responsible for the methods,means and techniques of performance. Professional's work does not include any supervision or direction of the work of any other person or entity or their employees or agents (except to the extent such person or Page 7 of 8 02/13/23 entity was actually retained by Professional), and Professional's presence shall in no way create any liability on behalf of Professional for failure of others,their employees or agents to properly or correctly perform their work. 26. NON-APPROPRIATION.Notwithstanding any other provisions of this Agreement,the parties agree that payments due hereunder from the City are from appropriations and monies from the City Council and/or other governmental entities,by and through the City. In the event sufficient appropriations or monies are not made available to the City to pay the terms of this Agreement for any fiscal year,the City may terminate this Agreement immediately without further obligation of the City except with respect to payment of Professional for work performed through the date of termination. 27. IRAN DIVESTMENT ACT N.C.G.S. 147-86.60 prohibits the State of North Carolina, a North Carolina local government,or any other political subdivision of the State of North Carolina from contracting with any entity that is listed on the Final Divestment List created by the North Carolina State Treasurer pursuant to N.C.G.S. 147-86.58.N.C.G.S. 147-86.59 further requires that contractors with the State, a North Carolina local government, or any other political subdivision of the State of North Carolina must not utilize any subcontractor found on the State Treasurer's Final Divestment List.As of the date of execution of this Agreement the Professional hereby certifies that the Professional is not listed on the Final Divestment List created by the North Carolina State Treasurer and that the Professional will not utilize any subcontractors found on the Final Divestment List. In witness thereof,the contracting parties,by their authorized agents, affix their signatures and seals this 21stday of March ,20 23, Professional City Davis • Martin • Powell & Associates, Inc. Name: Name of Professional (type orgl- tl,,,,,,, Steven Neuschafer,City Manager By: .. i(rature) :=�. c,OKP 0 f xii. • o; �,�-��{ p�,frcr '�, President : ockpOR,4r '. Title: ' 1965 r = 'yam cif Thy C AR / r (�� l•L �m� Davis • Martin • Powe ,&JAss ciat[g§ ,,,\Ync. Sl~ Company: ,,•� • �ji' . • ��TH C P?, Atte 4 tt t: it' Mb 4111 A A (Secretary;if a orporatiTin Tam y William ity Clerk Page 8 of 8 02/13/23 This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. Cary c llan, City Finance Director Page 9 of 8 02/13/23 CI WithersRavenel 10 Our People.Your Success. February 20,2026 Justin Hembree,City Manager City of Dunn 401 East Broad Street Dunn, NC 28334 RE: Agreement for Professional Services-Term Extension Amendment City of Dunn Master On-Call Dunn, North Carolina WR Project No.23-0017 Dear Mr. Hembree, We appreciate working with you through our On-Call Agreement signed March 15,2023,effective for three (3) years. As per the terms of the on-call, the Agreement could be extended for two (2) additional one (1) year extensions.WithersRavenel is pleased to submit said Amendment to our Agreement to extend the on- call for one(1)additional year for your approval.We look forward to continuing our collaboration with you on future projects. If you have any questions or concerns about this Amendment, please do not hesitate to call me at the number listed below. Sincerely, WithersRavenel el.07 0-0i)te/L . Clark Maness, PE Director of Utilities, Raleigh Cmaness@withersravenel.com Ph. 919.469.3340 I Direct.919.535.5213 167 E.Chatham Street,Suite 2101 Cary, NC 27511 t:919.469.3340 1 f:919.467.6008 I www.withersravenel.com I License No. F-1479 Asheville I Cary I Charlotte' Greensboro I Pittsboro I Powells Point'Raleigh I Southern Pines I Wilmington 01/ WithersRavenel ,/ Our People.Your Success. Original Agreement Term: March 15,2023-March 15, 2026 Amendment Agreement Term: March 15,2026- March 15,2027 OFFERED BY: ACCEPTED BY: WITHERSRAVENEL CITY OF DUNN Digitally signed by eierjk Clark Maness �ll�' Date:2026.02.20 06:09:28-05'00' Signature Signature Clark Maness, PE Name Name Director of Utilities, Raleigh Title Title Signature Name Title PREAUDIT STATEMENT:This instrument has been preaudited in the manner required by the Local Government Budget and Fiscal Control Act(NC G.S. 159-28(a)). Signature of Finance Officer: Printed Name: Date: City of Dunn Master On-Call WR Project No. 23-0017 February 20,2026 Page 12 STATE OF NORTH CAROLINA Contract Identification # COUNTY OF HARNETT MASTER AGREEMENT FOR ON-CALL PROFESSIONAL SERVICES THIS MASTER AGREEMENT FOR ON-CALL PROFESSIONAL SERVICES ("Agreement") is entered into this the 15 day of March , 23, by and between, WithersRavenel , a North Carolina Corporation with its principal business offices located at Cary North Carolina(the "Professional"), and the City of Dunn, a municipal corporation of the State of North Carolina, (the "City"). City and Professional may collectively be referred to as "Parties"hereinafter. WITNESSETH: WHEREAS, the City of Dunn is engaged in activities and services which from time to time require a wide range of professional services including, but not limited to: design, preparation of feasibility studies, preliminary reports, grant writing, land use planning, cost estimating, building architecture, landscape architecture, geotechnical investigations, construction materials testing, facility systems engineering , mechanical, electrical, plumbing, structural design and analysis, geomatics surveying/mapping, construction management services inspection, testing, disaster response monitoring and record keeping,permitting, information technology support, and other related professional services; and WHEREAS, pursuant to N.C.G.S. 143-64.31, it is the public policy of the State of North Carolina that municipalities announce all requirements for architectural, engineering, and surveying services, and select firms qualified on the basis of demonstrated competence and qualifications, and negotiate contracts for services at a fair and reasonable fee with the best qualified firm; and WHEREAS, Professional provides certain of the professional services of the nature required by the City and employs trained and experienced technical personnel possessing adequate knowledge, skills, and experience to provide such professional services to the City; and WHEREAS,pursuant to N.C.G.S. 143-64.31 the City announced to various competing films its need for on-call professional services of the nature described in this Agreement through a"Request for Letters of Interest and Statements of Qualifications for On-Call Professional Services" dated December 30, 2022, and the Professional provided a submittal, dated February 3, 2023, and is willing to serve as one of the City's professionals in one or more of the following areas: 1. Preliminary engineering studies &reports. 2. Grant writing, applications, and administration. 3. Design including field surveys,plan and specification preparation. Page 1 of 8 02/13/23 4. Permitting. 5. Construction services including bidding, contract administration and observation. 6. Asset and records management (GIS, web hosting, etc.). 7. Environmental engineering. 8. Sanitary sewer evaluation surveys. 9. Land surveying & geomatics. 10. Transportation. 11. Land Development and Planning. 12. Water Resources Planning. 13. Financial Analysis and Rate Studies. 14. ADA Transitioning. 15. Pavement Condition Surveys. WithersRavenel (FIRM) is on an on-call basis for each project/task order authorized under this Agreement; and WHEREAS, the Parties contemplate that the services of the Professional will be performed in various stages in accordance with Task Orders submitted by the Professional followed by separate authorizations to be issued by the City, and the Parties desire to set forth the basic teiizis of their agreement in this Agreement rather than in the separate authorizations issued by the City; and WHEREAS, the Parties agree that this Agreement is non-exclusive and does not require or commit the Professional to being available to perform services until a Task Order is submitted, and does not preclude the City from hiring other vendors or professionals to perform the same or similar work. NOW, THEREFORE, in consideration of the foregoing recitals, and the premises and mutual covenants herein contained, the receipt and adequacy of which is hereby acknowledged, the Parties, intending to be legally bound hereto, do contract and agree as follows: 1. REQUEST FOR TASK ORDER.Professional is qualified and able to provide one or more of the following specific categories of on-call services for the City: • Preliminary engineering studies &reports • Grant writing, applications, and administration • Design including field surveys, plan and specification preparation • Permitting • Construction services including bidding, contract administration and observation • Asset and records management (GIS, web hosting, etc.) • Environmental engineering Page 2 of 8 02/13/23 • Sanitary sewer evaluation surveys • Land surveying & geoinatics • Transportation • Land Development and Planning • Water Resources Planning • Financial Analysis and Rate Studies • ADA Transitioning • Pavement Condition Surveys As the need for professional services contemplated by this Agreement arise,the City will request a Task Order for said services from Professional which shall describe the scope of work, specifications, estimated schedule and the City's requirements. If the Professional employs the qualified personnel that meet the City's requirements to perform the requested services, Professional may submit to the City within the time specified a written Task Order describing the professional services to be provided. The Task Order shall set forth in general terms the Professional's recommendations to carry out the work. Professional shall list the background and experience of Professional's personnel to be assigned to the project as requested by City. The Task Order shall contain a project scope, schedule, and fee schedule setting forth the fees for the scope of services of the various categories of personnel to be assigned to the project. 2. ACCEPTANCE OF TASK ORDER. The City and the Professional contemplate certain discussions, negotiations and possible changes to the Task Order submitted by the Professional. Upon a meeting of the minds, Professional shall submit the final Task Order which shall set forth the agreement of the Parties; in the event of a conflict between the terms of the Task Order and this Agreement,this Agreement shall control unless the Task Order specifically notes the agreement of the parties that the conflicting term therein controls. If said Task Order is acceptable, the City shall accept the same in writing by a duly authorized officer or agent of the City. The City and the Professional agree that such written acceptance may be provided by electronic mail. Professional's fee schedule shall remain in effect during the term of this Agreement, unless modified by the Parties in writing. The Professional is entitled to request an annual review of the firm's fee schedule by the City. Acceptance of an annual fee schedule increase will be subject to approval by the City. The City shall provide Professional with a specific Authorization to Proceed for each Task Order accepted by the City. 3. DURATION OF CONTRACT. This Agreement shall be for an initial period of three (3) years, with the option of two (2) one (1) year extensions. Professional shall commence and complete the work required by a Task Order as expeditiously as is in keeping with the applicable standard of care and will, consistent therewith, endeavor to commence and complete the work in accordance with the dates provided in the Task Order(s) as agreed upon by the Parties. Professional shall immediately notify the City of any event or circumstance that may, immediately or in the future, impede the proper and timely execution of any work so that remedial action may be taken. Professional shall not begin any work pursuant to this Agreement Page 3 of 8 02/13/23 or a Task Order until written confirmation has been provided by the City. If Professional has not commenced or completed the work or a schedule to commensurate with the applicable standard of care, the City may declare such delay a material breach of contract and may pursue all available legal and equitable remedies. There shall be a presumption that the Professional can complete the work specified in the Task Order within the time specified therein,using the applicable standard of care, unless the Professional shall notify the City, in writing why additional time is required to complete the work using the applicable standard of care. Any changes to the schedule(s)provided in the Task Order must be agreed to in writing by the City and the Professional. 4. PAYMENT OF SERVICES. Professional shall submit to the City monthly invoices for the services performed during that month, calculated based on the approved Task Order. The City has the right to require the Professional to produce for inspection all of Professional's records related to the Task Order, billing rates of personnel, and charges for direct expenses for which cost-plus compensation is provided to verify the accuracy of all invoices. The City shall pay Professional's invoices within thirty (30) days of receipt unless a bona fide dispute exists between the City and Professional concerning the accuracy of said invoice or the services covered thereby, in which event the City shall pay any undisputed amounts within thirty (30) days of receipt of said invoice. Adjustments to an invoice for billing errors may extend the time for payment. 5. PROFESSIONAL STANDARDS AND DUTIES OF PROFESSIONAL. Professional shall be held to the same standard and shall exercise the same degree of care, skill, and judgment in the performance of services for the City as is ordinarily provided by a similar professional under the same or similar circumstances under the laws of the State of North Carolina. 6. CONSULTANT AS CONSTRUCTION ADMINISTRATOR. In the event the City contracts with the Professional to provide construction observation services the Professional shall be responsible for determining that the construction observed by the Professional is in general conformity with the quality level specified and in accordance with the plans and specifications. City agrees that such observation of construction work or documents by Professional shall not relieve any contractor from liability in regard to its duty to comply with the standards for the Project, shall not give rise to a claim against Professional for a contractor's failure to comply with the applicable plans, specifications or standards, and that Professional is not responsible for the means, methods, sequencing, safety, or other operations of any contractor. 7. TIME AND COST ESTIMATES. Professional's cost estimates and time estimates for construction, if required as part of a Task Order, shall be made on the basis of current labor and material prices and the Professional's experience and qualifications. Professional's estimates shall represent its judgment as an experienced and qualified professional familiar with water and sewer utility projects, or other projects for which Professional is employed under the teiiiis of this Agreement. Although Professional has no control over the resources provided by construction contractors to meet contract schedules, Professional's estimates or forecast of schedules shall be made on the basis of its experience and qualifications and shall represent Professional's judgment as an experienced and qualified professional familiar with water and sewer utility projects or other projects for which Professional is employed under the terms of this Page 4 of 8 02/13/23 Agreement, but the Professional cannot and does not guarantee the proposals, bids or actual costs or schedules will not vary significantly from opinions of probable costs or time prepared by it. If at any time the City wishes greater assurances as to the amount of any costs, they shall employ an independent cost estimator, scheduling consultant, or other third party to make such determination. 8. INDEMNIFICATION. To the extent permitted by law,the Professional agrees to defend, pay on behalf of, indemnify and hold-harmless the City, its elected and appointed officials, and employees against any and all claims, demands, suits or losses,including all costs connected therewith, for any damages which may be recovered against or from the City, its elected or appointed officials, or employees by reason of personal injury, including bodily injury or death and/or property damage, including loss of use thereof, resulting from the sole actual negligence of the Professional. 9. APPLICABILITY OF LAWS AND REGULATIONS. Consistent with the applicable standard of care, the Professional shall adhere to all applicable laws, ordinances, and regulations of the United States, the State of North Carolina, the County of Harnett, and the City of Dunn, in the performance of the services required by a Task Order. The Parties agree that this Agreement shall be governed and construed in accordance with the laws of the State of North Carolina and all disputes hereunder shall be resolved in accordance with the laws of the State of North Carolina with jurisdiction and venue in the state courts of Harnett County and all parties hereby consent to the jurisdiction and venue of such courts. 10. E-VERIFY COMPLIANCE. The Professional shall comply with the requirements of Article 2 of Chapter 64 of the North Carolina General Statutes (E-Verify). Professional shall require all of the Professional's subcontractors to comply with the requirements of Article 2 of Chapter 64 of the North Carolina General Statutes (E-Verify). 11. QUALITY AND WORKMANSHIP. All work performed pursuant to a Task Order shall be performed by the Professional consistent with the applicable standard of care. The "applicable standard of care" shall be the same degree of care, skill and judgment in the performance of services for the City as is ordinarily provide by similar professionals under the same or similar circumstances at the time in North Carolina. Professional shall provide services in accordance with applicable federal, state and local law and in accordance with applicable governing agency regulations. 12. INSURANCE. The Professional shall maintain valid general liability insurance in the minimum amount of$1,000,000, commercial automobile liability insurance in the minimum amount of$1,000,000, and provide certificates of such insurance naming the City of Dunn as an additional insured by endorsement to the policies. If the policy has a blanket additional insured provision,the Professional's insurance shall be primary and non-contributory to other insurance. Additionally, the Professional shall maintain and show proof of workers' compensation and employer's liability insurance in the minimum amount of$1,000,000; and shall show proof of professional liability coverage in a minimum aggregate amount of $2,000,000. The Professional shall provide notice of cancellation, non-renewal or material change in coverage to the City within ten(10) days of their receipt of notice from the insurance Page 5 of 8 02/13/23 company. All required certificates of insurance, endorsements, and blanket additional insured policy provisions are attached and considered part of this document. Notwithstanding the foregoing, neither the requirement of Professional to have sufficient insurance nor the requirement that the City is named as an additional insured, shall constitute waiver of the City's governmental immunity in any respect, under North Carolina law. 13. DEFAULT. In the event of substantial failure by Professional to perform in accordance with the teiiiis of this Agreement, the City shall have the right to terminate Professional upon seven (7) days written notice in which event Professional shall have neither the obligation nor the right to perform further services under this Agreement. 14. TERMINATION FOR CONVENIENCE. The City shall have the right to terminate this Agreement for the City's convenience upon thirty (30) days written notice to Professional. Professional shall terminate performance of services on a schedule acceptable to the City, provided that in no event shall Professional be required to perform services after the effective date of termination. In the event of termination for convenience, the City shall pay Professional for all services performed in accordance with the terms of this Agreement and each Task Order prior to the effective date of termination. 15. NOTICE. Any formal notice, demand, or request required by or made in connection with this Agreement shall be deemed properly made if delivered in writing or deposited in the United States mail, postage prepaid, to the address specified below. TO PROFESSIONAL: Clark Maness, P.E. Project Manager, Utilities Witherskavenel 115 MacKenan Dr Cary, NC 27511 TO CITY: Steven Neuschafer, City Manager City of Dunn PO Box 1065 Dunn,NC 28335 sneuschafer@dunn-nc.org dunn-nc.org WITH A COPY TO: P. Tilghman Pope Pope Law Group, P.A. Post Office Box 928 Dunn, North Carolina 28335 tilghman@plgpa.com 16. DELAY BEYOND THE CONTROL OF THE PARTIES. Neither Professional nor City shall be in default of the provisions of this Agreement for delays in performance due to forces beyond the control of the parties. "Forces beyond the control of the parties" shall mean, but is not limited to, delay caused by fire, acts of God, flood, earthquakes, storms, lightning, epidemic, war, riot, and/or civil disobedience. 17. NONWAIVER FOR BREACH. No breach or non-performance of any term of this Agreement shall be deemed to be waived by either party unless said breach or non-performance Page 6 of 8 02/13/23 is waived in writing and signed by the parties. No waiver of any breach or non-performance under this Agreement shall be deemed to constitute a waiver of any subsequent breach or non- performance and for any such breach or non-performance each party shall be relegated to such remedies as provided by law. 18. CONSTRUCTION. Should any portion of this Agreement require judicial interpretation, it is agreed that the Court or Tribunal construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against any one party by reason of the rule of construction that a document is to be more strictly construed against the party who prepared the documents. 19. NO REPRESENTATIONS. The parties hereby warrant that no representations about the nature or extent of any claims, demands, damages, or rights that they have, or may have, against one another have been made to them, or to anyone acting on their behalf,to induce them to execute this Agreement, and they rely on no such representations; that they have fully read and understood this Agreement before signing their names; and that they act voluntarily and with full advice of counsel. 20. SEVERABILITY. In the event for any reason that any provision or portion of this Agreement shall be found to be void or invalid, then such provision or portion shall be deemed to be severable from the remaining provisions or portions of this Agreement, and it shall not affect the validity of the remaining portions, which portions shall be given full effect as if the void or invalid provision or portion had not been included herein. 21. COUNTERPARTS. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. 22. MODIFICATION. This Agreement contains the full understanding of the parties. Any modifications or addendums to this Agreement must be in writing and executed with the same formality as this Agreement. 23. BINDING EFFECT. The terms of this Agreement shall be binding upon the parties'heirs, successors, and assigns. 24. ASSIGNMENT. Professional shall not assign, sublet, or transfer any rights under or interest in(including, but without limitation, monies that may become due or monies that are due) this Agreement without the written consent of the City, which may be withheld in the sole and absolute discretion of the City.Nothing contained in this paragraph shall prevent Professional from employing such independent consultants, associates, and sub-contractors as it may deem appropriate to assist Professional in the performance of services rendered. 25. INDEPENDENT CONTRACTOR. Professional is an independent contractor and shall undertake performance of the services pursuant to the terms of this Agreement as an independent contractor. Professional shall be wholly responsible for the methods, means and techniques of performance. Professional's work does not include any supervision or direction of the work of any other person or entity or their employees or agents (except to the extent such person or Page 7 of 8 02/13/23 entity was actually retained by Professional), and Professional's presence shall in no way create any liability on behalf of Professional for failure of others, their employees or agents to properly or correctly perform their work. 26. NON-APPROPRIATION. Notwithstanding any other provisions of this Agreement,the parties agree that payments due hereunder from the City are from appropriations and monies from the City Council and/or other governmental entities, by and through the City. In the event sufficient appropriations or monies are not made available to the City to pay the terms of this Agreement for any fiscal year, the City may terminate this Agreement immediately without further obligation of the City except with respect to payment of Professional for work performed through the date of termination. 27. IRAN DIVESTMENT ACT N.C.G.S. 147-86.60 prohibits the State of North Carolina, a North Carolina local government, or any other political subdivision of the State of North Carolina from contracting with any entity that is listed on the Final Divestment List created by the North Carolina State Treasurer pursuant to N.C.G.S. 147-86.58. N.C.G.S. 147-86.59 further requires that contractors with the State, a North Carolina local government, or any other political subdivision of the State of North Carolina must not utilize any subcontractor found on the State Treasurer's Final Divestment List. As of the date of execution of this Agreement the Professional hereby certifies that the Professional is not listed on the Final Divestment List created by the North Carolina State Treasurer and that the Professional will not utilize any subcontractors found on the Final Divestment List. In witness thereof, the contracting parties, by their authorized agents, affix their signatures and seals this day of , 20 . Professional City Name: Ken Orie, PE Name of Professional (type or print) Steven Neuschafer, City Manager By:_ (Signature) ,`,•`G� OF p,/1/,�' Title: Practice Area Lead,Utilities 4��: 0 ?ORAT�c''•. SEP`- . Q. Company: WithersRavenel �j,'••. Attest: tt t: (Secretary, if a corporation) Tam y William ity Clerk Page 8 of 8 02/13/23 v-is=23 Cary c llan, City Finance Director Page 9 of 8 02/13/23 CITY OF lilDuNN 1887 NORTH CAROLINA Pie &cootsafft4 kibid Regular Meeting, February 24, 2026 Agenda Item(s): Authorize and Approve Water Treatment Plant Land Purchase Financing Presenter(s): Cary McNallan—Finance Director Responsible Staff: Cary McNallan—Finance Director Action Item: Yes Attachment(s): 1) Resolution Authorizing and Approving Financing 2) Master Trust Agreement 3) First Supplemental Trust Agreement 4) Deed of Trust 5) Bond Purchase Agreement Purpose To authorize and approve the financing of the acquisition of land for future Water Plant expansions for the City through the issuance of a not to exceed$3,500,000 limited obligation bond and the execution and delivery of certain related documents. Background The Dunn Water Treatment Plant(WTP),which is located in Erwin, is in need of upgrades and expansion. In 2025,the Dunn City Council approved entering into an agreement of purchase for eight parcels of land at a cost of$5.25M. These parcels are all within close proximity of the WTP and would allow for the future expansion of the plant. Some of these properties may not be needed for the expansion and could be sold at a future date. As noted at the January 13, 2026, Public Hearing on this matter, the City plans to finance $3.5M of this purchase with a fifteen-year limited obligation bond. In December 2025, bids were received from Webster Bank and JP Morgan Chase Bank. Based on discussion with our Bond Counsel and financial advisors, it was recommended that we pursue the 15-Year Term Callable Limited Obligation Bond option presented by JP Morgan Chase Bank. It was also recommended, and staff concurs, that we not lock in the interest rate until after the Local Government Commission (LGC) approves the loan application, which is required by state Page 1 of 2 statute. The current rate as of this writing is 3.94%. The attached resolution for council approval lists a not to exceed rate of 4.50%. Attached to this agenda packet are the various documents that need to be executed for this loan. Staff Recommendation(s) Staff recommend that the City Council approve the 15-Year Term Callable Limited Obligation Bond option presented by JP Morgan Chase Bank. Budget Impact The impact on the FY27 Water Fund Budget will be an increase in debt principal and interest payments of approximately$307,000 which would likely require additional funding equal to a 9.75% increase in water rates. Suggested Motion(s) Motion to approve the attached resolution that authorizes and approves the Water Treatment Plant land purchase financing, with a not to exceed interest rate of 4.50%, and authorizes the Mayor and staff to execute the required documents. Page 2 of 2 NORTH CAROLINA RESOLUTION AUTHORIZING AND APPROVING THE FINANCING OF THE ACQUISITION OF LAND FOR FUTURE WATER PLANT EXPANSIONS FOR THE CITY THROUGH THE ISSUANCE OF A NOT TO EXCEED $3,500,000 LIMITED OBLIGATION BOND AND THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION THEREWITH BE IT RESOLVED by the City Council (the "City Council") of the City of Dunn,North Carolina (the "City") as follows: Section 1. The City Council does hereby find and determine as follows: (a) The City has determined to (i) pay or reimburse the costs of acquiring several parcels of land by the City to be utilized for future water treatment plant improvements and expansions (the "Project") and (ii)pay certain issuance costs relating thereto. (b) After a public hearing and due consideration, the City Council has determined that the most efficient manner of financing the Project will be through the execution and delivery of a Master Trust Agreement,to be dated as of February 1,2026 or other mutually convenient date (the "Master Trust Agreement"), and a First Supplemental Trust Agreement,to be dated as of February 1,2026 or other mutually convenient date(the"First Supplemental Trust Agreement"and,together with the Master Trust Agreement, the "Trust Agreement"), each between the City and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), pursuant to which the City will issue a limited obligation bond thereunder in an aggregate principal amount not to exceed $3,500,000 (the "Bond") to provide funds, together with any other available funds, to (i) pay the costs of the Project and (ii) pay the fees and expenses incurred in connection with the sale and issuance of the Bond. (c) In order to secure the payment of principal of and interest on the Bond and the performance of its other obligations under the Trust Agreement, the City will execute and deliver a Deed of Trust, to be dated as of February 1, 2026 or other mutually convenient date (the "Deed of Trust"), to the deed of trust trustee named therein for the benefit of the Trustee, granting a lien on all or a portion of the sites of the Project,together with any improvements and fixtures located or to be located thereon. (d) The City proposes to sell the Bond at a private sale without advertisement to JPMorgan Chase Bank, N.A., or its designee or assignee (the "Purchaser"), pursuant to the terms of a Bond Purchase Agreement, to be dated the date of delivery thereof(the "Bond Purchase Agreement"), between the City and the Purchaser. (e) There have been presented to the City Council drafts of the following documents relating to the transaction hereinabove described: (1) Master Trust Agreement; (2) First Supplemental Trust Agreement, including a form of the Bond attached as Exhibit A thereto; 7Nere communiy h jins! ril (, , , ,,, or mu DuNN 1887 NORTH CAROLINA (3) Deed of Trust; and (4) Bond Purchase Agreement. Section 2. In order to provide for the financing of the Project,the City is hereby authorized to enter into the Master Trust Agreement and the First Supplemental Trust Agreement and to issue the Bond thereunder in a principal amount not to exceed $3,500,000. The Bond shall mature in annual principal installments on each May 1, commencing on May 1, 2027, with a final maturity of May 1,2041, shall bear interest semiannually on each May 1 and November 1, commencing on November 1, 2026, at a rate not to exceed 4.50% per annum (subject to adjustment as provided in the First Supplemental Trust Agreement), and shall be subject to prior redemption on the dates, at the prices and in the manner set forth in the Trust Agreement. The terms and provisions of the Bond are hereby approved in substantially the foim presented at this meeting, and the Mayor or the Mayor Pro Tempore and the City Manager of the City are each hereby authorized to execute and deliver the Bond in substantially the faun presented at this meeting, together with such modifications as the person executing such document, with the advice of counsel, may deem necessary and appropriate, such execution and delivery to be conclusive evidence of the approval and authorization in all respects of the form and content thereof. The City Clerk or any Assistant or Deputy City Clerk of the City is hereby authorized to affix the official seal of the City to the Bond and to attest the same. Section 3. The proposal submitted by the Purchaser offering to purchase the Bond at a purchase price equal to par amount thereof is hereby approved. The terms and provisions of the Bond Purchase Agreement are hereby approved in substantially the foini presented at this meeting, and the Mayor or the Mayor Pro Tempore, the City Manager and the Finance Director of the City are each hereby authorized to execute and deliver the Bond Purchase Agreement in substantially the form presented at this meeting, together with such modifications as the person executing such document, with the advice of counsel, may deem necessary and appropriate, such execution and delivery to be conclusive evidence of the approval and authorization in all respects of the form and content thereof. Section 4. The City Council hereby approves the forms of the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust in substantially the forms presented at this meeting. The Mayor or the Mayor Pro Tempore,the City Manager and the Finance Director of the City are each hereby authorized to execute and deliver the Master Trust Agreement,the First Supplemental Trust Agreement and the Deed of Trust on behalf of the City in substantially the form presented at this meeting, containing such modifications as the person executing such documents shall approve, such execution to be conclusive evidence of approval by the City Council of any such changes. The City Clerk or any Assistant or Deputy City Clerk of the City is hereby authorized to affix the official seal of the City to said document and to attest the same to the extent required. Section 5. No deficiency judgment may be rendered against the City in any action for breach of any contractual obligation under the Bond or the Trust Agreement, and the taxing power of the City is not and may not be pledged directly or indirectly to secure any moneys due under the Bond or the Trust Agreement. Where communiy reins! CITY OF 1887 NORTH CAROLING Section 6. The Mayor or the Mayor Pro Tempore,the City Manager,the Finance Director, the City Attorney, the City Clerk and any other officers, agents and employees of the City, are hereby authorized and directed to deliver such certificates, opinions and other items of evidence as shall be deemed necessary to consummate the transactions described above. The officers of the City and the agents and employees of the City are hereby authorized and directed to do all acts and things required of them by the provisions of this resolution for the full, punctual and complete performance of the terms, covenants and provisions of the Bond, the Trust Agreement, the Deed of Trust, the Bond Purchase Agreement and the other documents contemplated by this resolution. Section 7. The City hereby represents that it reasonably expects that it, all subordinate entities thereof and all issuers issuing obligations on behalf of the City will not issue in the aggregate more than $10,000,000 of tax-exempt obligations (not counting certain current refunding obligations and private-activity bonds except for qualified 501(c)(3) bonds, as defined in the Internal Revenue Code of 1986, as amended (the "Code")) during calendar year 2026. In addition,the City hereby designates each of the debt service payments on the Bond as a"qualified tax-exempt obligation" for the purposes of the Code. Section 8. This resolution shall take effect immediately upon its adoption. Adopted this 24th day of February 2026. William P. Elmore Jr. Mayor ATTEST: Melissa R. Matti City Clerk ?(16ere community I gins! Draft No. 1 January 13, 2026 MASTER TRUST AGREEMENT Dated as of February 1, 2026 Between CITY OF DUNN,NORTH CAROLINA and U.S. BANK TRUST COMPANY,NATIONAL ASSOCIATION, as Trustee City of Dunn,North Carolina Limited Obligation Bonds TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 101 Meaning of Words and Terms Section 102 Rules of Construction. ARTICLE II THE BONDS Section 201 Limitation on Issuance of Bonds Section 202 Details of Bonds Section 203 Execution and Fowl of Bonds Section 204 Exchange of Bonds Section 205 Transfer and Registration of Transfer of Bonds Section 206 Ownership of Bonds Section 207 Authentication of Bonds Section 208 Terms and Conditions for Issuance of Bonds Section 209 Temporary Bonds Section 210 Mutilated, Destroyed, Lost or Stolen Bonds Section 211 Bonds Constitute Installment Contracts Under Act ARTICLE III REDEMPTION Section 301 Redemption Generally Section 302 Selection of Bonds or Portions Thereof to be Redeemed Section 303 Redemption Notice Section 304 Effect of Calling for Redemption Section 305 Redemption of a Portion of Bonds Section 306 Cancellation ARTICLE IV PROJECT FUND Section 401 Project Fund Section 402 Deposits to Project Fund; Payments from Project Fund Section 403 Requisitions from Project Fund Section 404 Reliance upon Requisitions Section 405 Completion of Project Section 406 Transfers of Unexpended Proceeds i ARTICLE V OTHER FUNDS AND ACCOUNTS; PAYMENT OF DEBT SERVICE Section 501 Establishment of Bond Fund Section 502 Payment of Debt Service Section 503 Application of Money in Interest Account Section 504 Application of Money in Principal Account Section 505 Application of Money in Sinking Fund Account Section 506 Application of Money in the Redemption Account Section 507 Net Proceeds Fund Section 508 Escheat Section 509 Cancellation of Bonds Section 510 Disposition of Fund Balances ARTICLE VI INSURANCE Section 601 Comprehensive General Liability Section 602 Workers' Compensation Section 603 Casualty and Theft Insurance Section 604 General Insurance Provisions ARTICLE VII DEPOSITARIES OF MONEY; SECURITY FOR DEPOSITS; INVESTMENT OF FUNDS AND COVENANTS OF THE CITY Section 701 Security for Deposits Section 702 Investment of Money Section 703 Valuation Section 704 Covenant as to Arbitrage Section 705 Construction Section 706 Installation of Additional Improvements; Modification of Mortgaged Property Section 707 Access to Mortgaged Property Section 708 Maintenance, Utilities, Taxes and Assessments Section 709 Encumbrances Section 710 Indemnification Section 711 Release of Mortgaged Property Section 712 Assignment and Lease by the City 11 ARTICLE VIII PAYMENT OF BONDS; LIMITED OBLIGATION; BUDGETING Section 801 Payment of Bonds; Limited Obligation; Budgeting Section 802 No Set-Off or Recoupment ARTICLE IX REMEDIES Section 901 Extension of Interest Payment Section 902 Events of Default Section 903 Acceleration of Maturities Section 904 Remedies Section 905 Application of Funds Section 906 Effect of Discontinuance of Proceedings Section 907 Control of Proceedings Section 908 Restrictions Upon Action Section 909 Enforcement of Rights of Action Section 910 No Remedy Exclusive Section 911 Delay Not a Waiver Section 912 Notice of Default Section 913 Right to Enforce Payment of Bonds Unimpaired Section 914 Trustee Notice of Default ARTICLE X TRUSTEE Section 1001 Acceptance of Trusts Section 1002 Indemnification of Trustee as Condition for Remedial Action Section 1003 Limitations on Obligations and Responsibilities of Trustee Section 1004 Trustee Not Liable for Failure of City to Act Section 1005 Compensation and Indemnification of Trustee Section 1006 Monthly Statements from Trustee Section 1007 Trustee May Rely on Certificates Section 1008 Trustee Not Responsible for Recitals Section 1009 Trustee Protected in Relying on Certain Documents Section 1010 Trustee May Pay Taxes and Assessments Section 1011 Resignation and Removal of Trustee Subject to Appointment of Successor Section 1012 Resignation of Trustee Section 1013 Removal of Trustee Section 1014 Appointment of Successor Trustee Section 1015 Vesting of Duties in Successor Trustee Section 1016 E-Verify 111 ARTICLE XI EXECUTION OF INSTRUMENTS BY OWNERS,PROOF OF OWNERSHIP OF BONDS,AND DETERMINATION OF CONCURRENCE OF OWNERS Section 1101 Execution of Instruments Section 1102 Preservation of Information; Communications ARTICLE XII AMENDMENTS AND SUPPLEMENTS Section 1201 Supplements and Amendments Without Consent Section 1202 Supplements and Amendments With Consent Section 1203 Bonds Affected Section 1204 Supplements and Amendments Part of Master Trust Agreement and Deed of Trust Section 1205 Supplemental Trust Agreements Section 1206 Exclusion of Bonds ARTICLE XIII DEFEASANCE Section 1301 Release of Trust Agreement ARTICLE XIV MISCELLANEOUS PROVISIONS Section 1401 Successorship of City Section 1402 Payment Due on Holidays Section 1403 Manner of Giving Notice Section 1404 Substitute Mailing Section 1405 Parties, Owners and Local Government Commission Alone Have Rights Under this Master Trust Agreement Section 1406 Effect of Partial Invalidity Section 1407 Effect of Covenants; Governing Law; Venue Section 1408 No Recourse Against Members, Officers or Employees of City or the Local Government Commission Section 1409 Dealing in Bonds Section 1410 Headings Section 1411 Further Authority Section 1412 Multiple Counterparts Section 1413 USA Patriot Act Compliance Exhibit A Form of Requisition and Certificate iv MASTER TRUST AGREEMENT This MASTER TRUST AGREEMENT, dated as of February 1, 2026 (this "Master Trust Agreement"), between the CITY OF DUNN, NORTH CAROLINA, a municipal corporation duly organized and validity existing under the Constitution and laws of the State of North Carolina (the "City"), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America, which is authorized under such laws to exercise trust powers (the "Trustee"); WITNESSETH: WHEREAS, the City is a municipal corporation duly organized and existing under the Constitution and laws of the State of North Carolina; WHEREAS, pursuant to Section 160A-20 of the General Statutes of North Carolina, as amended (the "Act"), the City may finance or refinance (a) the purchase of real or personal property or (b) the construction of fixtures or improvements on real property by contracts that create in the property so acquired or in the fixtures or improvements, or in all or some portion of the property upon which the fixtures or improvements are located, or in both, a security interest to secure repayment of the moneys advanced or made available for such purchase or construction; WHEREAS, the City desires to pay or reimburse the costs of acquiring several parcels of land by the City to be utilized for future water treatment plant improvements and expansions (the "2026 Project"); WHEREAS, the City has developed a plan of finance under which the City will enter into this Master Trust Agreement with the Trustee providing for the issuance by the City from time to time of limited obligation bonds, each such limited obligation bond constituting a contract between the City and the owners of such limited obligation bonds to provide funds to the City for the purpose of financing or refinancing all or a portion of the costs of various capital projects,the payments thereunder to be secured on a parity with all other bonds issued pursuant to the provisions hereof by the security created hereunder, and for the City to repay such financings as herein provided; WHEREAS, the City currently desires to provide for the issuance of the Series 2026 Bond (hereinafter defined) as provided in this Master Trust Agreement and the First Supplemental Trust Agreement (hereinafter defined) to provide funds, together with any other available funds, to (a) pay or reimburse the costs of the 2026 Project and (b) pay the fees and expenses incurred in connection with the sale and issuance of the Series 2026 Bond; WHEREAS, the City may hereafter desire to finance various other capital projects pursuant to the provisions of this Master Trust Agreement or to refund certain outstanding Bonds (hereinafter defined) issued hereunder by issuing additional Bonds as provided hereunder and by entering into Derivative Agreements (hereinafter defined) related thereto; WHEREAS, in order to secure such repayment and the performance by the City of its other obligations hereunder and certain of its obligations under any Derivative Agreements, the City will execute and deliver the Deed of Trust (hereinafter defined) granting a lien on the Mortgaged Property (hereinafter defined), all as more particularly described in the Deed of Trust; WHEREAS,under the Constitution and laws of the State of North Carolina, including the Act, the City is authorized to enter into this Master Trust Agreement, to issue the Bonds as hereinafter provided and to do or cause to be done all the acts and things herein provided or required to be done as hereinafter covenanted; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of North Carolina to happen, exist and be performed precedent to and in the execution and delivery of this Master Trust Agreement have happened, exist and have been performed as so required to make this Master Trust Agreement a valid and binding agreement of the City; and WHEREAS, the Trustee has accepted the trusts created by this Master Trust Agreement and in evidence thereof has joined in the execution hereof; NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein,the parties hereby agree as follows: 2 ARTICLE I DEFINITIONS Section 101 Meaning of Words and Terms. In addition to words and teiriis defined elsewhere in this Master Trust Agreement, the following words and terms as used in this Master Trust Agreement shall have the following meanings, unless some other meaning is plainly intended: "Additional Payments" means the additional payments required to be made by the City pursuant to Section 801. "Additional Project" means any building, facility, fixture, equipment or other improvement financed with the proceeds of Bonds, other than the 2026 Project. "Authorized Officer" means the City Manager, the Finance Director or any other person designated from time to time to perform the duties imposed on an Authorized Officer by this Master Trust Agreement pursuant to an Officer's Certificate filed with the Trustee for such purpose (which Officer's Certificate shall include the name, title and specimen signature of each such person so designated). "Bond" or "Bonds" means the Series 2026 Bond and any other bonds or notes issued under the provisions of Section 208 and secured on a parity with each other by this Master Trust Agreement. "Bond Counsel" means an attorney or firm of attorneys of nationally recognized standing in matters pertaining to the validity of, and the tax-exempt status of interest on, obligations issued by states and their political subdivisions and acceptable to the City. "Bond Fund" means the fund created and designated the "City of Dunn, North Carolina Limited Obligation Bonds Bond Fund"by Section 501. "Business Day" means a day on which the Trustee and the New York Stock Exchange are open for the purpose of conducting their businesses. "Certificate of Completion"means the certificate of an Authorized Officer stating that the 2026 Project or any Additional Project (or any component thereof financed with a particular Series of Bonds)has been completed as required by Section 405. "City" means the City of Dunn, North Carolina, a municipal corporation duly organized and validity existing under the Constitution and the laws of the State of North Carolina, and any successor thereto. "City Council"means the City Council of the City. "Deed of Trust" means the Deed of Trust, of even date herewith, from the City to the Deed of Trust Trustee for the benefit of the Trustee, granting a lien on the Mortgaged Property, 3 including any amendment or supplement thereto as permitted thereby and by this Master Trust Agreement. "Deed of Trust Trustee" means the trustee serving from time to time under the Deed of Trust. "Defaulted Interest"means Defaulted Interest as defined in Section 202. "Defeasance Obligations"means non-callable Government Obligations. "Derivative Agreement" means an interest rate swap, cap, collar, floor, forward, option, put, call or other agreement, arrangement or security however denominated, entered into by the City in order to hedge interest rate fluctuations on all or a portion of the Bonds or to provide debt management by changing the interest payments on any of the Bonds to be made by the City with a goal of achieving lower interest costs or reducing interest rate risk. "Derivative Agreement Additional Payments"means payments required to be paid by the City under a Derivative Agreement other than Derivative Agreement Scheduled Payments, including termination payments required to be paid in connection with the early tetiiiination of a Derivative Agreement, whether voluntarily or upon the occurrence of an event of default, termination event or similar event thereunder. "Derivative Agreement Scheduled Payments" means scheduled payments required to be paid by the City under a Derivative Agreement that are based upon a fixed or variable imputed rate on a notional amount set forth in the Derivative Agreement and which are intended by the City to correspond to interest on the underlying Bonds to which the Derivative Agreement relates. "Event of Default"means each of those events of default set forth in Section 902. "Event of Nonappropriation" means (a) the failure by the City Council to budget and appropriate in its budget for any Fiscal Year moneys sufficient to pay all payments of principal and interest on the Bonds (reasonably estimated in the case of any Bonds issued bearing a variable interest rate) and the reasonably estimated Additional Payments coming due in such Fiscal Year or (b) the deletion by the City Council from its duly adopted budget of any appropriation made for the purposes specified in clause (a) above. In the event that during any Fiscal Year, Additional Payments shall become due and payable that were not included in the City's current budget, and if there are no moneys available to pay such Additional Payments within sixty (60) days subsequent to the date upon which such Additional Payments are due and payable, an Event of Nonappropriation shall be deemed to have occurred. "First Supplemental Trust Agreement" means the First Supplemental Trust Agreement, dated as of February 1, 2026, between the City and the Trustee, setting forth the terms and provisions with respect to the Series 2026 Bond, including any amendments or supplements thereto. "Fiscal Year" means the period commencing on the first day of July of any year and ending on the last day of June of the following year. 4 "Fitch" means Fitch Inc. dba Fitch Ratings and its successors and assigns, and if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency designated by the City by notice to the Trustee. "Government Obligations"means direct obligations of, or obligations the principal of and the interest on which are fully and unconditionally guaranteed by, the United States of America in either certificated or book-entry faun, including (a) to the extent permitted by law, evidences of ownership of, or fractional undivided interests in, future interest and principal payments on such obligations and (b) to the extent permitted by law, obligations issued pursuant to Section 21B(d)(3) of the Federal Home Loan Bank Act, as amended by Section 511(a) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, and commonly known as "interest strips" of the Resolution Funding Corporation. "Interest Account" means the account in the Bond Fund created and so designated by Section 501. "Interest Payment Date" means, with respect to any Series of Bonds, each of the interest payment dates provided for in the Supplemental Trust Agreement relating to such Series. "Investment Obligations" means any investments which at the time of investment are authorized by Section 159-30 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, except as may otherwise be modified in a Supplemental Trust Agreement. "Issuance Costs" means and further includes all items of expense directly or indirectly payable by or reimbursable to the City relating to the sale and issuance of the Bonds, including, but not limited to, filing and recording costs, settlement costs, printing costs, word processing costs, reproduction and binding costs, initial fees and expenses of the Trustee, bond insurance premiums, initial credit facility or liquidity facility fees, Trustee, remarketing and tender agent fees, legal fees and expenses, financing and other professional consultant fees, costs of rating agencies and costs of providing information to such rating agencies, fees for execution, transportation and safekeeping of the Bonds and charges, fees and expenses in connection with the foregoing. "Local Government Commission" means the Local Government Commission, a division of the Department of the State Treasurer of the State. "Moody's" means Moody's Investors Service, Inc. and its successors and assigns, and if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the City by notice to the Trustee. "Mortgaged Property" means the property subject to the lien created by the Deed of Trust consisting of the site of the 2026 Project, together with all buildings, improvement and fixtures located or to be located thereon. 5 "Net Proceeds" means any proceeds of insurance or taking by eminent domain or condemnation paid with respect to the Mortgaged Property remaining after payment therefrom of any expenses (including attorneys' fees) incurred in the collection thereof. "Net Proceeds Fund" means the fund by that name established and held by the Trustee pursuant to Section 507. "Officer's Certificate"means a certificate signed by an Authorized Officer. "Outstanding" when used with reference to Bonds means, as of a particular date, all Bonds theretofore authenticated and delivered under this Master Trust Agreement, except: (a) Bonds theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b)Bonds deemed to be no longer Outstanding pursuant to Section 304; (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered under this Master Trust Agreement; (d)Bonds deemed to have been paid in accordance with Article XIII; and (e) Bonds deemed to have been purchased in accordance with the provisions of the applicable Supplemental Trust Agreement in lieu of which other Bonds have been delivered under such Supplemental Trust Agreement. "Owner" means a person or entity in whose name a Bond is registered in the registration books provided for in Section 205. "Permitted Encumbrances" means and includes (a) liens for taxes, assessments and other governmental charges due but not yet payable; (b) landlord's, warehouseman's, carrier's, worker's,vendor's, mechanic's and materialmen's liens and similar liens incurred in the ordinary course of business remaining undischarged for not longer than sixty (60) days from the filing thereof; (c) attachments remaining undischarged for not longer than sixty (60) days from the making thereof; (d) liens in respect of pledges or deposits under workers' compensation laws, unemployment insurance or similar legislation and in respect of pledges or deposits to secure bids, tenders, contracts (other than contracts for the payment of money), leases or statutory obligations, or in connection with surety, appeal and similar bonds incidental to the conduct of litigation; (e) the lien created by the Deed of Trust or any lease of all or any portion of the Mortgaged Property pettnitted by Section 1207; (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the date of execution and delivery of the Deed of Trust and any other easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the date of the property subject to such encumbrance becomes Mortgaged Property and that the City certifies to the Trustee in writing will not materially impair the use of such property for its intended purpose or materially impair the value of such property; (g) easements, licenses, rights of way and other rights or privileges in the nature of easements with respect to any part of the Mortgaged Property permitted by Section 4 of the Deed of Trust and(h)this Master Trust Agreement or any Supplemental Trust Agreement. 6 "Prior Bonds" of any particular Bond means every previous Bond evidencing all or a portion of the same debt as that evidenced by such particular Bond, and for purposes of this definition, any Bond authenticated and delivered under Section 210 in lieu of a lost, destroyed or stolen Bond shall be deemed to evidence the same debt as the lost, destroyed or stolen Bond. "Principal Account" means the account in the Bond Fund created and so designated by Section 501. "Project Costs" means, with respect to any item or portion of the 2026 Project or any Additional Project, the contract price paid or to be paid therefor upon construction, acquisition, remodeling, improvement or equipping thereof, in accordance with a purchase order or contract therefor. Project Costs include payment or the reimbursement of the City for the payment of the administrative, engineering, legal, financial and other costs incurred by the City in connection with the construction, acquisition, remodeling, improvement or equipping of the 2026 Project or any Additional Project, all costs incurred for the payment of interest on a Series of Bonds during the period of acquisition, construction or equipping of the 2026 Project or any Additional Project, and include all applicable sales taxes and other charges resulting from such construction, acquisition, remodeling, renovation or improvement of the 2026 Project or any Additional Project. "Project Fund"means the fund created and designated the "City of Dunn, North Carolina Limited Obligation Bonds Project Fund"by Section 401. "Rating Agency" means Fitch, Moody's and S&P to the extent that such entity is then maintaining a rating on any of the Bonds. "Redemption Account" means the account in the Bond Fund created and so designated by Section 501. "Redemption Price" means, with respect to Bonds, the principal amount of such Bonds called for redemption plus the applicable premium, if any,payable upon redemption thereof "Regular Record Date" means, with respect to any Series of Bonds, the regular record date, if any,provided for in the Supplemental Trust Agreement relating to such Series. "S&P" means S&P Global Ratings and its successors and assigns, and if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the City by notice to the Trustee. "Securities Depository" means the Depository Trust Company, or any other recognized securities depository selected by the City, which maintains a book-entry system in respect of a Series of Bonds, and shall include any substitute for or successor to the securities depository initially acting as Securities Depository. "Securities Depository Nominee" means, as to any Securities Depository, such Securities Depository or the nominee of such Securities Depository in whose name there shall be registered on the registration books maintained by the Trustee the Bond certificates to be delivered to and 7 immobilized at such Securities Depository during the continuation with such Securities Depository of participation in its book-entry system. "Serial Bonds" means the Bonds of any Series that are stated to mature in consecutive annual installments. "Series", whenever used herein with respect to Bonds, means all of the Bonds designated as being of the same series. "Series 2026 Bond" means the City of Dunn, North Carolina Limited Obligation Bond, Series 2026, dated February , 2026. "Sinking Fund Account" means the account in the Bond Fund created and so designated by the provisions of Section 501. "Sinking Fund Requirement" means, with respect to any Series of Bonds, the Sinking Fund Requirement provided in the Supplemental Trust Agreement relating to such Series. "Special Record Date" means a date fixed by the Trustee for determining the Owner of Bonds for the payment of Defaulted Interest pursuant to Section 202. "State"means the State of North Carolina. "Supplemental Trust Agreement" means any supplemental trust agreement executed and delivered by the City authorizing the issuance of any particular Series of Bonds that is required to be executed and delivered by this Master Trust Agreement prior to the issuance of any such Series, including the First Supplemental Trust Agreement. "Terri Bonds" means the Bonds of any Series, other than Serial Bonds, that are designated as such in the Supplemental Trust Agreement for such Series. "Trust Agreement" means collectively, this Master Trust Agreement, each Supplemental Trust Agreement and any supplements and amendments hereto and thereto permitted hereby or thereby. "Trustee"means the Trustee serving as such under the Trust Agreement, whether original or successor. "2026 Project"has the meaning set forth in the recitals hereof. Section 102 Rules of Construction. (a) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words used herein shall include the plural as well as the singular number. (b) References herein to particular articles or sections are references to articles or sections of this Master Trust Agreement unless some other reference is indicated. 8 (c) References herein to specific sections or chapters of the General Statutes of North Carolina or to specific legislative acts are intended to be references to these sections, chapters or acts as amended and as they may be amended from time to time by the General Assembly of North Carolina, or any successor statute. (d) Provisions calling for the redemption of Bonds or the calling of Bonds for redemption do not mean or include the payment of Bonds at a stated maturity or maturities. 9 ARTICLE II THE BONDS Section 201 Limitation on Issuance of Bonds. No Bonds may be issued under this Master Trust Agreement except in accordance with the provisions of this Article. The principal of, premium, if any, and interest on all Bonds issued under the provisions of this Master Trust Agreement shall be payable solely as described by this Master Trust Agreement and the respective Supplemental Trust Agreements for their payment. All covenants, agreements and provisions of this Master Trust Agreement shall be for the benefit and security of all present and future Owners of Bonds without preference, priority or distinction as to lien or otherwise, except as otherwise hereinafter or in any Supplemental Trust Agreement provided, of any one Bond over any other Bond by reason of priority in the issue, sale or negotiation thereof, or otherwise. Section 202 Details of Bonds. Bonds authorized hereunder may be issued in one or more Series that may be delivered from time to time. The City shall by Supplemental Trust Agreement authorize such Series and shall specify, to the extent appropriate, (a) the authorized principal amount of such Series, (b) the date and terms of maturity or maturities of the Bonds of such Series, or the dates of payment of the Bonds on the demand of the Owner; (c) the interest rate or rates of the Bonds of such Series, which may include variable, adjustable, convertible or other rates, original issue discount, capital appreciation bonds, municipal multipliers or other deferred interest arrangements and zero interest rate bonds, provided that the interest cost of such Series shall never exceed for such Series the maximum interest rate, if any, peliiiitted by law in effect at the time such Series is issued; (d) the Interest Payment Dates for such Series of Bonds; (e) the denominations, numbering, lettering and series designation of such Series of Bonds; (f) the place or places of payment of such Bonds; (g) the redemption dates and Redemption Prices for such Series of Bonds and any terms of redemption not inconsistent with the provisions of this Master Trust Agreement, which may include mandatory redemption at the election of the Owner thereof to the extent permitted by law; (h) the terms of any optional or mandatory tender requirement, if any, for such Series of Bonds; (i)the use to be made of proceeds of such Series of Bonds, including, without limitation, the deposits required to be made into the Project Fund or appropriate subaccount of the Interest Account or any debt service reserve fund; (j) provisions relating to any collateral security, bond insurance or a credit facility or liquidity facility for such Series and (k) any other telins or provisions applicable to the Series of Bonds not inconsistent with the provisions of this Master Trust Agreement or the Act. All of the foregoing may be added by Supplemental Trust Agreements executed at any time or from time to time prior to the issuance of such Series of Bonds. Each Bond shall bear interest from the Interest Payment Date next preceding the date on which it is authenticated unless it is (a) authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (b) authenticated prior to the first Interest Payment Date, in which event it shall bear interest from its date or such later date as is specified in the Supplemental Trust Agreement providing for its issuance; provided, however, that if at the time of authentication of any Bond interest is in default, such Bond shall bear interest from the date to which interest has been paid. 10 Unless otherwise provided in a Supplemental Trust Agreement, the principal of, premium, if any, and interest on the Bonds shall be payable in any coin or currency of the United States of America that is legal tender for the payment of public and private debts on the respective dates of payment thereof. The payment of interest on each Bond shall be made (a) by the Trustee on each Interest Payment Date to the person or entity appearing on the registration books of the Trustee as the registered owner thereof as of the Regular Record Date by check mailed to the registered owner at his address as it appears on such registration books, or (b) by such additional or alternative means as is provided in any Supplemental Trust Agreement providing for the issuance of such Bond. Unless otherwise provided in a Supplemental Trust Agreement, payment of the principal of all Bonds (other than pursuant to mandatory sinking fund redemption) shall be made upon the presentation and surrender of such Bonds at the designated corporate trust office of the Trustee as the same become due and payable (whether at maturity or by redemption, acceleration or otherwise). Any interest on any Bond of any Series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Owner on the relevant Regular Record Date solely by virtue of such Owner having been such Owner; and such Defaulted Interest may be paid by the City, at its election in each case, as provided in subsection A or B below: A. The City may elect to make payment of any Defaulted Interest on the Bonds of any Series to the persons or entities in whose names such Bonds (or their respective Prior Bonds) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The City shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be such as will enable the Trustee to comply with the next sentence hereof), and at the same time, the City shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons or entities entitled to such Defaulted Interest as in this Subsection provided. Thereupon, the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment and not less than ten (10) days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Owner at his address as it appears in the registration books maintained under Section 205 not less than ten (10) days prior to such Special Record Date. The Trustee shall, if directed by an Authorized Officer, in the name and at the expense of the City, cause a similar notice to be published at least once in (i) a financial journal distributed in the Borough of Manhattan, City and State of New York, and (ii) a newspaper of general circulation in the City of Dunn, North Carolina, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the 11 persons or entities in whose names the Bonds (or their respective Prior Bonds) are registered on such Special Record Date and shall no longer be payable pursuant to the following subsection B below. B. The City may make payment of any Defaulted Interest on the Bonds of any Series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Bonds may be listed and upon such notice as may be required by such exchange, if, after notice given by the City to the Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Bond delivered under this Master Trust Agreement upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond and each such Bond shall bear interest from such date, that neither gain nor loss in interest shall result from such transfer, exchange or substitution. Section 203 Execution and Foiiii of Bonds. The Bonds shall be signed by, or bear the facsimile signatures of, the Mayor or Mayor Pro Tempore or the City Manager of the City and the official seal of the City shall be impressed, or a facsimile thereof imprinted, on the Bonds and attested by the manual or facsimile signature of the City Clerk or any Deputy or Assistant City Clerk of the City. In case any officer whose signature or a facsimile of whose signature appears on any Bonds ceases to be such officer before the delivery of such Bonds, such signature or such facsimile nevertheless shall be valid and sufficient for all purposes the same as if he had remained in office until such delivery, and any Bond may bear the facsimile signature of, or may be signed by, such persons as at the actual time of the execution of such Bond are the proper officers to execute such Bond although at the date of such Bond such persons may not have been such officers. The definitive Bonds are issuable as peiiiiitted or required by the respective Supplemental Trust Agreement providing for the issuance of Bonds of any Series. Bonds may be issued under a book-entry system and held by a Securities Depository. All Bonds may have endorsed thereon such legends or text as may be necessary or appropriate to conform to the applicable rules and regulations of any governmental authority or any securities exchange on which the Bonds may be listed or to any requirement of law with respect thereto. Section 204 Exchange of Bonds. Bonds, upon surrender thereof at the designated corporate trust office of the Trustee, together with an assignment duly executed by the Owner or his attorney or legal representative, or legal representative of his estate if the Owner is deceased, in such form as shall be satisfactory to the Trustee, may, at the option of the Owner thereof, be exchanged for an equal aggregate principal amount of Bonds of the same Series and maturity, of any denomination or denominations authorized by the Supplemental Trust Agreement pursuant to which such Bonds were issued, bearing interest at the same rate and in the same than as the Bonds surrendered for exchange. The City shall make provision for the exchange of Bonds at the designated corporate trust office of the Trustee. 12 Section 205 Transfer and Registration of Transfer of Bonds. Unless provided to the contrary in a Supplemental Trust Agreement, and as permitted by law, the Trustee shall keep books for the registration and the registration of transfer of the Bonds. The registration books shall be available at all reasonable times for inspection by the City and any Owner of such Bonds and may be copied by either of the foregoing and their agents or representatives. The transfer of any Bond may be registered only upon the books kept for the registration and registration of transfer of Bonds upon presentation thereof to the Trustee together with an assignment duly executed by the Owner or his attorney or legal representative, or legal representative of his estate if the Owner is deceased, in such form as shall be satisfactory to the Trustee. No transfer of any Bond shall alter the ownership of such Bond for purposes of this Master Trust Agreement unless such transfer is registered with the Trustee. Upon any such registration of transfer, the City shall, if necessary, execute and the Trustee shall authenticate and deliver in exchange for such Bond a new Bond or Bonds, registered in the name of the transferee, of any denomination or denominations authorized by the Supplemental Trust Agreement pursuant to which such Bond was issued, in the aggregate principal amount equal to the principal amount of such Bond surrendered or exchanged, of the same maturity and bearing interest at the same rate. In all cases in which Bonds shall be exchanged or the transfer of Bonds shall be registered hereunder, the City shall, if necessary, execute and the Trustee shall authenticate and deliver at the earliest practicable time Bonds in accordance with the provisions of this Master Trust Agreement. All Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Trustee. No service charge shall be made for any registration, transfer or exchange of Bonds, but the City and the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds. Unless otherwise required by the applicable Supplemental Trust Agreement, neither the City nor the Trustee shall be required (a) to issue, transfer or exchange Bonds during a period beginning at the opening of business fifteen(15) days before the day of the mailing of a notice of redemption of Bonds and ending at the close of business on the day of such mailing or (b) to transfer or exchange any Bond so selected for redemption in whole or in part. Section 206 Ownership of Bonds. The City, the Trustee and any agent of the City or the Trustee, may treat the person or entity in whose name any Bond is registered, including, without limitation, any Securities Depository Nominee, as the Owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest on such Bond, and for all other purposes whatsoever, whether or not such Bond be overdue, and, to the extent permitted by law, neither the City, the Trustee, nor any such agent shall be affected by notice to the contrary. Section 207 Authentication of Bonds. Only such Bonds as have endorsed thereon a certificate of authentication substantially in the form set forth in the Supplemental Trust Agreement pursuant to which such Bonds are issued, duly executed as provided in the Supplemental Trust Agreement, shall be entitled to any benefit or security under this Master Trust Agreement. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication on the Bond has been duly executed and dated as provided in the 13 Supplemental Trust Agreement, and such certificate upon any such Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Master Trust Agreement. The certificate of authentication on any Bond shall be deemed to have been duly executed and dated if signed by an authorized officer of the party authorized under the Supplemental Trust Agreement but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds or any Series thereof that may be issued hereunder at any one time. Section 208 Terms and Conditions for Issuance of Bonds. Before any Bonds shall be issued, the City shall execute and deliver a Supplemental Trust Agreement authorizing the issuance of such Bonds, fixing the amount and the details thereof as provided in Section 202 and describing in brief and general terms the purpose for issuing such Bonds. The Series 2026 Bond shall be issued for the purposes set forth in the First Supplemental Trust Agreement. Additional Bonds may be issued for the purpose of providing funds, with any other available funds, for paying: (a)the costs of completion of the 2026 Project; (b)the costs of acquisition, construction or equipping of any Additional Project; and (c)the costs (including financing costs) of refunding any Bonds. Unless otherwise provided in the Supplemental Trust Agreement, the Bonds of each Series shall be designated "City of Dunn, North Carolina Limited Obligation Bonds, Series " (inserting the year such Bonds are issued and any other distinctive letter or number or other identifier that the City may determine), shall be stated to mature, subject to the right of prior redemption as therein set forth, on the date or dates specified therein, in such year or years not later than forty (40) years from their date, shall bear interest at a rate or rates not exceeding the maximum rate then permitted by law, shall be numbered and shall have such redemption provisions (subject to the provisions of Article III), all as provided in the Supplemental Trust Agreement. Except to the extent described in Section 202, all such Bonds shall be on a parity with each other and shall be entitled to the same benefit and security of this Master Trust Agreement. The Bonds shall be executed substantially in the form and in the manner hereinabove set forth and shall be deposited with the Trustee for authentication, but before the Bonds shall be authenticated and delivered to the City for redelivery to the purchasers thereof, there shall be filed with the Trustee the following: (i) an executed copy of this Master Trust Agreement; (ii) an executed copy of the Supplemental Trust Agreement for the particular Series of Bonds; (iii) an executed copy of the Deed of Trust and any modifications thereto that may be entered into in connection with the issuance of such Series of Bonds, and evidence satisfactory to the Trustee that the Deed of Trust and any such modifications have been or will be recorded in the office of the Register of Deeds of Harnett County,North Carolina; 14 (iv) a copy, certified by the City Clerk of the City, of the resolution of the City Council authorizing the particular Series of Bonds; (v) a copy, certified by the Secretary or Deputy Secretary of the Local Government Commission, of the resolution(s) or order(s) of the Local Government Commission approving this Master Trust Agreement and the Supplemental Trust Agreement relating to a particular Series of Bonds, if so required by the Act; (vi) an opinion of Bond Counsel to the effect that such Bonds have been duly authorized, executed and delivered and constitute valid and binding obligations of the City, enforceable in accordance with their terms, subject to customary exceptions for bankruptcy, insolvency, reorganization and similar laws affecting creditor's rights; and (vii) such other documents as are required to be delivered to the Trustee pursuant to the Supplemental Trust Agreement. When the documents mentioned in subsections (i) to (vii), inclusive, of this Section shall have been filed with the Trustee and when the Bonds shall have been executed and authenticated as required by this Master Trust Agreement, the Trustee shall deliver the Bonds at one time to or upon the order of the City for redelivery to or upon the order of the purchasers thereof, but only upon payment to the Trustee or other persons or entities as provided in the Supplemental Trust Agreement of the purchase price of the Bonds and the accrued interest, if any, thereon to the date of issuance. The Trustee shall be entitled to rely upon the resolutions and documents mentioned in subsections (i)to (vii) of this Section as to all matters stated therein. The proceeds (including accrued interest, if any) of the Bonds shall be applied simultaneously with the delivery of the Bonds as provided in the Supplemental Trust Agreement. Section 209 Temporary Bonds. Until the definitive Bonds of any Series are ready for delivery, there may be executed, and upon direction of the City, the Trustee shall deliver, in lieu of definitive Bonds and subject to the same limitations and conditions, except as to identifying numbers, printed, engraved, lithographed or typewritten temporary Bonds in denominations permitted by the applicable Supplemental Trust Agreement for the definitive Bonds, substantially of the tenor hereinabove set forth, with such appropriate omissions, insertions and variations as may be required. The City shall cause the definitive Bonds to be prepared and to be executed and delivered to the Trustee, and the Trustee, upon presentation to it of any temporary Bond, shall cancel the same or cause the same to be canceled and shall authenticate and deliver, in exchange therefor, at the place designated by the Owner, without expense to the Owner, a definitive Bond or Bonds of the same Series and in the same aggregate principal amount, maturing on the same date and bearing interest at the same rate as the temporary Bond surrendered. Until so exchanged, the temporary Bonds shall be entitled to the same benefit of the Trust Agreement as the definitive Bonds to be issued and authenticated hereunder, including the privilege of registration if so provided. Until definitive Bonds are ready for exchange, interest on temporary Bonds shall be paid when due and notation of such payment shall be endorsed thereon. 15 Section 210 Mutilated, Destroyed, Lost or Stolen Bonds. The City shall cause to be executed, and the Trustee shall authenticate and deliver a new Bond of like date, number and tenor in exchange and substitution for and upon the cancellation of any mutilated Bond, or in lieu of and in substitution for any destroyed, lost or stolen Bond, and the Owner shall pay the reasonable expenses and charges of the City in connection therewith. Prior to the delivery of a substitute Bond, the Owner of any Bond which was destroyed, lost or stolen shall file with the Trustee evidence satisfactory to it of the destruction, loss or theft of such Bond and of the Owner's ownership thereof and shall furnish to the City and to the Trustee such security or indemnity as may be required by them to save each of them harmless from all risks, however remote. Every Bond issued pursuant to the provisions of this Section in exchange or substitution for any Bond which is mutilated, destroyed, lost or stolen shall constitute an additional contractual obligation of the City, whether or not the destroyed, lost or stolen Bonds are found at any time or are enforceable by anyone, and shall be entitled to all the benefits and security hereof equally and proportionately with any and all other Bonds of the same Series duly issued under this Master Trust Agreement. Section 211 Bonds Constitute Installment Contracts Under Act. Bonds issued under and pursuant to the teiins hereof, together with corresponding obligations under the Trust Agreement and the Deed of Trust relating thereto, shall constitute installment contracts or contracts within the meaning of the Act entered into by the City for the purpose of financing or refinancing the acquisition of real or personal property or the construction or repair of improvements thereon. The payment by the City of the Bonds shall be secured on a parity by the lien on the Mortgaged Property created under the Deed of Trust and by the other security provided for hereunder to the extent provided herein. 16 ARTICLE III REDEMPTION Section 301 Redemption Generally. The Bonds of any Series issued under this Master Trust Agreement may be made subject to redemption, at such times and prices, as may be provided by the Supplemental Trust Agreement authorizing the issuance of such Bonds. Section 302 Selection of Bonds or Portions Thereof to be Redeemed. The Trustee shall select the Bonds or portions thereof to be redeemed in accordance with the terms and provisions of this Master Trust Agreement and the Supplemental Trust Agreement relating to such Bonds. Section 303 Redemption Notice. The requirements for notice of redemption shall be set forth in the Supplemental Trust Agreement for each Series of Bonds. Section 304 Effect of Calling for Redemption. On or before the date upon which Bonds are to be redeemed, the City shall deposit with the Trustee money or Defeasance Obligations, or a combination of both, that will be sufficient to pay on the redemption date the Redemption Price of and interest accruing on the Bonds to be redeemed on such redemption date. On the date fixed for redemption, notice having been given in the manner and under the conditions provided in the applicable Supplement Trust Agreement, the Bonds or portions thereof called for redemption shall be due and payable at the Redemption Price provided therefor, plus accrued interest to such date, and if moneys sufficient to pay the Redemption Price of the Bonds or portions thereof to be redeemed plus accrued interest thereon to the date of redemption are held by the Trustee in trust for the Owners of Bonds to be redeemed, interest on the Bonds or portions thereof called for redemption shall cease to accrue; such Bonds or portions thereof shall cease to be entitled to any benefits or security under this Master Trust Agreement or to be deemed Outstanding; and the Owners of such Bonds or portions thereof shall have no rights in respect thereof except to receive payment of the Redemption Price thereof, plus accrued interest to the date of redemption. Bonds and portions of Bonds for which irrevocable instructions to pay on one or more specified dates or to call for redemption on any one or more dates as determined by the City have been given to the Trustee in faun satisfactory to it shall not thereafter be deemed to be Outstanding under this Master Trust Agreement and shall cease to be entitled to the security of or any rights under this Master Trust Agreement, and the Owners shall have no rights in respect of the same other than to receive payment of the principal or Redemption Price thereof and accrued interest thereon, to be given notice of redemption in the manner provided in Section 303, and to the extent hereinafter provided, to receive Bonds for any unredeemed portions of Bonds if money or Defeasance Obligations (that have maturity dates or redemption dates which, at the option of the holder of such Defeasance Obligations, shall not be later than the date or dates on which moneys will be required to effect such payment or redemption), or a combination of both, sufficient to pay the principal or Redemption Price of such Bonds or portions thereof, together 17 with accrued interest thereon to the date upon which such Bonds are to be paid or redeemed, are held in separate accounts by the Trustee in trust for the Owners of such Bonds. Any Supplemental Trust Agreement may provide that any notice of redemption, except a notice of redemption in respect of a Sinking Fund Requirement, may state that the redemption to be effected is conditioned upon the receipt by the Trustee on or prior to the redemption date of moneys sufficient to pay the Redemption Price of and interest on the Bonds to be redeemed, and that if such moneys are not so received, such notice shall be of no force or effect and such Bonds shall not be required to be redeemed. In the event that such notice contains such a condition and moneys or Defeasance Obligations sufficient to pay the Redemption Price of and interest on such Bonds are not received by the Trustee on or prior to the redemption date, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received. The Supplemental Trust Agreement may also provide for the giving of notice of insufficient money prior to the redemption date and such other provisions as the City may determine. Section 305 Redemption of a Portion of Bonds. If less than all of an Outstanding Bond is selected for redemption, the Owner thereof or his attorney or legal representative, or legal representative of his estate if the Owner is deceased, shall present and surrender such Bond to the Trustee for payment of the principal amount thereof so called for redemption, and the redemption premium, if any, on such principal amount, and the City shall, if necessary, execute and the Trustee shall authenticate and deliver to or upon the order of such Owner or his attorney or legal representative,without charge, for the unredeemed portion of the principal amount of the Bond so surrendered, a new Bond of the same Series and maturity, bearing interest at the same rate and of any denomination or denominations authorized by Supplemental Trust Agreement for such Bond. Section 306 Cancellation. Bonds presented and surrendered in accordance with the provisions of this Article shall be canceled upon the surrender thereof. 18 ARTICLE IV PROJECT FUND Section 401 Project Fund. The Trustee shall establish a special fund designated as the "City of Dunn, North Carolina Limited Obligation Bonds Project Fund," shall keep such fund separate and apart from all other funds and moneys held by it and shall administer such fund as herein provided. When a Series of Bonds is issued under this Master Trust Agreement, the Trustee may establish separate accounts and subaccounts within the Project Fund to account for the proceeds of such Series of Bonds and any other funds. The moneys deposited in the Project Fund shall be held and applied by the Trustee in accordance with the provisions of this Article. The City hereby grants to the Trustee for the benefit of the Owners of respective Series of Bonds a lien on and a security interest in all monies and securities in the applicable accounts or subaccounts of the Project Fund relating to that Series of Bonds. The money in each such account or subaccount shall be held by the Trustee in trust and, pending application to the payment of the applicable Project Costs and/or Issuance Costs shall, to the extent permitted by law, be subject to a lien and charge in favor of the Owners of the respective Series of Bonds issued and Outstanding under this Master Trust Agreement and shall be held for the security of such Owners, except as otherwise provided herein or in any Supplemental Trust Agreement. Section 402 Deposits to Project Fund; Payments from Project Fund. There shall be credited to the applicable account or subaccount of the Project Fund the proceeds of the sale of a Series of Bonds as required to be deposited therein pursuant to the applicable Supplemental Trust Agreement. There shall also be credited to the applicable account or subaccount of the Project Fund the proceeds of performance and labor and materials payment bonds paid to the Trustee pursuant to Section 705, all investment earnings on moneys held in the Project Fund and any other funds from time to time deposited with the Trustee for such purposes. Payment of Project Costs and Issuance Costs shall be made from the applicable accounts and/or subaccounts of the Project Fund. All payments from the Project Fund shall be subject to the provisions and restrictions set forth in this Article, and the City shall not cause or agree to peiliiit to be paid from the Project Fund any sums except in accordance with such provisions and restrictions. Section 403 Requisitions from Project Fund. Payments from the Project Fund shall be made in accordance with the provisions of this Section. Upon request of the City, the Trustee shall pay Issuance Costs and/or Project Costs directly from the appropriate account or subaccount of the Project Fund, but before any payment shall be made there shall be filed with the Trustee a requisition, in substantially the form set forth in Exhibit A attached hereto, signed by an Authorized Officer, stating: (a)the requisition number for such payment; (b)the name of the person or entity to whom such payment is due; (c)the amount to be paid; 19 (d) a description of the purpose of such payment; (e) that the obligation in the stated amount has been incurred by the City, is presently due and payable and is a proper charge against the Project Fund that has not been paid; and (f) from which account or subaccount of the Project Fund such Project Cost or Issuance Cost shall be paid. Upon receipt of each requisition, the Trustee shall pay the obligations set forth in such requisition out of money in the applicable account or subaccount of the Project Fund, and each such obligation shall be paid by wire transfer or by check signed by one or more officers or employees of the Trustee designated for such purpose by the Trustee. If for any reason the City should decide prior to the initiation of the payment by the Trustee of any item in a requisition not to pay such item, it shall give written notice of such decision to the Trustee, and thereupon the Trustee shall not make such payment. Section 404 Reliance upon Requisitions. All requisitions received by the Trustee as conditions of payment from the Project Fund may be relied upon by the Trustee. Such requisitions shall be retained by the Trustee for so long as the Bonds are Outstanding and shall be subject at all reasonable times to examination by the City and the Owners of Bonds then Outstanding. Section 405 Completion of Project. The City shall use its best efforts to cause the acquisition, construction and equipping of the 2026 Project and any Additional Project to be completed with all reasonable dispatch. Upon the completion of the 2026 Project and any Additional Project (or the applicable component thereof), the City shall prepare and deliver to the Trustee a Certificate of Completion. The Certificate of Completion shall state that the 2026 Project or Additional Project (or applicable component thereof) has been completed and that there are no mechanic's or other liens against such 2026 Project or Additional Project (or applicable component thereof) for labor or materials furnished in connection therewith. Section 406 Transfers of Unexpended Proceeds. Subject to the provisions of any Supplemental Trust Agreement, upon the City's filing of a Certificate of Completion with the Trustee as described in Section 405, the Trustee shall withdraw all remaining moneys in the applicable account or subaccount of the Project Fund (other than any moneys retained therein to pay Project Costs and Issuance Costs not then due and payable) and deposit such moneys in the applicable account of the Bond Fund to be applied to the next succeeding payment of principal of or interest on the Series of Bonds from which such moneys are derived; provided, however, that if the Trustee receives a certificate of an Authorized Officer directing that the proceeds of such Bonds be applied to pay the cost of other components of the 2026 Project or Additional Project, as the case may be, or any other capital project of the City, accompanied by an opinion of Bond Counsel to the effect that such application will not violate the laws of the State, including the Act, and will not cause the interest on such Series of Bonds to be includable in the gross income of the owners thereof for purposes of federal income taxation (to the extent so intended),then the Trustee shall apply the remaining moneys in such account or subaccount of the Project Fund to the purposes so directed. In the event that following completion of the 2026 Project or any Additional Project (or any component thereof), the Trustee shall not have received a Certificate 20 of Completion, the Trustee may request the same in writing from the City and, if such Certificate of Completion is not delivered to the Trustee within forty-five (45) days, and if during such forty-five (45) day period the Trustee receives no notice from the City to the effect that the 2026 Project or Additional Project (or such component thereof) is not complete, then the Trustee may treat the 45th day following the Trustee's transmittal of the request for a Certificate of Completion as the day such certificate is received by the Trustee. 21 ARTICLE V OTHER FUNDS AND ACCOUNTS; PAYMENT OF DEBT SERVICE Section 501 Establishment of Bond Fund. In addition to the Project Fund, there is hereby established the City of Dunn, North Carolina Limited Obligation Bonds Bond Fund, in which there are established the Interest Account, the Principal Account, the Sinking Fund Account and the Redemption Account. The Bond Fund and the accounts and subaccounts therein shall be established with and held by the Trustee. Each Supplemental Trust Agreement shall provide, to the extent applicable, for the creation of a separate subaccount within the Interest Account, the Principal Account, the Sinking Fund Account and the Redemption Account with respect to each Series of Bonds, which subaccounts shall bear the designation of such Series of Bonds. The money in all of the accounts and subaccounts of the Bond Fund shall be held in trust and applied as hereinafter provided and, pending such application, the money in the Bond Fund and the accounts and subaccounts therein shall be subject to a pledge, charge and lien in favor of the Owners of each of the respective Series of Bonds issued and Outstanding under this Master Trust Agreement and for the further security of such Owners, except as otherwise provided herein or in any Supplemental Trust Agreement. A Supplemental Trust Agreement may provide for the creation of such other funds and accounts as the City may determine for the Series of Bonds authorized by such Supplemental Trust Agreement. Section 502 Payment of Debt Service. Subject to the limitations described in Section 801, the City shall make the following payments to the Trustee in the following manner and order: (a) At such time or times as provided in the Supplemental Trust Agreements, the City shall deliver to the Trustee the amounts required by the Supplemental Trust Agreements for deposit in the appropriate subaccounts of the Interest Account, provided that if there shall not be sufficient money to satisfy all such deposits then required to be made, such deposits shall be made to each such subaccount of the Interest Account ratably according to the amount so required to be deposited. (b) At such time or times as provided in the Supplemental Trust Agreements, the City shall deliver to the Trustee the amounts required by the Supplemental Trust Agreements for deposit in the appropriate subaccounts of the Principal Account and the Sinking Fund Account, provided that if there shall not be sufficient money to satisfy all such deposits then required to be made, such deposits shall be made to each such subaccount of the Principal Account and the Sinking Fund Account ratably according to the amount so required to be deposited. On or before the 45th day next preceding any date on which Serial Bonds are to mature or Telmm' Bonds are to be redeemed pursuant to Sinking Fund Requirements therefor or are to mature, the City may satisfy all or a portion of its obligation to make the payments required by subsections (a) and (b) of this Section by delivering to the Trustee Serial Bonds maturing or 22 Term Bonds maturing or required to be redeemed on such date. The price paid to purchase any such Bond, including accrued interest to the date of purchase, shall not exceed the principal or Redemption Price plus accrued interest to the date of purchase; provided, however, that the Trustee shall have no duty to confirm the purchase price paid by the City. Upon such delivery, the City shall receive a credit against amounts required to be deposited into the Interest Account and the Principal Account or the Sinking Fund Account, as the case may be, on account of such Bonds with respect to all interest payments for the remainder of the Fiscal Year and in the amount of 100% of the principal amount of any such Serial Bonds or Term Bonds so delivered. Section 503 Application of Money in Interest Account. Not later than 10:00 A.M. on each Interest Payment Date, date for the payment of Defaulted Interest or date upon which Bonds are to be redeemed, or on such other date as may be specified in the applicable Supplemental Trust Agreement, the Trustee shall withdraw from the applicable subaccount in the Interest Account and remit or otherwise set aside the amount due and payable to the Owners as provided in the Supplemental Trust Agreements. If there shall be deposited in the applicable subaccount of the Interest Account proceeds of a Series of Bonds that are to be used to finance interest payments with respect to such Bonds as provided in a Supplemental Trust Agreement, on the date of issuance of such Series of Bonds, an Authorized Officer shall deliver to the Trustee a schedule of payments to be made on Interest Payment Date from the applicable subaccount of the Interest Account for the payment of such interest. Unless otherwise provided by a Supplemental Trust Agreement, if the City fails to deposit with the Trustee the amounts required to be deposited in the Interest Account as provided in Section 502, or if the balance in the Interest Account on the Business Day next preceding an Interest Payment Date is insufficient to pay interest becoming due on the Bonds on such Interest Payment Date, the Trustee shall notify the City of the amount of the deficiency and request the City to immediately cure such deficiency. Section 504 Application of Money in Principal Account. Not later than 10:00 A.M. on each principal payment date, the Trustee shall withdraw from the applicable subaccount in the Principal Account and remit or otherwise set aside the amount due and payable to the Owners as provided in the Supplemental Trust Agreements. If on any date there is money in the Principal Account and no Serial Bonds are then Outstanding or if on any principal payment date money remains therein after the payment of the principal of Serial Bonds then due, the Trustee shall withdraw such money therefrom and shall apply the same in the following order: (a) deposit into the Sinking Fund Account the amount then required to be paid thereto by the City pursuant to Section 502 and (b) deliver all remaining amounts to the City. Unless otherwise provided in a Supplemental Trust Agreement, if the City fails to deposit with the Trustee the amounts required to be deposited in the Principal Account as provided in Section 502, or if the balance in the Principal Account on the Business Day next preceding a principal payment date is insufficient to pay principal coming due on the Serial Bonds on such 23 principal payment date, the Trustee shall notify the City of the amount of the deficiency and request the City to immediately cure such deficiency. Section 505 Application of Money in Sinking Fund Account. Money held for the credit of the subaccounts in the Sinking Fund Account shall be applied to the retirement, purchase, redemption or payment of Term Bonds in the manner provided in the applicable Supplemental Trust Agreement. Unless otherwise provided in a Supplemental Trust Agreement, if the City fails to deposit with the Trustee the amount required to be deposited in the Sinking Fund Account as provided in Section 502, or if the balance in the Sinking Fund Account on the Business Day next preceding any maturity date or mandatory sinking fund redemption date is insufficient to retire Term Bonds on such date as required by a Supplemental Trust Agreement, the Trustee shall notify the City of the amount of the deficiency and request the City to immediately cure such deficiency. Section 506 Application of Money in the Redemption Account. The Trustee shall apply money in the Redemption Account to the purchase or redemption of Bonds as follows: (a) Subject to the provisions of subsection (c) of this Section, and if instructed to do so by an Authorized Officer, the Trustee shall use commercially reasonable efforts to purchase and cancel Bonds or portions thereof, whether or not such Bonds or portions thereof are then subject to redemption, at the direction of an Authorized Officer, provided that the purchase price of each Bond, plus accrued interest to the date of purchase, shall not exceed the Redemption Price that would be payable on the next redemption date to the Owners of such Bonds under the provisions of the applicable Supplemental Trust Agreement plus accrued interest to the redemption date if such Bond or such portion thereof were called for redemption on such redemption date from the money in the applicable subaccount of the Redemption Account. The Trustee shall pay the interest accrued on such Bonds or portions thereof to the date of settlement from the applicable subaccount of the Interest Account and the purchase price from the applicable subaccount of the Redemption Account, but no such purchase shall be made by the Trustee from money in the applicable subaccount of the Redemption Account within the period of forty-five (45) days immediately preceding any date on which such Bonds or portions thereof are to be redeemed except from moneys other than the moneys set aside in the applicable subaccount of the Redemption Account for the redemption of Bonds. (b) Subject to the provisions of subsection (c) of this Section, the Trustee shall call for redemption on a date permitted by the applicable Supplemental Trust Agreement such amount of Bonds or portions thereof as, with the redemption premium, if any, will exhaust the moneys then held in the applicable subaccount of the Redemption Account as nearly as may be; provided, however, that not less than Fifty Thousand Dollars ($50,000)principal amount of Bonds shall be called for redemption at any one time unless the Trustee is so instructed by the City. The Trustee shall pay the accrued interest on the Bonds or portions thereof to be redeemed to the date of redemption from the applicable subaccount of the Interest Account and the Redemption Price of such Bonds or portions thereof from the applicable subaccount of the Redemption Account. On or before the redemption date, the Trustee shall withdraw from the applicable subaccount of the Redemption Account and the applicable subaccount of the Interest Account and the respective amounts required to pay the Redemption Price and accrued interest to the redemption date of the Bonds or portions thereof so called for redemption. 24 (c) Money in the Redemption Account may be applied by the Trustee in each Fiscal Year to the purchase or the redemption of Bonds of any one or more Series then Outstanding in accordance with the latest Officer's Certificate filed with the Trustee (i) designating one or more Series of Bonds to be purchased or redeemed, (ii) if more than one Series of Bonds is so designated, setting forth the aggregate principal amount of Bonds of each Series to be purchased or redeemed, and (iii) unless the Supplemental Trust Agreement relating to the Bonds to be redeemed specifies the order of redemption, designating the Bonds to be redeemed within each Series, and if such Bonds are Term Bonds, the years in which future Sinking Fund Requirements are to be reduced as a result of such redemption and the amount of such reduction in each such year. In the event no such certificate is filed and unless the Supplemental Trust Agreement relating to the Bonds to be redeemed specifies otherwise, (A)the Trustee shall apply such money to the redemption of Bonds bearing the highest rate of interest, (B) if Bonds of more than one maturity bear the same interest rate, the Trustee shall redeem such Bonds in the inverse order of maturities, and (C) if the Bonds bearing the highest rate of interest are Terri Bonds, the Trustee will reduce Sinking Fund Requirements for such Term Bonds in inverse order of the scheduled redemption of such Term Bonds. All Bonds shall be redeemed as provided in the applicable Supplemental Trust Agreement. Money held for the credit of the subaccounts in the Redemption Account shall be applied to the purchase or redemption of Bonds in the manner provided in the applicable Supplemental Trust Agreement. Section 507 Net Proceeds Fund. (a) Establishment of Net Proceeds Fund; Deposits. There is hereby established with the Trustee a special fund designated as the "City of Dunn, North Carolina Limited Obligation Bonds Net Proceeds Fund" to be maintained and held in trust for the benefit of the Owners as provided herein. The Trustee shall deposit Net Proceeds relating to casualty and theft or title insurance in the Net Proceeds Fund promptly upon receipt thereof. The City shall transfer to the Trustee for deposit in the Net Proceeds Fund any other Net Proceeds received by the City in the event of any damage, destruction, theft or taking by eminent domain or condemnation with respect to the Mortgaged Property. (b) Disbursements. The Trustee shall disburse Net Proceeds for replacement or repair of the Mortgaged Property as provided in subsection (c)(1) and (c)(3) below, or transfer such proceeds to the Redemption Account upon notification of an Authorized Officer as provided in subsection (c)(2) or (c)(4) below. Any balance of Net Proceeds remaining after receipt by the Trustee of a certificate of an Authorized Officer stating that any such replacement or repair has been completed shall be placed into the subaccount or subaccounts of the Bond Fund as so directed by an Authorized Officer and applied to the next payment of principal of and interest on the applicable series of Bonds. Any funds remaining in the Net Proceeds Fund after the redemption of all Bonds Outstanding, including accrued interest and payment of any applicable fees to the Trustee pursuant to Section 1005 or provision made therefor satisfactory to the Trustee, shall be withdrawn by the Trustee and remitted to the City. 25 (c)Application of Net Proceeds. (1) Upon receipt of a certification from an Authorized Officer that the Net Proceeds available for such purpcse, together with any other funds to be provided by the City in its discretion for such purpose, are sufficient to repair or replace the Mortgaged Property to a condition substantially similar to its condition prior to the loss, casualty or other event giving rise to receipt of such Net Proceeds, the Trustee shall disburse moneys in the Net Proceeds Fund to the person, fiiiii or corporation named in the requisition as authorized by subsection (b) above. The Authorized Officer must state in the requisition with respect to each payment to be made (A) the requisition number, (B) the name and address of the person, film or corporation to whom payment is due, (C) the amount to be paid and (D) that each obligation mentioned therein has been properly incurred, is a proper charge against the Net Proceeds Fund, has not been the basis of any previous withdrawal, and specifying in reasonable detail the nature of the obligation, accompanied by a bill or a statement of account for such obligation. Any balance of Net Proceeds remaining after such replacement or repair has been completed shall be transferred to the Bond Fund and applied to make payments of principal and interest on the Bonds as the same become due. After payment or provision for payment of all Bonds Outstanding as provided in this section, any balance of Net Proceeds shall be paid to the City. (2) If an Authorized Officer notifies the Trustee in writing that (A) the certification required by subsection (c)(1) of this Section cannot be made or (B) replacement or repair of the Mortgaged Property is not economically feasible or in the best interest of the City, then the Trustee, upon the direction of the City, shall promptly transfer the Net Proceeds to the Redemption Account as provided in this Section and apply such Net Proceeds, together with any other available moneys provided by City in its discretion to the Trustee for deposit to the Redemption Account (subject to the limitation set forth below), to the redemption in whole of all of the Outstanding Bonds as provided in Section 301 and the applicable Supplemental Trust Agreements; provided, however, that if any of the Bonds are not subject to redemption at that time, then the amount deposited in the Redemption Account may be invested in Defeasance Obligations which, together with investment earnings thereon and any moneys not so invested, shall be sufficient to pay all interest on such Bonds until their respective maturities or redemption dates and to pay the principal of and premium, if any, on such Bonds on the respective maturities or redemption dates. (3) If there are sufficient Net Proceeds to comply with the provisions of subsections (c)(1) or (c)(2) of this Section, the City must comply with either of such provisions. However, if the certification required by subsection (c)(1) of this Section cannot be made and if the Net Proceeds and other funds made available by the City are insufficient to redeem or defease all of the Bonds in whole as required by subsection (c)(2) of this Section, the Trustee shall apply the Net Proceeds and any other funds made available by the City in the City's discretion to the replacement and repair of the Mortgaged Property with such changes as may be necessary to cause the replacement and repair to be made from the funds available therefor; provided, however, that no change 26 may be made that would result in a use of the Mortgaged Property different from that which existed prior to the event giving rise to the receipt of Net Proceeds. If Net Proceeds are applied for such purpose, moneys shall be disbursed from the Net Proceeds Fund in the manner provided in subsection(c)(1) of this Section. (4) If the City is unable to comply with subsections (c)(1), (c)(2) or (c)(3) of this Section, then the City shall direct the Trustee to transfer the Net Proceeds to the Redemption Account to be used to redeem in part the Bonds Outstanding pursuant to the redemption provisions of any Supplemental Trust Agreements in such manner specified in an Officer's Certificate filed with the Trustee; provided, however, that if any of such Bonds are not subject to redemption at that time, then the amount deposited in the Redemption Account may be invested in Defeasance Obligations which, together with investment earnings thereon and any moneys not so invested, shall be sufficient to pay all interest on such Bonds until their respective maturities or redemption dates and to pay the principal of and premium, if any, on such Bonds on the respective maturities or redemption dates. (d) Cooperation. The Trustee shall cooperate fully with the City, at the expense of the City, in filing any proof of loss with respect to any insurance policy maintained pursuant to Article VI hereof and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Mortgaged Property or any item or portion thereof. Section 508 Escheat. All money that the Trustee shall have withdrawn from the Bond Fund or shall have received from any other source and set aside or delivered to the Trustee for the purpose of paying any of the Bonds issued hereunder, either at maturity or by purchase or call for redemption, shall be held in trust for the respective Owners. Any money that is so set aside and that remains unclaimed by the Owners for a period of five (5) years after the date on which such Bonds have become payable shall be presumed to be abandoned for purposes of Section 116B-53 of the General Statutes of North Carolina, and the Trustee shall report and remit this property to the State Treasurer pursuant to the requirements of, Article 4 of Chapter 116B of the General Statutes of North Carolina, and thereafter the Owners shall look only to the State Treasurer for payment and then only to the extent of the amounts so received, without any interest thereon, and the Trustee and the City shall have no responsibility with respect to such money. Section 509 Cancellation of Bonds. Upon receipt of the same, the Trustee shall cancel all Bonds paid, redeemed or purchased by the Trustee or purchased by the City and delivered to the Trustee, and all Bonds delivered to the Trustee in exchange for other Bonds or delivered to the Trustee upon the transfer of any Bond if a new Bond is delivered upon such transfer. The Trustee shall certify to the City the details of all Bonds so canceled. All Bonds canceled under any of the provisions of this Master Trust Agreement either shall be delivered to the City or destroyed by the Trustee, as the City directs. Upon destruction of any Bonds, the Trustee shall execute a certificate in duplicate, describing the Bonds so destroyed; and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the Trustee. 27 Section 510 Disposition of Fund Balances. After provision is made for the payment of all Outstanding Bonds, including the interest thereon and for the payment of all other obligations, expenses and charges required to be paid under or in connection with this Master Trust Agreement, the Trustee shall pay all amounts in any fund, account or subaccount then held by it under this Master Trust Agreement to the City. If a continuing lien has been imposed on such balance by another resolution, bond order, any other agreement, by court order or decree, or by law, the Trustee shall pay such balance to such person or entity as is entitled to receive the same by law or under the terms of such resolution, bond order, agreement, court order, or decree. 28 ARTICLE VI INSURANCE Section 601 Comprehensive General Liability. (a) The City shall maintain or caused to be maintained throughout the term of this Master Trust Agreement a comprehensive general liability policy or policies in protection of the City, its officers, agents and employees. Said policy shall cover such losses and for such amounts and shall have such deductible amounts as shall be satisfactory to the City Council and, in the judgment of the City Council, shall protect the City against losses not protected under the principles of sovereign immunity. (b) The net proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid. Section 602 Workers' Compensation. The City shall maintain workers' compensation insurance to insure its employees against liability for compensation under the laws now in force in the State, or any act hereafter enacted as an amendment or supplement thereto or in lieu thereof. The proceeds of such workers' compensation insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid. Section 603 Casualty and Theft Insurance. (a) The City shall procure and maintain, or cause to be procured and maintained, throughout the term of this Master Trust Agreement insurance against loss or damage to any portion of the Mortgaged Property by fire and lightning, with extended coverage, and vandalism and malicious mischief insurance. Said extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance. Such insurance policies shall name the Trustee as a lenders loss payable and/or mortgagee. To the extent that any contractor shall provide an insurance policy or certificate of insurance (naming the Trustee as a lenders loss payable and/or mortgagee) demonstrating that the same coverage as is required by this subsection is being carried by such contractor with respect to the Mortgaged Property or any part thereof and adequately protects the interest of the City and the Trustee, the insurance provided for by this subsection shall not be required with respect to the Mortgaged Property or such part thereof while the Mortgaged Property or such part thereof is so covered by such other insurance. (b) If any buildings, fixtures or other improvements are located on any portion of the Mortgaged Property that is located in a special flood hazard area according to the Federal Emergency Management Agency ("FEMA"), then the City is required to maintain a flood insurance policy on such portion of the Mortgaged Property. If at any time during the terra of this Master Trust Agreement, any portion of the Mortgaged Property on which buildings, fixtures or other improvements are located is classified by FEMA as being located in a special flood hazard area, flood insurance will be mandatory. Should this occur, federal law requires the Bond Trustee to notify the City of the reclassification. If, within forty-five (45) days of receipt of notification from the Bond Trustee that any portion of the Mortgaged Property on which buildings, fixtures or other improvements are located has been reclassified by the FEMA as being located in a special flood hazard area, the City has not provided sufficient evidence of 29 flood insurance, the Bond Trustee is mandated under federal law to purchase flood insurance on behalf of the City, and any amounts so expended shall immediately become debts of the City, shall bear interest at the rate specified in the Deed of Trust, and payment thereof shall be secured by the Deed of Trust. (c) Such insurance shall be in an amount equal to 100% of the replacement cost of the Mortgaged Property (except that such insurance may be subject to a reasonable and customary deductible clause for any one loss). (d) The Net Proceeds of such insurance shall be deposited in the Net Proceeds Fund and applied as provided in Section 507. Section 604 General Insurance Provisions. (a) The City shall pay or cause to be paid when due the premiums for all insurance policies required by this Master Trust Agreement. (b) Except as otherwise provided in subsection (d) of this Section, all insurance policies required by this Article shall be issued by a responsible carrier authorized to do business under the laws of the State. (c) The Trustee shall not be responsible for the sufficiency or adequacy of any insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee. (d) In lieu of obtaining the policies of insurance required by Section 601, Section 602 and Section 603, the City may adopt alternative risk management programs which it determines to be reasonable, including, without limitation, to self-insure in whole or in part, individually or in connection with other units of local government or other institutions, to participate in programs of captive insurance companies, to participate with other units of local government or other institutions in mutual or other cooperative insurance or other risk management programs, to participate in State or federal insurance programs, to take advantage of State or federal laws now or hereafter in existence limiting liability, or to establish or participate in other alternative risk management programs, all as may be reasonable and appropriate risk management by the City and that provide comparable coverages required by such sections. In addition, any insurance coverage pursuant to this Article may be pursuant to a program whereby the City self-insures against certain losses up to a stated loss amount, and retains excess coverage from an insurer meeting the requirements of this Article. (e) The insurance coverage required under Section 603 may be maintained under a blanket policy covering other properties of the City. (f) The City shall cause to be delivered to the Trustee at least once annually a certificate stating that the insurance policies or alternative risk management programs required or permitted by this Master Trust Agreement are in full force and effect. (g) The City shall cooperate fully with the Trustee in filing any proof of loss with respect to any insurance policy maintained pursuant to this Article and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Mortgaged Property or any portion thereof. 30 ARTICLE VII DEPOSITARIES OF MONEY; SECURITY FOR DEPOSITS; INVESTMENT OF FUNDS AND COVENANTS OF THE CITY Section 701 Security for Deposits. Any and all money deposited with the Trustee shall be trust funds under the terms hereof, and, to the extent permitted by law in the case of the Project Fund, shall not be subject to any lien or attachment by any creditor of the City. All money deposited with the Trustee hereunder in excess of the amount guaranteed by the Federal Deposit Insurance Corporation or other federal agency shall be continuously secured, for the benefit of the City and the Owners of Bonds, either (a) by lodging with a bank or trust company chosen by the Trustee or, if then permitted by law, by setting aside under control of the trust department of the bank or trust company holding such deposit, as collateral security, Government Obligations or other marketable securities eligible as security for the deposit of trust funds under regulations of the Comptroller of the Currency of the United States or applicable State law or regulations, having a market value (exclusive of accrued interest) not less than the amount of such deposit, or (b) if the furnishing of security as provided in clause (a) above is not permitted by applicable law, then in such other manner as may then be required or permitted by applicable State or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds; provided, however, that it shall not be necessary for the Trustee to give security for the deposit of any money with it for the payment of the principal of or the redemption premium or the interest on any Bonds, or for the Trustee to give security for any money that shall be represented by Investment Obligations purchased under the provisions of this Article as an investment of such money. All money deposited with the Trustee shall be credited to the particular fund, account or subaccount to which such money belongs. Section 702 Investment of Money. Money held for the credit of all funds, accounts and subaccounts shall be continuously invested and reinvested by the Trustee in Investment Obligations or held as cash to the extent investment or reinvestment in Investment Obligations is not practicable or to the extent the Trustee has not received written direction from the City with respect to the making of such investments. Except as hereinafter provided in this Section with respect to the disposition of investment income, the particular investments to be made and other related matters in respect of investments may, as to each Series of Bonds, be provided in the applicable Supplemental Trust Agreement. Investment Obligations shall mature or be redeemable at the option of the holder thereof not later than the respective dates when the money held for the credit of such funds, accounts and subaccounts will be required for the purposes intended. Notwithstanding the forgoing, no Investment Obligations pertaining to any Series in any fund, account or subaccount shall mature on a date beyond the latest maturity date of the respective Series of Bonds Outstanding at the time such Investment Obligations are deposited. For purposes of this Section, the maturity date of any repurchase agreement shall be deemed to 31 be the stated maturity date of such agreement and not the maturity dates of the underlying obligations. An Authorized Officer shall give to the Trustee written directions respecting the investment of any money required to be invested hereunder, subject, however, to the provisions of this Article, and the Trustee shall then invest such money as so directed. The Trustee may request additional direction or authorization from the Authorized Officer or his designee in writing with respect to the proposed investment of money under the provisions of this Master Trust Agreement. Upon receipt of such directions, the Trustee shall invest, subject to the provisions of this Article, such money in accordance with such directions. The Trustee shall have no liability for investments made in accordance with this Section. The Trustee may rely in good faith upon any certification from the City that such directed investment constitutes an Investment Obligation within the meaning of this Master Trust Agreement and otherwise complies with the provisions of this Section. Investment Obligations acquired with money in or credited to any fund, account or subaccount established under this Master Trust Agreement shall be deemed at all times to be part of such fund, account or subaccount. Any loss realized upon the disposition or maturity of such Investment Obligations shall be charged against such funds, accounts or subaccounts. The interest accruing on any such Investment Obligations and any profit realized upon the disposition or maturity of such Investment Obligations shall be credited to such funds, accounts or subaccounts. Any such interest accruing and any such profit realized shall be transferred upon the receipt thereof by the Trustee pursuant to the provisions of this Master Trust Agreement. The Trustee shall sell or reduce to cash a sufficient amount of such Investment Obligations whenever it is necessary to do so to provide money to make any payment from any such fund, account or subaccount. The Trustee shall not be liable or responsible for any loss resulting from any investment made pursuant to the provisions of this Section. Whenever a transfer of money between two or more of the funds, accounts or subaccounts established under this Master Trust Agreement is permitted or required, such transfer may be made as a whole or in part by transfer of one or more Investment Obligations at a value determined at the time of such transfer in accordance with this Article, provided that the Investlmient Obligations transferred are those in which money of the receiving fund, account or subaccount could be invested at the date of such transfer. For purposes of making any investment hereunder, the Trustee may consolidate money held by it in any fund, account or subaccount with money in any other fund, account or subaccount. Transfers from any fund, account or subaccount to the credit of any other fund, account or subaccount provided for in this Master Trust Agreement may be effectuated on the books and records of the Trustee and the City without any actual transfer of funds or liquidation of investments. Investment Obligations purchased with consolidated funds shall be allocated to each fund, account or subaccount on a pro rata basis in accordance with the initial amount so invested from each such fund, account or subaccount. 32 Unless otherwise directed by the City, Investment Obligations may be purchased by the Trustee through its own investment division or other bank facilities established for such purpose. Although the City recognizes that it may obtain a broker confirmation or written statement containing comparable information at no additional cost, the City hereby agrees that confirmations of investments are not required to be issued by the Trustee for each month in which a monthly statement is rendered to the City that includes comparable information to which would have been included in the broker confirmation. Unless otherwise requested by the City, no statement need be rendered for any fund or account if no activity occurred in such fund or account during such month. The Trustee may elect, but shall not be obligated, to credit the funds and accounts held by it with moneys representing income or principal payments due on, or sales proceeds due in respect of, Investment Obligations in such funds and accounts, or to credit to Investment Obligations intended to be purchased with such moneys, in each case before actually receiving the requisite moneys from the payment source, or to otherwise advance funds for account transactions. The City acknowledges that the legal obligation to pay the purchase price of any Investment Obligations arises immediately at the time of the purchase. Notwithstanding anything else in this Master Trust Agreement, (i) any such crediting of funds or assets shall be provisional in nature, and the Trustee shall be authorized to reverse any such transactions or advances of funds in the event that it does not receive good funds with respect thereto, and (ii)nothing in this Master Trust Agreement shall constitute a waiver of any of the Trustee's rights as a securities intermediary under Section 25-9-206 of the General Statutes of North Carolina, as amended. Section 703 Valuation. For the purpose of deteiiiiining the amount on deposit in any fund, account or subaccount, Investment Obligations in which money in such fund, account or subaccount is invested shall be valued by the Trustee (a) at face value if such Investment Obligations mature within twelve (12) months from the date of valuation thereof and (b) if such Investment Obligations mature more than twelve (12) months after the date of valuation thereof, at the price at which such Investment Obligations are redeemable by the holder at its option, if so redeemable, or, if not so redeemable, at the lesser of(i) the cost of such Investment Obligations minus the amortization of any premium or plus the amortization of any discount thereon and (ii) the market value of such Investment Obligations. All Investment Obligations in all of the funds, accounts and subaccounts created hereunder shall be valued as of the last day of each Fiscal Year. When a valuation is made by the Trustee, the Trustee shall report the result of such valuation to the City within thirty (30) days after such valuation. In addition, Investment Obligations shall be valued at any time requested by the City on reasonable notice to the Trustee (which period of notice may be waived or reduced by the Trustee); provided, however, that the Trustee shall not be required to value Investment Obligations more than once in any calendar month. Section 704 Covenant as to Arbitrage. The City covenants that so long as any of the Bonds remain Outstanding, money on deposit in any fund, account or subaccount maintained in connection with the Bonds, regardless of whether such money was derived from the proceeds of the sale of the Bonds or from any other sources, will not be used in a manner that would cause any of the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal 33 Revenue Code of 1986, as amended (the "Code"), and applicable regulations promulgated from time to time thereunder, except for moneys on deposit in such funds, accounts or subaccounts with respect to any Series of Bonds not intended to be tax-exempt under the provisions of the Code. The City further covenants and agrees to comply with the requirements of Section 148 of the Code and applicable regulations promulgated from time to time thereunder with respect to any Series of Bonds intended to be tax-exempt under the provisions of the Code. Section 705 Construction. The City shall comply with the provisions of applicable law and enter into one or more contracts or purchase orders providing for the acquisition, construction and equipping of the 2026 Project and any Additional Project. The City shall require the acquisition, construction and equipping of the 2026 Project and any Additional Project to be carried on expeditiously in accordance with the plans and specifications therefor, all applicable ordinances and statutes, and in accordance with the requirements of all regularly constituted authorities having jurisdiction over same. Section 706 Installation of Additional Improvements; Modification of Mortgaged Property. (a) The City may at any time and from time to time, in its sole discretion and at its own expense, construct or cause to be constructed additional improvements and install or permit to be installed items of equipment or other personal property in or upon any portion of the Mortgaged Property that do not materially impair the effective use, nor materially decrease the value, of the Mortgaged Property. All such items shall be subject to the lien of the Deed of Trust to the extent provided therein. The City shall repair and restore at its own expense any and all damage resulting from the construction or installation of such improvements or equipment. (b) The City shall have the right, at its own expense, to make modifications and improvements to any portion of the Mortgaged Property if such modifications or improvements are necessary or beneficial for the use of the Mortgaged Property. Such modifications or improvements shall not in any way damage any portion of the Mortgaged Property (unless such damage is to be repaired as provided in subsection (a) of this Section) or cause it to be used for purposes other than those authorized under the provisions of State and federal law or which would impair the exclusion from gross income for federal income tax purposes of the interest on the Bonds intended to be exempt for federal income tax purposes; and the Mortgaged Property, upon completion of any modifications or improvements made pursuant to this Section, shall be of a value which is not less than the value of the Mortgaged Property immediately prior to the making of such modifications and improvements. (c) Except for Permitted Encumbrances, the City will not permit any mechanic's or other lien to be established or remain against the Mortgaged Property for labor or materials furnished in connection with any modifications or improvements made by the City pursuant to this Section; provided, however, that if any such lien is established, the City may in good faith contest any lien filed or established against the Mortgaged Property, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and shall provide the Trustee with full security against any loss or forfeiture which might arise from the nonpayment of any such item, in form satisfactory to the Trustee. Section 707 Access to Mortgaged Property. The City agrees that the Trustee, and any of its officers, agents, employees or representatives, shall have the right at all reasonable times to 34 enter upon the Mortgaged Property or any portion thereof to inspect the Mortgaged Property. The City shall cause any contractor or subcontractor to cooperate with the Trustee, and any of their officers, agents, employees or representatives, during such inspections. No right of inspection contained herein shall be deemed to impose upon the Trustee any duty or obligation whatsoever to undertake any inspection. No inspection made shall be deemed to impose upon the Trustee any duty or obligation whatsoever to identify or correct any defects in the Mortgaged Property or to notify any person or entity with respect thereto, and no liability shall be imposed upon the Trustee and no warranties (either express or implied) are made by the Trustee as to the quality or fitness of any improvement, any such inspection and approval being given solely for the benefit of the Trustee. Section 708 Maintenance, Utilities, Taxes and Assessments. (a) The City shall provide for the repair and replacement of any portion of the Mortgaged Property necessary on account of ordinary wear and tear or want of care. (b) The City shall also pay or cause to be paid all utilities, taxes, assessments or other charges of any type or nature levied, assessed or charged against any portion of the Mortgaged Property; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid as and when the same become due. (c) The City may, at its expense and in its name, in good faith contest any such utilities, taxes, assessments or other charges and, in the event of any such contest, may permit such utilities, taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom; provided, however, that prior to such nonpayment it shall furnish to the Trustee a written opinion of counsel to the effect that, by nonpayment of any such items, the interest of the Trustee as beneficiary under the Deed of Trust will not be materially endangered and that the Mortgaged Property will not be subject to loss or forfeiture. Otherwise, the City shall promptly pay such utilities, taxes, assessments or charges or make provisions for the payment thereof. Section 709 Encumbrances. Except as provided in this Article or in the Deed of Trust, the City shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim, as applicable, on or with respect to the Mortgaged Property, other than Permitted Encumbrances, and shall promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim for which it is responsible if the same shall arise at any time; provided, however, that the City may contest any such mortgage, pledge, lien, charge, encumbrance or claim if it desires to do so and shall provide the Trustee with full security against any loss or forfeiture which might arise from the nonpayment of any such item in form satisfactory to the Trustee. Section 710 Indemnification. To the extent permitted by law, the City covenants to defend, indemnify and hold harmless the Trustee and its directors, officers and employees (collectively, the "Indemnified Party") against any and all losses, claims, damages or liabilities, 35 joint or several, including reasonable fees and expenses incurred in connection therewith, to which such Indemnified Party may become subject under any statute or at law or in equity or otherwise in connection with the 2026 Project, any Additional Project or the Mortgaged Property and the transactions contemplated by this Master Trust Agreement or the Deed of Trust and shall reimburse any such Indemnified Party for any legal or other expenses incurred by it in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of the transactions contemplated by this Master Trust Agreement or the Deed of Trust, whether such loss or claim is asserted prior to teiiliination of this Master Trust Agreement or thereafter. In particular, without limitation, the City shall and hereby agrees to indemnify and save the Indemnified Party harmless from and against all claims, losses and damages, including reasonable legal fees and expenses, arising out of any breach or default on the part of the City in the performance of any of its obligations under this Master Trust Agreement. Section 711 Release of Mortga ed Property. At any time and from time to time, so long as no Event of Default has occurred/and is continuing hereunder or under the Deed of Trust, the Deed of Trust Trustee and the Trustee shall be required to release a portion of the Mortgaged Property from the lien and security interest created by the Deed of Trust when and if the following requirements have been met: (a) there is filed with the Trustee a certified copy of a resolution of the City Council stating that the City desires the release of such portion of the Mortgaged Property, giving an adequate legal description of the portion of the Mortgaged Property to be released, requesting such release and providing for the payment by the City of all expenses in connection with such release; (b) there is filed with the Trustee evidence that either (i) the value of the Mortgaged Property remaining after the proposed release (as such value is evidenced by or derived from (A) an appraisal of the remaining Mortgaged Property prepared by a certified MAI-approved appraiser selected by the City, (B) the insured value of the remaining Mortgaged Property or (C) the assessed tax valuation of the remaining Mortgaged Property ), is not less than 50% of the aggregate principal amount of Bonds then Outstanding or (ii) the City (A) provides for the substitution of other property (the "Substitute Property") that will be made subject to the lien of the Deed of Trust that has a value such that the combined value of the remaining Mortgaged Property and the Substitute Property (as such value is evidenced by or derived from (1) an appraisal of the remaining Mortgaged Property and the Substitute Property prepared by a certified MAI-approved appraiser selected by the City, (2) the insured value of the remaining Mortgaged Property and the Substitute Property or (3) the assessed tax valuation of the remaining Mortgaged Property and the Substitute Property) is not less than the value of the Mortgaged Property immediately before the proposed substitution or is not less than 50% of the aggregate principal amount of Bonds then Outstanding, (B) delivers to the Deed of Trust Trustee and the Trustee an opinion of Bond Counsel to the City to the effect that the substitution of such property is permitted by law and is permitted under the terms of this Master Trust Agreement and the Deed of Trust and for any Bonds with respect to which interest is intended to be excludable from the gross income of the owners thereof for federal or state income tax purposes, that such release and substitution will not adversely affect the exclusion of interest on such Bonds from the gross income of the owners thereof for federal or state income tax purposes and 36 (C) records a release, amendment or modification to the Deed of Trust or such other instruments necessary to reflect such release and substitution of the Mortgaged Property at the place and in the manner required by the laws of the State; and (c) there is filed with the Trustee a certificate of an Authorized Officer stating that such release shall not prohibit the City's ingress, egress and regress to and from the remainder of the Mortgaged Property not being released, or materially interfere with the use of the remainder of the Mortgaged Property not being released. The City shall provide notice to each Rating Agency of the release of any of the Mortgaged Property pursuant to this Section. Section 712 Assignment and Lease by the City. (a) The Trust Agreement may not be assigned by the City. (b) The City may lease all or any portion of the 2026 Project, any Additional Project or the Mortgaged Property, subject to all of the following conditions: (i) the obligation of the City to pay the principal of, premium, if any, and interest on the Bonds and the Additional Payments hereunder shall remain obligations of the City; (ii) the City shall, at least ten (10) days prior to the execution and delivery of any such lease, furnish or cause to be furnished to the Trustee a true and complete copy of such lease; (iii) no lease by the City shall cause the 2026 Project, any Additional Project or the Mortgaged Property to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State; (iv) no lease shall cause the interest on the Bonds intended to be exempt for federal income tax purposes to become includable in gross income for federal income taxation purposes; and (v) in the case of a lease of any of the Mortgaged Property, the Trustee shall have received evidence satisfactory to the Trustee that such lease is subordinate in all respects to the lien of the Deed of Trust. 37 ARTICLE VIII PAYMENT OF BONDS; LIMITED OBLIGATION; BUDGETING Section 801 Payment of Bonds; Limited Obligation; Budgeting. The City shall cause to be paid, when due, the principal of (whether at maturity, by acceleration, by call for redemption or otherwise) and the premium, if any, and interest on the Bonds at the places, on the dates and in the manner provided herein and in the Bonds and the documentation securing such Bonds, according to the true intent and meaning thereof. The City shall also pay to such persons or entities as are entitled thereto such amounts ("Additional Payments") as shall be required for the payment of all administrative and other costs relating to the 2026 Project, any Additional Project or the Bonds, including, without limitation, (i) all costs, expenses, compensation and indemnity of the Trustee, the Local Government Commission, the provider of any bond insurance policy, credit facility or liquidity facility relating to any Bonds and any fiscal agents required to administer the terms of any Bonds (such as remarketing agents, auction agents, tender agents or paying agents); (ii) fees of auditors, accountants, attorneys or engineers; (iii) any Derivative Agreement Scheduled Payments or Derivative Agreement Additional Payments; (iv) all other necessary administrative costs of the City or to indemnify any Indemnified Party; and (v) any other payments specified as Additional Payments under a Supplemental Trust Agreement. The City shall promptly file with the Trustee copies of any Derivative Agreement entered into by the City relating to the Bonds. The City Manager of the City (or any other officer at any time charged with the responsibility for foiinulating budget proposals) shall'include in the budget proposals for review and consideration by the City Council in each Fiscal Year in which this Master Trust Agreement shall be in effect, items for all payments of principal of, premium, if any, and interest due on the Bonds (reasonably estimated in the case of any Bonds issued bearing interest at a variable interest rate and taking into account the effect of any Derivative Agreement) and reasonably estimated Additional Payments required for such Fiscal Year under this Master Trust Agreement. Any budget item referred to in this paragraph shall be deleted from the applicable budget by the City Council only by the adoption of a resolution to such effect containing a statement of its reasons therefor, which resolution shall be adopted by roll-call vote. The City shall furnish to the Trustee within thirty (30) days of the adoption by the City of its annual budget a certificate of an Authorized Officer certifying that such annual budget includes items for all payments of principal of, premium, if any, and interest on the Bonds and the reasonably estimated Additional Payments for the Fiscal Year to which the annual budget relates. In addition, the City shall promptly provide to the Trustee notice of any amendments to its annual budget affecting appropriations for payments of principal of, premium, if any, and interest on the Bonds or Additional Payments. The City shall promptly provide notice of any Event of Nonappropriation to the Trustee, the Local Government Commission and each Rating Agency. In order to secure the City's obligation hereunder and under any Supplemental Trust Agreement, including payment of principal of, premium, if any, and interest on the Bonds, and to further secure the City's obligations under any Derivative Agreement, the City has delivered the 38 Deed of Trust creating a lien on the Mortgaged Property, subject only to Permitted Encumbrances, and hereby grants to the Trustee a security interest in all money and securities held by or on behalf of the Trustee in all of the funds, accounts or subaccounts established pursuant to this Master Trust Agreement, except those funds, accounts and subaccounts that are expressly pledged in a Supplemental Trust Agreement as security only for a specified Series of Bonds and solely in strict compliance with the terms hereof. NO PROVISION OF THIS MASTER TRUST AGREEMENT OR THE DEED OF TRUST SHALL BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND CREDIT OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT LIMITATION. NO PROVISION OF THIS MASTER TRUST AGREEMENT OR THE DEED OF TRUST SHALL BE CONSTRUED OR INTERPRETED AS CREATING A DELEGATION OF GOVERNMENTAL POWERS NOR AS A DONATION BY OR A LENDING OF THE CREDIT OF THE CITY WITHIN THE MEANING OF THE CONSTITUTION OF THE STATE. THIS MASTER TRUST AGREEMENT OR THE DEED OF TRUST SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE CITY TO MAKE ANY PAYMENTS BEYOND THOSE APPROPRIATED IN THE SOLE DISCRETION OF THE CITY FOR ANY FISCAL YEAR IN WHICH THIS MASTER TRUST AGREEMENT OR THE DEED OF TRUST IS IN EFFECT; PROVIDED, HOWEVER, THAT ANY FAILURE OR REFUSAL BY THE CITY TO APPROPRIATE FUNDS, WHICH RESULTS IN THE FAILURE BY THE CITY TO MAKE ANY PAYMENT COMING DUE UNDER THIS MASTER TRUST AGREEMENT WILL IN NO WAY OBVIATE THE OCCURRENCE OF THE EVENT OF DEFAULT RESULTING FROM SUCH NONPAYMENT. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE CITY IN ANY ACTION FOR BREACH OF A CONTRACTUAL OBLIGATION UNDER THIS MASTER TRUST AGREEMENT OR THE DEED OF TRUST, AND THE TAXING POWER OF THE CITY IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEYS DUE UNDER THIS MASTER TRUST AGREEMENT OR THE DEED OF TRUST. No provision of this Master Trust Agreement or the Deed of Trust shall be construed to pledge or to create a lien on any class or source of the City's moneys, nor shall any provision of this Master Trust Agreement restrict the future issuance of any of the City's bonds or other indebtedness. To the extent of any conflict between this Section and any other provision of this Master Trust Agreement or the Deed of Trust,this Section shall take priority. Section 802 No Set-Off or Recoupment. Subject to the provisions of Section 801, the obligation of the City to pay the principal of (whether at maturity, by acceleration, by call for redemption or otherwise) and the premium, if any, and interest on the Bonds and the Additional Payments under the Trust Agreement and to perform and observe the other covenants set forth in the Trust Agreement shall be absolute and unconditional, and the City shall pay without abatement, diminution or deduction all such amounts regardless of any cause or circumstance whatsoever, including, without limitation (a) any damage, destruction or taking by eminent domain of the 2026 Project, any Additional Project or the Mortgaged Property or (b) any defense, set-off, recoupment or counterclaim that the City may have against the Trustee or any Owner of the Bonds. 39 ARTICLE IX REMEDIES Section 901 Extension of Interest Payment. If the time for the payment of the interest on any Bond is extended, whether or not such extension is by or with the consent of the City, such interest so extended shall not be entitled in case of Event of Default hereunder to the benefit or security of this Master Trust Agreement and in such case the Owner of the Bond for which the time for payment of interest was extended shall be entitled only to the payment in full of the principal of all Bonds then Outstanding and of interest for which the time for payment shall not have been extended. Section 902 Events of Default. Each of the following events is hereby declared an Event of Default: (a) payment of the principal of and the redemption premium, if any, on any of the Bonds is not made when the same are due and payable, either at maturity or by redemption or otherwise; (b) payment of the interest on any of the Bonds is not made when the same is due and payable; (c)the occurrence of an Event of Nonappropriation; (d) failure by the City to observe and perform any warranty, covenant, condition or agreement on its part to be observed or performed herein or in any Supplemental Trust Agreement, other than as referred to in subsections (a), (b) or (c) of this Section, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Trustee; provided, however, that if the failure stated in the notice cannot be corrected within the applicable period and if corrective action is instituted by the City within the applicable period and diligently pursued, the City shall have an additional period to correct the failure of the amount of time necessary to correct such failure if diligently pursued. (e)the occurrence of an event of default as provided in the Deed of Trust; or (f) receipt by the Trustee of written notice from any counterparty under a Derivative Agreement that the City shall have failed to make any Derivative Agreement Scheduled Payment or Derivative Agreement Additional Payment within ten(10) days of the same becoming due and payable. Section 903 Acceleration of Maturities. Upon the happening and continuance of any Event of Default specified in Section 902, then and in every case the Trustee may, and upon the written request of the'Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall, by a notice in writing to the City, declare the principal of all the Bonds then Outstanding (if not then due and payable) to be due and payable immediately, and upon such declaration the same shall become and be immediately due and payable, anything contained in the Bonds or this Master Trust Agreement to the contrary notwithstanding; provided, however, that if at any time after the principal of the Bonds shall have been so declared to be due and 40 payable, and before the entry of final judgment or decree in any suit, action or proceeding instituted on account of such default, or before the completion of the enforcement of any other remedy under this Master Trust Agreement or the Deed of Trust, moneys shall have accumulated in the Bond Fund sufficient to pay the principal of all matured Bonds and all arrears of interest, if any, upon all the Bonds then Outstanding (except the principal of any Bonds not then due and payable by their terms and the interest accrued on such Bonds since the last interest payment date) and sufficient to satisfy the Sinking Fund Requirement, if any, for any Teilii Bonds then Outstanding, for the then current Fiscal Year, and the charges, compensation, expenses, disbursements, advances and liabilities of the Trustee and all other amounts then payable by the City hereunder or under the Deed of Trust shall have been paid or a sum sufficient to pay the same shall have been deposited with the Trustee, and every other default known to the Trustee in the observance or performance of any covenant, condition, agreement or provision contained in the Bonds, this Master Trust Agreement (other than a default in the payment of the principal of such Bonds then due and payable only because of a declaration under this Section) or the Deed of Trust shall have been remedied to the satisfaction of the Trustee, then and in every such case the Trustee may, and upon the written request of the Owners of not less than 25% in aggregate principal amount of the Bonds not then due and payable by their terms and then Outstanding shall, by written notice to the City, rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent Event of Default or impair any right consequent thereon. Section 904 Remedies. Upon the happening and continuance of any Event of Default specified in Section 902, then and in every such case the Trustee may, and upon the written request of the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall, proceed (subject to the provisions of Section 1002) to protect and enforce its rights and the rights of the Owners of the Bonds under applicable laws and under this Master Trust Agreement or the Deed of Trust by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid or execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, as the Trustee, being advised by counsel, chosen by the Trustee, shall deem most effectual to protect and enforce such rights. In the enforcement of any remedy under this Master Trust Agreement or the Deed of Trust, the Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any Event of Default becoming, and at any time remaining, due from the City for principal, interest or otherwise under any of the provisions of this Master Trust Agreement, the Deed of Trust or of the Bonds unpaid, with interest on overdue payments of principal at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Trustee or of the Owners of the Bond, and to recover and enforce any judgment or decree against the City, but solely as provided herein and in such Bonds, for any portion of such amounts remaining unpaid and interest, costs and expenses as above provided, and to collect (but solely from moneys in the funds and accounts pledged to secure the Bonds under the provisions of this Master Trust Agreement and any Supplemental Trust Agreement and any other moneys available for such purpose) in any manner provided by law, the moneys adjudged or decreed to be payable. 41 The provisions of this Section 904 are subject to the provisions of Section 801, and the Trustee is not authorized to pursue any action to collect any deficiency for the amounts owed to the Owners of the Bonds or any other party pursuant to the provisions of this Master Trust Agreement following the realization of the remedies available under the Deed of Trust and the application of the proceeds thereof, and any other amounts held hereunder, to the payment thereof. Section 905 Application of Funds. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article shall, after payment of the costs and expenses of the Trustee and the Deed of Trust Trustee, and after satisfaction of all costs and expenses of the Trustee and the Deed of Trust Trustee, of the Owners in declaring such Event of Default, including, to the extent permitted by law, reasonable compensation to its or their agents, attorneys and counsel and the creation of a reasonable reserve for anticipated fees, costs and expenses, be deposited to the credit of the Bond Fund. Anything in this Master Trust Agreement to the contrary notwithstanding, if at any time the money in the Bond Fund is not sufficient to pay the interest on or the principal of the Bonds as the same become due and payable (either by their terms or by acceleration of maturities under the provisions of Section 903), such money, together with any money then available or thereafter becoming available for such purposes (except for such money that has already been deposited in subaccounts of the Interest Account, the Principal Account or the Sinking Fund Account for a particular Series of Bonds pursuant to the provisions of Section 502), whether through the exercise of the remedies provided for in this Article or otherwise, shall be applied as follows: (a) if the principal of all Series of Bonds shall not have become or shall not have been declared due and payable, all such money shall be applied as follows: first: to the payment to the persons or entities entitled thereto of all installments of interest on Bonds then due and payable and all Derivative Agreement Scheduled Payments in the order in which such installments became due and payable and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment, ratably according to the amounts due on such installments, to the persons or entities entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in such Bonds; second: to the payment to the persons or entities entitled thereto of the unpaid principal of any Bonds that shall have become due and payable (other than Bonds deemed to have been paid pursuant to the provisions of Section 1301 of this Master Trust Agreement), in the order of their due dates,with interest on the overdue principal at a rate equal to the rate on such Bonds, and, if the amount available shall not be sufficient to pay in full all of the amounts due on the Bonds on any date, together with such interest, then to the payment ratably according to the amount of such principal due on such date, to the persons or entities entitled thereto, without any discrimination or preference; third: to the payment of the interest on and the principal of Bonds, to the purchase and retirement of Bonds, and to the redemption of Bonds, all in accordance with the provisions of this Master Trust Agreement; and 42 fourth: to the payment of persons or entities entitled thereto of all Additional Payments, including Derivative Agreement Additional Payments, then due, and if the amount available shall not be sufficient to pay in full all such Additional Payments, then to the payment thereof ratably according to the amounts due thereon, to the persons or entities entitled thereto, without any discrimination or preference. (b) If the principal of all of the Series of Bonds shall have become or shall have been declared due and payable, all such money shall be applied: first: to the payment of principal and interest then due upon such Bonds and Derivative Agreement Scheduled Payments, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons or entities entitled thereto without any discrimination or privilege; and second: to the payment of persons or entities entitled thereto of all Additional Payments, including Derivative Agreement Additional Payments, then due, and if the amount available shall not be sufficient to pay in full all such Additional Payments, then to the payment thereof ratably according to the amounts due thereon, to the persons or entities entitled thereto, without any discrimination or preference. (c) If the principal of all of the Series of Bonds shall have been declared due and payable and if such declaration shall thereafter have been rescinded and annulled under the provisions of Section 903 of this Master Trust Agreement, then, subject to the provisions of paragraph (b) of this Section in the event that the principal of all of the Series of Bonds shall later become due and payable or be declared due and payable,the money then remaining in and thereafter accruing to the Bond Fund shall be applied in accordance with the provisions of paragraph (a) of this Section. Whenever money is to be applied by the Trustee pursuant to the provisions of this Section, (a) such money shall be applied by the Trustee at such times and from time to time as the Trustee in its sole discretion shall deteiiiiine, having due regard for the amount of money available for such application and the likelihood of additional money becoming available for such application in the future, (b) setting aside such money as provided herein in trust for the proper purpose shall constitute proper application by the Trustee and (c) the Trustee shall incur no liability whatsoever to the City, to any Owner or to any other person or entity for any delay in applying any such money so long as the Trustee acts with reasonable diligence, having due regard for the circumstances, and ultimately applies the same in accordance with such provisions of this Master Trust Agreement as may be applicable at the time of application by the Trustee. Whenever the Trustee exercises such discretion in applying such money, it shall fix the date (which shall be an Interest Payment Date unless the Trustee shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the fixing of any such date and shall not be required to make payment to the Owner of any Bond until such Bond is surrendered to the Trustee for appropriate endorsement or for cancellation if fully paid. The Trustee shall be entitled to rely upon written 43 certificates supplied to both the City and the Trustee by any counterparty under a Derivative Agreement with respect to the amount of Derivative Agreement Scheduled Payments and Derivative Agreement Additional Payments due and payable thereunder. The provisions of this Section are subject to the provisions of Section 801. Section 906 Effect of Discontinuance of Proceedings. If any proceeding taken by the Trustee or Owners of Bonds on account of any Event of Default is discontinued or abandoned for any reason, then and in every such case, the City, the Trustee and the Owners of Bonds shall be restored to their former positions and rights hereunder, and all rights, remedies, powers and duties of the Trustee shall continue as though no proceedings had been taken. Section 907 Control of Proceedings. Anything in this Master Trust Agreement to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of Bonds at any time Outstanding shall have the right, subject to the provisions of Section 1002, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall be in accordance with law and the provisions of this Master Trust Agreement. Section 908 Restrictions Upon Action. Except as provided in Section 913, no Owner of Bonds shall have any right to institute any suit, action or proceeding in equity or at law on any Bonds or for the execution of any trust hereunder or for any other remedy hereunder unless such Owner of Bonds previously shall (a) have given to the Trustee written notice of the Event of Default on account of which suit, action or proceeding is to be instituted, (b) have requested the Trustee to take action after the right to exercise such powers or right of action, as the case may be, shall have accrued, (c) have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such action, suit or proceedings in its or their name, and (d) have offered to the Trustee reasonable security and satisfactory indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time. Such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this Master Trust Agreement or to any other remedy hereunder. Notwithstanding the foregoing provisions of this Section and without complying therewith, the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding may institute any such suit, action or proceeding in their own names for the benefit of all Owners of Bonds. It is understood and intended that, except as otherwise above provided, no one or more Owners of Bonds shall have any right in any manner whatsoever by his or their action to affect, disturb or prejudice the security of this Master Trust Agreement or to enforce any right hereunder except in the manner provided, that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Owners of Bonds and that any individual rights of action or other right given to one or more of such Owners by law are restricted by this Master Trust Agreement to the rights and remedies herein provided. Section 909 Enforcement of Rights of Action. All rights of action (including the right to file proof of claim) under this Master Trust Agreement or under any Bonds may be enforced 44 by the Trustee without the possession of any Bonds or the production thereof in any proceedings relating thereto, and any such suit or proceedings instituted by the Trustee shall be brought in its name as Trustee, without the necessity of joining as plaintiffs or defendants any Owners of Bonds, and any recovery of judgment shall be for the equal benefit of the Owners of Bonds, subject to the provisions of Section 801. Section 910 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of Bonds is intended to be exclusive of any other remedy or remedies herein provided, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. Section 911 Delay Not a Waiver. No delay or omission by the Trustee or of any Owner of Bonds in the exercise of any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or any acquiescence therein, and every power or remedy given by this Master Trust Agreement to the Trustee and to the Owners of Bonds may be exercised from time to time and as often as may be deemed expedient. The Trustee may, and upon written request of the Owners of not less than a majority in principal amount of the Bonds then Outstanding shall, waive any Event of Default which in its opinion has been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of this Master Trust Agreement or before the completion of the enforcement of any other remedies under this Master Trust Agreement, but no such waiver shall extend to or affect any other existing or subsequent Event of Default or impair any rights or remedies consequent thereon. Section 912 Notice of Default. Subject to Section 914, the Trustee shall mail to the City, the Local Government Commission and to all Owners at their addresses as they appear on the registration books written notice of the occurrence of any Event of Default within thirty (30) days after the Trustee has knowledge or notice that any such Event of Default shall have occurred. The Trustee shall not be subject to any liability to any Owner by reason of its failure to mail any such notice. Section 913 Right to Enforce Payment of Bonds Unimpaired. Nothing in this Article shall affect or impair the right of any Owner of Bonds to enforce the payment of the principal of and interest on his Bonds or the obligation of the City to pay the principal of and interest on each Bond to the Owner thereof at the time and place specified in said Bonds. Section 914 Trustee Notice of Default. Except upon the happening of any Event of Default specified in subsections (a) and (b) of Section 902, the Trustee shall not be obliged to take notice or be deemed to have notice or knowledge of any Event of Default unless specifically notified in writing of such Event of Default by the City or the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding. 45 ARTICLE X TRUSTEE Section 1001 Acceptance of Trusts. The Trustee by execution hereof accepts and agrees to fulfill the trusts imposed upon it by this Master Trust Agreement, but only upon the terms and conditions set forth in this Article and subject to the provisions of this Master Trust Agreement, to all of which the City, the Trustee and the respective Owners of the Bonds agree. Prior to the occurrence of any Event of Default and after the curing of all such Events of Default that may have occurred, the Trustee shall perform such duties and only such duties of the Trustee as are specifically set forth in this Master Trust Agreement. Upon the occurrence and during the continuation of any Event of Default, the Trustee shall use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. No provision of this Master Trust Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (a) prior to any such Event of Default hereunder, and after the curing of any Event of Default that may have occurred: (i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Master Trust Agreement, and the Trustee shall not be liable except for the performance of such duties and obligations of the Trustee as are specifically set forth in this Master Trust Agreement, and no implied covenants or obligations shall be read into this Master Trust Agreement against the Trustee and no peimissive right of the Trustee under this Master Trust Agreement shall impose any duty on the Trustee to take such action, and (ii) in the absence of willful misconduct on its part, the Trustee may conclusively rely, as to the accuracy of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to it conforming to the requirements of this Master Trust Agreement, but in the case of any such certificate or opinion which by any provision hereof is specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not on its face it conforms to the requirements of this Master Trust Agreement; and (b) at all times, regardless of whether or not any such Event of Default shall exist: (i) the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer or officers of the Trustee unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and (ii)the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of not less than 25% or a majority, as this Master Trust Agreement shall require, in aggregate principal amount of the Bonds then Outstanding relating to the time, method and place of conducting any 46 proceeding for any remedy available to the Trustee, or exercising any power conferred upon the Trustee under this Master Trust Agreement. None of the provisions contained in the Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur individual financial liability in the performance of any of its duties or in the exercise of any of its rights or powers. Section 1002 Indemnification of Trustee as Condition for Remedial Action. The Trustee shall be under no obligation to institute any suit or to take any remedial proceeding (including, but not limited to, the appointment of a receiver or the acceleration of the maturity date of any or all Bonds under this Master Trust Agreement) or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the execution of any of the trusts hereby created or in the enforcement of any rights and powers hereunder, until it shall be indemnified to its satisfaction against any and all costs and expenses, outlays and counsel fees and other reasonable disbursements, and against all liability. The Trustee nevertheless may begin suit, or appear in and defend suit, or do anything else in its judgment proper to be done by it as such Trustee, without indemnity, and in such case the City, at the request of the Trustee, shall reimburse the trustee for all costs, expenses, outlays and counsel fees and other reasonable disbursements properly incurred in connection therewith. If the City shall fail to make such reimbursement, the Trustee may reimburse itself from any money in its possession under the provisions of this Master Trust Agreement and shall be entitled to a preference therefor over any Bonds Outstanding. Section 1003 Limitations on Obligations and Responsibilities of Trustee. (a) The Trustee shall be under no obligation to effect or maintain insurance or to renew any policies of insurance or to inquire as to the sufficiency of any policies of insurance carried by the City, or to report, or make or file claims or proof of loss for, any loss or damage insured against or that may occur, or to keep itself infoinied or advised as to the payment of any taxes or assessments, or to require any such payment to be made. Except as to the acceptance of the trusts under the Trust Agreement, the Trustee shall have no responsibility in respect of the validity or sufficiency of the Trust Agreement, or in respect of the validity of Bonds or the due execution or issuance thereof. The Trustee shall be under no obligation to see that any duties herein imposed upon the City or any party other than itself, or any covenants contained in the Trust Agreement or the Deed of Trust on the part of any party other than itself to be performed, shall be done or performed, and the Trustee shall be under no obligation for failure to see that any such duties or covenants are so done or perfoiiiied. (b) The Trustee shall have no duty or responsibility to examine or review, and shall have no liability for, the contents of any documents submitted or delivered to any Owner in the nature of a preliminary or final placement memorandum, official statement, offering circular or similar disclosure document; the Trustee shall not be liable for any debts contracted or for damages to persons or to property injured or damaged, or for salaries or nonfulfillment of contracts, relating to the acquisition, construction or equipping of the 2026 Project or any Additional Project; and the Trustee shall have no duty to inspect or oversee the acquisition, construction or equipping of the 2026 Project or any Additional Project, or, except as provided in Section 1001(a)(ii), to verify the truthfulness or accuracy of the certifications made by the City with respect to the 47 Trustee's disbursements for Project Costs or Issuance Costs in accordance with this Master Trust Agreement. (c) Notwithstanding any provision of the Trust Agreement to the contrary, the Trustee shall not be liable or responsible for any calculation or determination which may be required in connection with or for the purpose of complying with Section 148 of the Code or any applicable Treasury regulations, including, without limitation, the calculation of amounts required to be paid to the United States under the provisions of Section 148 of the Code and the applicable Treasury regulations, the maximum amount which may be invested in"non-purpose obligations" as defined in the Code and the fair market value of any investments made hereunder, and the sole obligation of the Trustee with respect to investment of funds hereunder shall be to invest the monies received by the Trustee in accordance with Article VII pursuant to instructions from an authorized representative of the City and to maintain appropriate records relating to the investments so made. (d) The Trustee shall not be responsible or liable for the environmental condition or any contamination of the Mortgaged Property or any other property which secures the City's obligations under the Trust Agreement or the Bonds or for any diminution in value of any such property as a result of any contamination of the property by any hazardous substance, hazardous material, pollutant or contaminant. The Trustee shall not be liable for any claims by or on behalf of the Owners or any other person or entity arising from contamination of the Mortgaged Property or any other property which secures the City's obligations under the Trust Agreement or the Bonds by any hazardous substance, hazardous material,pollutant or contaminant, and shall have no duty or obligation to assess the environmental condition of any such property or with respect to compliance of any such property under state or federal laws pertaining to the transport, storage, treatment or disposal of, hazardous substances, hazardous materials, pollutants, or contaminants or regulations,permits or licenses issued under such laws. (e) The Trustee shall not be liable if and to the extent its performance under the Trust Agreement if and to the extent such performance is prevented by reason of"force majeure." For purposes of this provision, "force majeure" means an occurrence beyond the control of the Trustee and could not have been avoided by exercising due care, including, without limitation, acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar circumstances. (f) The Trustee shall not be responsible for the filing of, or for the sufficiency or accuracy of, any financing statements initially filed to perfect any lien or lien or security interest granted or created under this Master Trust Agreement, any Supplemental Trust Agreement or the Deed of Trust in connection with the issuance of the Series 2026 Bond or any subsequent Series of Bonds. The Trustee shall be required to file continuation statements with respect to each such financing statement initially filed by the City at the time of the issuance of the Series 2026 Bond or any subsequent Series of Bonds, provided that a copy of such initial financing statement is timely delivered to the Trustee. In addition, unless the Trustee shall have been notified in writing by the City that any such initial filing or description of collateral was or has become defective, the Trustee shall be fully protected in (i) relying on such initial filing and descriptions in filing any financing or continuation statements or modifications thereto pursuant to this subsection and (ii) filing any continuation statements in the same filing offices as the initial 48 filings were made. The City shall be responsible for all reasonable and customary fees charged by the Trustee for the preparation and filing of any such continuation statements, including reasonable attorneys' fees and expenses, in accordance with Section 1005. Section 1004 Trustee Not Liable for Failure of City to Act. The Trustee shall not be liable or responsible because of the failure of the City or of any of its employees or agents to make any collections or deposits or to perform any act herein required of the City. The Trustee shall not be responsible for the application of any of the proceeds of Bonds or any other money deposited with it and invested, paid out, withdrawn or transferred hereunder if such application, investment, payment, withdrawal or transfer shall be made in accordance with the provisions of this Master Trust Agreement. The immunities and exemptions from liability of the Trustee hereunder shall extend to its directors, officers, employees and agents. Section 1005 Compensation and Indemnification of Trustee. Subject to the provisions of any contract between the City and the Trustee relating to the compensation of the Trustee, the City shall pay to the Trustee reasonable compensation for all services performed by them hereunder and also all their reasonable expenses, charges and other disbursements and those of their attorneys, agents and employees incurred in and about the administration and the performance of their powers and duties hereunder and, to the extent permitted by law, shall indemnify and save the Trustee harmless against any liabilities that they may incur in the proper exercise and performance of their powers and duties hereunder. If the City shall fail to cause any payment required by this Section to be made, the Trustee may make such payment from any money in its possession under the provisions of the Trust Agreement and shall be entitled to a preference therefor over any Bonds Outstanding hereunder. The City covenants that it shall promptly deposit or cause to be deposited to the credit of the respective fund or account the amount withdrawn therefrom by the Trustee to make any such payment. The provisions of this Section shall survive the removal or resignation of the Trustee. Section 1006 Monthly Statements from Trustee. It shall be the duty of the Trustee, on or before the 10th day of each month, to file with the City a statement setting forth in respect of the preceding calendar month: (a) the amount withdrawn or transferred by it and the amount deposited with it on account of each fund, account or subaccount held by it under the provisions of the Trust Agreement, (b) the amount on deposit with it at the end of such month in each such fund, account or subaccount, (c) a brief description of all obligations held by it as an investment of money in each such fund, account or subaccount, (d) the amount applied to the payment, purchase or redemption of Bonds under the provisions of Article V and a description of the Bonds or portions thereof so paid, purchased or redeemed, and (e) any other information that the City may reasonably request which is contained in the books and records of the Trustee. 49 All records and files pertaining to Bonds in the custody of the Trustee not otherwise restricted or excluded from disclosure by the terms of the Trust Agreement, including, without limitation, Section 1102, shall be open at all reasonable times to the inspection of the City and its agents and representatives. Section 1007 Trustee May Rely on Certificates. If at any time it shall be necessary or desirable for the Trustee to make any investigation respecting any fact preparatory to taking or not taking any action or doing or not doing anything as such Trustee, and in any case in which the Trust Agreement or the Deed of Trust provides for permitting or taking any action, the Trustee may rely upon any certificate required or peiniitted to be filed with it under the provisions of the Trust Agreement or the Deed of Trust, and any such certificate shall be evidence of such fact or protect the Trustee in any action that it may or may not take or in respect of anything it may or may not do, in absence of willful misconduct, by reason of the supposed existence of such fact. Except as otherwise provided in the Trust Agreement or the Deed of Trust, any request, notice, certificate or other instrument from the City to the Trustee shall be deemed to have been signed by the proper party or parties if signed by any Authorized Officer, and the Trustee may accept and rely upon a certificate signed by any Authorized Officer as to any action taken by the City. Section 1008 Trustee Not Responsible for Recitals. The recitals, statements and representations contained herein and in the Bonds shall be taken and construed as made by and on the part of the City and not by the Trustee, and the Trustee assumes and shall be under no responsibility for the correctness of the same. Section 1009 Trustee Protected in Relying on Certain Documents. The Trustee shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in absence of willful misconduct, reasonably and in accordance with the terms of the Trust Agreement or the Deed of Trust, upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other paper or document that it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of the Trust Agreement or the Deed of Trust, or upon the written opinion of any attorney, engineer or accountant believed by the Trustee to be qualified in relation to the subject matter, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Trustee shall not be under any obligation to see to the recording or filing of the Trust Agreement or otherwise to the giving to any person of notice of the provisions hereof. Section 1010 Trustee May Pay Taxes and Assessments. In case the City shall fail to pay or cause to be paid any lawful tax, assessment or governmental charge or other charge upon any part of the City to the extent, if any, that the City may be deemed by the Trustee liable for same, the Trustee may pay such tax, assessment or governmental charge, without prejudice, however, to any rights of the Trustee or the Owners of Bonds arising in consequence of such failure; and any amount at any time so paid under this Section shall be repaid upon demand by the Trustee by the City, but the Trustee shall be under no obligation to make any such payment from sources provided in the Trust Agreement unless it shall have available or be provided with adequate funds for the purpose of such payment. 50 Section 1011 Resignation and Removal of Trustee Subject to Appointment of Successor. No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 1014 and approval by the Local Government Commission. Section 1012 Resignation of Trustee. Subject to the provisions of Section 1011, the Trustee may resign and thereby become discharged from the trusts hereby created, by notice in writing given to the City, and mailed, postage prepaid, at the Trustee's expense, to each Owner of Bonds, not less than sixty (60) days before such resignation is to take effect, but such resignation shall take effect immediately upon the appointment of a new Trustee hereunder if such new Trustee shall be appointed before the time limited by such notice and shall then accept the trusts hereof. Section 1013 Removal of Trustee. The Trustee may be removed at any time by an instrument or concurrent instruments in writing (i) executed by the Owners of not less than a majority in aggregate principal amount of Bonds then Outstanding and filed with the City or (ii) executed by an Authorized Officer, so long as no Event of Default shall have occurred and be continuing, in either case filed with Trustee not less than sixty (60) days before such removal is to take effect as stated in said instrument of instruments. A photographic copy of any order, instrument or instruments filed with the City under the provisions of this paragraph shall be delivered promptly by the City to the Trustee. The Trustee may also be removed at any time for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provisions of this Master Trust Agreement with respect to the duties and obligations of the Trustee by any court of competent jurisdiction upon the application of the City or the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding. Section 1014 Appointment of Successor Trustee. If at any time the Trustee shall resign, be removed, be dissolved or otherwise become incapable of acting, or the bank or trust company acting as Trustee shall be taken over by any governmental official, agency, department or board, the positions of Trustee shall thereupon become vacant. If the position of Trustee shall become vacant for any reason, the City shall appoint a Trustee to fill such vacancy. The appointment of any successor Trustee shall be subject to the approval of the Local Government Commission. The City shall mail notice of any such appointment made by it,postage prepaid, to all Owners of Bonds. Any organization or entity into which the Trustee may be merged or converted or with which it may be consolidated, or any organization or entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any organization or entity succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such organization or entity shall be otherwise qualified and eligible to serve as Trustee under this Article X and provided such successor entity is (i) a bank or trust company within or without the City which is duly authorized to exercise corporate trust powers and subject to examination by federal or State authority, (ii) of good standing and (iii) having a combined capital, surplus and undivided profits aggregating not less than One Hundred Million Dollars ($100,000,000). 51 At any time within sixty (60) days after any such vacancy shall have occurred, the Owners of not less than 25% in principal amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing, executed by such Owners and filed with the City, may nominate a successor Trustee, which the City shall appoint and which shall supersede any Trustee theretofore appointed by the City. Photographic copies of each such instrument shall be delivered promptly by the City to the predecessor Trustee and to the Trustee so appointed by the Owners. If no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section, any Owner hereunder or any retiring Trustee may apply to any court of competent jurisdiction to appoint a successor Trustee. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. Any successor Trustee appointed shall be (i) a bank or trust company within or without the City which is duly authorized to exercise corporate trust powers and subject to examination by federal or State authority, (ii) of good standing and (iii) having a combined capital, surplus and undivided profits aggregating not less than One Hundred Million Dollars ($100,000,000). Section 1015 Vesting of Duties in Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor, and also to the City, an instrument in writing accepting such appointment hereunder, and thereupon such successor Trustee, without any further act, shall become fully vested with all the rights, immunities and powers, and subject to all the duties and obligations, of its predecessor; but such predecessor shall nevertheless, on the written request of its successor or of the City and upon payment of the expenses, charges and other disbursements of such predecessor that are payable pursuant to the provisions of Section 1005, execute and deliver an instrument transferring to such successor Trustee all the rights, immunities and powers of such predecessor hereunder; and every predecessor Trustee shall deliver all property and money held by it hereunder to its successor. Should any instrument in writing from the City be required by any successor Trustee for more fully and certainly vesting in such Trustee the rights, immunities, powers and trusts hereby vested or intended to be vested in the predecessor Trustee, any such instrument in writing shall and will, on request, be executed, acknowledged and delivered by the City. Section 1016 E-Verify. The Trustee hereby certifies that the Trustee understands that "E-Verify" is a federal program operated by the United States Department of Homeland Security and other federal agencies, or any successor or equivalent program used to verify the work authorization of newly hired employees pursuant to federal law in accordance with Section 64- 25(5) of the General Statutes of North Carolina, as amended. The Trustee uses E-Verify to verify the work authorization of its employees in accordance with Section 64-26(a) of the General Statutes of North Carolina, as amended. The Trustee shall require that any subcontractor that it uses in connection with the performance of its obligations under the Trust Agreement to certify to such subcontractor's compliance with E-Verify. 52 • ARTICLE XI EXECUTION OF INSTRUMENTS BY OWNERS, PROOF OF OWNERSHIP OF BONDS,AND DETERMINATION OF CONCURRENCE OF OWNERS Section 1101 Execution of Instruments. Any request, direction, consent or other instrument in writing required or permitted by this Master Trust Agreement or any Supplemental Trust Agreement to be signed or executed by any Owners of Bonds may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Owners or their attorneys or legal representatives or legal representative of his estate if the Owner is deceased. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of this Master Trust Agreement or any Supplemental Trust Agreement and shall be conclusive in favor of the Trustee and the City with regard to any action taken by either under such instrument if made in the following manner: (a) The fact and date of the execution by any person of any such instrument may be proved by the verification, by any officer in any jurisdiction who by the laws thereof has power to take affidavits within such jurisdictions, to the effect that such instrument was subscribed and sworn to before him or by an affidavit of a witness to such execution. Where such execution is on behalf of a person other than an individual, such verification or affidavit shall also constitute sufficient proof of the authority of the signer thereof (b) The ownership of Bonds shall be proved by the registration books kept under the provisions of Section 205. Nothing contained in this Article shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which it may deem sufficient. Any request or consent of any Owner of Bonds shall bind every future Owner of the same Bonds in respect of anything done by the Trustee in pursuance of such request or consent. Notwithstanding any of the foregoing provisions of this Section, the Trustee shall not be required to recognize any person as an Owner of Bonds or to take any action at such an Owner's request unless such Bonds shall be deposited with it. Section 1102 Preservation of Information; Communications. (a) The Trustee shall preserve, in as current a farm as is reasonably practicable, the names and addresses of Owners received by the Trustee. (b) If an Owner which is a Securities Depository Nominee or three or more Owners which are not Securities Depository Nominees (hereinafter collectively referred to as "applicants") apply in writing to the Trustee and furnish reasonable proof that each such applicant has owned a Bond for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Owners with respect to their rights under this Master Trust Agreement or under the Bonds and such application, at its election, either 53 (i) afford such applicants access to the information preserved at the time by the Trustee in accordance with subsection(a) of this Section, or (ii) inform such applicants as to the approximate number of Owners whose names and addresses appear in the information preserved at the time by the Trustee in accordance with sub-section (a) of this Section, and as to the approximate cost of mailing to such Owners the forma of communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Owner whose name and address appears in the information preserved at the time by the Trustee in accordance with subsection (a) of this Section a copy of the form of communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing. (c) Every Owner, by receiving and holding one or more Bonds, agrees with the City and the Trustee that neither the City nor the Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Owners in accordance with subsection (b) of this Section, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under such subsection. 54 ARTICLE XII AMENDMENTS AND SUPPLEMENTS Section 1201 Supplements and Amendments Without Consent. This Master Trust Agreement and the Deed of Trust, and the rights and obligations of the parties thereto, may be amended or supplemented at any time by an amendment or supplement thereto without the consent of any Owners,provided that, in the opinion of the Trustee, who may rely upon a written opinion of legal counsel, such amendment or supplement shall not materially adversely affect the interest of the Owners: (a) to cure any ambiguity or formal defect or omission, to correct or supplement any provision herein that may be inconsistent with any other provision herein, to make any other provisions with respect to matters or questions arising under this Master Trust Agreement or the Deed of Trust, or to modify, alter, amend, add to or rescind, in any particular, any of the terms or provisions contained in this Master Trust Agreement or the Deed of Trust, or (b) to grant or to confer upon the Trustee, for the benefit of the Owners, any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Owners or the Trustee, or (c) to add to the provisions of this Master Trust Agreement or the Deed of Trust other conditions, limitations and restrictions thereafter to be observed, or (d) to add to the covenants and agreements of the City in this Master Trust Agreement or the Deed of Trust other covenants and agreements thereafter to be observed by the City or to surrender any right or power herein reserved to or conferred upon the City, or (e) to permit the qualification of this Master Trust Agreement or the Deed of Trust under any federal statute now or hereafter in effect or under any state blue sky law, and, in connection therewith, if the City so determines, to add to this Master Trust Agreement, any Supplemental Trust Agreement or the Deed of Trust such other terms, conditions and provisions as may be permitted or required by such federal statute or blue sky law. At least thirty (30) days prior to the execution and delivery of any such supplement or amendment for any of the purposes of this Section, the Trustee shall cause a notice of the proposed supplement or amendment to be mailed, postage prepaid, to all Owners of Bonds and to each Rating Agency. Such notice shall be prepared by the City, shall briefly set forth the nature of the proposed supplement or amendment and shall state that copies thereof are on file at the designated corporate trust office of the Trustee for inspection by all Owners of Bonds. A failure on the part of the Trustee to mail the notice required by this Section shall not affect the validity of such supplement or amendment. Section 1202 Supplements and Amendments With Consent. Subject to the terms and provisions contained in this Section, and not otherwise, the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding that will be affected by a proposed supplement or amendment to this Master Trust Agreement or the Deed of Trust (as defined in Section 1203) shall have the right, from time to time, anything contained in this Master Trust 55 Agreement or the Deed of Trust to the contrary notwithstanding, to consent to and approve the execution and delivery of such supplement or amendment as are deemed necessary or desirable by the City for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Master Trust Agreement or the Deed of Trust; provided, however, that nothing herein contained shall permit, or be construed as permitting (a) an extension of the maturity of the principal of or the interest on any Bonds without the consent of the Owner of such Bond and the approval of the Local Government Commission, (b) a reduction in the principal amount of any Bonds or the redemption premium or the rate of interest on any Bonds without the consent of the Owner of such Bond, (c) a preference or priority of any Bonds over any other Bonds without the consent of the Owners of all Bonds then Outstanding or (d) a reduction in the aggregate principal amount of the Bonds required for consent to such supplement or amendment without the consent of the Owners of all Bonds then Outstanding. Nothing herein contained, however, shall be construed as making necessary the approval by Owners of Bonds of the execution and delivery of any supplement or amendment to this Master Trust Agreement or the Deed of Trust as authorized in Section 1201. If at any time the City and the Trustee determine that it is necessary or desirable to execute and deliver any supplement or amendment to this Master Trust Agreement or the Deed of Trust for any of the purposes of this Section, the Trustee shall, at the expense of the City, cause notice of the proposed supplement or amendment to be mailed, postage prepaid, to all Owners at their addresses as they appear on the registration books as of the date of mailing such notice and to each Rating Agency. Such notice shall be prepared by the City, shall briefly set forth the nature of the proposed supplement or amendment and shall state that copies thereof are on file at the designated corporate trust office of the Trustee for inspection by all Owners of Bonds. The Trustee shall not, however, be subject to any liability to any Owner of Bonds by reason of its failure to cause the notice required by this Section to be mailed, and any such failure to cause the notice required by this Section to be mailed shall not affect the validity of such supplement or amendment when consented to and approved as provided in this Section. Whenever, at any time within three (3) years after the date of the mailing of such notice, the City delivers to the Trustee an instrument or instruments in writing purporting to be executed by the Owners of not less than a majority in aggregate principal amount of Bonds then Outstanding that are affected (as defined in Section 1203) by a proposed supplement or amendment, which instrument or instruments shall refer to the proposed supplement or amendment described in such notice and shall specifically consent to and approve the execution and delivery thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the City and the Trustee, as applicable, may execute and deliver such supplement or amendment to this Master Trust Agreement or the Deed of Trust in substantially such form, without liability or responsibility to any Owner of Bonds whether or not such Owner shall have consented thereto. If the Owners of not less than a majority in aggregate principal amount of Bonds then Outstanding at the time of the execution and delivery of such supplement or amendment and that are affected (as defined in Section 1203) by a proposed supplement or amendment to this Master Trust Agreement or the Deed of Trust have consented to and approved the execution and delivery thereof as herein provided, to the extent permitted by law, no Owner of Bonds shall have any right to object to the execution and delivery of such supplement or amendment, to 56 object to any of the terms and provisions contained therein or the operation thereof, to question the propriety of the execution and delivery thereof, or to enjoin or restrain the City and the Trustee, as applicable, from executing and delivering the same or from taking any action pursuant to the provisions thereof. Section 1203 Bonds Affected. For purposes of this Master Trust Agreement, Bonds shall be deemed to be "affected"by a supplement or amendment to this Master Trust Agreement or the Deed of Trust if the same adversely affects or diminishes the rights of the Owners of such Bonds against the City or the rights of such Owners in the security for such Bonds. The Trustee may in its reasonable discretion determine whether any Bonds would be affected by any such supplement or amendment, and any such determination shall be conclusive upon the Owners of all Bonds, whether theretofore or thereafter issued or incurred. The Trustee shall not be liable for any such deteiniination made in good faith. The Trustee may, but shall not be required to, execute or consent to any such supplement or amendment that adversely affects its rights, protections or indemnifications under this Master Trust Agreement, any Supplemental Trust Agreement or the Deed of Trust. Section 1204 Supplements and Amendments Part of Master Trust Agreement and Deed of Trust. Any supplement or amendment to this Master Trust Agreement or the Deed of Trust executed and delivered in accordance with the provisions of this Article shall thereafter form a part of this Master Trust Agreement and the Deed of Trust, as applicable, and this Master Trust Agreement and the Deed of Trust shall be and be deemed to be modified and amended in accordance therewith. Thereafter the respective rights, duties and obligations under this Master Trust Agreement and the Deed of Trust of the City, the Trustee and all Owners of Bonds then Outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Master Trust Agreement and the Deed of Trust as so supplemented and amended. If any supplement or amendment to this Master Trust Agreement or the Deed of Trust is executed and delivered, Bonds issued thereafter may contain an express reference to such supplements or amendments if deemed necessary or desirable by the City. Section 1205 Supplemental Trust Agreements. For purpose of this Article XII, a Supplemental Trust Agreement that relates only to a particular Series of Bonds and that does not purport to alter or amend the rights or security of any Owners of any Bonds of any other Series shall not be deemed or considered to be a supplement or amendment to this Master Trust Agreement for purposes of this Article. Section 1206 Exclusion of Bonds. Bonds owned or held by or for the account of the City shall not be deemed Outstanding Bonds for the purpose of any consent or other action or any calculation of Outstanding Bonds provided for in this Article, and the City as Owner of such Bonds shall not be entitled to consent or take any other action provided for in this Article. At the time of any consent or other action taken under this Article, the City shall furnish the Trustee an Officer's Certificate upon which the Trustee may rely, describing all Bonds so to be excluded. 57 ARTICLE XIII DEFEASANCE Section 1301 Release of Trust Agreement. When: (a) the Bonds issued hereunder shall have become due and payable in accordance with their terms or otherwise as provided in this Master Trust Agreement, and the whole amount of the principal and the interest and premium, if any, so due and payable upon all Bonds shall be paid, and (b) if the Bonds shall not have become due and payable in accordance with their terms, the Trustee shall hold, sufficient (i) money or (ii) Defeasance Obligations or a combination of(i) and (ii) of this clause (b), the principal of and the interest on which, when due and payable, will provide sufficient money to pay the principal of, and the interest and redemption premium, if any, on all Bonds then Outstanding to the maturity date or dates of such Bonds or to the date or dates specified for the redemption thereof, and there shall have been delivered to the Trustee an opinion of Bond Counsel that such deposit of money or Defeasance Obligations will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds, and (c) if Bonds are to be called for redemption, irrevocable instructions to call the Bonds for redemption shall have been given by the City to the Trustee, and (d) sufficient funds shall also have been provided or provision made for paying all other obligations payable hereunder by the City; then and in that case the right, title and interest of the Trustee in the funds, accounts and subaccounts mentioned in this Master Trust Agreement shall thereupon cease, determine and become void and, upon being furnished with an opinion, in form and substance satisfactory to the Trustee, of counsel approved by the Trustee, to the effect that all conditions precedent to the release of this Master Trust Agreement and the Deed of Trust have been satisfied, the Trustee shall release this Master Trust Agreement and the Deed of Trust and shall execute such documents to evidence such release as may be required by such counsel, and the Trustee shall turn over to the City any surplus in, and all balances remaining in, all funds, accounts and subaccounts other than money held for the redemption or payment of Bonds. If the Bonds to be paid by the moneys or Defeasance Obligations deposited with the Trustee will not be retired within six months of the date of the deposit, then in addition to the requirements set forth in (a) through (d) above, such deposit shall be accompanied by a report of an independent verification agent or certified public accountant to the effect that the principal of and the interest on the Defeasance Obligations when due and payable, together with any money deposited, will provide sufficient money to pay the principal of, and the interest and redemption premium, if any, on, all Bonds then Outstanding to the maturity date or dates of such Bonds or to the date or dates specified for the redemption thereof. Otherwise, this Master Trust Agreement shall be, continue and remain in full force and effect; provided, however, that (i) if the Bonds to be paid by the moneys or Defeasance Obligations deposited with the Trustee will not be retired within thirty days of the date of the deposit, then in addition to the requirements set forth in Article III, the 58 Trustee, within thirty (30) days after such moneys or Defeasance Obligations shall have been deposited with it, shall cause a notice signed by the Trustee to be mailed, postage prepaid, to all Owners of Bonds, setting forth (a) the date or dates, if any, designated for the redemption of the Bonds, (b) a description of the Defeasance Obligations so held by it, and (c) that this Master Trust Agreement has been released in accordance with the provisions of this Section, and (ii) (a) the Trustee shall nevertheless retain such rights, powers and privileges under this Master Trust Agreement as may be necessary and convenient in respect of the Bonds for the payment of the principal, interest and any premium for which such Defeasance Obligations have been deposited and (b) the Trustee shall retain such rights, powers and privileges under this Master Trust Agreement as may be necessary and convenient for the registration, transfer and exchange of Bonds; provided,however, that failure to mail such notice to any Owner or to the Owners, or any defect in such notice so mailed, shall not affect the validity of the release of this Master Trust Agreement. All money and Defeasance Obligations held by the Trustee pursuant to this Section shall be held in trust and applied to the payment,when due, of the obligations payable therewith. 59 ARTICLE XIV MISCELLANEOUS PROVISIONS Section 1401 Successorship of City. In the event the City for any reason shall be dissolved or its legal existence shall otherwise be terminated, all of the covenants, stipulations, obligations and agreements contained in this Master Trust Agreement by or on behalf of or for the benefit of the City shall bind or inure to the benefit of the successor of the City from time to time and any officer, board, commission, authority, agency or instrumentality to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law, and the term "City" as used in this Master Trust Agreement shall include such successor or successors. Section 1402 Payment Due on Holidays. If the date for making any payment or the last day for performance of any act or the exercising of any right as provided in this Master Trust Agreement is not a Business Day, such payment may be made or act performed or right exercised on the next Business Day with the same force and effect as if done on the date provided in this Master Trust Agreement. Section 1403 Manner of Giving Notice. All notices, demands and requests to be given to or made hereunder by the City or the Trustee shall be given or made in writing and shall be deemed to be properly given or made if sent by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (a) As to the City-- City of Dunn,North Carolina 401 E. Broad Street Dunn,North Carolina 28334 Attention: Finance Director (b) As to the Trustee-- U.S. Bank Trust Company,National Association 214 North Tryon Street 27th Floor, Mail Code CN-NC-H27A Charlotte,North Carolina 28202 Attention: Global Corporate Trust (c) As to the Local Government Commission-- North Carolina Local Government Commission Longleaf Building 3200 Atlantic Avenue Raleigh,North Carolina 27604 Attention: Secretary 60 Unless otherwise specifically provided herein to the contrary, the Trustee shall also have the right to accept and act upon notices, certificates, consents, requests, waivers, requisitions, instructions and directions, including funds transfer and investment instructions (each for purposes of this paragraph, a"Notice"), under this Master Trust Agreement or any Supplemental Trust Agreement sent by Electronic Means by the City. As used in this paragraph, "Electronic Means" means a portable document format ("pdf') or other replicating image attached to an unsecured email, facsimile transmission, secure electronic transmission (containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee), or another method or system specified by the Trustee as available for use in connection with its services hereunder; provided, however, that the City shall provide to the Trustee an incumbency certificate listing designated persons authorized to provide Notices by Electronic Means ("Authorized Officers"), which incumbency certificate shall include each Authorized Officer's name, title, sample signature, telephone number, facsimile number and email address from which such Notices will be sent and shall be amended whenever a person is to be added or deleted from the listing. The City agrees that the Trustee cannot determine the identity of the actual sender of Notices delivered by Electronic Means and that the Trustee shall be deemed to have acted reasonably in believing the genuineness of a Notice received by Electronic Means if such Notice on its face appears to have been signed by, and sent from the email address of, an Authorized Officer, as shown on the incumbency certificate provided to the Trustee. The City shall be responsible for ensuring that only its Authorized Officers use Electronic Means to deliver Notices to the Trustee, and the City and its Authorized Officers are responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and authentication keys provided by the Trustee, if any. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with Notices delivered by Electronic Means notwithstanding such Notices conflict or are inconsistent with a subsequent written Notice delivered by other means. If the Trustee accepts and acts upon a Notice delivered by Electronic Means in accordance with this paragraph, the City agrees (i) to assume all risks arising out of the use of such Electronic Means to submit Notices to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized Notices and the risk that a Notice is intercepted during transmission and misused by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting instructions to the Trustee and that there may be more secure methods of transmitting instructions than the use of Electronic Means; (iii) that the Trustee has no responsibility for the City's security procedures in connection with its transmission of Notices and that such procedures, including the procedures set forth herein, provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) that it will notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures to the extent they may impact the use of Electronic Means to deliver Notices pursuant to this paragraph. Any such notice, demand or request may also be transmitted to the appropriate above- mentioned party by telephone and shall be deemed to be properly given or made at the time of such transmission if, and only if, such transmission of notice shall be confirmed in writing and sent as specified above. Any of such addresses may be changed at any time upon written notice of such change in the manner provided above to the other parties by the party effecting the change. 61 • All documents received by the Trustee under the provisions of this Master Trust Agreement, or photographic copies thereof, shall be retained in its possession until this Master Trust Agreement shall be released under the provisions of Section 1301, subject at all reasonable times to the inspection of the City, any Owner and their respective agents and representatives. Section 1404 Substitute Mailing. If, because of the temporary or permanent suspension of postal service, the City or the Trustee shall be unable to mail any notice required to be given by the provisions of this Master Trust Agreement, the City or the Trustee shall give notice in such other manner as in the judgment of the City or the Trustee shall most effectively approximate mailing, and the giving of notice in such manner shall for all purposes of this Master Trust Agreement be deemed to be in compliance with the requirement for the mailing thereof Section 1405 Parties, Owners and Local Government Commission Alone Have Rights Under this Master Trust Agreement. Except as herein or in a Supplemental Trust Agreement otherwise expressly provided, nothing in this Master Trust Agreement, express or implied, is intended or shall be construed to confer upon any person, film or corporation, other than the Trustee, the City, the Owners of Bonds and the Local Government Commission any right, remedy or claim, legal or equitable, under or by reason of this Master Trust Agreement or any provision being intended to be and being for the sole and exclusive benefit of the Trustee, the City,the Owners of Bonds and the Local Government Commission. Section 1406 Effect of Partial Invalidity. In case any one or more of the provisions of this Master Trust Agreement or the Bonds shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this Master Trust Agreement or the Bonds, but this Master Trust Agreement and the Bonds shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. In case any covenant, stipulation, obligation or agreement contained in the Bonds or this Master Trust Agreement shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the City to the full extent permitted by law. Section 1407 Effect of Covenants; Governing Law; Venue. All covenants, stipulations, obligations and agreements of the City contained in this Master Trust Agreement shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent permitted by the Constitution and laws of the State. This Master Trust Agreement is executed and delivered with the intent that the laws of the State shall govern this construction. The exclusive forum and venue for all actions arising out of this Master Trust Agreement are with the North Carolina General Court of Justice in Harnett County, North Carolina or the U.S. District Court for the Eastern District of North Carolina, Raleigh Division. Any attempt to contravene this Section shall be an express violation of this Master Trust Agreement. Section 1408 No Recourse Against Members, Officers or Employees of City or the Local Government Commission. No recourse under, or upon, any statement, obligation, covenant or agreement contained in this Master Trust Agreement, or in any Bonds issued hereunder, or in any document or certification whatsoever, or under any judgment obtained against the City, or by the enforcement of any assessment, or by any legal or equitable 62 proceeding by virtue of any constitution or statute or otherwise or under any circumstances, shall be had against any member, officer or employee of the City or the Local Government Commission, either directly or through the City for the payment for or to, the City or any receiver of either of them, or for, or to, any Owner of Bonds or otherwise, of any sum that may be due and unpaid upon any such Bonds. Any and all personal liability of every nature, whether at common law or in equity or by statute or by constitution or otherwise, of any such member, officer or employee to respond by reason of any act or omission on his or her part or otherwise, for the payment for, or to, the City or the Local Government Commission or any receiver of either of them, or for, or to, any Owner of Bonds, or otherwise, of any sum that may remain due and unpaid upon the Bonds hereby secured or any of them, is hereby expressly waived and released as an express condition of, and in consideration for, the adoption of this Master Trust Agreement and the issuance of the Bonds. Section 1409 Dealing in Bonds. The Trustee and its directors, officers, employees or agents, and any officer, employee or agent of the City, may in good faith, buy, sell, own, hold and deal in any Bonds and may join in any action which any Owner thereof may be entitled to take with like effects as if such Trustee were not a Trustee. Section 1410 Headings. Any heading preceding the text of the several articles hereof, any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Master Trust Agreement, nor shall they affect its meaning, construction or effect. Section 1411 Further Authority. The officers of the City, attorneys and other agents or employees of the City are hereby authorized to do all acts and things required of them by this Master Trust Agreement for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Bonds and this Master Trust Agreement. Section 1412 Multiple Counterparts. This Master Trust Agreement.may be executed in multiple counterparts, each of which shall be regarded for all purposes as an original, and such counterparts shall constitute but one and the same instrument. Section 1413 USA Patriot Act Compliance. To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity, the Trustee requires documentation to verify its formation and existence as a legal entity. The Trustee may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. 63 IN WITNESS WHEREOF, the City and the Trustee have caused this Master Trust Agreement to be executed in their respective names by their respective duly authorized representatives all as of the date first written above. CITY OF DUNN,NORTH CAROLINA [SEAL] By: Mayor Attest: City Clerk U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By: Vice President 64 [Counterpart signature page to the Master Trust Agreement, dated as of February 1, 2026, between the City of Dunn,North Carolina and U.S. Bank Trust Company,National Association] CERTIFICATE OF LOCAL GOVERNMENT COMMISSION The foregoing Master Trust Agreement has been approved under the provisions of Section 160A-20 and Article 8 of Chapter 159 of the General Statutes of North Carolina, as amended. Deputy Secretary, Local Government Commission of North Carolina 65 EXHIBIT A Requisition No. REQUISITION AND CERTIFICATE ,20 U.S. Bank Trust Company,National Association 214 North Tryon Street 27th Floor, Mail Code CN-NC-H27A Charlotte,North Carolina 28202 Attention: Global Corporate Trust Dear Sir or Madam: On behalf of the City of Dunn, North Carolina (the "City"), in connection with the $ City of Dunn, North Carolina Limited Obligation Bonds, Series (the "Bonds") issued by the City, I hereby requisition from you funds held in the Project Account of the City of Dunn, North Carolina Limited Obligation Bonds Project Fund (the "Project Fund") in accordance with the Master Trust Agreement, dated as of February 1, 2026 (the "Master Trust Agreement"), between the City and yourself, as trustee (the "Trustee), and the Supplemental Trust Agreement, dated as of (the "Supplemental Trust Agreement"), between the City and the Trustee, the sum of $ payable to I hereby certify that the obligation to make such payment was incurred by the City in connection with the [ ] Project as defined in the [Master][Supplemental] Trust Agreement or is a cost of issuance relating to the issuance of the Bonds, is presently due and payable, is a proper charge against the Project Fund and has not been the basis for any prior requisition which has been paid. All capitalized terms not otherwise defined herein shall have the same meaning in the Trust Agreement. Authorized Officer A-1 Draft No. 1 January 13, 2026 FIRST SUPPLEMENTAL TRUST AGREEMENT Dated as of February 1, 2026 Between CITY OF DUNN,NORTH CAROLINA and U.S. BANK TRUST COMPANY,NATIONAL ASSOCIATION, as Trustee $ City of Dunn,North Carolina Limited Obligation Bond Series 2026 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 101. Meaning of Words and Teiliis Section 102. Rules of Construction ARTICLE II AUTHORIZATION, FORM, DELIVERY AND REGISTRATION OF THE SERIES 2026 BOND Section 201. Authorization and Issuance of the Series 2026 Bond Section 202. Fotin of Series 2026 Bond Section 203. Details of Series 2026 Bond Section 204. Terms and Conditions for Issuance of the Series 2026 Bond Section 205. Representations, Covenants and Warranties of the City ARTICLE III REDEMPTION OF SERIES 2026 BOND Section 301. Redemption of Series 2026 Bond Section 302. Redemption Notice ARTICLE IV SERIES 2026 PROJECT ACCOUNT; BOND FUND SUBACCOUNTS; PAYMENTS AND COVENANTS Section 401. Establishment of Series 2026 Project Account and Bond Fund Subaccounts Section 402. Payments by the City Section 403. Application of Money in the Series 2026 Project Account Section 404. Application of Money in the Series 2026 Subaccount of the Redemption Account Section 405. Investment of Money Section 406. Payment of Principal, Interest and Premium Section 407. Tax Covenant Section 408. Other Covenants of the City i ARTICLE V THE TRUSTEE Section 501. Acceptance of Duties by Trustee Section 502. E-Verify ARTICLE VI SUPPLEMENTAL TRUST AGREEMENTS Section 601. Supplemental Trust Agreements Without Consent of Owner Section 602. Modification of Supplemental Agreement With Consent of Owner Section 603. Series 2026 Bond Affected Section 604. Responsibilities of Trustee and City under this Article ARTICLE VII MISCELLANEOUS PROVISIONS Section 701. Manner of Giving Notice Section 702. Substitute Mailing Section 703. Parties, Owner and Local Government Commission Alone Have Rights Under this First Supplemental Trust Agreement Section 704. Effect of Partial Invalidity Section 705. Effect of Covenants; Governing Law; Venue Section 706. Headings Section 707. Further Authority Section 708. Payment Due on Holidays Section 709. Multiple Counterparts Exhibit A - Foini of Series 2026 Bond ii FIRST SUPPLEMENTAL TRUST AGREEMENT This FIRST SUPPLEMENTAL TRUST AGREEMENT, dated as of February 1, 2026 (this "First Supplemental Trust Agreement"), between the CITY OF DUNN, NORTH CAROLINA, a municipal corporation duly organized and validly existing under the Constitution and laws of the State of North Carolina (the "City"), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America, which is authorized under such laws to exercise trust powers (the "Trustee"); WITNESSETH: WHEREAS, pursuant to Section 160A-20 of the General Statutes of North Carolina (as amended, the "Act"), the City may finance or refinance (a) the purchase of real or personal property or (b) the construction of fixtures or improvements on real property by contracts that create in the property so acquired or in the fixtures or improvements, or in all or some portion of the property upon which the fixtures or improvements are located, or in both, a security interest to secure repayment of the moneys advanced or made available for such purchase or construction; WHEREAS, the City and the Trustee have executed and delivered simultaneously herewith a Master Trust Agreement, dated as of February 1, 2026 (the "Master Trust Agreement"), which authorizes the City to issue bonds thereunder from time to time secured by the Master Trust Agreement in accordance with the terms thereof; WHEREAS, the City desires to pay or reimburse the costs of acquiring several parcels of land by the City to be utilized for future water treatment plant improvements and expansions (the "2026 Project"); WHEREAS, the City has determined that the issuance of the Series 2026 Bond (hereinafter defined) as authorized by this First Supplemental Trust Agreement for such purpose will benefit and be in the best interests of the City, and the City has taken all actions legally required for the issuance thereof; and WHEREAS, this First Supplemental Trust Agreement constitutes a Supplemental Trust Agreement within the meaning of the Master Trust Agreement; NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 101. Meaning of Words and Terms. Unless otherwise required by the context, capitalized words and terms used herein which are defined in the Master Trust Agreement shall have the meanings assigned to them therein, and the following capitalized words and terms shall have the following meanings: "Bond Purchase Agreement" means the Bond Purchase Agreement, dated February , 2026, between the City and the Purchaser relating to the sale and issuance of the Series 2026 Bond. "Closing"means the delivery of and payment for the Series 2026 Bond. "Closing Date"means the date of the Closing. "Determination of Taxability" means and shall be deemed to have occurred on the date when (a) the City shall receive notice from the Owner of the Series 2026 Bond that the Internal Revenue Service has assessed as includable in gross income the interest on the Series 2026 Bond and such assessment is due to the occurrence of an Event of Taxability or (b) the City or the Owner of the Series 2026 Bond shall receive notice from the Commissioner or any District Director of the Internal Revenue Service that interest on the Series 2026 Bond is includable in the gross income of the Owner of the Series 2026 Bond for federal income tax purposes and such determination is due to the occurrence of an Event of Taxability. "Event of Taxability" means the occurrence or existence of any fact, event or circumstance caused by the failure of the City to comply with any covenants in the Master Trust Agreement, this First Supplemental Trust Agreement or any document or certificate executed by the City in connection with the issuance of the Series 2026 Bond which has the effect of causing the interest on the Series 2026 Bond to be includable in gross income of the owner thereof for federal income tax purposes. "Inclusion Date" means the effective date that interest on the Series 2026 Bond is includable in gross income of the owner thereof as a result of a Determination of Taxability. "Interest Payment Date" means, with respect to the Series 2026 Bond, May 1 and November 1 of each year, beginning November 1, 2026. "Purchaser" means JPMorgan Chase Bank, N.A., as the initial purchaser of the Series 2026 Bond. "Regular Record Date" means, with respect to the Series 2026 Bond, the day immediately preceding each Interest Payment Date, whether or not a Business Day. "Series 2026 Bond" means the City of Dunn, North Carolina Limited Obligation Bond, Series 2026, issued pursuant to the Master Trust Agreement and this First Supplemental Trust Agreement. 2 "Series 2026 Project Account" means the account of the Project Fund created and so designated by Section 401. "Series 2026 Subaccount of the Interest Account" means the subaccount created and so designated by Section 401. "Series 2026 Subaccount of the Principal Account" means the subaccount created and so designated by Section 401. "Series 2026 Subaccount of the Redemption Account" means the subaccount created and so designated by Section 401. "2026 Project" means the acquisition of several parcels of land to be utilized for future water treatment plant improvements and expansions which is to be financed in whole or in part from the proceeds of the Series 2026 Bond. Section 102. Rules of Construction. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words used herein shall include the plural as well as the singular number. References herein to particular articles or sections are references to articles or sections of this First Supplemental Trust Agreement unless some other reference is indicated. 3 ARTICLE II AUTHORIZATION, FORM,DELIVERY AND REGISTRATION OF THE SERIES 2026 BOND Section 201. Authorization and Issuance of the Series 2026 Bond. For the purpose of providing funds, together with other available funds, to (a) pay or reimburse the Project Costs relating to the 2026 Project and (b) pay the Delivery Costs in connection with the Series 2026 Bond, there shall be issued, under and pursuant to the Constitution and the laws of the State, the Master Trust Agreement and this First Supplemental Trust Agreement, the Series 2026 Bond of the City designated "City of Dunn, North Carolina Limited Obligation Bond, Series 2026" in the aggregate principal amount of$ Section 202. Form of Series 2026 Bond. The definitive Series 2026 Bond shall be initially issued as one fully registered bond without coupons numbered R-1 in the aggregate principal amount of$ and shall be initially registered in the name of the Purchaser. The definitive Series 2026 Bond shall be substantially in the form set forth in Exhibit A attached hereto and made a part hereof, with such appropriate variations, omissions and insertions as are permitted or required by the Master Trust Agreement or this First Supplemental Trust Agreement. Notwithstanding anything in the Master Trust Agreement to the contrary, the Series 2026 Bond may be transferred in the manner specified in the Master Trust Agreement, but may not be exchanged for any denomination other than the outstanding principal amount thereof Notwithstanding any other provisions of the Master Trust Agreement or this First Supplemental Trust Agreement to the contrary, the Trustee shall not register the transfer of the Series 2026 Bond to any person or entity other than (a) a bank, insurance company or similar financial institution or(b) any other entity approved by the Local Government Commission. The provisions of this paragraph may not be amended without the prior written consent of the Local Government Commission. The principal of and the interest and premium, if any, on the Series 2026 Bond shall be payable by the Trustee on each Interest Payment Date to the person or entity appearing on the registration books of the Trustee as the registered owner thereof as of the Regular Record Date by wire transfer in immediately available funds to the account designated in writing by such registered owner to the Trustee. Notwithstanding anything in the Master Trust Agreement to the contrary, no presentation or surrender of the Series 2026 Bond is required in order for the registered owner to receive timely payment of the principal or interest on the Series 2026 Bond; provided, however, that the Owner of the Series 2026 Bond shall promptly cancel and surrender the Series 2026 Bond to the Trustee following payment of the final maturity of the Series 2026 Bond or redemption in full of the Series 2026 Bond. Section 203. Details of Series 2026 Bond. (a) The Series 2026 Bond shall be dated as of the date of initial delivery thereof, shall bear interest at a rate of %per annum, subject to adjustment as provided below(computed on the basis of a 360-day year consisting of twelve 30- day months), such interest being payable on each Interest Payment Date, and shall be stated to mature (subject to the right of prior redemption), in annual principal installments payable on 4 each May 1, commencing on May 1, 2027, with a final maturity of May 1, 2041, all as set forth in the form of the Series 2026 Bond. (b)Notwithstanding the provisions set forth in subsection (a) of this Section, in the event of a Determination of Taxability, the interest rate on the Series 2026 Bond, from and after the Inclusion Date, shall be adjusted to preserve the Owner's after-tax economic yield with respect to the interest on the Series 2026 Bond. In addition, the City shall pay to the Owner of the Series 2026 Bond (i) an amount necessary to reimburse the Owner for any interest, penalties, or other charges assessed by the Internal Revenue Service and the Department of Revenue by reason of the Owner's failure to include the interest on the Series 2026 Bond in its gross income for federal income tax purposes, and (ii) upon request of the Owner, any additional interest as a result of the increase in the interest rate on all previous interest payments made by the City after the Inclusion Date. In the event of a Determination of Taxability, the Owner of the Series 2026 Bond shall provide the City and the Trustee with a new debt service schedule which reflects the new interest rate on the Series 2026 Bond which will replace the debt service schedule set forth in Schedule A to the Series 2026 Bond. (c) The City hereby represents that it reasonably expects that the City, all entities issuing obligations on behalf of the City and all subordinate entities of the City will not issue in the aggregate more than $10,000,000 of tax-exempt obligations (not counting private-activity bonds except for qualified 501(c)(3) bonds (as defined by the Code) and not counting certain current refunding obligations as provided in Section 265(b)(3)(C)(ii)(III) of the Code) during the calendar year 2026. The City hereby designates each of the principal and interest payments due on the Series 2026 Bond as a"qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code. In the event the City breaches any of these representations, the interest rate payable on the Series 2026 Bond shall be adjusted to preserve the Owner's after-tax economic yield with respect to the interest payments on the Series 2026 Bond, taking into account any interest expense deductions lost by the Owner as a direct or indirect result of the City's actions. In addition, the City shall pay to the Owner an amount necessary to reimburse the Owner for any interest, penalties or other charges assessed by the Internal Revenue Service or the Department of Revenue by reason of its loss of such interest expense deductions. In such event, the Owner shall provide the City with a new debt service schedule which reflects the new interest rate on the Series 2026 Bond which will replace the debt service schedule set forth in Schedule A to the Series 2026 Bond. (d) The City agrees to give prompt written notice to the Trustee and the Owner of the Series 2026 Bond upon the City's determination or receipt of any notice or information from any source whatsoever to the effect that an Event of Taxability, a Determination of Taxability or any event affecting the Owner's deductibility of its interest expense as described in subsection (c) of this Section shall have occurred. The Trustee shall not be deemed to have notice of an Event of Taxability, a Determination of Taxability or any event affecting the Owner's deductibility of its interest expense as described in subsection (c) of this Section unless it shall have received such notice from the City or the Owner of the Series 2026 Bond. (e) All payments on the Series 2026 Bond shall be made to the Owner thereof by wire transfer, ACH or other electronic means as directed by such Owner on or up to 29 days prior to the scheduled payment date. Any payments made more than 29 days prior to such scheduled 5 payment date may not be accepted by such Owner. To the extent permitted by law, if any payment is received by the Owner of the Series 2026 Bond more than ten (10) days following the scheduled payment date, the City may be charged additional accrued interest for each day such payment is late (at the interest rate borne by the Series 2026 Bond), which payment shall be due upon demand by such Owner or, if billed, within the time for payment specified by such Owner. Section 204. Terms and Conditions for Issuance of the Series 2026 Bond. The Series 2026 Bond shall be executed substantially in the foal' and in the manner herein set forth and shall be deposited with the Trustee for authentication, but before the Series 2026 Bond shall be authenticated and delivered to the Purchaser, there shall be filed with the Trustee (a) the items required to be delivered pursuant to Section 208 of the Master Trust Agreement and Section 5 of the Bond Purchase Agreement and (b) such other documentation as may be reasonably requested by the Trustee, the Purchaser or Bond Counsel. When the documents mentioned above shall have been filed with the Trustee, and when the Series 2026 Bond shall have been executed and authenticated as required by this First Supplemental Trust Agreement, the Series 2026 Bond shall be delivered to or upon the order of the Purchaser, but only upon deposit with the Trustee of the purchase price of the Series 2026 Bond in the amount of$ , representing the par amount of the Series 2026 Bond. Simultaneously with the Closing and the deposit of the proceeds of the Series 2026 Bond with the Trustee, the Trustee shall cause the proceeds of the Series 2026 Bond to be deposited to the credit of the Series 2026 Project Account to be used to pay the Project Costs relating to the 2026 Project and Delivery Costs relating to the Series 2026 Bond. Section 205. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants to the Trustee as follows: (a) The Constitution and laws of the State authorize the City to (i) execute and deliver the Master Trust Agreement, the Deed of Trust and this First Supplemental Trust Agreement and to issue the Series 2026 Bond, (ii) enter into the transactions contemplated hereby and thereby and (iii)perfotin its obligations hereunder and thereunder. (b) The City has duly authorized the execution and delivery of the Master Trust Agreement, the Deed of Trust and this First Supplemental Trust Agreement and the sale and issuance of the Series 2026 Bond in accordance with the Constitution and laws of the State. (c) Neither the execution and delivery of the Master Trust Agreement, the Deed of Trust or this First Supplemental Trust Agreement or the issuance of the Series 2026 Bond, nor the fulfillment of or compliance with the teams and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of its organizational documents or any agreement or instrument to which the City is now a party or by which the City or its property is bound, or constitutes a default under any of the foregoing. (d) No approval or consent is required from any governmental authority with respect to the entering into or perfotnnance by the City of the Master Trust Agreement, the Deed of Trust, this First Supplemental Trust Agreement or the Series 2026 Bond or any other documents related 6 thereto and the transactions contemplated hereby and thereby, or if such approval is required, it has been duly obtained. (e) There is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the City challenging the validity or enforceability of the Master Trust Agreement, the Deed of Trust, this First Supplemental Trust Agreement or the Series 2026 Bond, or any other documents relating hereto or thereto or the performance of the City's obligations hereunder or thereunder. (f) The City will make no use of the proceeds of the Series 2026 Bond or of any other amounts or property regardless of the source or take any action that, or refrain from taking any action, as to which the failure to take such action, may cause the Series 2026 Bond to be an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), "private activity bond" within the meaning of Section 141 of the Code or "federally guaranteed" within the meaning of Section 149(b) of the Code. To that end, so long as the Series 2026 Bond remains Outstanding, the City, with respect to such proceeds and such other funds, will comply with all requirements of such Sections of the Code and all regulations of the United States Department of the Treasury issued thereunder are, at the time, applicable and in effect. 7 ARTICLE III REDEMPTION OF SERIES 2026 BOND Section 301. Redemption of Series 2026 Bond. (a) The Series 2026 Bond shall not be subject to prior redemption except as provided in this Article III and in Article III of the Master Trust Agreement. (b) Prior to May 1, 2031, the Series 2026 Bond shall not be subject to redemption. The City shall have the option to redeem, in whole or in part, the outstanding principal amount of the Series 2026 Bond on any date on or after May 1, 2031, at a Redemption Price equal to 100% of the outstanding principal amount of the Series 2026 Bond to be redeemed, plus accrued interest thereon, if any,to the redemption date. (c) Any redemption in part of the Series 2026 Bond shall be applied to reduce the principal installments of the Series 2026 Bond in inverse order of the maturity unless otherwise agreed to in writing by the Owner of the Series 2026 Bond. In the event of any such redemption in part, the Owner of the Series 2026 Bond shall provide the City and the Trustee with a new debt service schedule which reflects such redemption which will replace the debt service schedule set forth in Schedule A to the Series 2026 Bond. Section 302. Redemption Notice. At least sixty (60) days prior to the redemption date (unless otherwise waived by the Trustee), the City shall notify the Trustee of its intention to redeem the Series 2026 Bond. At forty-five (45) days prior to the redemption date of the Series 2026 Bond (unless otherwise waived by the Owner of the Series 2026 Bond), the Trustee shall cause a notice of any such redemption to be mailed, first class, postage prepaid, to the Owner of the Series 2026 Bond. The Trustee shall also provide a copy of such notice to the Local Government Commission at the same time as such notice is provided to the Owner of the Series 2026 Bond; provided, however, that failure to provide a copy of such notice to the Local Government Commission or any defect in such notice shall not affect the validity of the proceedings for such redemption. Each such notice shall set forth the designation and date of the Series 2026 Bond, the date fixed for redemption, the principal installments of the Series 2026 Bond to be redeemed, the Redemption Price to be paid and the address and phone number of the Trustee. Any notice of redemption may state that the redemption to be effected is conditioned upon the receipt by the Trustee on or prior to the redemption date of money or Defeasance Obligations sufficient to pay the Redemption Price of and interest on the Series 2026 Bond, and that if such moneys are not so received, such notice shall be of no force or effect and the Series 2026 Bond shall not be required to be redeemed. In the event that such notice contains such a condition and moneys or Defeasance Obligations sufficient to pay the Redemption Price of and interest on the Series 2026 Bond are not received by the Trustee on or prior to the redemption date, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received. 8 ARTICLE IV SERIES 2026 PROJECT ACCOUNT; BOND FUND SUBACCOUNTS; PAYMENTS AND COVENANTS Section 401. Establishment of Series 2026 Project Account and Bond Fund Subaccounts. The Trustee shall establish a special account within the Project Fund designated as the "Series 2026 Project Account" and shall keep the Series 2026 Project Account separate and apart from all other funds and moneys held by it. The following subaccounts in the Bond Fund are hereby established: (a) Series 2026 Subaccount of the Interest Account; (b) Series 2026 Subaccount of the Principal Account; and (c) Series 2026 Subaccount of the Redemption Account. The account and subaccounts mentioned above shall be established with and held by the Trustee pursuant to the Master Trust Agreement and this First Supplemental Trust Agreement. Section 402. Payments by the City. The City shall, subject to the limitations of Section 801 of the Master Trust Agreement, deposit or cause to be deposited with the Trustee the following amounts, and the Trustee shall apply such amounts to the various subaccounts specified herein in the following order: (a) into the Series 2026 Subaccount of the Interest Account, on or before the Business Day immediately preceding each Interest Payment Date, the amount required to pay the interest due on the Series 2026 Bond on such Interest Payment Date; and (b) into the Series 2026 Subaccount of the Principal Account, on or before the Business Day immediately preceding each May 1, the amount required to pay the principal installment of the Series 2026 Bond coming due on such May 1. In addition, the Trustee shall deposit to the Series 2026 Subaccount of the Redemption Account all amounts as shall be delivered to the Trustee by the City from time to time with instructions that such amounts be so deposited. Section 403. Application of Money in the Series 2026 Project Account. Money deposited in the Series 2026 Project Account in accordance with Section 204 shall be applied to pay the Project Costs relating to the 2026 Project and the Delivery Costs incurred in connection with the sale and issuance of the Series 2026 Bond, all in accordance with Article IV of the Master Trust Agreement. Section 404. Application of Money in the Series 2026 Subaccount of the Redemption Account. The Trustee shall apply money in the Series 2026 Subaccount of the Redemption Account to the redemption of the Series 2026 Bond as provided in Article III. The Trustee shall pay the accrued interest on the Series 2026 Bond to the date of redemption from the Series 2026 9 Subaccount of the Interest Account or other available funds of the City and the Redemption Price of the Series 2026 Bond from the Series 2026 Subaccount of the Redemption Account. The Trustee shall withdraw from the Series 2026 Subaccount of the Interest Account and the Series 2026 Subaccount of the Redemption Account the amounts required to pay the Redemption Price of the Series 2026 Bond so called for redemption, together with accrued interest thereon to the redemption date. The expenses incurred by the Trustee in connection with the redemption of the Series 2026 Bond shall be paid by the City from any available moneys of the City. Section 405. Investment of Money. Money held for the credit of the account and subaccounts established hereunder on deposit with the Trustee shall be continuously invested and reinvested by the Trustee at the written direction of the City as provided in the Master Trust Agreement and this First Supplemental Trust Agreement. Section 406. Payment of Principal, Interest and Premium. Subject to the limitations of Section 801 of the Master Trust Agreement, the City covenants that it will promptly pay the principal of and the interest on the Series 2026 Bond issued under the provisions of this First Supplemental Trust Agreement at the places, on the dates and in the manner provided herein and in the Series 2026 Bond, according to the true intent and meaning thereof The City further covenants that it will faithfully perform at all times all of its covenants, undertakings and agreements contained in this First Supplemental Trust Agreement, the Master Trust Agreement, the Deed of Trust or the Series 2026 Bond executed, authenticated and delivered hereunder and under the Master Trust Agreement or in any proceedings of the City pertaining thereto. The City represents and covenants that it is duly authorized under the Constitution and laws of the State, particularly the Act, to issue the Series 2026 Bond authorized hereby; that all action on its part for the issuance of the Series 2026 Bond has been duly and effectively taken; and that the Series 2026 Bond in the hands of the Owner thereof is and will be a valid and binding limited obligation of the City payable according to its terms. The Series 2026 Bond shall be equally and ratably secured with all other Bonds issued and Outstanding under the Master Trust Agreement as provided in the Master Trust Agreement and the Deed of Trust. Section 407. Tax Covenant. The City covenants to do and perform all acts and things permitted by law in order to assure that interest paid on the Series 2026 Bond which was excludable from the gross income of its Owner for federal income taxes on the date of their issuance shall continue to be so excludable. Section 408. Other Covenants of the City. (a) The City shall furnish to the Owner of the Series 2026 Bond or otherwise post to the Electronic Municipal Market Access ("EMMA") website its audited financial statements within 270 days after the end of the Fiscal Year. The City shall also provide to the Owner of the Series 2026 Bond a copy of its annual budget within 30 days after its adoption. In addition, the City shall provide to the Owner of the Series 2026 Bond such financial information regarding the City and such information relating to the Series 2026 Bond, the 2026 Project or the Mortgaged Property as such Owner may reasonably request, including copies of any long-term capital improvement plans (excluding any privileged or confidential information required or permitted by law to be withheld). 10 (b) The City hereby agrees that the Owner of the Series 2026 Bond may provide any information or knowledge such Owner may have about the City or about any matter relating to the Series 2026 Bond, the 2026 Project or the Mortgaged Property to any of its subsidiaries or affiliates or their successors, or to any one or more participants or assignees of the Series 2026 Bond. (c) In the event the City delivers or permits, authorizes or consents to the delivery of the Master Trust Agreement, this First Supplemental Trust Agreement or the Deed of Trust to any person for delivery to the Municipal Securities Rulemaking Board or posting on the EMMA website, prior to such delivery, the City agrees that it shall redact any personal contact information of the Owner of the Series 2026 Bond, any information relating to fees of such Owner and any other information contained herein as may be requested by such Owner in writing to the City and which is permitted to be redacted in accordance with the provisions of MSRB Notice 2011-17 (February 23, 2011). Only such copies of the Master Trust Agreement, this First Supplemental Trust Agreement or the Deed of Trust reflecting such redacted material shall be delivered to the Municipal Securities Rulemaking Board or posted on the EMMA website. 11 ARTICLE V THE TRUSTEE Section 501. Acceptance of Duties by Trustee. The Trustee by execution hereof accepts and agrees to fulfill the trusts imposed upon it by this First Supplemental Trust Agreement subject to the teiins and conditions of the Master Trust Agreement. Section 502. E-Verify. The Trustee hereby certifies that the Trustee understands that"E- Verify" is a federal program operated by the United States Department of Homeland Security and other federal agencies, or any successor or equivalent program used to verify the work authorization of newly hired employees pursuant to federal law in accordance with Section 64- 25(5) of the General Statutes of North Carolina, as amended. The Trustee uses E-Verify to verify the work authorization of its employees in accordance with Section 64-26(a) of the General Statutes of North Carolina, as amended. The Trustee shall require that any subcontractor that it uses in connection with the transactions contemplated by this First Supplemental Trust Agreement certify to such subcontractor's compliance with E-Verify. 12 ARTICLE VI SUPPLEMENTAL TRUST AGREEMENTS Section 601. Supplemental Trust Agreements Without Consent of Owner. The City may, from time to time and at any time, execute and deliver such trust agreements supplemental hereto (which supplemental trust agreements shall thereafter Rhin a part hereof) as shall be substantially consistent with the terms and provisions of this First Supplemental Trust Agreement and, in the opinion of the Trustee, who may rely upon a written opinion of legal counsel, shall not materially and adversely affect the interest of the Owner: (a) to cure any ambiguity or formal defect or omission, to correct or supplement any provision herein that may be inconsistent with any other provision herein, to make any other provisions with respect to matters or questions arising under this First Supplemental Trust Agreement or to modify, alter, amend, add to or rescind, in any particular, any of the teiriis or provisions contained in this First Supplemental Trust Agreement; (b) to grant or to confer upon the Trustee for the benefit of the Owner any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Owner or the Trustee; (c) to add to the covenants and agreements of the City in this First Supplemental Trust Agreement other covenants and agreements thereafter to be observed by the City or to surrender any right or power herein reserved to or conferred upon the City; or (d) to permit the qualification of this First Supplemental Trust Agreement under any federal statute now or hereafter in effect or under any state blue sky law, and, in connection therewith, if the City so determines, to add to this First Supplemental Trust Agreement or any supplemental trust agreement such other terms, conditions and provisions as may be permitted or required by such federal statute or blue sky law. At least thirty (30) days prior to the execution and delivery of any supplemental trust agreement for any of the purposes of this Section, the Trustee shall cause at the City's expense a notice of the proposed supplemental trust agreement to be mailed first-class, postage prepaid, to the Owner of the Series 2026 Bond. Such notice shall be prepared by the City, shall briefly set forth the nature of the proposed supplemental trust agreement and shall state that copies thereof are on file at the designated corporate trust office of the Trustee for inspection by the Owner of the Series 2026 Bond. A failure on the part of the Trustee to mail the notice required by this Section shall not affect the validity of such supplemental trust agreement. Section 602. Modification of Supplemental Agreement With Consent of Owner. Subject to the teiins and provisions contained in this Section, and not otherwise, the Owner of the Series 2026 Bond shall have the right, from time to time, anything contained in this First Supplemental Trust Agreement to the contrary notwithstanding, to consent to and approve the execution and delivery by the City and the Trustee of such supplemental trust agreement as shall be deemed necessary or desirable by the City for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this First Supplemental Trust Agreement or in any supplemental trust agreement. Nothing herein 13 contained, however, shall be construed as making necessary the approval by the Owner of the Series 2026 Bond of the execution and delivery of any supplemental trust agreement as authorized in Section 601. The Trustee shall, at the expense of the City, cause notice of the proposed supplemental trust agreement to be mailed, postage prepaid, to the Owner of the Series 2026 Bond as of the date such notice is mailed. Such notice shall be prepared by the City, shall briefly set forth the nature of the proposed supplemental trust agreement and shall state that copies thereof are on file at the designated corporate trust office of the Trustee for inspection by such Owner. Whenever, at any time after the date of the mailing of such notice, the City shall deliver to the Trustee an instrument or instruments in writing purporting to be executed by the Owner of the Series 2026 Bond, which instrument shall refer to the proposed supplemental trust agreement described in such notice and shall specifically consent to and approve the execution and delivery thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the City and the Trustee may execute and deliver such supplemental trust agreement in substantially such form, without liability or responsibility to such Owner. If the Owner of the Series 2026 Bond has consented to and approved the execution and delivery thereof as herein provided, to the extent permitted by law, the Owner shall not have any right to object to the execution and delivery of such supplemental trust agreement, to object to any of the terms and provisions contained therein or the operation thereof, to question the propriety of the execution and delivery thereof, or enjoin or restrain the City or the Trustee from executing and delivering the same or from taking any action pursuant to the provisions thereof Upon the execution and delivery of any supplemental trust agreement pursuant to the provisions of this Section or Section 601, this First Supplemental Trust Agreement shall be and be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this First Supplemental Trust Agreement of the City, the Trustee and the Owner of the Series 2026 Bond shall thereafter be determined, exercised and enforced in all respects pursuant to the provisions of this First Supplemental Trust Agreement, as so modified and amended. Section 603. Series 2026 Bond Affected. For purposes of this First Supplemental Trust Agreement, the Series 2026 Bond shall be deemed to be "affected" by a supplemental trust agreement if the same adversely affects or diminishes the rights of the Owner of the Series 2026 Bond against the City. The Trustee may in its discretion determine whether the Series 2026 Bond would be affected by any supplemental trust agreement and any such determination shall be conclusive upon the Owner of the Series 2026 Bond, whether theretofore or thereafter authenticated and delivered hereunder. The Trustee shall not be liable for any such determination made in good faith. The Trustee may, but shall not be required to, execute or consent to any such supplement or amendment that adversely affects its rights, protections or indemnifications under this First Supplemental Trust Agreement. Section 604. Responsibilities of Trustee and City under this Article. The Trustee and the City shall be entitled to exercise their discretion in determining whether or not any proposed supplemental trust agreement or any term or provision therein contained is desirable, after 14 considering the purposes of such instrument, the needs of the City, the rights and interests of the Owner of the Series 2026 Bond, and the rights, obligations and interests of the Trustee. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, the opinion of counsel approved by it, who may be Bond Counsel for the City, as conclusive evidence that any such proposed supplemental trust agreement does or does not comply with the provisions of this First Supplemental Trust Agreement, and that it is or is not proper for it, under the provisions of this Article, to execute and deliver such supplemental trust agreement. 15 ARTICLE VII MISCELLANEOUS PROVISIONS Section 701. Manner of Giving Notice. All notices, demands and requests to be given to or made hereunder by the City, the Trustee or the Local Government Commission shall be given or made in writing and shall be deemed to be properly given or made if sent by United States registered or certified mail,return receipt requested postage prepaid, addressed as follows: (a) As to the City— City of Dunn,North Carolina 401 E. Broad Street Dunn,North Carolina 28334 Attention: Finance Director (b) As to the Trustee -- U.S. Bank Trust Company,National Association 214 North Tryon Street 27th Floor, Mail Code CN-NC-H27A Charlotte,North Carolina 28202 Attention: Global Corporate Trust (c) As to the Local Government Commission-- North Carolina Local Government Commission Longleaf Building 3200 Atlantic Avenue Raleigh,North Carolina 27604 Attention: Secretary (d) As to the initial Owner of the Series 2026 Bond-- JPMorgan Chase Bank,N.A. 111 E. Court Street, Floor 02 Flint, Michigan 48502-1649 Attention: Yvonne G. Carr, Vice President Unless otherwise specifically provided herein to the contrary, the Trustee shall also have the right to accept and act upon notices, certificates, consents, requests, waivers, requisitions, instructions and directions, including funds transfer and investment instructions (each for purposes of this paragraph, a "Notice"), under this First Supplemental Trust Agreement sent by Electronic Means by the City. As used in this paragraph, "Electronic Means" means a portable document foiliiat ("pdf") or other replicating image attached to an unsecured email, facsimile transmission, secure electronic transmission (containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee), or another method or system specified by the Trustee as available for use in connection with its services hereunder; provided, 16 however, that the City shall provide to the Trustee an incumbency certificate listing designated persons authorized to provide Notices by Electronic Means ("Authorized Officers"), which incumbency certificate shall include each Authorized Officer's name, title, sample signature, telephone number, facsimile number and email address from which such Notices will be sent and shall be amended whenever a person is to be added or deleted from the listing. The City agrees that the Trustee cannot determine the identity of the actual sender of Notices delivered by Electronic Means and that the Trustee shall be deemed to have acted reasonably in believing the genuineness of a Notice received by Electronic Means if such Notice on its face appears to have been signed by, and sent from the email address of, an Authorized Officer, as shown on the incumbency certificate provided to the Trustee. The City shall be responsible for ensuring that only its Authorized Officers use Electronic Means to deliver Notices to the Trustee, and the City and its Authorized Officers are responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and authentication keys provided by the Trustee, if any. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with Notices delivered by Electronic Means notwithstanding such Notices conflict or are inconsistent with a subsequent written Notice delivered by other means. If the Trustee accepts and acts upon a Notice delivered by Electronic Means in accordance with this paragraph, the City agrees (i) to assume all risks arising out of the use of such Electronic Means to submit Notices to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized Notices and the risk that a Notice is intercepted during transmission and misused by third parties; (ii)that it is fully informed of the protections and risks associated with the various methods of transmitting instructions to the Trustee and that there may be more secure methods of transmitting instructions than the use of Electronic Means; (iii) that the Trustee has no responsibility for the City's security procedures in connection with its transmission of Notices and that such procedures, including the procedures set forth herein, provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) that it will notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures to the extent they may impact the use of Electronic Means to deliver Notices pursuant to this paragraph. Any such notice, demand or request may also be transmitted to the appropriate above- mentioned party by telephone and shall be deemed to be properly given or made at the time of such transmission if, and only if, such transmission of notice shall be confirmed in writing and sent as specified above. Any of such addresses may be changed at any time upon written notice of such change sent by United States registered or certified mail, postage prepaid, to the other parties by the party effecting the change. All documents received by the Trustee under the provisions of this First Supplemental Trust Agreement, or photographic copies thereof, shall be retained in its possession until this First Supplemental Trust Agreement shall be released under the provisions of Section 1301 of the Master Trust Agreement, subject at all reasonable times to the inspection of the City, the Owner of the Series 2026 Bond and their respective agents and representatives. Section 702. Substitute Mailing. If, because of the temporary or permanent suspension of postal service, the City, the Local Government Commission or the Trustee shall be unable to 17 mail any notice required to be given by the provisions of this First Supplemental Trust Agreement, such party shall give notice in such other manner as in the judgment of such party shall most effectively approximate mailing, and the giving of notice in such manner shall for all purposes of this First Supplemental Trust Agreement be deemed to be in compliance with the requirement for the mailing thereof. Section 703. Parties, Owner and Local Government Commission Alone Have Rights Under this First Supplemental Trust Agreement. Except as herein otherwise expressly provided, nothing in this First Supplemental Trust Agreement, express or implied, is intended or shall be construed to confer upon any person, firm or corporation, other than the City, the Trustee, the Owner of the Series 2026 Bond and the Local Government Commission any right, remedy or claim, legal or equitable, under or by reason of this First Supplemental Trust Agreement or any provision being intended to be and being for the sole and exclusive benefit of the City, the Trustee,the Owner of the Series 2026 Bond and the Local Government Commission. Section 704. Effect of Partial Invalidity. In case any one or more of the provisions of this First Supplemental Trust Agreement or the Series 2026 Bond shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this First Supplemental Trust Agreement or the Series 2026 Bond, but this First Supplemental Trust Agreement and the Series 2026 Bond shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. In case any covenant, stipulation, obligation or agreement contained in this First Supplemental Trust Agreement or the Series 2026 Bond shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the City to the full extent permitted by law. Section 705. Effect of Covenants; Governing Law; Venue. All covenants, stipulations, obligations and agreements of the City contained in this First Supplemental Trust Agreement shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent permitted by the Constitution and laws of the State. This First Supplemental Trust Agreement is executed and delivered with the intent that the laws of the State shall govern this construction. The exclusive forum and venue for all actions arising out of this First Supplemental Trust Agreement are with the North Carolina General Court of Justice in Harnett City,North Carolina or the U.S. District Court for the Eastern District of North Carolina, Raleigh Division. Any attempt to contravene this Section shall be an express violation of this First Supplemental Trust Agreement. Section 706. Headings. Any heading preceding the text of the several articles hereof, any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this First Supplemental Trust Agreement,nor shall they affect its meaning, construction or effect. Section 707. Further Authority. The officers of the City and other agents or employees of the City are hereby authorized to do all acts and things required of them by this First Supplemental Trust Agreement for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Series 2026 Bond and this First Supplemental Trust Agreement. 18 Section 708. Payment Due on Holidays. If the date for making any payment or the last day for performance of any act or the exercising of any right as provided in this First Supplemental Trust Agreement is not a Business Day, such payment may be made or act performed or right exercised on the next Business Day with the same force and effect as if done on the date provided in this First Supplemental Trust Agreement. Section 709. Multiple Counterparts. This First Supplemental Trust Agreement may be executed in multiple counterparts, each of which shall be regarded for all purposes as an original, and such counterparts shall constitute but one and the same instrument. 19 IN WITNESS WHEREOF, the City and the Trustee have caused this First Supplemental Trust Agreement to be executed in their respective names by their respective duly authorized representatives all as of the date first written above. CITY OF DUNN,NORTH CAROLINA [SEAL] By: Mayor Attest: City Clerk U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By: Vice President 20 [Signature page to First Supplemental Trust Agreement, dated as of February 1, 2026, between the City of Dunn,North Carolina and U.S. Bank Trust Company,National Association] CERTIFICATE OF LOCAL GOVERNMENT COMMISSION The foregoing First Supplemental Trust Agreement has been approved under the provisions of Section 160A-20 and Article 8 of Chapter 159 of the General Statutes of North Carolina, as amended. Deputy Secretary, Local Government Commission of North Carolina 21 EXHIBIT A FORM OF SERIES 2026 BOND R-1 $ United States of America State of North Carolina County of Harnett CITY OF DUNN,NORTH CAROLINA LIMITED OBLIGATION BOND SERIES 2026 The City of Dunn, North Carolina (the "City"), for value received, hereby promises to pay, but solely from the sources and in the manner hereinafter provided, to JPMORGAN CHASE BANK, N.A., or registered assigns or legal representative, the principal sum set forth above in annual installments of principal on May 1 in the years and amounts set forth in Schedule A attached hereto and made a part hereof, and to pay, but solely from said sources, interest from the date hereof on the unpaid portion of said principal sum until payment thereof (computed on the basis of a 360-day year consisting of twelve 30-day months) at the rate of % per annum (subject to adjustment as provided below), such interest being payable on May 1 and November 1 of each year, beginning November 1, 2026, as set forth in Schedule A attached hereto. Notwithstanding the foregoing, in the event of a Determination of Taxability, the interest rate on this bond, from and after the Inclusion Date, shall be adjusted to preserve the Owner's after-tax economic yield with respect to the interest on this bond. In addition, the City shall pay to the Owner of this bond (i) an amount necessary to reimburse the Owner for any interest, penalties, or other charges assessed by the Internal Revenue Service and the Department of Revenue by reason of the Owner's failure to include the interest on this bond in its gross income for federal income tax purposes, and (ii) upon request of the Owner of this bond, any additional interest as a result of the increase in the interest rate on all previous interest payments made by the City after the Inclusion Date. In the event of a Determination of Taxability, the Owner of this bond shall provide the City and the Trustee with a new debt service schedule which reflects the new interest rate on this bond which will replace the debt service schedule set forth in Schedule A to this bond. All payments on this bond shall be made to the Owner hereof by wire transfer, ACH or other electronic means as directed by such Owner on or up to 29 days prior to the scheduled payment date. Any payments made more than 29 days prior to such scheduled payment date may not be accepted by such Owner. To the extent permitted by law, if any payment is received by the Owner of this bond more than ten (10) days following the scheduled payment date, the City may be charged additional accrued interest for each day such payment is late (at the interest rate borne by this bond), which payment shall be due upon demand by such Owner or, if billed, within the time for payment specified by such Owner. A-l The principal or interest so payable and punctually paid or duly provided for on any Interest Payment Date will be paid to the person in whose name this bond is registered at the close of business on the Regular Record Date for such interest, which shall be the day immediately preceding such Interest Payment Date, whether or not a Business Day. Any such principal or interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered owner on such Regular Record Date, and may be paid to the person in whose name this bond is registered at the close of business on a Special Record Date for the payment of such defaulted principal or interest to be fixed by the Trustee, notice whereof being given to the registered owner not less than ten (10) days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which this bond may be listed and upon such notice as may be required by such exchange, or as more fully provided in the Master Trust Agreement (hereinafter mentioned). All such payments shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. The Owner of this bond shall promptly cancel and surrender this bond to U.S. Bank Trust Company, National Association or its successor (the "Trustee") at its designated corporate trust office following payment of the final maturity of this bond or redemption in full of this bond. This bond is a duly authorized limited obligation bond of the City designated "City of Dunn, North Carolina Limited Obligation Bond, Series 2026" issued under and pursuant to the Constitution and laws of the State of North Carolina, a resolution of the City Council of the City adopted on January 27, 2026, authorizing the issuance of the this bond, a Master Trust Agreement, dated as of February 1, 2026 (the "Master Trust Agreement"), between the City and the Trustee, and a First Supplemental Trust Agreement, dated as of February 1, 2026 (the "First Supplemental Trust Agreement"), between the City and the Trustee. This bond is being issued for the purpose of providing funds, together with any other available funds, to (a) pay or reimburse the costs of the 2026 Project and (b) pay the fees and expenses incurred in connection with sale and issuance of this bond. Capitalized terms used herein and not otherwise defined have the meanings given such terms in the Master Trust Agreement and the First Supplemental Trust Agreement. This bond is a limited obligation of the City payable during any Fiscal Year solely from funds appropriated for that purpose by the City Council of the City in its discretion and from certain other monies made available therefor under the Master Trust Agreement and the First Supplemental Trust Agreement and amounts received under the hereinafter mentioned Deed of Trust. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the principal of and the interest on this bond. The Master Trust Agreement provides for the issuance from time to time under the conditions, limitations and restrictions set forth therein of Additional Bonds which shall be equally and ratably secured with this bond and any other Additional Bonds hereafter issued pursuant to the Master Trust Agreement (this bond and any Additional Bonds herein referred to as the "Bonds"). As security for the payment of the Bonds and the performance by the City of its other obligations under the Master Trust Agreement, the City has executed and delivered a Deed of A-2 Trust, dated as of February 1, 2026 (the "Deed of Trust"), granting to the Trustee for the benefit of the Owners a lien on the Mortgaged Property, subject only to Petliiitted Encumbrances. Reference is made to the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust for a more complete statement of the provisions thereof and of the rights of the City, the Trustee and the registered owner of this bond. Copies of the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust are available for inspection by any registered owner of this bond at all reasonable times at the designated corporate trust office of the Trustee. By the purchase and acceptance of this bond, the registered owner hereof signifies assent to all of the provisions of the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust. This bond, together with corresponding obligations under the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust relating thereto, constitutes an installment contract or contract within the meaning of the Section 160A-20, as amended, of the General Statutes of North Carolina entered into by the City for the purpose of financing the acquisition of real or personal property or the construction or repair of improvements thereon. The Trustee shall keep at its designated corporate trust office books for the registration of transfer of this bond. The transfer of this bond may be registered only upon such books and as otherwise provided in the Master Trust Agreement upon the surrender hereof to the Trustee together with an assignment duly executed by the registered owner hereof or his attorney or legal representative in such form as shall be satisfactory to the Trustee. Upon any such registration of transfer,the Trustee shall deliver in exchange for this bond a new bond, registered in the name of the transferee, in an aggregate principal amount equal to the principal amount of this bond, containing the same principal installments and bearing interest at the same rate. This bond may not be exchanged for any denomination other than the outstanding principal amount thereof. Notwithstanding any other provisions of the Master Trust Agreement or the First Supplemental Trust Agreement to the contrary, the Trustee shall not register the transfer of this bond to any person or entity other than (a) a bank, insurance company or similar financial institution or(b) any other entity approved by the Local Government Commission. Prior to May 1, 2031, this bond shall not be subject to redemption. The City shall have the option to redeem, in whole or in part, the outstanding principal amount of this bond on any date on or after May 1, 2031, at a Redemption Price equal to 100% of the outstanding principal amount of this bond to be redeemed,plus accrued interest thereon, if any, to the redemption date. Any redemption in part of this bond shall be applied to reduce the principal installments of this bond in inverse order of the maturity unless otherwise agreed to in writing by the Owner of this bond. In the event of any such redemption in part, the Owner of this bond shall provide the City and the Trustee with a new debt service schedule which reflects such redemption which will replace the debt service schedule set forth in Schedule A hereto. At least forty-five (45) days prior to the redemption date of this bond (unless otherwise waived by the Owner of this bond), the Trustee shall cause a notice of any such redemption to be mailed, first class,postage prepaid,to the Owner of this bond. A-3 Any notice of redemption may state that the redemption to be effected is conditioned upon the receipt by the Trustee on or prior to the redemption date of money or Defeasance Obligations sufficient to pay the Redemption Price of and interest on this bond, and that if such moneys are not so received, such notice shall be of no force or effect and this bond shall not be required to be redeemed. In the event that such notice contains such a condition and moneys or Defeasance Obligations sufficient to pay the Redemption Price of and interest on this bond are not received by the Trustee on or prior to the redemption date, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given,that such moneys were not so received. On the date designated for redemption, notice having been given as aforesaid, this bond shall become due and payable at the Redemption Price provided for the redemption of this bond on such date plus accrued interest to such date. The registered owner of this bond shall have no right to enforce the provisions of the Master Trust Agreement or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Master Trust Agreement, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Master Trust Agreement. Supplements or amendments to the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust may be made only to the extent and in the circumstances permitted by the Master Trust Agreement and the First Supplemental Trust Agreement. This bond is issued with the intent that the laws of the State of North Carolina shall govern its construction. All acts, conditions and things required to happen, exist and be performed precedent to and in the issuance of this bond and the execution and delivery of the Master Trust Agreement and the First Supplemental Trust Agreement have happened, exist and have been performed as so required. This bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Master Trust Agreement or the First Supplemental Trust Agreement until it shall have been authenticated by the execution by the Trustee of the certificate of authentication endorsed hereon. A-4 IN WITNESS WHEREOF, the City of Dunn, North Carolina, by resolution duly adopted by its City Council, has caused this bond to be manually signed by the Mayor of the City and attested to by the City Clerk of the City and the official seal of the City to be impressed hereon, all as of the day of February, 2026. CITY OF DUNN,NORTH CAROLINA [SEAL] By: Mayor Attest: City Clerk A-5 CERTIFICATE OF LOCAL GOVERNMENT COMMISSION The City of Dunn, North Carolina Limited Obligation Bond, Series 2026 hereinabove mentioned has been approved under the provisions of Section 160A-20 and Article 8 of Chapter 159 of the General Statutes of North Carolina, as amended. Deputy Secretary, Local Government Commission of North Carolina A-6 CERTIFICATE OF AUTHENTICATION This bond is a Bond of the Series designated therein and issued under the provisions of the within mentioned Master Trust Agreement and First Supplemental Trust Agreement. U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory Date of authentication: A-7 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE the within bond and all right thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer the within bond on the books kept for registration thereof,with full power of substitution in the premises. Dated: In the presence of: NOTICE: Signature must be guaranteed by an The signature to this assignment must institution which is a participant in the correspond with the name as it appears upon Securities Transfer Agent Medallion Program the face of the within bond in every particular, (STAMP) or similar program. without alteration or enlargement or any change whatever. A-8 SCHEDULE A DEBT SERVICE SCHEDULE Payment Date Principal Interest Total November 1,2026 May 1, 2027 November 1,2027 May 1, 2028 November 1,2028 May 1, 2029 November 1,2029 May 1, 2030 November 1, 2030 May 1, 2031 November 1, 2031 May 1, 2032 November 1, 2032 May 1, 2033 November 1, 2033 May 1, 2034 November 1, 2034 May 1, 2035 November 1, 2035 May 1, 2036 November 1, 2036 May 1, 2037 November 1, 2037 May 1, 2038 November 1, 2038 May 1, 2039 November 1, 2039 May 1, 2040 November 1, 2040 May 1, 2041 A-9 Draft No. 1 January 13, 2026 Prepared by and return to: Paul H. Billow, Esq. Womble Bond Dickinson(US) LLP 555 Fayetteville Street, Suite 1100 Raleigh,North Carolina 27601 STATE OF NORTH CAROLINA COUNTY OF HARNETT DEED OF TRUST This DEED OF TRUST, dated as of February 1, 2026 (the "Deed of Trust"), from the CITY OF DUNN, NORTH CAROLINA, a municipal corporation duly organized and validly existing under the Constitution and laws of the State of North Carolina (the "City"), to THE FIDELITY COMPANY, as trustee (the "Deed of Trust Trustee"), for the benefit of U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (the "Trustee) under the Trust Agreement(hereinafter defined), and its successors and assigns (the`Beneficiary"); WITNES SETH: WHEREAS, the City and the Trustee have entered into a Master Trust Agreement, dated as of February 1, 2026 (the "Master Trust Agreement" and, together with any amendments or supplements thereto, the "Trust Agreement"), pursuant to which the City is authorized to issue limited obligation bonds (the `Bonds") from time to time to provide funds for the purpose of acquiring, constructing and equipping the 2026 Project and any Additional Projects (both as defined in the Master Trust Agreement) and refunding Bonds issued under the Trust Agreement, and the City has agreed to pay principal of, premium, if any, and interest on the Bonds as described in the Trust Agreement and to pay certain additional payments as more fully provided for therein; WHEREAS, the City and the Trustee contemplate that each series of Bonds to be issued by the City will be issued pursuant to a supplement to the Master Trust Agreement; COLLATERAL IS OR INCLUDES FIXTURES WHEREAS, pursuant to the Master Trust Agreement and a First Supplemental Trust Agreement, dated as of February 1, 2026 (the "First Supplemental Trust Agreement"), between the City and the Trustee, the City is issuing its $ City of Dunn, North Carolina Limited Obligation Bond, Series 2026 (the "Series 2026 Bond") for the purpose of providing funds, together with any other available funds, to (a) pay or reimburse the costs of the 2026 Project and (b)pay the fees and expenses incurred in connection with the sale and issuance of eh Series 2026 Bond; WHEREAS, the City is obligated to pay debt service on the Series 2026 Bond until its final maturity on May 1, 2041; WHEREAS, the Master Trust Agreement provides that the City may, under the conditions set forth therein, issue additional Bonds (as described in Section 208 the Master Trust Agreement) for the purposes specified in the Master Trust Agreement; and WHEREAS, the City desires to secure (a) the payment of the principal of, premium, if any, and interest on the Series 2026 Bond and any additional Bonds issued under the Trust Agreement; (b) the payment by the City of all additional amounts required to be paid by the City under the Trust Agreement and the performance by the City of all of its other obligations under the Trust Agreement; (c) the payment of any and all other indebtedness or obligations which this Deed of Trust by its terms secures; and (d) the performance by the City of the covenants and agreements contained in this Deed of Trust; NOW, THEREFORE, the City, subject to Permitted Encumbrances (as defined in the Master Trust Agreement), as security for (a) the payment of the principal of, premium, if any, and interest on the Series 2026 Bond and any additional Bonds issued under the Trust Agreement; (b) the payment by the City of all additional amounts required to be paid by the City under the Trust Agreement and the performance by the City of all of its other obligations under the Trust Agreement; (c) the payment of any and all other indebtedness or obligations which this Deed of Trust by its terms secures; and (d) the performance by the City of the covenants and agreements contained in this Deed of Trust; and in further consideration of the sum of$1.00 paid to the City by the Deed of Trust Trustee, receipt and sufficiency of which are hereby acknowledged, has given, granted, bargained and sold, and by these presents does give, grant, bargain, sell and convey unto the Deed of Trust Trustee, its successors and assigns, in trust, with power of sale, the real property lying and being in the County of Harnett in the State of North Carolina, constituting so much thereof as constitutes real property or fixtures, and more particularly described as set forth in Schedule I attached hereto and made a part hereof (collectively, the "Site"); TOGETHER with any real property or fixtures that may be hereafter added to the lien created by this Deed of Trust by an supplement, amendment or modification hereof; TOGETHER with all buildings, improvements and fixtures of every kind and description now or hereafter erected or located thereon, all rights, appurtenances, easements, privileges, remainders and reversions appertaining thereto and all materials intended for construction, reconstruction, alteration and repair of such buildings and improvements now or hereafter erected thereon, all of which materials shall be deemed to be included within the Site hereby conveyed or any additional premises added thereto immediately upon the delivery thereof to the aforesaid real property, and all apparatus, equipment, fixtures and articles of personal property now or hereafter attached thereto as fixtures, and replacements thereof, including, but not limited to, all heating, refrigerating, air conditioning, gas, plumbing, telephone and electric apparatus 2 and equipment, all boilers, engines, motors, power equipment, piping and plumbing fixtures, pumps, tanks, lighting equipment and systems, fire prevention and sprinkling equipment and systems, and other things now or hereafter thereon or therein, including all interests of any owner thereof in any of such items, and all renewals or replacements thereof or articles in substitution thereof; TOGETHER with all rents, issues, profits and revenues of the aforesaid real property, fixtures and other property and all of the right, title and interest of the City in and to any and all leases and contracts now or hereafter affecting the real property, fixtures and other property covered hereby or any part thereof; TOGETHER with all proceeds of any of the foregoing real property, fixtures and other property including, without limitation, proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, all awards and other payments as a result of or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain by any governmental authority ("Eminent Domain"), all insurance proceeds and claims therefor as a result of damage to or destruction of all or any part of any of the foregoing, and all proceeds of any title insurance with respect to all or any part of the foregoing (the real property, fixtures, other property and proceeds granted to the Deed of Trust Trustee pursuant to the foregoing provisions hereof being collectively referred to as the"Mortgaged Property"); TO HAVE AND TO HOLD the Mortgaged Property, with all the rights, privileges and appurtenances thereunto belonging or appertaining to the Deed of Trust Trustee, its heirs, successors and assigns, in fee simple forever, upon the trusts and for the uses and purposes herein set forth; AND THE CITY COVENANTS to and with the Deed of Trust Trustee and the Beneficiary that the City is seized of the Site in fee simple, that the City has the right to convey the Site in fee simple, that the Site is free and clear from all encumbrances and restrictions other than the such encumbrances specifically mentioned in Schedule II attached hereto and made a part hereof, and that the City does hereby forever warrant and will forever defend the title to the Site (except for those matters set forth in Schedule II) against the claims of all persons whatsoever; provided,however,that THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if the City shall make all of the payments of principal of, premium, if any, and interest on the Bonds and all other amounts secured hereby in accordance with the terms thereof, together with interest thereon and all taxes, charges, assessments and any premiums for insurance hereby secured, and, further, shall comply with all the covenants, teinis and conditions of this Deed of Trust and the Trust Agreement, and any amendments and supplements hereto and thereto,then this conveyance shall be null and void and may be canceled of record at the request and at the cost of the City. This Deed of Trust secures an obligation incurred for the construction of an improvement on the real property covered hereby and as such constitutes a "construction mortgage" under Section 25-9-334 of the General Statutes of North Carolina. THE CITY FURTHER COVENANTS, REPRESENTS AND AGREES AS FOLLOWS: Section 1. Amount Secured. This Deed of Trust secures all present and future obligations owing by the City under the Bonds and the Trust Agreement. The amount of the present obligations secured hereby is $ and the maximum principal amount of the obligations 3 which may be secured hereby at any one time is $100,000,000. The time period within which such future obligations may be incurred is the period between the date hereof and the date thirty (30)years from the date hereof. Section 2. Additions to the Mortgaged Property. The City may from time to time execute and deliver one or more supplements or amendments to this Deed of Trust under which the City may subject to the lien and security interest created by this Deed of Trust such additional real or personal property, or interest therein as shall be agreed to between the City and Beneficiary in connection with the issuance of additional Bonds under the Trust Agreement. Upon the effective date of such supplement or amendment, the property so conveyed by the supplement or amendment hereto shall immediately become subject to this Deed of Trust and become part of the Mortgaged Property, except as otherwise may be provided therein. Section 3. Maintenance and Modification of Mortgaged Property by City. The Deed of Trust Trustee shall not be under any obligation to operate, maintain or repair the Mortgaged Property. The City agrees that it will at its own expense (a) keep the Mortgaged Property in as reasonably safe condition as its operations shall permit, (b) keep the Mortgaged Property in good repair and in good operating condition, (c) comply with all applicable governmental requirements imposed upon the Mortgaged Property or in connection with its use, and (d) make from time to time all necessary repairs thereto. The City may, also at its own expense, make from time to time any additions, modifications or improvements to the real property covered hereby that it may deem desirable for its governmental or proprietary purposes and that do not materially impair the effective use, nor materially decrease the value, of the Mortgaged Property. All such additions, modifications and improvements so made by the City within the boundaries of the Mortgaged Property shall become a part of the Mortgaged Property. The City will do, or cause to be done, all such things as may be required by law in order to fully protect the security and all rights of the Beneficiary under this Deed of Trust. Except as provided in Section 4 hereof, the City shall not cause or permit the lien of this Deed of Trust to be impaired in any way. Section 4. Grant and Release of Easements; Release of Mortgaged Property. (a) If no Event of Default under this Deed of Trust shall have occurred and shall continue to exist, the City may at any time or times grant easements, licenses, rights of way and other rights or privileges in the nature of easements with respect to any part of the Mortgaged Property, and the City may release existing interests, easements, licenses, rights of way and other rights or privileges with or without consideration, and the Beneficiary agrees that it shall execute and deliver and will cause, request or direct the Deed of Trust Trustee to execute and deliver any instrument necessary or appropriate to grant or release any such interest, easement, license, right of way or other right or privilege but only upon receipt of(a) a copy of the instrument of grant or release to be executed, (b) a written application of the City requesting such instrument and (c) a certificate executed by an Authorized Officer (as defined in the Master Trust Agreement) of the City that such grant or release (i) is not detrimental to the proper conduct of the operations of the City at the Mortgaged Property and (ii) will not materially impair the effective use of or interfere with the operations of the City at the Mortgaged Property and will not materially impair the value of the security under this Deed of Trust in contravention of the provisions hereof. 4 (b) At any time and from time to time, so long as no Event of Default has occurred and is continuing, the Deed of Trust Trustee and the Beneficiary shall be required to release a portion of the Mortgaged Property from the lien and security interest created by this Deed of Trust when and if the requirements set forth in Section 711 of the Master Trust Agreement have been met. Section 5. Remedies of the Deed of Trust Trustee Upon Default. (a) If any of the following events shall occur: (i) default in the payment of principal of, premium, if any, or interest on the Bonds and the expiration of any applicable grace or notice periods provided in the Bonds or the Trust Agreement; (ii) default in any payment required by the Trust Agreement (other than any payment required by clause (i) above) or default by the City in the performance of any other obligation of the City under the Trust Agreement and the expiration of any applicable grace or notice periods provided thereby; (iii) failure by the City to observe and perform any warranty, covenant, condition or agreement on the part of the City under this Deed of Trust other than Section 8 hereof for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to the City by the Beneficiary unless the Beneficiary shall agree in writing to an extension of such time prior to its expiration; provided, however, that if the failure stated in the notice cannot be reasonably corrected within the applicable period, and if corrective action is instituted by the City within the applicable period and diligently pursued and provides the Beneficiary with a certification to that effect,the City shall have an additional period following such written notice to correct the failure; or (iv) any lien, charge or encumbrance prior to or affecting the validity of this Deed of Trust is found to exist, other than Permitted Encumbrances, or proceedings are instituted to enforce any lien, charge or encumbrance against any of said Mortgaged Property and such lien, charge or encumbrance would be prior to the lien of this Deed of Trust; then and in any of such events (hereinafter referred to as an "Event of Default"), all payments under the Trust Agreement shall, at the option of the Beneficiary, become at once due and payable, regardless of the maturity date or other due date thereof (b) Upon the occurrence of an Event of Default: (i) To the extent peiiiiitted by law, the Deed of Trust Trustee shall have the right to enter upon the Mortgaged Property to such extent and as often as the Deed of Trust Trustee, in its sole discretion, deems necessary or desirable in order to cure any default by the City. The Deed of Trust Trustee may take possession of all or any part of the Mortgaged Property and may hold, operate and manage the same, and from time to time make all needful repairs and improvements as shall be deemed expedient by the Deed of Trust Trustee; and the Deed of Trust Trustee may lease any part of the Mortgaged Property in the name of and for the account of the City, and collect, receive and sequester the rent, revenues, receipts, earnings, income, products and profits therefrom, and out of 5 the same and from any moneys received from any receiver of any part thereof pay, and set up proper reserves for the payment of, all proper costs and expenses of so taking, holding and managing the same, including reasonable compensation to the Deed of Trust Trustee, its agents and counsel, and any taxes and assessments and other charges prior to the lien of this Deed of Trust which the Deed of Trust Trustee may deem it proper to pay, and all expenses of such repairs and improvements, and apply the remainder of the moneys so received in accordance with the provisions hereof. (ii) To the extent permitted by law, the Deed of Trust Trustee shall have the right after an Event of Default to the appointment of a receiver to collect the rents and profits from the Mortgaged Property without consideration of the value of the premises or the solvency of any person liable for the payment of the amounts then owing, and all amounts collected by the receiver shall, after expenses of the receivership, be applied to the payment of the obligations hereby secured, and the Deed of Trust Trustee, at its option, in lieu of an appointment of a receiver, shall have the right to do the same. If such receiver should be appointed or if there should be a sale of the said premises, as provided below, the City, or any person in possession of the premises thereunder, as tenant or otherwise, shall become a tenant at will of the receiver or of the purchaser and may be removed by a writ of ejectment, summary ejectment or other lawful remedy. (iii) The Deed of Trust Trustee shall have the right to assign to any other person, for lawful consideration, any rents, revenues, earnings, income, products and profits receivable under this Deed of Trust, provided that the proceeds of any such assignment shall be applied as provided in this Deed of Trust. (iv) The Deed of Trust Trustee is hereby authorized and empowered to expose to sale and to sell the Mortgaged Property or such part or parts thereof or interests therein as the Deed of Trust Trustee deems prudent at public auction for cash, and upon collection of the proceeds from such sale to make and deliver a deed therefor, after first having complied with all applicable requirements of North Carolina law with respect to the exercise of powers of sale contained in deeds of trust. The City agrees that in the event of a sale hereunder, the Beneficiary shall have the right to bid at it and to become the purchaser. The Deed of Trust Trustee may require the successful bidder at any sale to deposit immediately with the Deed of Trust Trustee cash or a certified check in an amount not to exceed five percent (5%) of the bid, provided notice of such requirement is contained in the advertisement of the sale. The bid may be rejected if the deposit is not immediately made and thereupon the next highest bidder may be declared to be the successful bidder. Such deposit shall be refunded in case a resale is had; otherwise it shall be applied to the purchase price. The sale of the Mortgaged Property or any part thereof or any interest therein, whether pursuant to judicial foreclosure, foreclosure under power of sale or otherwise under this Deed of Trust, shall forever bar any claim with respect to the Mortgaged Property by the City. (v) To the extent permitted by law, the Beneficiary, immediately and without additional notice and without liability therefor to the City, may do or cause to be done any or all of the following: (A) take physical possession of the Mortgaged Property; (B) exercise its right to collect the rents and profits thereof; (C) enter into contracts for the completion, repair and maintenance of the Mortgaged Property; (D) expend any rents, 6 income and profits derived from the Mortgaged Property for payment of any taxes, insurance premiums, assessments and charges for completion, repair and maintenance of the Mortgaged Property, preservation of the lien of this Deed of Trust and satisfaction and fulfillment of any liabilities or obligations of the City arising out of or in any way connected with the Mortgaged Property whether or not such liabilities and obligations in any way affect, or may affect, the lien of this Deed of Trust; (E) enter into leases demising the Mortgaged Property or any part thereof; (F) take such steps to protect and enforce the specific performance of any covenant, condition or agreement in this Deed of Trust or the Trust Agreement or to aid the execution of any power herein granted; and (G) generally, supervise, manage, and contract with reference to the Mortgaged Property as if the Beneficiary were the equitable owner of the Mortgaged Property. The City also agrees that any of the foregoing rights and remedies of the Beneficiary may be exercised at any time independently of the exercise of any other such rights and remedies, and the Beneficiary may continue to exercise any or all such rights and remedies until the Event(s) of Default of the City are cured with the consent of the Beneficiary or until foreclosure and the conveyance of the Mortgaged Property to the high bidder or until the indebtedness secured hereby is otherwise satisfied or paid in full. (vi) The Beneficiary may proceed against the fixtures referred to in Section 14 as provided in and in accordance with the applicable provisions of the Uniform Commercial Code as adopted by the State of North Carolina, as amended (the "UCC") or, at its election, may proceed and may instruct the Deed of Trust Trustee to proceed as to the portion of the Mortgaged Property constituting fixtures, in accordance with its rights and remedies with respect thereto and those granted to the Deed of Trust Trustee, all as set forth in this Deed of Trust. Subject to any limitations imposed by the applicable provisions of the UCC, the Beneficiary may sell, lease, or otherwise dispose of all or any part of the fixtures, at public or private sale, for cash or on credit, as a whole or in part, and the Beneficiary may at such sale or sales purchase the fixtures or any part thereof. The proceeds of such sale, lease, collection or other disposition shall be applied first to the costs and expenses of the Beneficiary incurred in connection with such sale, lease, collection or other disposition, and then to such outstanding balance due on any and all indebtedness owed to the Beneficiary. Further, the Beneficiary may require the City to assemble the fixtures, or evidence thereof; and make them reasonably available to the Beneficiary at one or more places to be designated by the Beneficiary which are reasonably convenient to the Beneficiary, and the Beneficiary may take possession of the fixtures and hold, prepare for sale, lease or other disposition and sell, lease or otherwise dispose of the fixtures. Any required notice by the Beneficiary of sale or other disposition or default, when mailed to the City at its address set forth herein, shall constitute reasonable notice to the City. In addition to, but not in limitation of, any of the foregoing, the Beneficiary may exercise any or all of the rights and remedies afforded to the Beneficiary by the provisions of the UCC or otherwise afforded to the Beneficiary under this Deed of Trust, with all such rights and remedies being cumulative and not alternative, and the City agrees, to the extent permitted by law, to pay the reasonable costs of collection, including, in addition to the costs and disbursements provided by statute, reasonable attorneys' fees and legal expenses which may be incurred by the Beneficiary subject to the procedures and limitations set forth in Section 6-21.2 of the General Statutes of North Carolina, as amended. 7 In all such cases, the Beneficiary shall have the right to direct the Deed of Trust Trustee to exercise the remedies granted hereunder. (c) The City hereby waives, to the full extent it lawfully may, the benefit of all appraisement, valuation, stay, moratorium, exemption from execution, extension and redemption laws and any statute of limitations, now or hereafter in force and all rights of marshalling in the event of the sale of the Mortgaged Property or any part thereof or any interest therein. (d) Except as set forth in subsection (e) of this Section, the foregoing shall in no way be construed to limit the powers of sale or to restrict the discretion the Deed of Trust Trustee may have under the provisions of Article 2A of Chapter 45 of the General Statutes of North Carolina, as amended. Each legal, equitable or contractual right, power or remedy of the Deed of Trust Trustee now or hereafter provided herein or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power and remedy, and the exercise or beginning of the exercise by the Deed of Trust Trustee of any one or more of such rights,powers and remedies shall not preclude the simultaneous or later exercise of any or all such other rights, powers and remedies. (e) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NO DEFICIENCY JUDGMENT SHALL BE RENDERED AGAINST THE CITY IN ANY ACTION FOR BREACH BY THE CITY OF ITS OBLIGATIONS WITH RESPECT TO THE BONDS OR OTHERWISE UNDER THE TRUST AGREEMENT OR THIS DEED OF TRUST; THE REMEDIES PROVIDED UNDER THIS DEED OF TRUST, INCLUDING FORECLOSURE AND SALE OF THE MORTGAGED PROPERTY UNDER THIS DEED OF TRUST, BEING THE SOLE REMEDIES GRANTED HEREBY. THE TAXING POWER OF THE CITY IS NOT AND MAY NOT BE PLEDGED IN ANY WAY, DIRECTLY OR INDIRECTLY, TO SECURE THE PAYMENT OF ANY MONEYS DUE UNDER THE TRUST AGREEMENT, INCLUDING THE PAYMENT OF THE BONDS OR ANY ADDITIONAL PAYMENTS BY THE CITY UNDER THE TRUST AGREEMENT, THIS DEED OF TRUST OR ANY OTHER INSTRUMENT CONTEMPLATED HEREBY OR THEREBY. Section 6. Application of Proceeds. The proceeds of(a) the operation and management of the Mortgaged Property pursuant to Section 5 hereof, (b) any sale of the Mortgaged Property or any interest therein, whether pursuant to judicial foreclosure, foreclosure under power of sale or otherwise, and (c) any insurance policies or eminent domain awards or other sums (other than awards or sums to which the City is entitled to under the Trust Agreement) retained by the Deed of Trust Trustee upon the occurrence of an Event of Default shall be applied to pay: First: The costs and expenses of sale, reasonable attorneys' fees actually incurred to the extent permitted by Section 6-21.2 of the General Statutes of North Carolina, as amended, the Beneficiary's fees and expenses, court costs, any other expenses or advances made or incurred in the protection of the rights of the Beneficiary or in the pursuance of any remedies hereunder and the Deed of Trust Trustee's commission payable under Section 7 hereof; Second: All taxes and assessments then constituting a lien against said premises other than those advertised and sold subject to; 8 Third: Any indebtedness or other obligation secured by this Deed of Trust and at the time due and payable (whether by acceleration or otherwise) in the manner and subject to the priority provided in the Trust Agreement; and Fourth: The balance, if any, to the persons then entitled thereto under the Trust Agreement. Section 7. Deed of Trust Trustee's Commission. In the event of a consummated sale under the power of sale contained herein, the Deed of Trust Trustee's commission shall be one- half of one percent (0.5%) of the successful bid thereat. It is further provided that in the event foreclosure is terminated upon the request of the City prior to delivery of the deed by the Deed of Trust Trustee, the City shall pay the Deed of Trust Trustee all costs and expenses incident to the foreclosure, including as compensation for services an amount equal to one-half of one percent (0.5%) of the outstanding indebtedness in accordance with the following schedule: one-fourth (1/4) thereof before the Deed of Trust Trustee issues a notice of hearing on the right to foreclose; one-half(1/2) thereof after issuance of said notice; three-fourths (3/4) thereof after such hearing; and the full commission if such termination is at any time after the initial sale; together with attorneys' fees actually incurred to the extent permitted by Section 6-21.2 of the General Statutes of North Carolina, as amended. It is further provided that the compensation herein allowed to the Deed of Trust Trustee shall constitute a lien on the Mortgaged Property immediately upon request of sale. Section 8. General Covenant. The City shall pay the principal of and interest on the Bonds and all other amounts due under the Trust Agreement and shall observe and perform all covenants, conditions and agreements contained in the Trust Agreement, and any amendments and supplements thereto, to the same extent and with the same force and effect as if each and all of said representations, warranties, terms, provisions, restrictions, covenants and agreements were set out and repeated herein at length. Any provisions governing the rights, immunities and protections of the Trustee under the Trust Agreement are incorporated herein by reference into this Deed of Trust as being applicable to the Trustee, as Beneficiary hereunder. Section 9. Payment of Costs, Attorneys' Fees and Expenses. As between the Beneficiary, the Deed of Trust Trustee and the City, the City shall pay, to the extent permitted by law, any and all costs, attorneys' fees and other expenses of whatever kind incurred by the Beneficiary or the Deed of Trust Trustee in connection with (a) obtaining possession of the Mortgaged Property, (b) the protection and preservation of the Mortgaged Property, (c) the collection of any sum or sums secured hereby, (d) any litigation involving the Mortgaged Property, this trust, any benefit accruing by virtue of the provisions hereof, or the rights of the Deed of Trust Trustee or the Beneficiary, (e)the presentation of any claim under any administrative or other proceeding in which proof of claim is required by law to be filed, (f) any additional examination of the title to the Mortgaged Property which may be reasonably required by the Beneficiary or the Deed of Trust Trustee, (g) taking any steps whatsoever in enforcing this Deed of Trust, claiming any benefit accruing by virtue of the provisions hereof, or exercising the rights of the Beneficiary hereunder, or(h) any proceeding, legal or otherwise, which the Beneficiary shall deem necessary to sustain the lien of this Deed of Trust or its priority. If the City shall fail to make any payment required to be made by the foregoing covenant, however, such amount shall be payable solely 9 from the amounts realized upon the enforcement of the remedies set forth in Section 5 of this Deed of Trust. Section 10. Insurance and Taxes. Pursuant to the Master Trust Agreement, the City has covenanted to obtain and maintain certain insurance and will pay all lawful taxes, assessments and charges, if any, at any time levied or assessed upon or against the Mortgaged Property or any part thereof; provided, however, that nothing contained in this Deed of Trust shall require the maintenance of insurance or the payment of any such taxes, assessments or charges if the same are not required to be paid under the Master Trust Agreement. If the City shall fail to make any payment required to be made by the foregoing covenant, however, such amount shall be payable solely from the amounts realized upon the enforcement of the remedies set forth in Section 5 of this Deed of Trust. Section 11. No Assignment or Encumbrance of Mortgaged Property. Except in accordance with Section 4 hereof and the Trust Agreement, the City shall not sell, transfer, exchange, lease, mortgage, encumber, pledge, assign or otherwise dispose of the Mortgaged Property, or any interest therein or any part thereof, without the prior written consent of the Beneficiary. Any such disposition or encumbrance of the Mortgaged Property, or any interest therein or any part thereof, without such prior written consent shall, at the option of the Beneficiary, constitute a default hereunder, giving rise to all of the remedies herein provided for an Event of Default. Section 12. Advances by Beneficiary. The Beneficiary is authorized, but is not required, for the account of the City, to make any required payments under any lien prior hereto or under this Deed of Trust, the non-payment of which would constitute a default, including but not limited to principal payments, interest payments, premium payments, if any, taxes and insurance premiums. All sums so advanced shall attach to and become part of the debt secured hereby, shall become payable at any time on demand therefor and, from the date of the advance to the date of repayment, any sum so advanced shall bear interest at a rate of six percent (6%) per annum. The failure to make payment on demand shall, at the option of the Beneficiary, constitute a default hereunder, giving rise to all of the remedies herein provided for an Event of Default. If the City shall fail to make any payment required to be made by the foregoing covenant, however, such amount shall be payable solely from the amounts realized upon the enforcement of the remedies set forth in Section 5 hereof. Section 13. The Deed of Trust Trustee. The Deed of Trust Trustee shall be under no duty to take any action hereunder except as expressly required, or to perform any act which would involve him in expense or liability or to institute or defend any suit in respect hereof, unless properly indemnified to its satisfaction by the Beneficiary. All reasonable expenses, charges, counsel fees and other disbursements incurred by the Deed of Trust Trustee in and about the administration and execution of the trusts hereby created, and the performance of its duties and powers hereunder, shall, to the extent permitted by law, be payable at any time on demand therefor, be secured by this Deed of Trust prior to the indebtedness represented by the Trust Agreement, and such amounts not paid when due shall, to the extent permitted by law, bear interest at a rate of six percent (6%) per annum. If the City shall fail to make any payment required to be made by the foregoing covenant, however, such amount shall be payable solely from the amounts realized upon the enforcement of the remedies set forth in Section 5 hereof. 10 Section 14. Security Interest in Fixtures. COLLATERAL IS OR INCLUDES FIXTURES. With respect to any portion of the Mortgaged Property which is or may become fixtures, this Deed of Trust shall constitute a financing statement filed as a fixture filing. The lien upon fixtures granted herein and perfected hereby shall be in addition to and not in lieu of any lien upon fixtures acquired under real property law. Section 15. Additional Documents. The City agrees to execute and deliver to the Beneficiary, concurrently with the execution of this Deed of Trust and upon the request of the Beneficiary from time to time hereafter, all financing statements and other documents reasonably required to perfect and maintain the lien or security interest created hereby. For the period in which the indebtedness of the City to the Beneficiary remains unpaid, the City hereby irrevocably makes, constitutes and appoints the Beneficiary as the true and lawful attorney in fact of the City to sign the name of the City on any financing statement, continuation of financing statement or similar document required to perfect or continue such security interests. Section 16. Substitution of Deed of Trust Trustee. The Deed of Trust Trustee may resign at any time without liability by providing written notice to the City and the Beneficiary. The City and the Deed of Trust Trustee covenant and agree to and with the Beneficiary that in case the Deed of Trust Trustee, or any successor trustee, shall die, become incapable of acting, renounce its trust, or for any reason the holder the Beneficiary desires to replace the Deed of Trust Trustee, then the Beneficiary may appoint, in writing, a trustee to take the place of the Deed of Trust Trustee; and upon the probate and registration of the same, the trustee thus appointed shall succeed to all rights, powers and duties of the Deed of Trust Trustee. This granting of power to the Beneficiary is coupled with an interest and is irrevocable. Section 17. Environmental Issues. Based upon investigation and inquiry, the City for itself, its successors and assigns represents, warrants and agrees that, except as disclosed in writing to the Beneficiary by the City, (a) neither the City nor any other person has improperly used or installed any Hazardous Material (as hereinafter defined) on the Site or received any notice from any governmental agency, entity or other person with regard to Hazardous Materials on, from or affecting the Site; (b) neither the City nor any other person has violated any applicable Environmental Laws (as hereinafter defined) relating to or affecting the Site; (c) the Site is presently in compliance with all Environmental Laws and there are no circumstances presently existing upon or under the Site, or relating to the Site which may violate any applicable Environmental Laws, and there is not now pending, or threatened, any action, suit, investigation or proceeding against the City relating to the Site (or against any other party relating to the Site) seeking to enforce any right or remedy under any of the Environmental Laws; (d) the Mortgaged Property shall not be used to generate, manufacture, refine, transport, treat, store, handle, dispose, produce or process Hazardous Materials except in accordance with all applicable Environmental Laws; (e) the City shall not cause nor permit the improper installation of Hazardous Materials in the Mortgaged Property nor a release of Hazardous Materials on the Mortgaged Property; (f) the City shall at all times comply with and ensure compliance by all other parties with all applicable Environmental Laws relating to or affecting the Mortgaged Property and shall keep the Mortgaged Property free and clear of any liens imposed pursuant to any applicable Environmental Laws; (g) the City has obtained and will at all times continue to obtain and/or maintain all licenses, permits, and/or other governmental or regulatory actions necessary to comply with Environmental Laws with respect to the Site (the "Permits"), and the 11 City is in full compliance with the terms and provisions of the Permits and will continue to comply with the terms and provisions of the Permits; (h) the City shall immediately give the Beneficiary oral and written notice in the event that the City receives any notice from any governmental agency, entity, or any other party with regard to Hazardous Materials on, from or affecting the Mortgaged Property and shall conduct and complete, or cause the responsible party to conduct and complete, all investigations, sampling, and testing, and all remedial, removal, and other actions necessary to clean up and remove all Hazardous Materials on, from or affecting the Mortgaged Property in accordance with all applicable Environmental Laws. In connection with the execution and delivery of any supplement to this Deed of Trust pursuant to Section 2, the City shall set forth representations with respect to the property covered thereby to the effect set forth in items (a), (b), (c) and (g), unless the Beneficiary shall consent to the absence of such representations. To the extent permitted by law, the City hereby agrees to defend and indemnify the Deed of Trust Trustee and the Beneficiary and hold them harmless from and against any and all losses, liabilities, damages, injuries (including, without limitation, attorneys' fees) and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against the Deed of Trust Trustee or the Beneficiary for, with respect to, or as a direct or indirect result of(a) the presence on, or under, or the escape, spillage, emission or release from the Mortgaged Property of any Hazardous Material regardless of whether or not caused by or within the control of the City, (b) the violation of any Environmental Laws relating to or affecting the Mortgaged Property, whether or not caused by or within the control of the City, (c) the failure by the City to comply fully with the terms and provisions of this paragraph, or (d) any warranty or representation made by the City in this paragraph being false or untrue in any material respect. In the event that the Beneficiary elects to control, operate, sell or otherwise claim property rights in the Mortgaged Property, the City shall, to the extent feasible, deliver the Mortgaged Property free of any and all Hazardous Materials so that the condition of the Mortgaged Property shall conform with all applicable Environmental Laws, or otherwise, shall agree to undertake remediation action in accordance with all applicable regulatory standards, designed to render the property free of hazardous Materials and in conformity with all applicable Environmental Laws. Prior to any such delivery of the Mortgaged Property, the City shall pay to the Beneficiary from its own funds any amounts required to be paid under the indemnification provisions set forth above. For purposes of this Deed of Trust, "Hazardous Material" means and includes petroleum products, any flammable explosives, radioactive materials, hazardous materials, asbestos or any material containing asbestos, and/or any hazardous, toxic or dangerous waste, substance or material defined as such in (or for the purpose of)the Environmental Laws. For the purposes of this Deed of Trust, "Environmental Laws" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Hazardous Materials Transportation Act, the Oil Pollution Act of 1990, the Emergency Planning and Right-to-Know Act, the Clean Water Act, the Clean Air Act, the Toxic Substance Control Act, the Resource Conservation and Recovery Act, any "Super Fund" or "Super Lien" law (including in all cases any regulations promulgated thereunder), or any other federal, state, or local law, regulation or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials, as may now or at any time hereafter be in effect. The obligations and liabilities of the City under this paragraph shall survive the foreclosure of the Deed of Trust, the delivery of a deed in lieu of foreclosure, and the cancellation of this Deed of Trust; or if otherwise expressly permitted in writing by the Beneficiary, the sale or alienation of any part of the Mortgaged Property. 12 Section 18. Miscellaneous. (a) Notices. All notices, approvals, consents, requests and other communications hereunder shall be in writing and, unless otherwise provided herein, shall be deemed to have been given when delivered or mailed by registered or certified mail, postage prepaid, addressed as follows: (a) if to the City, at City of Dunn, 401 E. Broad Street, Dunn, North Carolina 28334, Attention: Finance Director; (b) if to the Beneficiary, at U.S. Bank Trust Company, National Association, 214 North Tryon Street, 27th Floor, Mail Code CN-NC-H27A, Charlotte, North Carolina 28202, Attention: Global Corporate Trust, and (c) if to the Deed of Trust Trustee, at The Fidelity Company, 555 Fayetteville St., Suite 1100, Raleigh, North Carolina 27601, Attention: John C. Cooke. The City, the Beneficiary and the Deed of Trust Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, approvals, consents, requests or other communications shall be sent or persons to whose attention the same shall be directed. (b) Successors and Assigns. This Deed of Trust shall inure to the benefit of and be enforceable by the Deed of Trust Trustee and the Beneficiary and their respective successors and assigns. (c) Amendments and Supplements. This Deed of Trust may be amended and supplemented only as provided herein or in the Master Trust Agreement. Notwithstanding the foregoing, this Deed of Trust may be supplemented in writing to add additional property hereafter acquired by the City to this Deed of Trust by an instrument signed by the City only, without the joinder of any other party. (d) Applicable Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of North Carolina. (e) Severability. In the event any term, provision or covenant herein contained or the application thereof to any circumstances or situation shall be invalid or unenforceable in whole or in part, the remainder hereof and the application of said term or provision or covenant to any other circumstances or situation shall not be affected thereby, and every other term, provision or covenant herein shall be valid and enforceable to the full extent peiiiiitted by law. 13 IN WITNESS WHEREOF, the City has caused this Deed of Trust to be executed in its name by its duly authorized representatives all as of the date first above written. CITY OF DUNN,NORTH CAROLINA [SEAL] By: Mayor Attest: City Clerk ACKNOWLEDGEMENT FOR CITY STATE OF NORTH CAROLINA COUNTY OF HARNETT This day of February, 2026, personally came before me, a Notary Public in and for the said City and State, Melissa Matti, who, being by me duly sworn, says that she is the City Clerk of the City of Dunn, North Carolina, a municipal corporation duly organized and validly existing under the Constitution and laws of the State of North Carolina and acting through its City Council, and by authority duly given and as the act of said City, the foregoing instrument was signed in its name by William P. Elmore, Jr., as Mayor of said City, sealed with its seal, and attested by herself as the City Clerk. WITNESS my hand and notarial seal this day of February, 2026. Notary Public Printed Name: My commission expires: (SEAL) 14 SCHEDULE I LEGAL DESCRIPTION OF THE SITE [To be provided by the City and inserted] Schedule I-1 SCHEDULE II LIST OF ENCUMBRANCES All Permitted Encumbrances as defined in the Master Trust Agreement. Schedule II-1 Draft No. 2 February , 2026 BOND PURCHASE AGREEMENT Between City of Dunn,North Carolina and JPMorgan Chase Bank,N.A. concerning $ City of Dunn,North Carolina Limited Obligation Bond Series 2026 BOND PURCHASE AGREEMENT concerning City of Dunn,North Carolina Limited Obligation Bond Series 2026 February , 2026 City of Dunn,North Carolina Sanford,North Carolina Ladies and Gentlemen: JPMorgan Chase Bank, N.A. (the "Purchaser") hereby offers to enter into this Bond Purchase Agreement with the City of Dunn,North Carolina(the "City"), which, upon acceptance of this offer by the City, will be binding upon the City and the Purchaser. 1. Purchase and Sale of the Bond. Upon the terms and conditions hereof and upon the basis of the representations set forth herein, the Purchaser hereby agrees to purchase, and the City hereby agrees to sell to the Purchaser, the $ City of Dunn, North Carolina Limited Obligation Bond, Series 2026 (the "Bond"). The purchase price for the Bond shall be $ , representing the par amount of the Bond. The delivery and payment for the Bond and other actions contemplated hereby shall take place at the time thereof being herein sometimes called the"Closing." The Bond shall consist of one fully registered bond certificate in the aggregate principal amount of$ , shall be dated February _, 2026, shall be payable in annual principal installments on each May 1, beginning May 1, 2027, with a final maturity of May 1, 2041, subject to redemption as set forth in the Bond, and shall bear interest from its date, at a rate of % per annum (subject to adjustment as provided therein). The Bond shall be issued and secured under the provisions of a resolution adopted by the City Council of the City (the "City Council") on January 27, 2026 (the "Resolution"), a Master Trust Agreement, dated as of February 1, 2026 (the "Master Trust Agreement"), between the City and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), and a First Supplemental Trust Agreement, dated as of February 1, 2026 (the "First Supplemental Trust Agreement"), between the City and the Trustee. Capitalized terms used herein and not otherwise defined shall have the meaning given such terms in the Master Trust Agreement and the First Supplemental Trust Agreement. As security for its obligations under the Master Trust Agreement, the City has executed and delivered to a deed of trust trustee for the benefit of the Trustee a Deed of Trust, dated as of February 1, 2026 (the "Deed of Trust"), granting, among other things, a lien on the Mortgaged Property. The Deed of Trust authorizes future obligations evidenced by additional limited obligation bonds executed and delivered under the Master Trust Agreement, provided that the total amount of present and future obligations secured by the Deed of Trust at any one time does not exceed $100,000,000. The proceeds of the Bond are to be used to provide funds, together with any other available funds, to (a) pay or reimburse the costs of acquiring several parcels of land by the City to be utilized for future water treatment plant improvements and expansions (the "2026 Project") and(b)pay the fees and expenses incurred in connection with the sale and issuance of the Bond. 2. Representations of the Purchaser; Purchase for Account. (a) The Purchaser hereby acknowledges and represents, in respect of the Bond,that: (i)the Purchaser is familiar with the City; (ii) the Purchaser has been furnished with all financial and other information about the City and the Bond as requested by the Purchaser required in order to make the loan evidenced by its purchase of the Bond; and (iii) the City has made available to the Purchaser the opportunity to obtain additional information about the City and the Bond. (b) The Purchaser further acknowledges and represents in respect of the Bond that a part of the Purchaser's business consists of making loans as evidenced by the purchase, holding and sale of obligations of the same general character as the Bond, and the Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks inherent in making the loan evidenced by purchasing the Bond. The Purchaser has made such investigation of the Bond and of the financial condition and operations of the City as it deems necessary to evaluate the merits and risks inherent in making the loan evidenced by purchasing the Bond. The Purchaser is aware that there may be no secondary market for the Bond and that it may be required to hold the Bond for an indefinite period. The Purchaser represents that it is purchasing the Bond for its own account with the present intent to hold the Bond to maturity and with no present intention to resell or distribute the Bond or any interest therein; provided, however, that the Purchaser intends to sell a 100% participation interest in the Bond to an affiliate of the Purchaser on the date hereof, at par, and the Purchaser reserves the right at all times to control the disposition of its assets, including the Bond, and reserves the right to sell, assign and transfer the Bond or fractional interests in the Bond to (i) an affiliate of the Purchaser, (ii) bank, insurance companies or other financial institutions (or their affiliates), including participating arrangements, or (iii) any other entity approved by the Local Government Commission, all as permitted by the Master Trust Agreement and the First Supplemental Trust Agreement. 3. Representations and Warranties of the City. The City, by its acceptance hereof, represents and warrants to the Purchaser as follows: (a) The City is a municipal corporation duly organized and validly existing under the laws of the State of North Carolina, and is authorized and empowered to finance the 2026 Project by causing the Bond to be issued. 2 (b) The City has the full legal right, power and authority to adopt the Resolution, to issue the Bond, to execute and deliver the Master Trust Agreement, the First Supplemental Trust Agreement, the Deed of Trust and this Bond Purchase Agreement and to perfotiii its respective obligations hereunder and thereunder. (c) The Resolution has been duly adopted by the City Council, is in full force and effect and has not been modified, supplemented or amended in any manner. (d) The City has duly authorized (i) the execution and delivery of the Master Trust Agreement, the First Supplemental Trust Agreement, the Deed of Trust and this Bond Purchase Agreement, (ii) the issuance, sale and delivery of the Bond to the Purchaser and (iii) such action as may be required on the part of the City to consummate the transactions contemplated by such documents. (e) When executed and delivered, this Bond Purchase Agreement, the Bond, the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust shall constitute legal, valid and binding obligations of the City enforceable in accordance with their respective teens, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. (f) The City is not in violation of any applicable constitutional provision, law or administrative rule or regulation of the State of North Carolina or of the United States of America or in default under any agreement, resolution, indenture or instrument to which the City is a party or by which the City or its property is bound, the effect of which violation or default would materially affect the ability of the City to perform its obligations under this Bond Purchase Agreement, the Bond, the Master Trust Agreement, the First Supplemental Trust Agreement or the Deed of Trust, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a violation or default hereunder or thereunder. (g) The execution and delivery of this Bond Purchase Agreement, the Bond, the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust and the adoption of the Resolution and performance of the obligations of the City hereunder or thereunder do not and will not conflict with, result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the City (other than as provided in the Bond, the Master Trust Agreement, the First Supplemental Trust Agreement and the Deed of Trust) pursuant to the terms of, or constitute a default under, any agreement, indenture or instrument to which the City is a party or by which the City or its property is bound, or result in a violation of any applicable constitutional provision, law or administrative regulation or any order, rule or regulation of any court or governmental agency having jurisdiction over the City or its property, except as provided and permitted by such documents. (h) Except for any action that may be required by applicable federal or state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency not already obtained or made is required for the execution, delivery and performance of this Bond Purchase Agreement or the consummation of the transactions 3 contemplated hereunder, and any such consent, authorization or order so obtained is in full force and effect. (i) Any certificate signed by an authorized officer of the City and delivered to the Purchaser shall be deemed a representation and warranty of the City to the Purchaser as to the statements made therein. (j) There is no litigation or any other proceeding before or by any court, public board, agency or body, pending or, to the best knowledge of the City, threatened against or affecting the City or any of the members of the City Council in their respective capacities as such (nor is there any basis therefor), wherein an unfavorable decision, ruling or finding would in any way materially adversely affect (i) the transactions contemplated by this Bond Purchase Agreement, (ii) the organization, existence or powers of the City or the title to the office of any of the members of the City Council, (iii) the properties or assets or the condition, financial or otherwise, of the City, (iv) the validity or enforceability of this Bond Purchase Agreement, the Resolution, the Bond, the Master Trust Agreement, the First Supplemental Trust Agreement or the Deed of Trust (or any other agreement or instrument of which the City is a party or used or contemplated for use in the consummation of the transactions contemplated hereby) or (v) the exemption from federal or State of North Carolina income taxation of the interest on the Bond. (k) There has been no material adverse change in the financial condition of the City since June 30, 2025, except as otherwise disclosed to the Purchaser by the City prior to the date hereof in writing. (1) The City acknowledges and agrees that (i) this Bond Purchase Agreement is an arm's length commercial transaction between the City and the Purchaser in which the Purchaser is acting solely as a principal to make a loan to the City, and not as a municipal advisor, financial advisor or fiduciary to the City or any other person or entity regardless of whether the Purchaser or an affiliate has or is currently acting as such on a separate transaction; (ii) the Purchaser has not assumed any advisory or fiduciary responsibility to the City with respect to the transaction contemplated by this Bond Purchase Agreement, and the discussions, undertakings and procedures leading to this Bond Purchase Agreement (irrespective of whether the Purchaser or its affiliates have provided other services or are currently providing other services to the City on other matters); (iii) the only obligations the Purchaser has to the City with respect to the transaction contemplated by this Bond Purchase Agreement are expressly set forth herein or the related Bond Documents (hereinafter defined); and (iv) the City has consulted its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate. (m) The City acknowledges and agrees that the Purchaser is purchasing the Bond in evidence of a privately placed financing and that it will not (i) request the assignment of a rating on the Bond by any municipal securities rating agency, (ii) register the Bond with The Depositary Trust Company or any other securities depository, (iii) offer the Bond pursuant to any type of offering document or official statement or (iv) request the assignment of a CUSIP number to the Bond by Standard& Poor's CUSIP Service. 4 (n) The City acknowledges that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act), all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The City agrees that it will provide to the Purchaser such information as it may request, from time to time, in order for the Purchaser to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided. (o) In connection with the City's compliance with any continuing disclosure undertakings (each, a "Continuing Disclosure Agreement") entered into by the City on and after February 27, 2019, pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the "Rule"), the Purchaser acknowledges that the City may be required to file with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system, or its successor ("EMMA"), notice that the City has incurred obligations under the Bond and notice of certain subsequent events reflecting financial difficulties in connection therewith. The City agrees that it shall not file or submit, or permit to be filed or submitted, with EMMA any documentation that includes the following unredacted sensitive or confidential information about the Purchaser or its affiliates: address and account information of the Purchaser or its affiliate, or e-mail addresses, telephone numbers, fax numbers, names and signatures of officers, employees and signatories of the Purchaser or its affiliates, unless otherwise required for compliance with the Rule or otherwise required by law. The City acknowledges that the Purchaser is not responsible for the City's compliance or noncompliance with the Rule or any Continuing Disclosure Agreement. 4. Payment and Delivery. At 10:00 a.m., North Carolina time, on February , 2026, or at such other time or on such earlier or later date as mutually agreed upon, the City will deliver or cause to be delivered the Bond to the Purchaser. Upon such delivery of the Bond, the Purchaser shall pay the purchase price for the Bond as specified in Section 1 hereof to the Trustee in immediately available funds, and the Trustee shall deposit the full purchase price thereof in the manner specified in Section 204 of the First Supplemental Trust Agreement. The Closing on the Bond will be held at the offices of Womble Bond Dickinson (US) LLP in Raleigh, North Carolina, or at such other place as the City, the Trustee and the Purchaser may mutually agree upon. 5. Conditions of Closing. The Purchaser has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at Closing and upon the perfoiiiiance by the City of its obligations hereunder. Accordingly,the Purchaser's obligation under this Bond Purchase Agreement to purchase and pay for the Bond shall be subject to the perfoiiiiance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to Closing, and shall also be subject to the following conditions: 5 (a) At the time of Closing (i) the representations and warranties of the City contained herein shall be true, complete and correct, (ii) the Master Trust Agreement, the First Supplemental Trust Agreement, the Deed of Trust and this Bond Purchase Agreement shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to by the Purchaser and (iii) the City and the Local Government Commission shall have duly adopted and there shall be in full force and effect such resolutions as in the opinion of Womble Bond Dickinson(US) LLP, Raleigh,North Carolina ("Bond Counsel"), shall be necessary in connection with the transactions contemplated hereby, and such resolutions shall not have been amended, modified or supplemented, except as may have been agreed to by the Purchaser. (b) On or prior to the date of Closing, the Purchaser shall have received the following documents in form and substance reasonably satisfactory to the Purchaser: (1) opinion of Bond Counsel, dated as of the date of Closing, in form and substance satisfactory to the Purchaser; (2) opinion of the City Attorney, dated as of the date of Closing, in form and substance satisfactory to the Purchaser; (3) copy of the signed and authenticated Bond; (4) executed counterparts or copies of the Master Trust Agreement,. the First Supplemental Trust Agreement,the Deed of Trust and this Bond Purchase Agreement; (5) certified copies of all proceedings of the City relating to approvals or authorizations for the Bond and the execution and delivery of this Bond Purchase Agreement, including the adoption of the Resolution; (6) certified copy of approving resolution of the Local Government Commission; (7) executed copies of the Tax Certificate of the City relating to the Bond and the IRS Forni 8038-G; (8) such other documents as may be required to be delivered pursuant to Section 208 of the Master Trust Agreement or Section 204 of the First Supplemental Trust Agreement; and (9) such additional certificates (including appropriate incumbency and no- litigation certificates), instruments, opinions or other documents as the Purchaser may reasonably request. All representations and warranties of the City set forth in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of(i) any investigation made by or on behalf of the Purchaser or any person controlling the Purchaser and (ii) acceptance of and payment for the Bond. 6 6. Counterparts. This Bond Purchase Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 7. Notices. Any notice or other communication to be given under this Bond Purchase Agreement may be given by delivering the same in writing by first-class mail, postage prepaid, to the following addresses: To the City: City of Dunn,North Carolina 401 E. Broad Street Dunn,North Carolina 28334 Attention: Finance Director To the Purchaser: JPMorgan Chase Bank,N.A. 111 E. Court Street, Floor 02 Flint, Michigan 48502-1649 Attention: Yvonne G. Carr, Vice President 8. Governing Law. This Bond Purchase Agreement shall be governed by, and construed in accordance with, the laws of the State of North Carolina. 9. Severability. In the event any provision of this Bond Purchase Agreement shall be held invalid or unenforceable by a court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 10. E-Verify. The Purchaser understands that "E-Verify" is a federal program operated by the United States Department of Homeland Security and other federal agencies, or any successor or equivalent program used to verify the work authorization of newly hired employees pursuant to federal law in accordance with Section 64-25(5) of the General Statutes of North Carolina, as amended. To the extent applicable, in connection with this Bond Purchase Agreement, the Purchaser will comply with the "E-Verify" requirements of Sections 64-25(5) and 64-26(a) of the General Statutes of North Carolina, as amended, including with respect to subcontractors the Purchaser may use in connection with this Bond Purchase Agreement, if any. The Purchaser hereby represents that, as of the effective date of this Bond Purchase Agreement, it has deteiiiiined that it is not an "employer" within the meaning of Section 64-25(4) of the General Statutes of North Carolina, as amended, as it does not employ 25 or more employees in the State. 11. Role of Purchaser. The Purchaser and its representatives are not registered municipal advisors and do not provide advice to municipal entities or obligated persons with respect to municipal financial products or the issuance of municipal securities (including regarding the structure,timing,terms and similar matters concerning municipal financial products or municipal securities issuances) or engage in the solicitation of municipal entities or obligated persons for the provision by non-affiliated persons of municipal advisory services and/or investment 7 advisory services. With respect to the Resolution, the Master Trust Agreement, the First Supplemental Trust Agreement, the Deed of Trust and this Bond Purchase Agreement (collectively, the "Bond Documents") or the matters related to the sale and issuance of the Bond and any other information, materials or communications provided by the Purchaser: (a) the Purchaser and its representatives are not recommending an action to any municipal entity or obligated person; (b) the Purchaser and its representatives are not acting as an advisor to any municipal entity or obligated person and do not owe a fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to any municipal entity or obligated person with respect to the Bond Documents or the matters related to the sale and issuance of the Bond, information, materials or communications; (c) the Purchaser and its representatives are acting for their own interests; and (d) the City has been informed that the City should discuss the Bond Documents and matters related to the sale and issuance of the Bond, and any such other information, materials or communications with its own legal, tax, financial and other advisors that the City deems appropriate before executing and delivering this Bond Purchase Agreement or acting on such other matters related to the sale and issuance of the Bond or any such other information, materials or communications. 12. Payment of Costs. The City covenants and agrees that it will pay or cause to be paid all expenses and costs incident to the authorization, issuance, printing and delivery of the Bond and the Bond Documents, including, without limitation (i) any registration, filing, allocation, recording and other fees and expenses and(ii)the fees and expenses of Bond Counsel, counsel to the City and counsel to the Purchaser in the amount not to exceed $10,000. (signatures to follow) 8 This Bond Purchase Agreement shall become effective upon the execution of the acceptance hereof by a duly authorized officer of the City and shall be valid and enforceable as of the time of such acceptance. JPMORGAN CHASE BANK,N.A. By: Yvonne G. Carr Vice President 9 [Counterpart signature page to Bond Purchase Agreement, dated February , 2026, between the City of Dunn,North Carolina and JPMorgan Chase Bank,N.A.] Approved: CITY OF DUNN,NORTH CAROLINA By: Justin B. Hembree City Manager 10 CITY Or oli 1887 NORTH CAROLINA Nher&co /egt:As! Regular Meeting, February 24, 2026 Agenda Item(s): Capital Project Ordinance Amendment II - Tart Park Improvement Project (Close-Out) Presenter(s): Cary McNallan, Finance Director Responsible Staff: Brian McNeill, Park and Recreation Director Action Item: Yes Attachment(s): 1) Capital Project Ordinance Amendment II 2) Budget Amendment Background The Tart Park Improvement Project was approved by the City Council in March 2024. The project included the installation of playground equipment at two (2) sites within the park and the renovation of an existing picnic shelter. The project budget was $440,000 and included funding from a Parks and Recreation Trust Fund (PARTF)grant of$400,000 and General Fund Reserves of$40,000. The project has now been completed, and the final cost of the project was $419,870.85 leaving a balance of $20,129.15 to be returned to the General Fund. In order to properly account for the funding and expenditures related to this project, an amendment to the previously adopted Capital Project Ordinance is required. Staff Recommendation(s) Staff recommend that the City Council approve a Capital Project Ordinance Amendment that will close out this project. Budget Impact The project balance of$20,129.15 will be returned to the General Fund Reserves. Suggested Motion(s) Motion to approve the attached Capital Project Ordinance Amendment and Budget Amendment for the Tart Park Improvement Project. Page 1 of 1 CITY OF ,,,-- ti: 4DUNN , , I' Tt , AR ',::-._: L 1 1 ..: Capital Project Ordinance Amendment 2 Tart Park Improvements Project WHEREAS, the City Council for the City of Dunn, on June 13, 2023, adopted the Annual Budget Ordinance number 02023-13 for the fiscal year beginning July 1, 2023; and, WHEREAS, the City Council, on June 13, 2023, adopted the Capital Improvements Plan for fiscal year 2023-24; and, WHEREAS, on November 15, 2022, the City Council formally accepted a North Carolina Parks and Recreation Trust Fund (PARTF) grant from the North Carolina Division of Parks and Recreation; and, WHEREAS, on March 26, 2024, the City Council approved a $400,000 Capital Project Ordinance for the Tart Park Improvements Project; and, WHEREAS, on August 27, 2024, the City Council approved Capital Project Ordinance Amendment#1 which included an additional$40,000 of funding for this project with monies from the General Fund; and, WHEREAS,the project is now completed, and the final project budget needs to be amended to close out the remaining funds; and, NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUNN, NC, PURSUANT TO SECTION 13.2 OF CHAPTER 159 OF THE GENERAL STATUTES OF NORTH CAROLINA,THAT: Section 1: Contractual and construction services for the City of Dunn Tart Park Improvements Project is authorized to be undertaken until all project activity is completed, and is adopted as follows: Section 2. The amount of funding appropriated, and amounts budgeted for project expenditures are amended and approved as follows: 'Mere community h jins! CITY OF bid DuNN 887 NORTH CAROLINA Funding Appropriations Previous Budget Revised Budget Amendments Budget State Parks and Recreation Grant $ 200,000.00 $ 200,000.00 General Fund Operating Transfer $ 240,000.00 $ 240,000.00 Total Funding $ 440,000.00 $ - $ 440,000.00 Expenditures: Construction $ 440,000.00 $ (20,129.15) $ 419,870.85 Oper Trf to General Fund $ - $ 20,129.15 $ 20,129.15 Total Expenditures $ 440,000.00 $ - $ 440,000.00 Section 3: The Finance Director is directed to report periodically on the financial status of each project element in Section 2 and on the total revenues received or claimed. Section 4: Funds may be advanced from the General Fund for the purpose of making payments as due. Reimbursement requests should be made to the Federal or State grantor agency in an orderly and timely manner. Compliance with all Federal and State Procurement Regulations is required. Section 5: Within five (5) days after this ordinance is adopted,the City Clerk shall file a copy of this ordinance with the Finance Director. Section 6: This Capital Project Ordinance shall be effective immediately. Duly adopted this 24th day of February 2026. William P. Elmore,Jr. Mayor Attest: Melissa R. Matti Interim City Clerk J06ere communit 6jins! CITY OF DUNN BUDGET ORDINANCE AMENDMENT Department: Park&Rec Budget Amendment#: 19 FISCAL YEAR ENDING: 6/30/2026 Date: 2/24/2026 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment Tart Park Project 104-0910-7600 Construction 440,000.00 (20,129.15) $ 419,870.85 Tart Park Project 104-0910-8501 Oper Trfs to General Fund - 20,129.15 20,129.15 EXPENDITURE TOTAL: $ 440,000.00 $ - $ 440,000.00 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment General 010-0369-0104 Oper Trfs fr Fund 104 $ - $ 20,129.15 $ 20,129.15 General 010-0368-2001 Fund Balance Appropriation $ 841,797.00 $ (20,129.15) $ 821,667.85 $ - $ - $ - $ - $ - $ - REVENUE TOTAL: $ 841,797.00 $ - $ 841,797.00 CERTIFICATION: I certify this requested budget amendment was approved by the City Council on: City Manager: 2/24/2026 Finance Director: 2/24/2026 JUSTIFICATION: Close out completed Tart Park Improvements project and return advanced loan funds to the General Fund. FUNDING SOURCE: General Fund Transfer. CITY OF 11� DuNN 1887 NORTH CAROLINA Piet&co ,6eguts/ Regular Meeting, February 24, 2026 Agenda Item(s): Accept NCDEQ OSG Funding-Juniper Creek Area Stormwater Presenter(s): Cary McNallan, Finance Director Responsible Staff: Cary McNallan, Finance Director Action Item: Yes Attachment(s): 1) Resolution 2) Capital Project Amendment 3) NCDEQ Funding Offer Background On June 24, 2025, the City Council accepted a $2,805,150 State Revolving Fund (SRF) Loan offer from the North Carolina Department of Environmental Quality (NCDEQ) to fund the Juniper Creek Area Stormwater Improvements. To date, these funds have not been spent. In January 2026, the City of Dunn received a funding offer from NCDEQ for a $3,396,071 Sewer Overflow and Stormwater Reuse Municipal Grant(OSG). This grant would replace the previously accepted SRF loan funding. The purpose of the OSG would be to fund a portion of the Juniper Creek Area Stormwater Improvements. Staff Recommendation(s) Staff are recommending that the City Council approve the acceptance of these grant funds. Budget Impact The grant funds would increase the stormwater project budget to $3,896,071 and would not require any City funds. Suggested Motion(s) Motion to adopt the resolution accepting the $3,396,071 of OSG-370417-08 grant funds from NCDEQ for the Juniper Creek Area Stormwater Project. Page 1 of 1 CITY OF DUNN1887 NORTH CAROLINA CITY OF DUNN RESOLUTION BY GOVERNING BODY OF RECIPIENT Juniper Creek Area Stormwater System Improvements Sewer Overflow and Stormwater Reuse Municipal Grant Program (OSG) - 370417-08 WHEREAS, the North Carolina Clean Water Revolving Loan and Grant Act of 1987 has authorized the making of loans and grants to aid eligible units of government in financing the cost of construction of wastewater treatment works, wastewater collection systems, and water supply systems, water conservation projects,stormwater quality projects,and WHEREAS, the North Carolina Department of Environmental Quality Division of Water Infrastructure (DWI) previously offered a Clean Water State Revolving Fund(CWSRF)Loan in the amount of$2,805,150 for the construction of stormwater quality improvements project,and WHEREAS, the NC North Carolina Department of Environmental Quality has instead offered a Sewer Overflow and Stormwater Reuse Municipal Grant Program (OSG) in the amount of$3,396,071 for the construction of stormwater quality improvements project,and WHEREAS, the City of Dunn intends to perform said project in accordance with the agreed scope of work, NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUNN: That the City of Dunn does hereby accept the OSG grant offer of$3,396,071. That the City of Dunn does hereby give assurance to the North Carolina Department of Environmental Quality that any Conditions or Assurances contained in the Award Offer will be adhered to, has substantially complied, or will substantially comply, with all Federal, State and local laws, rules, regulations,and ordinances applicable to the project and to Federal and State grants and loans pertaining thereto. That City Manager Justin Hembree and Assistant City Manager Billy Godwin, the Authorized Official(s),and successors so titled,are hereby authorized and directed to furnish such information as the appropriate State agency may request in connection with this project and the projects listed below;to make the assurances as contained above; and to execute such other documents as may be required by the Division of Water Infrastructure. • Water AIA;AIA-D-0302 • Sewer AIA;AIA-W-ARP-0203 (ARPA) • Sewer Collection System Improvements; CWSRF CS370417-06 • West Pearsall Culvert Replacement;SRP-SW-ARP-0030,SRP-SW-ARP-0003,SRP-W-SW-ARP-0098 (ARPA LASII) Adopted this the 24th day of February 2026 at City of Dunn, North Carolina. William P. Elmore ATTEST: Mayor Melissa R.Matti, City Clerk Mere comrnuni I ejinsl CITY iii 887 NORTH CAROLINA Capital Project Ordinance Amendment 2 Juniper Creek Area Stormwater Improvements WHEREAS,the City Council for the City of Dunn,on June 25,2024,adopted the annual budget ordinance number 02024-13 for the fiscal year beginning July 1, 2024; and, WHEREAS, the City Council, on June 25, 2024, adopted the capital improvements plan for fiscal year 2024-25; and, WHEREAS, the City Council, intends to construct stormwater improvements at the location of East Bay Street, South Wilson Avenue, and Merry Street; and, WHEREAS, the City has been awarded a $500,000 Golden LEAF (Long-Term Economic Advancement Foundation)grant and the NC Department of Environmental Quality's Division of Water Infrastructure State Water Infrastructure Authority has approved a Clean Water State Revolving Fund low interest loan of up to $2,805,150, of which $500,000 is available for a loan forgiveness grant; and, WHEREAS,on August 27, 2024,the city council approved a capital project ordinance for the Juniper Creek Area Stormwater Improvements Project for a total of$2,859,955; and, WHEREAS, on June 24, 2025, the city council approved a capital project ordinance amendment for the Juniper Creek Area Stormwater Improvements Project for a total of $445,195 to adjust the project's total budget to reflect the total funding awards; and, WHEREAS, it is necessary to create a second amendment to this capital project to increase the project total to $3,896,071 to account for changes in funding sources and expenditures of this project; and, NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUNN, NC, PURSUANT TO SECTION 13.2 OF CHAPTER 159 OF THE GENERAL STATUTES OF NORTH CAROLINA, THAT: Section 1: The Project authorized is the Juniper Creek Area Stormwater Improvements Project (grant project number OSG-370417-08) to be to be financed by the federal Sewer Overflow and Stormwater Reuse Municipal Grant Program (OSG) awarded to the City of Dunn by the North Carolina Department of Environmental Quality (DEQ) Division of Water Infrastructure (DWI) and is authorized to be undertaken until all project activity is completed. This funding replaces the previously accepted grant and loan funding from the NCDEQ (loan project number CS370417-08) which was to be financed by the Clean Water State Revolving Fund (CWSRF) awarded to the City of Dunn by the North Carolina Department of Environmental Quality (DEQ) Division of Water Infrastructure (DWI). Section 2: The officers of this unit are hereby directed to proceed with the grant project within the terms of the council resolution, grant/loan documents, the rules and regulations of the Division of Water Infrastructure (DWI), and the budget contained herein. The amount Rliere communly hjins! 1VVf NORTH CAROLINA of funding appropriated, and amounts budgeted for construction and related costs, are approved as follows: Previous Budget Revised Funding Appropriations Budget Amendments Budget Golden LEAF Grant $ 500,000 $ 500,000 NCDEQ CWSRF Grant $ 500,000 $ (500,000) $ - NCDEQ CWSRF Loan Funds $ 2,305,150 $ (2,305,150) $ - NCDEQ OSG Program $ 3,396,071 $ 3,396,071 Total Funding $ 3,305,150 $ 590,921 $ 3,896,071 Expenditures: Administration $ 57,200 $ 57,200 Professionl Services $ 250,000 $ 250,000 Engineering $ 315,000 $ 185,000 $ 500,000 Easements $ 150,000 $ 150,000 Construction $ 2,432,950 $ 2,432,950 Contingency $ 100,000 $ 405,921 $ 505,921 Total Expenditures $ 3,305,150 $ 590,921 $ 3,896,071 Section 3: The finance officer is hereby directed to maintain within the Juniper Creek Area Stormwater Improvements Project Fund sufficient specific detailed accounting records to satisfy the requirements of the funding agency, the grant agreements, and federal regulations. Section 4: Funds may be advanced from the Enterprise Fund or General Fund for the purpose of making payments as due. Reimbursement requests should be made to the State funding agency in an orderly and timely manner. Compliance with all federal and state procurement regulations is required. Section 5: The finance officer is directed to report, on a quarterly basis, on the financial status of each project element in section 2 and on the total grant revenues received or claimed. Section 6: The Budget Officer is directed to include a detailed analysis of past and future costs and revenues on this capital project in every budget submission made to this city council. Section 7: Within five (5) days after this ordinance is adopted, the City Clerk shall file a copy of this ordinance with the Finance Director. 'Mere communif h jins! CITY OF 11111 1887 NORTH CAROLINA Section 8: This capital project ordinance shall be effective immediately. Duly adopted this 24th day of February 2026. William P. Elmore, Jr. Mayor Attest: Melissa R. Matti City Clerk 'Mere communiy i 3ins! Docusign Envelope ID: B572F7EE-B182-4680-B9EB-50FA6B4A6B2E STATE OF NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY DIVISION OF WATER INFRASTRUCTURE Funding Offer and Acceptance Legal Name and Address of Award Recipient Project Number(s): OSG-370417-08 City of Dunn P.O. Box 1065 : N/A Assistance Listing Number : 66:447 Dunn, North Carolina 28335 Unique Entity ID Number: MLLCTPVM8A39 Funding Program Drinking Water Additional Amount for Previous Total Total Offered Stormwater Funding Increases Wastewater Sewer Overflow and Stormwater Reuse ® $ 3,396,071 Municipal Grant Program State Revolving Fund-Principal Forgiveness State Reserve Loan State Reserve Grant State Reserve Earmark(S.L. 2023-134)* _ American Rescue Plan Act-Choose an item. Project Description: Total Financial Assistance Offer: $ 3,396,071 Juniper Creek Area Stormwater System Improvements Total Project Cost: $4,059,337 Estimated Closing Fee**: N/A *Federal conditions and requirements will also apply to S.L 2023-134 projects co funded with federal funds. **Estimated closing fee calculated based on grant and loan amount. Pursuant to North Carolina General Statute 159G: • The applicant is eligible under Federal and State law, • The project is eligible under Federal and State law, and • The project has been approved by the Department of Environmental Quality as having sufficient priority to receive financial assistance. The Department of Environmental Quality, acting on behalf of the State of North Carolina, hereby offers the financial assistance described in this document. For The State of North Carolina: Stephanie Suter, Deputy Director, Division of Water Infrastructure 1/28/2026 Signature Date ,--Signed by: _ _�_� Stifi EC0B3F178E434D9... North Carolina Department of Environmental Quality On Behalf of: City of Dunn Name of Representative in Resolution: Title (Type or Print): I, the undersigned, being duly authorized to take such action, as evidenced by the attached CERTIFIED COPY OF AUTHORIZATION BY THE APPLICANT'S GOVERNING BODY,do hereby accept this Financial Award Offer and will comply with the attached Assurances and the Standard Conditions. Signature Date CITY OF mai DuNN 1887 NORTH CAOLI Pitet&ceirksacit4lochs Regular Meeting, February 24, 2026 Agenda Item(s): Acceptance of AKC Reunite, K-9 Cop Grant Presenter(s): Police Chief, Lynn Gay Responsible Staff: Police Chief, Lynn Gay Action Item: Yes Attachment(s): 1) Copy of the grant check 2) Budget Amendment Background The AKC Reunite K-9 Cop Grant Program provides funding assistance to law enforcement agencies for the purchase of trained police service dogs. The program is designed to support public safety by helping agencies acquire K-9s that are used for patrol functions such as tracking, apprehension, and narcotics detection. The grant operates on a matching funds basis, covering 75%of the approved purchase cost, up to a maximum cost of$10,000.The Dunn Police Department was awarded the full grant amount of$7,500, with the remaining required match to be funded by the department. The estimated cost of a new K-9 is $12,000. The Dunn Police Department has been awarded an AKC Reunite grant to assist with the purchase of a new police K-9. This K-9 will replace Police K-9 Apacs, who is nearing retirement after years of service to the community. Acceptance of the grant funds by City Council is required to proceed with the purchase. Approval of this request will allow the department to maintain K-9 operational capabilities without interruption and continue providing enhanced public safety services to the community. Page 1 of 2 Budget Impact This acceptance will secure $7,500 toward the purchase of a new police K-9 and will be appropriated to the Police budget. The City's share of the purchase will be funded from available funds within the police budget. The overall budget for the Police Department will increase by$7,500. Staff Recommendation(s) Approve the acceptance of the grant and the Budget Amendment. Suggested Motion(s) Motion to approve the acceptance of the AKC Reunite, K-9 Cop Grant and the attached Budget Amendment. Page 2 of 2 DA26T9 21,803 AAC Reunite Ty 8051 Arco Corporate DrivePage 1dI ' Suite 200 V%WWI s� Raleigh, OK 27617 Date: 02/05/2026 Check#: 92625 010902 R3K6T1A Payment Amount: 7,500.00 Ems' • DUNN POLICE DEPT Vendor#. VN24653 401 E B ROAD ST DUNN NC 28335 rrIirhiI1iIrIIhIuIIIIrllrlrhII IrlrllrrluJI1.4-1I1irriIU,II Remittance Advice Invoice Net Invoice Date Invoice No. Invoice Description Amount 01/16/2026 20/6-01-16 GRANT ADOPT A K-9 COP GRANT 7,500.00 PLEASE DETACH BEFORE DEPOSITING CHECK THIS CHECK CONTAINS MULTIPLE FRAUD DETERRENT SECURITY FEATURES AMC Reunite 90-13 $051 Arto Corporate Drive ? 56 156t931 Suite Zee 8L Date: 02/05/2026 Raleigh, tic 27617 Check#: 92625 Amount Pay Exactly *Seven Thousand Five Hundred and 00/100-US Dollars ,. $•"••7,500.00 TO THE DUNN POLICE DEPT 14-1 ORDER OF }E WELLS FARGO BANK,N A. Authorized Si. r if'000009 26 2 5n' 1:0531,0L5 Li:80 L85 ? ? 5620 CITY OF DUNN BUDGET ORDINANCE AMENDMENT Department: Police Budget Amendment#: 20 FISCAL YEAR ENDING: 6/30/2026 Date: 2/24/2026 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment • General 010-0510-7400 Capital Outlay - 12,000.00 $ 12,000.00 General 010-0510-5300 Dues&Subscriptions 63,800.00 (4,500.00) 59,300.00 EXPENDITURE TOTAL: $ 63,800.00 $ 7,500.00 $ 71,300.00 Appropriation Amount of Appropriation FUND Acct# LINE ITEM DESCRIPTION Before Amendment After Amendment Increase/(Decrease) Amendment General 010-0363-0002 Non-Govt Grants $ - $ 7,500.00 $ 7,500.00 $ $REVENUE TOTAL: $ - $ 7,500.00 $ 7,500.00 CERTIFICATION: I certify this requested budget amendment was approved by the City Council on: City Manager: 2/24/2026 Finance Director: 2/24/2026 JUSTIFICATION: Police received a grant for the purchase of a new K9 at an estimated cost of$12K. A budget amendment is needed for the city's share of this purchase. FUNDING SOURCE: Grant funds and available funds from the Police Department's dues and subscriptions line item. CITY OF DuNN1887 NORTH CAROL.INA t)ltet&ezzirtnaut4,liege Regular Meeting, February 24, 2026 Agenda Item(s): City Manager's Report Presenter(s): Justin Hembree, City Manager Responsible Staff: Justin Hembree, City Manager Action Item: No Attachment(s): None The City Manager will provide updates on the following items: a. Budget Retreat Summary Report b. 2026-2027 Budget Planning Retreat— Facilitator Slide Presentation Page 1 of 1 mmumerammoi emorlh Nommilimmis KC1 MEMORANDUM Justin Hembree, City Manager TO: Billy Godwin, Assistant City Manager FROM: Chad Sary, KCI Associated of NC DATE: February 12, 2026 SUBJECT: City of Dunn City Council FY 26-27 Budget Retreat Summary Report Thank you for the opportunity to facilitate the City of Dunn's City Council FY 26-27 Retreat on February 6-7, 2026, in Wrightsville Beach, NC. The objectives of the retreat were to: • Connect goals & actions to the City's overall financial picture. • Review accomplishments from FY 2025-26. • Review progress of previous goals & projects. • Review of goals from adopted plans. • Set/prioritize goals and funding to support. • Create a consensus-driven work plan & budget for staff. The overall goal of the retreat was to collaborate on and prioritize a balance of City Council priorities, departmental needs, and strategies from the Imagine Dunn Strategic Plan, thereby assisting City staff in preparing the FY 2026-27 budget and beyond. Attached, you will find a report summarizing the retreat activities, the goal-setting process, and the prioritization that occurred. Employee-Owned Since 1988 RISE TO THE CHALLENGE WWW.KCI.COM City of Dunn City Council Retreat Report 2.12.26 CITY OF DUNN CITY COUNCIL RETREAT REPORT BUDGET YEAR 26-27 The Dunn City Council held a retreat with key staff to establish goals & priorities for fiscal year 2026-2027. Chad Sary with KCI Associates of North Carolina facilitated the retreat. LOCATION & DATES: Lumina Hotel on Wrightsville Beach, Wrightsville Beach, NC Friday, February 6, 2026 & Saturday, February 7, 2026 PARTICIPANTS: Mayor & City Council • William P. Elmore Jr. • J. Wesley Sills • April Gaulden • Billy Tart • Dr. David Bradham • Raquel McNeil • Alan Hargis CITY DEPARTMENT REPRESENTATIVES: • Justin Hembree, Billy Godwin, Melissa Math, Alex Abling [Administration] • Brian McNeill [Parks & Recreation] • Connie Jernigan [Human Resources] • Stephanie Goodrich [Planning] • Timothy Gay, Nicholas Simmons [Police] • Billy Godwin [Public Utilities] • Dwayne Williams [Public Works] • Cary McNallan [Finance] DAY ONE — FRIDAY, FEBRUARY 6, 2026: Session 1 — Getting Started The sessions of day one started with the call to order and opening remarks by Mayor—William Elmore, Jr., City Manager—Justin Hembree, and Facilitator - Chad Sary. 2 City of Dunn City Council Retreat Report 2.12.26 Session 1 - Pre-Retreat Questions The first activity involved three questions for all participants to answer. The questions are listed below, along with a summarization of the answers provided: Question 1 - What is one thing you learned in 2025 as a City Official? • Making complex decisions in the best interest of Dunn. • Valuing high-quality staff and strong teamwork. • Adapting effectively to change. • Navigating complex laws and ordinances. • Recognizing that the limits and pace of government can be frustrating. Question 2 - What do you see as the most critical issue or trend (internal and external) facing the City of Dunn over the next year or two? • Adequate and reliable infrastructure. • Balanced, high-quality growth. • Retaining and attracting talented city staff. • Maintaining public trust. • Securing funding for needed projects. • Supporting social and community health. Question 3—What is the one thing you hope to take away from this retreat? • Consensus on goals and projects. • Clear direction and unity. • Actionable goals • Short- and long-term wins Session 1 — Four Tendencies & Decision Making in Government The Four Tendencies is a research-based framework developed by Gretchen Rubin that explains habits & how people are likely to follow through with commitments. According to Rubin's research, people fall into one of four types (Upholder, Questioner, Obliger, or Rebel) based on whether they are more likely to meet or resist these expectations. City Council members responded to a series of questions designed to identify the leadership or decision-making tendencies that most closely align with their perspectives. FOUR TENDENCIES Upholders Obligers 3 City of Dunn City Council Retreat Report 2.12.26 • Embrace both internal and external • The "people pleaser" —easily meets outer expectations easily. expectations but struggles to meet inner • Do not' want to fail others, but they don't expectations. believe in failing themselves either = • Creating outer accountability is the key to balance + boundaries success. • Comforted by meeting expectations • Susceptible to overwork & burnout. • Watch for "tightening" — becoming • Risk "obliger rebellion" when overly rigid with routines and overwhelmed. expectations. City Council members who align with this City Council members who align with this tendency: tendency: --> William Elmore —* Wes Sills —> Billy Tart —> Raquel McNeil Questioners Rebels • Do well in achieving their own • Independent thinkers expectations but often fail to live up to • Resist internal and external expectations. those of others. • Motivated by freedom and authenticity. • Understanding the "why" is key— need to • Can do anything they WANT to do. meet an information threshold. • Struggle with routines and planning. • Value effective and efficient systems. • Respond best to information + • Can struggle with "analysis paralysis" consequences + choice. when answers aren't complete. City Council members who align with this City Council members who align with this tendency: tendency: --> Alan Hargis --+ April Gaulden --> David Bradham Session 1 - Decision Making in Government This session, grounded in the work of public administration scholar John Nalbandian, explored the complex nature of decision-making in local government, not as a search for "right" answers, but as a process of balancing legitimate, often competing values. Participants examined four core values that shape public service: • Accountability and Representation • Efficiency and Professionalism • Social Equity and Diversity • Justice and Individual Rights 4 City of Dunn City Council Retreat Report 2.12.26 These values frequently exist in tension, requiring elected officials to navigate trade-offs rather than seek perfect solutions. Dr. Nalbandian expanded on this framework in partnership with Julia Novak, and introduced six governance "hats" that elected officials wear: • Big Picture Thinker—strategic thinking long-term and big-picture about the community's future. • Trustee/Steward— making decisions that serve the whole community (or future community), even when they're unpopular. • Customer Service— responding to individual concerns and being a voice for residents. • Community Builder—fostering relationships and bringing people together across differences. • Decision-Maker—weighing evidence and casting votes. • Oversight—ensuring accountability and transparency in government operations. Each member of the Council was asked to consider which value and hat feels most dominant to them. In other words, how do they most often come to the table to do the business of city government? Council members reflected on their dominant values and roles, identifying how these influence their approach to governance and teamwork. Understanding values can give the governing body a common language to use for healthy debate of conflicting perspectives instead of allowing conflict to get personal. Core Value Governance Hat William Elmore Efficiency & Professionalism Big Picture Thinker Billy Tart Efficiency & Professionalism Big Picture Thinker Wes Sills Accountability & Representation Customer Service Raquel McNeil Accountability & Representation Community Builder Alan Hargis Accountability & Representation Community Builder April Gaulden Accountability & Representation Customer Service David Bradham Efficiency & Professionalism Big Picture Thinker Session 2 — Reflecting Finance Director, Cary McNallan, provided a presentation of the mid-year and overall financial outlook of the City. The City Manager and Assistant City Manager provided updates on major capital projects, spending priorities, and the revenue policy. In addition, Dr. AR El-Khattabi from 5 City of Dunn City Council Retreat Report 2.12.26 the UNC School of Government provided a presentation on utility rates. The following projects were discussed: Major Capital Projects: • Water Treatment Plant • Wastewater Treatment Plant • New Public Services Building • Cotton Gin Property • Stewart Theater • Paving Project— Phase II Spending Priorities • Personnel Priorities • General Utility & Stormwater Projects • Neighborhood Improvements • Codrington Park Enhancements • General Equipment Maintenance, Repairs, Additions & Upgrades • Marketing & Public Outreach • Beautification • Railroad Building • Wayfinding Project Phase II • Park to Park Trail Project Phase II Revenue Policy • Enterprise Fund • General Fund • Vehicle & Equipment Session 3 — Specific Projects Prioritization Exercise For the purposes of the budget retreat, it was agreed upon that discussions would be consistent with the City's vision statement (Core Value) & strategic themes (Focus Areas) from the City's Strategic Plan [Imagine Dunn], illustrated below. The specific projects discussed in Session 2 were categorized into these themes. 6 City of Dunn City Council Retreat Report 2.12.26 0 4110 VI •UALITY OF LIFE SI a,4. 044.4 44.4444 ,"14,41_ €°than and © PLANNING FOR GROWTH COAL Dune sell acco bite sett s.pport the needs of a&w.and grc..r Mketrery rrw.th that a.aees/a owrsli ties base wUe cortrr trvi to this Gty s time*shear ter.It y piatie poleisit apt wet*6 6 ""ccira(estfrCd.V risad.r sstr:.st r,r�the t e,. drr�a s ndr.etopesent.and sell crone s Oise*vial astas a..�onmerst fee C"" Dunn1sadynamic engagedcom unit where BUSINESS DEVELOPMENT l • ysee a s t eiey a diversity o f people want _ awsystaa,etas siestas se ,has 4ess*+ to live, visit, play and do 0 COMMUNITY CHARACTER business. We embrace ,, a a e . ch ractor As at 4s tears and nth !t.wii trcexna a C and Entart vnaNth growth, o ) )ortunitc me countyyowed brook,t, tpbaa .last , . t., AG io.s Aatory,or'amply Head a braai� [}irrs.. hang ptasaaag srcl.tact.n,a racft«e carr dais and Avant(cantors of conw.arce progress while preserving MARKET POSITIONING the hometown character tr411/4 oct tm81rtctrAsetv* t t .. #a40444 ta that makes our community � s.r proud. 11 0 PARTNERSHIPS GOAL 1,4 C.._.y,a.......i<'+u.t e�°�3:::e.+.�l_».,^�a':r ,.Fe.�"s+.•wx;:.,,;,:G:^rt 4,40torty and tI m r partners weed tarthw for tic a•>!u r n#�^`s.g;. �� 6w44:r an.ncL..proressne and*nerd crn» While ALL these projects are important, the council members had the opportunity to vote on which projects were considered priorities for FY 26-27. The voting occurred through the "dot democracy" method, with each member getting a total of 7 dots. The chart below illustrates these priorities and their connection to implementing Imagine Dunn's goals. Priority Votes Goal Imagine Dunn Theme 8 Water Treatment Plant Upgrades Quality of Life 6 Stormwater Projects Quality of Life 6 Marketing & Public Outreach Efforts Marketing Positioning 4 Personnel Priorities Planning for Growth 4 Codrington Park Enhancements Community Character 3 City Hall Improvements Planning for Growth 3 Stewart Theater Renovations Community Character 2 Utility System Replacement Projects Quality of Life 2 General Equipment Maintenance & Repairs Planning for Growth 7 > h gg • _ _ '� < b.may i t t y • f` R ` S ?: PT.^ :'' '. 'Shy. - - 3 r7 '- M y i. - . .. ..:^x. �- - . .. ." - - _ ye. : . ". _ fig C 4. *t :-; �F `r" h - S'f » _ -- * y` .- .:,fin� ma's :` emf:R b f.:' � _ `rf . i . -4 . -\: :".V.1 ,- -''• - s .. City of Dunn City Council Retreat Report 2.12.26 2 Police Tech Upgrades Planning for Growth 2 Vehicle Equipment Updates Planning for Growth 2 Neighborhood Improvements Community Character 2 Wayfinding Project— Phase 2 Marketing Positioning 1 Permitting Software Improvements Business Development 1 Wastewater Treatment Plant Upgrades Quality of Life 1 Railroad Building Improvements Community Character 0 Cotton Gin Improvements Community Character 0 Beautification Projects Community Character 0 Park to Park Trail Project Phase 2 Community Character 0 New Public Services Facility Planning for Growth Session 4 — Keep, Toss, Complete Exercise Facilitator Sary reviewed the goals and priorities from the previous year's retreat, and a category of"Keep, Toss or Complete" was agreed upon by the City Council. A consensus was formed to delete the goals that were complete or no longer a priority and to keep the ones that remain as relevant goals. The following illustrates the outcome of this exercise: FY 25-26 Goal Status Water, Sewer, WWTP • Flocculator replacement Keep/progress made • Building updates Keep/progress made • Digester Building Keep/progress made • Asphalt milling Complete Community Center Bathrooms Update Keep/progress made Police Department • Retention Plan Complete • Special Response Team Toss • Research Drone Use Keep • Vehicle Replacement Schedule Keep Strategy for 107 S. Railroad Street Building Keep Improvements Public Works Grapple Truck Replacement Complete 8 N 3 _CC.a fryers,{ • • n *, - = a _ � s�.;r'tea""` h a .. - as G ex.'s. r a. a _ - '-- -" - - - - .. - ,,r .T , :'-' . .. ".,:-I.-_,,'.,:f.,..,:.:_ii'''.,:-,,,,..1„;.;:-..:::-I;::-.„.'..i:::.1;;'-„7:7'-',:::::-,:,:,:::..14',.,',,;-.!:,..:;:.„. r x z ' f • a i. >•' _ -- - .4, -'Sam'+ x. x; i.- iry 4 - IX I z G Z K A r7 • sue}: ¢�r t 5 City of Dunn City Council Retreat Report 2.12.26 Planning & Inspections Building Rehab Keep Parks & Recreation • FTE as program coordinator Keep • Cemetery lighting process Keep • Plan for pickleball courts Complete • Greenwood Cemetery beautification Keep Sidewalk Repairs Keep/progress made Historic Preservation District/Ordinance Keep Economic Development Zones Keep Increased focus on code enforcement Keep/progress made Boarded Window Ordinance Keep Research Juneteenth Holiday Costs Complete Session 4— Goal Setting & Prioritization Facilitator Sary compiled all priorities discussed in previous sessions, aligned them with the six (6) focus areas identified in Imagine Dunn, and organized them into primary and secondary goal categories. While all the identified projects are important, Council members were asked to prioritize those they believe should receive the greatest focus in FY 2026-2027. To do this, members participated in a structured voting exercise using a dot allocation system tied to monetary values. Each Council member received a total of$0.82 to allocate across the goals (two pennies, two nickels, two dimes, and two quarters). • Quarters ($0.25) represented top priorities. • Dimes ($0.10) represented very important initiatives. • Nickels ($0.05) represented helpful but secondary efforts. • Pennies ($0.01) represented "nice to have" items. All coins were required to be used, and members could allocate multiple coins to a single goal if they felt it warranted stronger emphasis. The intent of the exercise was to simulate real-world funding decisions and encourage thoughtful prioritization of where the city should concentrate resources in the upcoming fiscal year. The chart below illustrates the results of the Council's voting priorities. PRIORITIZED GOALS: 9 City of Dunn City Council Retreat Report 2.12.26 Rank &Voting Goal & Action Steps Water Treatment Plant Upgrades Identify funding opportunities. #1 ($1.50) • Develop a phased engineering & financial report. • Develop agreements with partners to purchase water. Create a plan for short-term actions. Responsible Party: Public Utilities Stormwater Projects #2 ($0.90) % Continue to look for grant funding. r Complete projects along Merry Street & Friendly Road. Responsible Party: Administration Personnel Priorities Review workforce pay & structure to assure competitiveness. #3 ($0.75) ➢ Include policy for COLA & merit increases. ➢ Look at targeted market adjustments for specific positions. • Review and make budget recommendations. Responsible Party:Administration & Human Resources Codrington Park Enhancements Pursue PARTF grant. #4 ($0.71) Complete concept plan • Move or sell the house on the property. Y Look at selling the Magnolia Street property for redevelopment. Responsible Party:Administration & Parks/Recreation General Marketing& Public Outreach Merge marketing & communications responsibilities with Downtown Dunn and other administrative duties. Proactive outreach on special events regulations & policies. #5 ($0.57) Proactive outreach on leaf collection. Look for opportunities for city employees to help with brand awareness through clothing & accessories. Hire for position (budgeted in FY 25-26). Responsible Party:Administration 10 - • a - sr .r teaz.f - .. ,_ - .. ;,,,y ice.' - .::::::•-• . , .." • .' . . 7-----.:-- ' • -- ' ' ' c - , -, , , , , , _ -. ; . • -7:.:',,••,7....1_,.,•'.:,..,,'::.',_ ‘: -..-' '‘,1'.::,..."...",:,:,.:::::!,-,.':,-'.,:.:::::.:,;?•stii.,.."::::..,•..;-:,.,!:,414T„:„.; _ : - ```_ • ate' , s. 3s .k �Y �.F' s+�.v., z r k .w .fir"` - - - - -..yam . .I q R;, _, ,-. .. : '%' Y '�ja-fir. - -' { - a - h � 'k P .. • - +�Rh am} «x^ _ - V ' _ ~ 1�1. yes • T` .. ,�y' < - .. - - - - - .. f t . - : •• - t z _ � - _ " - '. w. x . ti City of Dunn City Council Retreat Report 2.12.26 Police Tech Upgrades .- Purchase drone and cameras. #6 ($0.35) Replace side-by-side. Pursue grants for purchases. Responsible Party: Police Stewart Theater Renovations #7 ($0.25) Contribute $50K annually Responsible Party:Administration & Finance City Hall Improvements Create an overall improvement plan to address appearance & #8 ($0.13) privacy. ➢ Repair roof& replace HVAC. ➢ Install new/additional landscaping and exterior improvements. Responsible Party:Administration General Equipment Maintenance/Repairs #9 ($0.10) - Identify needs & develop a maintenance schedule for equipment. ➢ Should be managed by each department. Look at the replacement of older vehicles to address continual maintenance = ROI of buying new vs. repair costs. Responsible Party:All Departments Railroad Building Upgrades Develop a concept plan for best use. #9 ($0.10) .- Look for funding opportunities and partnerships. Paint exterior Responsible Party:Administration Vehicle & Equipment Replacement Develop Replacement Schedule #10 ($0.06) Implement VERF Look at the pricing of the new leaf truck. Look for other alternatives to help with citizen concerns Responsible Party:Administration & Finance 11 w e • �tiFt • gG '1. - - -' _ was . i ,:,, .. .. - x r t d �r c • �, .-. • _ .' - _ ' ray,"€'^w'r, X s v..d't', S� 3 vt +.rf 1 g 0 tr'-, 3 f�$ tt(Yl ▪ .F•. r �k n • • - 3Y▪ -'X ' y ,. "Y � - tr=0. _TK.- a ,'w • Y / _- .- • - - ten. ▪L 1�" .y� —`.. ' yam- S`s "rot, n Y fr L7T' }'4F'L 1. . S, 7" L- 1 \ P V d r- -'e % .'s'G t_ ,, '' City of Dunn City Council Retreat Report 2.12.26 Neighborhood Improvements r Create a comprehensive list of actions and provide them with them to the city council. #11 ($0.04) ➢ Should include general maintenance, tree removal/replacement, trash cans, planters, etc. Continue to focus on code enforcement. ➢ Focus on pavement markings and sidewalk improvements. Responsible Party: Public Works Beautification Projects #12 ($0.02) ➢ Implement adopt-a-street program. • Develop a city-wide cleanup day Responsible Party: Planning & Inspections Permitting Software Improvements ➢ Create opportunities to educate &train external users. #13 (0.01) ➢ Look for ways to refine software for ease. • Focus on customer service Responsible Party: Planning & Inspections CONCLUSION The Dunn City Council Budget Retreat, held on February 6-7, 2026, focused on strengthening team dynamics and identifying the City's top strategic priorities for the upcoming fiscal year and beyond. Through guided discussions, Council members explored personal tendencies and governance styles, fostering a better understanding of how they work individually and collectively. The Council reached consensus on its highest priorities and identified specific goals and action items to achieve them. This process provides City staff with a clear, consensus-driven work plan and budgeting guidance for FY 2026-2027. 12 , CITY OF *.r ��r Day 1 Session 1 — Getting Mil 1LJNN * ` • • Started Opening Remarks 1887 . + y t t r NORTH CAROLINA Introductions Y y 2026-2027 Facilitator Budget Planning Retreat Professional Career Chad Sary,AICP SESSION 1—GETTING STARTED Sent Assalate t 'ii' xecutive Stewart SESSION 1—GETTING STARTED E VP -14 , ,4 Pre-retreat Questions(all in attendance) Town of Wake Forest-Planning ' ,f Ffi Town of Zehubn-Planning L ~ Chowan County %anrdng • Uty of Ehnlxth City-Planning Pub11c5ectorEapedence y a What is one thing you learned in 2025 as a City official? - • Wake Forest Town Co..2019-20 2 31 a to to• w 01'. �( oState your name. �� o What do you see as the top critical issue or trend facing the • Wake Forest Planning Board(2 018-2 0191 r - r'-r antolPmesBoam°f°ekgates(zola oRole&tenure with City.oAnswers to 1;oNs 1: 2823) ` pdc City(internal or external)? i W°`'ed'"'g°`°mm°""rsoNC pre retreat questions. %ir o What one thing do you hope to take away from this retreat? Edroatlon East Carolim University .-.. �. Ohl°State university Agenda: • UNC School of Government Senior Associate SESSION 1—GETTING STARTED SESSION 1—GETTING STARTED SESSION 1—GETTING STARTED Session 1,Day 1—Getting Started Tree of Local Government Trunk-core Purpose of Local Government Leaves(projects): ,f,tI •Protect citizens Session 2,Day 1—Reflecting are what resiaents �1`�:0 •Provide forresidents'quolityoflife Session 3,Day 1—Review Priorities " `P -4'."• Vj� , (�•y;� g Branches-Departments&Services Branches ��`,�� 4 C Examples:Public Safety,Public Works,Planning,Parks& Session 4,Day 2—Goal Setting&Prioritization (department): ►1-11Pi. NI Recreation,Utilities,Administration . Leaves-Projects&Amenities Trunk(mission): , Examples:Roads,sidewalks,parks,buildings,infrastructure improvements,community programs y rs d're cs, ,. Roots-Finances&Budgeting i. •Revenues(taxes,fees,grants,intergovernmental funds) Roots($):,sstams Y 4J� - •Budgeting&financial management that support all services ifireverything it,\ .% Budget Basics: SESSION 1—GETTING STARTED SESSION 1—GETTING STARTED SESSION 1—GETTING STARTED •A comprehensive financial plan of operations that allocates "a p',''° anticipated revenuesamongcompetingexpenditure Budget Basics: Facilitator's Role. requirements fora defined fiscal period. / , •Budget covers July 1-June 30(fiscal year). �1:. o A"neutral party"that has no stake in the outcome of a •In accordance with NCGS§159-8,each local government and — •Policy documents outlining established financial management meeting.o Guide group discussions&general flow of • • v_ i public authority in North Carolina must operate under an // .f• practices. meeting.o Ensures all participants'voices are heard.o y annual balanced budget ordinance. •Financial plan for appropriation of forecasted revenues. BUDGET Take notes to record key points of conversation and 4 `,, •A budget ordinance is considered balanced when the sum of •Operation guide for city services. CYCLE group decisions.a Remind the group of"big picture" t',I. ^(1 estimated net revenues and appropriated fund balance equals Roles& goals&avoid rabbit holes or getting in the weeds.o Help total appropriations. '�F , the group plan to carry out decisions made. o 1` Rules ��4r'oN ''w\'.-- Timekeeper.o Parking lot manager. City Staff's Role: 5", 5, ., / ..�/,r� ,i� " I6i i�. r �" N%F H ir+" . � .. � s �.:, n,, ,. :y��"a7" ,�,PPri1,�/"/, �"�� � ��1�'� r: i � � � "�� z r«� 9r. :.r ✓ /y�r" z s,"f'fi,' ,.,e�ri ',/1,1,v,v "!/,,71rf,�: G,,'I Wm r, k/„A.� SESSION 1—GETTING STARTED SESSION 1—GETTING STARTED SESSION 1—GETTING STARTED o Provide information o Listen o o Listen with respect...o Be attentive... Elected Body's Role: �: Participate in discussion o Think"big - - :e o Value differences...o Group consensus GROUND �' o Participate in discussion o Listen to ; '� * picture"o Help to keep things in mentality...o Planning&focus for staff RULES others o Ask questions o Be respectful o perspective w direction...o ENJOY&have a good time... 'r -,. Think"big picture"o Be realistic&honest CITY : . — o Strive for consensus o What's best for COUNCIL Four Tendencies& .i — the City mentality Ground Rules: p orDecision Making In Government Exercise SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES Four Tendencies&Decision Making In Government \.,,,, '` UPHOLDER I OBLIGER QUESTIONER I REBEL Upholders Inner Outer Rules Rules (4 AlIFIllik Gretchen Rubin Professor John Nalbandian SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES • Embrace both internal and external Outer • Do well in achieving their own expectations easily. Questioners Rules ; expectations but often fail to live up to • Don't'want to fail others,but they don't I those of others. believe in failing themselves either= • Understanding the"why"is key—need balance+boundaries . A°°• ,, to meet an information threshold. • Comforted by meeting expectations • Value effective and efficient systems. • Watch for"tightening"—becoming • Can struggle with"analysis paralysis" overly rigid with routines and _B when answers aren't complete. Reexpectations. Ruless4 SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES Clear Path • The"people pleaser"—easily meets Rebels Obligers outer expectations but struggles to meet inner expectations. • Creating outer accountability is the 4,t,1I,>, key to success. ,., • Susceptible to overwork&burnout. • Risk"obliger rebellion"when "REMk�C:t�_ Obfi er overwhelmed. Focus on Push 9 Desires Back Rebellion .,'k/,.. . ✓' ,;, „�..Cr x1 ,,�'" ,/9^Yf r ,.. /$, � ;w�'r rF*F Y Yr ,.,, Y, T''., M' % ,, h .,M/„ / '�" t,F a,,..,. .„ �..,.,., f ..9s. ,.,.., ,25. ✓. ;�' ✓m'....,. r� ,..<. ,,.. ^trrrsr.,✓^� ,,. ,,, 3 r n � t m?r%� � ,t �rYY, „,�" „��,r,"r�....�� .r �r.,r.. r r ,..,,.,/r l'.... ,. .,. ,/ ,r,,,a r ,, ,..,, ,,,,:�r✓r'"'. ",3 ., �..,r.,rsC'"�".... � .�:.., ,,.,,,,n ,< ,,.... .r.r�.,;'rsY' ..,, ,� ...iF, .i. .. .. "r, r."'f. ... �" ... r, ,,,.. .,,. ,. ,, ,_r,,. d �° ,,.__.,�.�,,._,,, �,�.,,.,., �":s,y", o //�`�,5ti r �,,,,a � ,.. r.. ��"�,.<.,_Mr ,_,.,, ,,rr.. ,. „i?/"✓".,,, 5',,7�, .�, .3..,,d t �.,r ,� <,,. /��r�F,�'�, rc,,.,,,%4�X,,,�c ,,,,Fl�f,ra ;,✓ ,,, SESSION 1—GETTING STARTED—CORE RESPONSE TENDENCIES `` QUESTIONERS UPHOLDERS• Independent thinkers E' ., .„, • Resist internal and external expectations. How to Identify: How to Identify: `- 1f3^ „�`` •Information junkies;motivated by logic and r •Often prefer solo activities reason • Motivated by freedom and , -consistently follow through 0 . .-: . .Do they read instruction manuals/Go to trivia authenticity. Inight?Provide a tat of context and details? , How to Motivate Them to Action: •Ask a lot of questions • Can do anything they WANT to do. ,1 4 •Know what they value,and honor that-be ,; ; r • Struggle with routines and punctual and prepared How to Motivate Them to Action: •Know the details,and be diligent about - •Give them a sense of logic and reason;make the planning. information 7' next step make sense to them •Appeal to sense of responsibility 4 •Don't push them:logic will drive them,but not • Respond best to information+ emotional pulls orsurface-level asks consequences+choice. 7TN`Lo„eLanguage: " LiH.,,„,. •Being rewarded and recognized for excellence TheirLowLanguage.„° -`�.,,,,,. , ---_ and productivity �" "`. •Being rewarded and recognized for metrics and w f efficiency r. - ..,, ..a,,� ,�_, -, r ;�5 UPHOLDER it OBLIGERS 1 REBELS MR „' ~" a• 1 y 9; How to identify . + lit _ ,•`,. it ' ag «,1 •Prefer group work or being part of something ` 1't How to Identify. �., s \ , T ,s •Resist rules and control•values freedom and *�, C structured Ilk `' y ', •Accountability is important choice / •Identity and sense of self important QUESTIONER :,C�t EC'bEGt N r, ,. How to Motivate Them to Action a x• 3 $a •Make sure they are ail in. a How to Motivate Them to Action: ',, ••Create tangible action steps 1 s •Give them a choice •Have an accountability structure in place '( •Acknowledge their rebellious nature,they '''l , r ,' ', actually generally appreciate that Their Love Language: r• , ,(04,„.. REBEL •Being rewarded and recognized for efforts that 3 ,. Their Love Language. . g t go the extra mile Being rewarded and recognized for thinking as w i e . / ,- , , outside the box and flexibility s SESSION 1-GETTING STARTED-CORE VALUES&GOVERNANCE HAT ACCOUNTABILITY Good "a"TAa""Y AND REPRESENTATION n REPRESENTATION politics isillkA •Responding to the wit of the PRO about values E�,s5IONIEN�Y 4.► A,F,_,,;,� people !,. i65ALISM RSiiY not rig 1 t •Public involvement in the aril • governing process is essential for answers." \.--"l: its legitimacy V( N F��„ •Can be either from a"trustee" '4 perspective or a"representative" _- perspective EFFICIENCY AND SOCIAL EQUITY ANDl;Lo_ JUSTICE AND PROFESSIONALISM DIVERSITY INDIVIDUAL RIGHTS •Focuses on the"how" •Property and individual rights #, sa •Respect for the differences within ' � our community t granted through ordinances, •Respect for the analytical process statutes,and laws and details i'✓', 4 ' r` '' •Address access and representative / dr. •Being good stewards of public �^ issues ,4- •We like to create"rights" ,,:.� _..-. resources _-- " 1 r �4 •Staff likes to live here ,w SESSION 1—GETTING STARTED—CORE VALUES&GOVERNANCE HAT ELECTED OFFICIALS WEAR LOTS OF HATS DECISION MAKER n pr„ „ Q Hats ,� }� »Weighing evidence and casting votes. , ARv#w+.a'A,# .tb•,cM.._,,,f ;ntl' sm>M..x 7.�w«M.a,�. OVERSIGHT BIG PICTURE THINKER0 »Ensuring accountability and transparency in government »Focuses on Lon term strafe and[he commumt s future. Q 6- gY Y �.. operatlons. TRUSTEE/STEWARD »Acts in the best interest of the whole community,even when `r'••-E unpopular. CUSTOMER SERVICE »Responds to individual concerns and represents residents. COMMUNITY BUILDER »Brings people together and builds relationships. ,_.,,.,_.,,,., ,,.....• • - How do you come to the table? UPHOLDER I OBLIGER I QUESTIONER I REBEL TENSION BETWEEN POLITICAL ACCEPTABILITY • How do you see your AND ADMINISTRATIVE SUSTAINABILITY core values& o.ip411114 ..4) governance hat „', influencing your , Political `; Acceptability � -•� �._'.. =n,�.�•- tendency? 04► -- • How can .•�vtir Community and third i".- 410 Cli) 0 understanding this wit '��� help the council work Administrative better together? Yi Sustalnability . ,.u.. ...,�•.ec.a...�.vnm,- .a_,s.nA.J,.s. ..,..oven >.,x.,..a'�L u, .n.,s,x,.ci-„-.m.,..am ,.ranmo.,o�nuw.a ,aa9b. nx.r.mu m,,,,..v_ .,._m. uass...,w,,.,.w.nw.my,..ui,axn J.t�l.,., oc >... .,w.. _,aw._.�., ...W.d.M .« u.,�..., <, ,x,..,..,,,... u Key Takeaways among these roles helps officials lead more effectively Personnel Report Specific and collaboratively. • Understanding values can give a governing body a common language to help bridge the gap of political Break - 15 Minutes Day 1 Projects acceptability& administrative sustainability. Session 2 - Reflecting Discussion • Can create a healthy debate when conflicting perspectives are presented instead of allowing conflict to Mid Year Report MAJOR CAPITAL PROJECTS get personal.Recognizing and intentionally shifting Overall Financial Outlook , ,, �x�ii��eaGi,��ic�U�m�aa�A�a�z�d9�ie�,zF�,a�,wpm/✓�u ,�os�au��iapap,���wus �. Pue � r ��u ��� � aors� • ,., N,,. -_<, ., ce, u ,.<,.�. ,. .:, ,,�eg, a�, ,,,, ,.,�� z.<.. ,..,rp, ,WM*/ ','> , . ,r"<.,• Opwtd@AnMfat atapEIS{;194I0O00 - Water Treatment Plant = — Opundfastatifixt' ' "/°'1SAX= Wastewater Treatment Plant Major Capital Projects g ild5dEr reei�lEtwnErypeaetgAS MGM =x r •Short-Term&Long-Term Upgrades to '"' idmehagr Bata n gn u s�+seaet ��t� r' z 1 - •Current Capacity •" Water Treatment Plant ''.' ExistingPlant Op.Nato onwlithbe`Oti$ilea �� P q.oAtartr�i.trt+aNtS;2seem •Permitted 3.75MGD,Peak 7.5MGD �IdtCttOttat FR ritMR I •Low Est:$73.7 Million S L •Peak after Elf Proj.11.5MGD \Nastewater Treatment Plant High Est Phased Expansion Million �r,, , ;-a arRecw• laie$A-dmaap > • v..1 ••Pla dfal xpan ed Capacity , .. .. .-s.. ,t •Potential "Wi7ta NAirotenproacit,kkttr,Sutt xr: i . New Public Services QUlldin y�c rA4t.11a�'ususus6UXe 'tanned/ --- • Estimate$83.5to$155.1Million g i :? •Land Acquisition Acres ova�wee ua e�er+os•s u •Need for Pretreatment Ordinance t d /aaa 57M1IW FER lei •Expand or Construct New Pla --- - - Cotton Gin Property , o dtxtpsattmt lrt S,E a0 ; •To Address Anticipated Industry Ex:Vulcan i •Several Aifferrnt Design Pt9•4sal art fir;�e99oaep Elements .� ,....NW ,•�,.0.,.a• ,��.,•..Mrs ���a .,�. �, ,,, „.rev a� t Stewart Theater •Partners" Layouts _� _ C �� • Potential Partners • _ [ 1•T Other Needs • �' •Rehab/Re air ExistingBuildings •Potential Customers " p' i Paving Project Phase II Purchase Capacity in Plant _, `,�. $1 55 asper 20_6 Quote ,*•: s ,,,, t w•.,�.,� ,..xJs .,,,>,s:� +',zSh<,;.a .'�" .,�"�,.d. p yr,t ,N ,\ tO r� � � �L.lt t � AB • a s it � 2S 1 � .w.,..•� =. Cotton Gin: New Public Services Facility •current options Demolition vs Rehabilitation? 4 �� •Continue with USDA Loan Applicatio , / �� �� •Full Construction$20.2 Million(2024 Est •2025 Engineer report #.:',..,5'` , •Refiab is Cost Prohibitive • ffj � \\\ •• Modified Phased Construction •Recommends Demolition-$50F to$90K Est • ��\ •Delay Project k ' f / •interim Uses for Demo'd Property � ` s ''�- •Financing Option. :_ •Temporary Parking for Events •USDA Loan Ji •Farmers Market/Greeitspace s �.� �,. Conventional Loa � r,; " •Requisite City Funds • .d- V r •Other ` w / i� t T` • •Long-Term Uses for Property "+, y �' •Move Fuel Station •11 � '' :I •$500,000 SCIF Grant-'s2 alli p - Mixed Use-Retail/Residential/Entertainment 11 •"'--- t •Public/Private Partnership i ucknow Station Event Space $6.4 Millions Est(2024} '''',(''''`'''' 'z`,1'.%\ : . . i * , ,,' • I If Stewart TheaterSt' � - :., :- .`its--F ,,r r - Renovation a �' Paving Project Phase II •Phase I Now Underway_$1.4 Million I „/ „ •Phase II-Start Summer 2026 •Complete Renovation&Modernization �. ., -,.a•.-. •USDA Loan •Stewart Theater is Owned by DDDC i d •Anticipate$4 Million USDA Loan •Quasi Public Entity •Ticket Sales-2024$..07K 2025$247K •Debt Service Paid by$0.04 on Property Tax � , • 2025 Sales Tax an Tickets-$16,000 •Theater Brought 7,150 Patrons to Downtown f'f - Area in 2025 r""j •Project Cost-$8 Million , ( a r• i •Privately Pledged to Date-$1.8 Million t` Ewa •City Pledge to Cover Debt Service - Pt. - •City Pledge Minimum of 50K i , _ — , ....g Pt.,,I !' s , SPENDING PRIORITIES Council Spending Priorities Personnel Priorities , 0 q •Workforce Pay Rates Personnel Priorities e„�a rre F,„<. w^t': A+Pay Plan Structure %•Targeted Market Adjustments General Utility&Stormwater Projects 3,COLA Raises-$340,000 Est•Ellerd Raises-S100,000 Est r•PublieN,'orks&Utilities Staffing•2 More Positions-Es. Neighborhood Improvements 0 `, g p — u�/i' $80,000 Totat , Er. e Mealth Insurance Codrington Park Enhancements '„ v Employer Costs Pee Employee Went Up by IO',; /> From 2025 to 2026.Rates are Adjusted Every General Equipment Maintenance,Repair,Additions,&Upgrades t, January 1st •Training&Professional Development Marketing&Public Outreach ` •Training/Travel Expenses are Estimated to be •,s,,14,tii',isiaN;.E,.hdrrvyur,w'uue4 4 t•,,°%v 1 a;ww,d<mens,awa 1s'ivhta,,,a,,,"a;H,w,v„<,w!;6rr4.1 /. are1> y it FY26 Maint _ � ��+' Requires a eral Utility System Replacement Projects Schedule ,. ' , I is r .+r.`u it v% . ` } r- Stormwater Projects ;'•: Neighborhood Improvements \ ` �; ," City Hall era "amtenance&Appearance Maintenance/Improvements Gen ', •Grant Funding , s�" ` r • Edging&Trimming on ROW 'v • , ut}w •OSG EPA Grant-$3.4 Million-E Bay/Wilson& b •Sidewalk Construcflon/Repair(Replacement r.: - a ,r,, Merry Route 1 1 •Budgeted$25 000/Spent$15 735 L,,,,, I� ♦" •Golden Leaf Grant-$500,000-Merry Route 1 :i; •New Construction Cost per Foot$6.50 SqFt //!! gg °•, •HMGP-Pending-Up to$14.2 Million-All Projects i ,,Y • Cost per Block$9 Aso " • i' •Downtown Tree Removal and/or Replacement w s @ vlerry Street •City Funding-$(TBD) r :� e. •Current Trees Damage Sidewalks-Trip Hazard .Projects �^� " � � _ E Bay/Wilson Street-$3.5 Million `..P •Arborist Recommendations-Jan 2026 �� - „. s - • Op^onl Ezist+ng Tree Replacement Schedule ' ," •ws. •Lower Merry St/Friendly Rd -- • Op^on 2-Replacement p0th Different Species �.y�� r^ • Route One-$4.5 Million&Route Two-55 Million - "", • Conon 3 above Ground Potted Trees-No S,dewali; �. 'Cc r . .., y,. .:7-,,...C.rkng o I •Upper Merry St-$0.5 Million ,.ti, '- impa`t i_ a ��` •FY26 Budget was$3,000 gar / err •CurntuckProjects-$1Million .t... •General Stormwater System Maintenance , , ._. •Demolition of Properties-Code Enforcement _ — FY 26 Maintenance Budget-$204,�30 ,.y.,. y 1 • Budgeted 530,000(Spent 511,430 on 2 Prop ri ` ....4.- :Z.: ti� .. `•°'- i s ••- Codrington Park General Equipment ' ik 4 •Roof Needs Repair/Replace ,~, ,, '- Enhancements Maintenance/Repair 's •$277K to$324K Estimates j •HVAC System Needs replacernen>z � •$19,000 per 2025 Quote 3 „ !,Grants 3`- "._ •Accessible Parks Grant was Awarded in June A •Council Chambers Renovation; a 2025 for SSOo,o00 with$i00,0oo City Match �_�-•;: ,,..: ,,,„"w;w,.,A ,, �, � 1, •Improve Landscaping r • •Parks&Recreation Trust Fund(PARTF) •New Equipment Line Item .w •Application Due in May,Awarded in August 2026 •Non-Itemized Budget �y ;, •� • 1:1 Match of City Funds , q, •Equip Maintenance/Repair Line Items;' i ," •Estimated Budget b' •Budgeted$348,000 for fY26 •Budget will Depend on Funding from PARTF •Spent to Date-$245,462 " .t -,' \ /// •Expenses/Encumbrances to Date / t A` Townsend Property-$188.354 , •Consultant Fee-533.500,Survey-51,500 *a The City of Dunn,NC 4,4 'I Police Tech Upgrades T I , Vehicle/Equipment I 'RI Marketing&Public Outreach (- \ _ \ •Replacement Schedule =MIN -1 I i .., . , •There are 28 Items Awaiting Replacement as of Dec _ si' linen Scsi ices 2025.Ex 1995 Dump Truck -.N .Mi-alimairwidalm,.... - , Marketing Police Equipment ,*$1 54 Million(Original Costs Adjusted for Inflation) ' 'i--,- 4-h-l- ', , • Mai keting&Communication Responsibilities to be • Ii.lerged with Downtown Dunn and Other Adrmn , r Duties •Flock Drone($40,000 to$50,000 Annual) , 7.rtial Funding for Replacements could be I. r i &Flock Cameras(53,000 Annual per Unit) , OWN Raised from Vehicle&Equipment salik' ttvere taNnittfirti tillier, •Pu.bAllbcd°,:ttoreAa87,,t current ,,,,;,, •Police Utility Side by Side($35K) ___, ehlis ...,,,, ., Revolving Fund(VERF) , „ _ ' t ISI 1 t to C o'er Costs For Crowd Security during Public Events ' s' , ., ,1 Associated with Public Outreach and Public ( •Need 20 Leaf Truck . " Communications , ' t. •Truck&Equip are Estimated at$300,000 , thecityordunn „,,„, 41'41 ji "'''''""'''''''" N , I F MIL MIIIIIIINie MEE ' iA16 MISCELLANEOUS SPENDING Miscellaneous Spending Topics Beautification TOPICS ,IL'EGAL "eaut-ification , .... .,,,,„ , I . 14445#4447f°"4 Tei,:iit;'***. .. \. 1 sue, Railroad Building Wayfinding Project Phase II - City Building Located at 107 S Railroad •Phase I-Majority Complete sus: '5�6 I , < r ,,, •Yard Waste Collection 4,1= ,,,_. z i •On the Lot of the Planned"Downtown •Phase I had Additional Items Added to the Dunn Pocket Park" Phase Due to Funds from Tourism and is ^'" r•,,< ; Adopt a Street Program '; _- still Underway , •Some Minor Repairs Already Made,Other a „ •City Cleanup Day", Needs Remain Est Final Cost-$219,000 - lb ..,/�, ,„,,, ‘ " "�1 •Future Use-DDDC • Except for Punchlist `; •DDDC Input " "'" •Phase II-Gateway Signss '1 •Downtown Director's Office and a , ,,," ,a d- ••,0i: •,a` ffi• • ) i',-:, - Downtown Conference Room&Focal ' Point for Events ;� ,,,,,,,-•,--,..---• ,` 1 •Possible Public/Private Partnership . '''' ct Alb Park to Park Trail Project Phase II REVENUE POLICY •Phase I Summary a +1 +(". •Tyler&Tart Connection ..6, y s,'Sf •Cost was$566,600 1„i) ' •Phase II Plan 1 •To Connect Codrington with Tyler&Tart Park •Est Cost$(TBD) '.:1";;"'1 Irli."''' wig, ,r x Revenue Policy Enterprise Funds lEstabilsfirneixi'°''8 ''at'ex ,, 1111E1- ,, •Current Rates , -u.A; . ..,.ro,. Wry In FY 26 Sewer&Water Rates Increased to Enterprise Fund Revenue '41 Cover Debt Payments on Infrastructure '',.Projects Stormwater Fund *Future Rates General Fund Revenue •Enterprise Rates should Cover Expenditures I Vehicle&Equipment Revolving Fund General Fund �.- t _c • •Vehicles and equipment that includes a motor or wheels(i.e.-cars,dump trucks,trailers) n �uuw iry..M i i x.,. ii�n qry w w s • t f •Monthly charges to operating departments for"vehicle/equipment rental" 1 `•• •Property Tax Rate/Revenue after :=1. 'SW' Revaluation , •Rental fee is equal to the monthly depreciation for each asset owned by the department •Property Tax Income to Meet General Fund Expenditures.See Finance ,; •The rental fees would accumulate in a separate VER Fund and carryover year after year r;,,F,M 99 f9rPe tl w„, ,,•? •Future replacements of vehicles and equipment would be funded from the VERF •Estimated costs: General Fund=$385,000 Water Fund = $115,500 Sewer Fund =$162,000 Stormwater Fund=$94,500 •Funding: General Fund=Tax Levy,Water Fund=4%rate increase,Sewer Fund=4.5% Lunch — Hour p.mCITY OF rate increase,Stormwater Fund=15%rate increase Specific Projects ma JJIJjtj 1887 Discussion (CONTINUED) FINANCE DEPAF sMLNT 2025-2026 Budget Planning Retreat Mid-Year Financial Report Cash and Investments Cash Balances General Fund Cash Balances-Water/Sewer Fand snnnroo Operations Only awn wk.,Sw“P OM •k-w..M'rw.„N�n..w..J •wp...r.,L t6Wtab Aar MO ......_ 55p e. A...0 _. - :71: 1 ihi w sa ._ a .stiS: d W/h ' s A4`A Win" l,! Cash and Investments Cash and Investments General Fund: Fund Balance Cash Balances by Fund at 12/31/25 Cash Balances by Fund at 12/31/25 Cash Balances by Fund at 1/14/Z sixomnro rnn,,naa7 .,.anmam 7000,00a1 , , ' • ' • z03VOM 1 , I • ' • s vanro .... -- --- i nmrmm /uo.aN v {]um,OalaY 3r .. „, �a ,d, i} ,, C.unam.ua 3A ,, D A ,,A �.{' I0 ,r 7.anonm -- - - -- 1200]p00a1{;c aF r.' ,c , yr fir' nanemrm �t' .'' W ,fit' �° p�+ 7moamm- -".� IaAconrg.�' ,,des 2` .." �: .0. ,.p e twnonna,}p a s°r' i d ;la ht �' /c i... 1 • {spa1W0IN t` n,N001ap e° IIp(agl[•OOi a'.`" p 4 --+ -yP Ai (q :MOayxlml Ih001,1e.N1 !F •fit IJOropin.ON I/1110,0J0oH .eF q'} i , ;varra.m Ormean xn • • Unassigned Fund Balance(UFB)decreased General Fund:Fund Balance General Fund: FY26._.Budget General Fund YTD Expenses in FY25 S6,000,000 40.5% 36.3% .-........ 45.0% 34.. 1 If actual revenues and expenditures equal the amounts ' 25.8%40.0% budgeted,the reduction in and balance at FY26 year end • Decrease was due to 55,000,000 29.8%.. 28.7% �', .-.!- ---.---- 9 f ,1 35.0% will be$980,077. $1.3M HTS balloon loan payoff $4,000.000 .. — -_.. 300% 25.04S 53,000,000 - ----- — 3eneral Fund-FY26 Budget Fund Balance Appropriation-General Fund Target • Tar UFB%is 41.7%, 20.0Y, g Revenues 13,873,018.00 FY25 Police Vehicles&FY26 Planning or 5 months of yearly $2•00Q000 - _' - -- — 15.0!6 Expenditures (14,176,235.00) Vehicle 354,975.00 expenditures i0'ar' :Y26 Budget Deficit-adopted budget (303,217.00)Codrington Park Design Consultant -- 5.0% 33,500.00 5- 0 7Y26 Fund Balance Appropriations (676,860.00)•— Codrington Park Grant match 100,000.00 FY20 FY21 FY21 FY23 FY24 FY25 Total Fund Balance decrease (980 077 001400 F Tpwnsesd St house purchase 188,385 00 Total Fund Balance UFB=% aaariRestricted ata•Unnssigned —%t1FR/Fxp -- Appropriations 676.860.00 Unassigned Fund Balance per Expenditures General Fund Y O Expenses vs Budget As of 12/31/25 Water&Sewer: Unrestricted Net Position if , .1 d ml ill , 6amral Gwt Public Safely ebnsts Pak Wanks Sanitation Pak•RK Way DebtSer.. i am Po*audio • 1 • Unrestricted Net *Adopted budget surplus to build fund balance Position(UNP) Water&Sewer Fund:Unrestricted Net Position Water Fund: FY26 Budget Sewer Fund: FY26 Budget decreases the past 53,500,0p0 - -- - 60.tAE • 19.2% If actual revenues and expenditures equal the amounts -- -__-- - three years 49_5%__�'1% budgeted,the increase in and balance at FY26year end I actual revenues and expenditures equal the amounts $3,000,000 ..."_ _ _-. 34:6%__.. ._"..."_._..—.."___._ Sp.p;K 9 f f P q Decreases are due to ,30.9% will be$407,651. budgeted,the reduction in fund balance at FY26 year end • ' S2,5Ug000 40"0% will be$489,098. funding the city share of szopp. capital water and sewer 193% 3p.p45 projects 52,500,000 Water Fund-FY26 Budget Fund Balance Appropriation-Water Fund Revenues 5,020,354.00 Sewer Fund-FY26 Budget Fund Balanee Appropriation-Sewer Fund 51,000,000 - _.".".._ —..s._.. ..._..__ .._. 2p.0°5 Public Information Services Revenues 5,202,632.00 • Target UNP%Is Expenditures 4,592,903.00 19,800.00 41.7%,or 5 months of g`'��" "" " --`--` ---- ....._ "___ 10.0% Pun ( ) Expenditures (5A81500.00) W WTF Maintenance Building Construction 210,230.00 yearly expenditures g- --- ---- ._..__.... _. _-- ._. —_ op% •FY26 Budget Surplus-adopted budget 427,451.00 Replacement of waterlines 196,565.00 •FY26 Budget Deficit-adopted budget (278,868.00) FY20 FY21 FY22 FY23 FY24 FY25 FY26 Fund Balance Appropriations (216,365.00), 1 FY26 Fund Balance Appropriations (210 710 001 Total Fund'Balance Appropriations 210,230.00 Total Fund Balance decrease Total Fund Balance Appropriations 21¢•165 F)Total (489.098.00) Unrestricted ....--°ri UNP/Ezp UNP=% Fund Balance increase 211,086.00 Unrestricted Net Position per Operating Expenditures "The staff recommended 41%rate increase was adjusted to 34%by the city council,which required , using fund reserves to balance the FY26 budget. Water ato r&Sewer Operations Water&Sewer Operating Revenues and Expenses A' sm000ma S0.xgaal.on :::: L -___. ..._..._.. 4Y12 {r}.t 1'Si IYn 47)RE$P �WM3rflm Inl�}erwrlkr �•QtwrM fuW I:NY P:!v �..rrEy+ �ICt,ErP lPri¢VytM.v • Trend An a I ys s,,,Pa General Fund Property Tax&operating Expenditure trend Expenditures are trending with the CPI Property Tax Revaluation • FY23 was a tax assessment revaluation year • Assessed values remain relatively flat since FY23 Swaw.aP • Tax Revenues are not in pace with expenditures or CPI 34..1113 xm+.Pro {rl} M3 EY}I MS tlf. —SIX-Eb�r4*h',A��Nxw�VMWN WLM.�..-(a tw `ems In North on occurs,rat aste every Propert_yTax Reval -Revenue Neutral Tax Rate Property Tax Reval - Revenue Neutral Tax Rate revaluation at least eight - --- ------,,-I-..,-,--" "'"` years,ensuring property values reflect Calendar Year 2025 2026 Net Percent Calendar Year 2025 2026 Net Percent current market conditions and maintaining f Fiscal Year FY26 FY27 Change Change Fiscal Year FY26 FY27 Change Change equity among property owners. M . overview of the Revaluation Process *`�� Property Appraisal Value $ 1,166,000,000$ 1,399,200,000$233,200,000 20.0% Frequency North Carolina law mandates that Property Appraisal Value $ 1,166,000,000 $ 1,399,200,000$ 233,200,000 20.0% counties must reappraise realat least Tax Rate $ $ $ - 0.0% PRra property $ 0.5400 0.5400 once every eight years.This process helps to ensure that property t Tax Rate $ 0.5400 $ - 0.0% assessments are fair and based on current market values. 02 0.5400 Tax Revenue $ 6,296,400$ 7 555 680$ 1 2597280,,,20.0% 2.Purpose:The primary goal of revaluation is to reset property values to Tax Revenue $ 6,296,400 $ 7,555,680$ 1,259,280 20.0% their current market value,which helps to equalize the tax burden among property owners.Without periodic revaluations,some property owners Revenue Neutral Tax Rate$ 0.5400$ 0.4500$ (0.0900)-16.7% may pay more than their fair share while others pay less. 0 1 Tax Revenue $ 6,296,400$ 6,296,400$ - 0.0% Revenue Neutral Tax Rate $ 0.5400$ 0.4500 $(0.0900) -16.7% Erwin 4,631 S 371,253.565 S 0.575 E 2,134,708 S - S - S - N/A N/A S - S 5.211,96 1404 Lillington 4,583E 635,496.346 E 0.520 5 3,304,581 S 325,487$0.051 E 2,132,082 S - N/A S 2.132,082$ 3,761,602 52.8 Smithfield 11,867 S 1,595,885,439 S 0.570 5 9,096,547 5 438,274$0.027 E 4.255.693 S 11,421,308 E 1,276,334 S 16,953,335 S 18,191,910 119.2 Property Tax Reval — Revenue Neutral Tax Rate Tax Revenue $ 1,350$ 1,350$ 0'0% Average 6.853 S 823.053,360 50.526 54,288,497$ 385.376 50.042 52,304,211 S 7,097,672 5 662,100 S 8,577,101 S 6,333,635 71.1% Sourtn:FY31 L°C ti4aa ofCaya M°W CanpnMwn FiwriY Report Calendar Year 2025 2026 Net Percent Comparisons to Area Cities Fiscal Year FY26 FY27 Change Change Asutysu of Tex Rate>Ikbt,and Funs Halarces for area cities es Example of a single Property A Appraisal Value $250,000 $300,000 $ 50,000 20.0% er6rlOna PP PcopttU'7)xltn cum_—____Annual LkbL T:I4J DlUl DAM., Au�Bnlao4s Resmss Dunn parcel Gen Fund Tax Pemmt Tax Rate $ 0.5400$ 0.5400$ - 0.0% Gen Fund Debt Rate General WtrStSwr Electric Total Taal Gen Fund Appraised T. Estimated Service for Fund Fund Fund Fund am Fund Balance v. tellloiFi�aliry Powlatim Value Rate• lax Revenue Pavments Debt Debt Debt DeM Debt Balance EHMLse4 Tax Revenue $ 1,350$ 1,620$ 270 20.0% Angier 5,832E 713,192.075$0.530 S 3.779,918 S 177,435$0.025 S 257,731 S 7.040.299 N/A S 7,298,030 S 8,232,387 121 6% Bnuon 4,I64 5 405,605,144 S 0.590 S 2,391,070 E 140,723 S 0.035 S 958.335 S 4,628,398$ 47,665 S S,634,598 S (846,522) -13R% Clinton 8,361E 889,049,750 S 0.400E 3,556,I99 E 527,240 S 0059 S 1,173.728 E 6.359,367 N/A S 7,533,095 5 5193,444 41.1 1>unn S,iis S L150.891,.00 E 0.1'S Si..�,4 6 .'.1'•',.'r2 5�•:,,i S 7T51;)0Y FI:,I36,R5A \::l 52U,488,567 5 !,'91.3.'.X Y,.t°,. Projected Debt Payments Debt Principal&Interest Payments Consumer Price Index (CPI) $2,S00,0(00 • CPI data for the South Region of the United States $2,010,00000 • CPI has averaged 2.4%for July-Dec 2025 Fiscal Op'go COLA Year July 1st July 1st Variance ! $1,500,000.00 _.._. � Fv20 1.40% 2.00% 0.60% • FY27 Budget: FY22 5.80% 3.00% -2.80% FY21 0.60% 0.00% -0.60% $1,000,000.00III 2.80• Supplies,Materials,Fuel,etc expected to be FY22 9.40% 3.00% % $500,000.� idill L '� �, III. FY24 2.90% 2.00% -2.90% 2.5%higher in FY27 Fvzs 2.90% 0.00% -2.90% $ , FY26 2.30% 2.7596 0.45% General Fund Powell Bill water Fund Sewer Fund StoJmwater • Anticipated COLA recommendation for salaries is Tot,. 25.80% 13.25% -12.55% Fund 3.0%to 3.5% 6-yr Avg 4.1% 1.9% -2.2% Ftt1:]%�the 23%was ptl as lump sum ■FY26•FY27 •FY28 ■FY29■FY30 •FY31 • Benefit cost increases Ftt5:$1,500 lump sums.to eoch employee (Health insurance premiums increased IS%January 1,2026) increases,or a decrease in services to create a reduction in • A 1%increase in water sewer rates would generate approximately Summary expenditures $32,550/$36,935 in additional water/sewer revenue • General Fund cash balances and revenue streams remain strong • Infrastructure expenditures and debt issuance—necessary for future • A 1%increase in stormwater rates would generate$6,450 in • Water,Sewer,and Stormwater cash balances fluctuate depending growth additional stormwater utility revenue on capital projects and grant reimbursements • Continued monitoring of debt ratios and fund balances • Opportunities for grants and low interest loans • A 5 year,$1M loan at 4.00%interest would require an annual • Cash reserves have decreased to fund capital projects • Increased importance of utility cash flow management Informational Figures payment of$224,600 (10 year,$1M loan=$123,290 annually) • Expenditure budgets keeping in pace with inflation;property tax revenues will not keep pace without new development,rate • Every penny of tax rate generates an estimated$116,640 • A$0.01 increase in the tax rate would add$25 to the city portion of the property tax for a house assessed at$250,000 CITY OF Council Comments & Priorities !?J! DUN Discussion --.INANCE DEPARTMENT Break — 15 Minutes Day 1 Questions' Comments Session 3 — Review M� a o � Increased to Increasedt • Demographic Tod y True in 10 Years (recapfrom- - Trends: True a — 5 years .�.,.1o: •_,,, r 11% _" ,, ,:. •Dunn& Harnett Co. is getting a little older ago): ' tlliesedto39.a M-+••-w •+a •Median income is gradually increasing What is TRUE about Dunn TODAY What is NOT TRUE about T �w �u '', that you still hope will be true in Dunn TODAY that you hope . ;: M.., aotz� 2 a Stayed at 11% •Housing values are moderately keeping up with the rest of '~ ` ---------- 'e' It �+`I^•rHOusD+r the county 10 years? will be true in 10 years. OC.CUP UCY MEDI,ANa — Incr,,se to$73955 Increase to$4. " * $33,aao z�.3zr �' �� Owner occupied housing continues to increase •Council in tune with residents _ I I •Maintain a small-town feel but accept growth Increased to 56% •A sense of community Increased to 44% MUM s ., •Embracinggrowth •More dining options in downtown SESSION 3—REVIEW PRIORITIES Overall Retreat SESSION 3—REVIEW PRIORITIES Co visioN •A low crime rate •An established"niche"for Dunn for marketing purposes Goals• •Growth to occur-move past being stagnant PKygw Ur •Infrastructure issues resolved •aeardirarnnn for land us ''''''m growth decisions ;Connect to the overall CitY s financial P icture;c Review - •Better connecnvrty throughout the city ` OAK UTAnn is adynamic.•A better job market accomplishments from FY 2025-26;:,Review progress of Quality Dr Life Community Character 1tNh'-�r-f community where GOALS goals&projects; ;Review. of goals from adopted plans; (( a divcisily of people want .Set/prioritizegoals and fundingto support. ,Create a �f '7�' to live.visit.plat/and do PP etc Q Planning for Growth Market Positioning consensus driven work plan&budget for staff Guvnc s. We embrace e ,,, growth.opportunity and TG Business Development Partnerships progress while pre'(rvtn(/ The outcome should represent a balance of City Council priorities, departmental needs,and strategies from the Imagine Dunn Strategic Plan to assist City staff in the hometown character preparing the EY 2026-27 budget and beyond. than makes our community proud. /9 O UALITY OF LIFE ,Q 4GOM•Dm.iM• Specific Projects Use your dots wisely! Break — 15 Minutes Specific - o.y,w.�myly.nWbW Dunes. npk..�ng•rc nw.a r ... Prioritization Projects 'Put all dots on one goal OR spread out.'You must use O PLANNING FOR GROWTH 0 all seven dots. MARKET POSITIONING GOAL Qn p •d u•,,d:oerl,M•••m•f•d And uwmg GOAL Y1 Prioritization Voting mow•. nd _ ° D� a.r .r...�«•d�. w �.n.g; Exercise & Voting �Mwa..y mom,.,»a;nam.o g.,.,. «.g.a«oy.,M e,d r .,•,...w.,ry s.�,«..ha�.a,..,�• s•dw•lopm•nt+nd mn,rt•4•.dvua•M vnt+rv..a en..,�mnmt to g,o..a. • BUSINESS DEVELOPMENTOnt=aim •• 000.0 Review GOAL h• f 4 t t ,. GOAL tb•Cq,Dv.Me C,,,k,d C Dv,eM•loon:. _ b add ad AwMny.clus «grcdnlgDn..n.d. Day 1 Closing Comments & . y,.. a.•.�..,WMy.:,y.na�;yv„,w,-..:,»s,.r,«, bvaa.ngM.n<wrw•.e.•g,.,uw,w.ryt.g<ecM.m.,o,<y. ra<•M,•grd:•,n ar brc�ou,.a. Adjournment 2026-2027 What is one thing you What do you see as the top What one thing do you learned in 2015 as a City critical issue or trend facing hope to take away official? the City(internal or from this retreat? rCITY OF external)? 1,111 / Budget P I a n n i n g Retreat Making diff cult decisions in the Recognizing that the limits and Securing funding for III Di N� best interest of Dunn. pace of government can be needed projects. • Valuing high-quality staff and frustrating. • Supporting social and O -7 strong teamwork. • Adequate and reliable community health. 1 . / • Adapting effectively to change. infrastructure. • Consensus on goals and N C' 1 CA R O L.I N A Recap of Day 1 Pre-retreat Navigating complex laws and • Balanced,high-quality growth. projects. ordinances. • Retaining and attracting talented • Clear direction and unity.. city staff. • Actionable goals Questions Themes • Maintaining public trust. • Short-and long-term wins. UPHOLDER I OBLIGER I QUESTIONER I REBEL CORE VALUES ACCOUNTABILITY EFFICIENCY AND 0 0 0 AND REPRESENTATION PROFESSIONALISM AH j DB • .Rr.,{xyWingm me willn`tfw •Focuse�ert the'twv.' • a UK11(.�Tendenc �°p� t TaIKU om" ...... �� �""1�y F' Upholder Cue tt r r p-bF.in r;,t;� •Respect ror the anarytical process Upholder • (2j (1) o i eat i5esseneattor aned�tad: aytti y0 0 0 Questioner • " c,n ne:rn r izn cee' �'ny ycotl stewards of pUDrk Obilger(21 ReLel() oarspert"eo a repr�xxntatrvP^ resources Obliger • • °Nspect`re Rebel , GOVERNANCE HAT , ,�"�'"Y7S�i,..w,rm�r,2/9�.,��/h Tj�/�/d�rr,�H,tw/� �r�Y, t/� /f.Pt,/" Hy ,,„ r2 ra,n,r� �/T„/ �. Tl 6 TV,i/T a/9Y �/fi ' / � "�, ,,N,., .r�,..H/M /^l�,'N,./N ��""",r�,fi,Y� / rW..�r>/.,,r..fi, ,.F,T. �/, 'r�/,,.e S !��, fi rr,w/.,j ti�/,,r..�,.�,�,�✓,,-s{ /r/;wy r�r. i .���.3l,T".l" r�er r.P,fi,.4 ."�.!/T.„,.d.,.,a„N.r rr#,�'H�r�,N."'FN'r �,.i rz"r r�r",...r�.,�,„. 4/.r., ',G. Demographic Trends: True Today—True in 10 Years (recap from 5 years •A low crime rate 'Dunn&Harnett Co.is getting a little older ago): What is TRUE about Dunn TODAY What is NOT TRUE about •Infrastructure issues res°'ved 'Median income is gradually increasing •A better job market that you still hope will be true in Dunn TODAY that you hope •More dining options In downtown •Housing values are moderately keeping up with the rest of 10 years? will be true in 10 years? •An established"niche"for Dunn for markesrg purp�es the county •Growh[o occur-move past being stagnant •Clear direction for land use&growth decisions •Better connecttvity throughout the city 'Owner-occupied housing continues to increase •Council in tune with residents •Maintain a small-town feel but accept growth •A sense of community •Embracing growth COMMUNITY CHARACTER P=Partnerships • Wayfinding Project-Phase 2- 1 QUALITY OF LIFE specific MP FY 25-26 GOMt:ow,«.x�c.,.w...,,,..,ryor.i,,.«...e,r,"a ar�e.•,.r.w«,.cn,r,..,w C.41aL t' w c^•r vra,t.=,uA +,.. sa Primary Goals(received more than 1 vote) Secondary Goals Ww,e,ta Ery a•w nv use v."wrmy tom: : lemur .,",e. ,«e t•. p e« C. r.t,.d t«,«r«„m...s„s �I. .n,q h. r -*k a *+ -«a,..r:•^•^rw,M,...+.. • Water Treatment Plant Upgrades-QL •"-,+••,�+•"•"�w>ugh'y �»n r yy". w w.,.arwV.pi«,::,g,.aw.«,,,,.,,o.<,,.« Projects Wastewater Treatment Plant ,e•,.,"a n."„a<,,, "r a,:«,m,a« • Utility System Replacement Projects-QL Upgrades-QL Keep, Toss, Complete Prioritization • StormwaterProjects-QL • New Public Services Facility-PG lel PLANNING FOR GROWTH • Personnel Priorities-PG • Permitting Software MARKET POSITIONING g Boni a.« a wr a prM,e.r»..w„l,ar...«.,a g.•.,� • City Hall Improvements-PG Improvements-BD at=Quality ofLife Exercise ^a6^• g s« m. ,�wM "y*. r a w• General Equipment Maintenance&Repairs-PG <,ry, y ti � a.,,v*v y„a� m.t;,r.«� i;,,.„, ae..,...,.a,."•R.e,a,-o-r t„.„'�y«..,,,,,,„„,.•m,ro,,.„.«a« Cotton Gin Actions-CC .m eara•wae•�:.a:,.., ,,,,,&.«.. w,g,.a«.,.,r,,,«,r.,,a r ,«„, ,l•,,,«.ar w„«„ • Police Tech Upgrades-PG CC=community Character Pg Beautification Projects-CC • Vehicle Equipment Updates-PG • Railroad Building-CC L.Water,Sewer,WWTP 3.DPD PG=Planning for Growth • Stewart Theater Renovations-CC Flocculororreplccemenr Rerentfon Pier • Park to Park Trail Project Ph.2-CC CO BUSINESSDEVELOPMENT 43gimmzirmigimin BD=BusinasoDevelopment • Neighborhoodlmprovements-CC eauemgupenrea spena/Re:ponser m GOAL The Gs.DwwAra Cross Cnmm<•,D.«n,,cs taww„ • Codrington Park Enhancements-CC •Digester Budding Research Drone use .. a... .a." wt«eM1, r,OD.«,«knad•„n_ Asphalt milling FY 25-26 Goals • v nrrle na^r r^^•^ r^g•" BEM° MP=Market Positioning • Marketing&Public Outreach Efforts-MP „" ro r..,., w„e>:,e v s lr,rv,.,.',"• wnd.g>"„,d.,,,»,v.,g,.,:,...,a.n.�a.o.,, ,�ry. �x•r7 r«g„a rd a«.ae«, 2.Community Center Bathrooms Update Replacement schedule 8.Sidewalk repairs ,ew,, „v„„„„,.,wvo,,:. Nw ;u,/_.. inn, naa" ,an ,v „ ,.n „ ..a, m ... 9. Historic Preservation District/Ordinance 12.Boarded Window Ordinance 10.Economic Development Zones 13.Research Juneteenth Holiday Costs Review& FY 25/26 Recap& Imagine Dunn Establish Tactics&Accountability for Goals 11.Increased focus on code enforcement Prioritization of N Keep,Toss, Core Values& Special Projects Complete Exercise Goals 4.Strategy for 107 S.Railroad Street Building Improvements Tactics/KPIs-A precise,measurable result that supports the achievement 5.PW Grapple Truck Replacement of a goal. 6.P&I Building Rehab 7.P&R Accountability/Ownership—Who is responsible for implementing the • FTEospmgramcoordinamr Consensus on Tactic/KPI. 411• Cemererylighdngprocess Refine Goals& • PlonJorpickleboNcourts budget and work 'W Goal Prioritization • �reenwoodcemererybeounhcorion plan for staffTactics Use your money wisely! • You must use all coins. Coin Value Meaning place coins next to oats based on Closing Comments & Next Steps Prioritization Coin w g Quarter 25 Top priority—mission critical r importance. Dime 10 Very important d ' Multiple coins can goon one goal. Exercise (82 Cents) Nickel 5 Helpful but secondary Penny 1 Nice to have Discussion Si Consensus Mayor William P.Elmore,Jr. CITY Y O F Mayor Pro Tem April Gaulden "� Council Members 1887 J.Wesley Sills NORTH CAROLINA Raquel McNet Billy Tart 401 E Broad St •PO Box 1065 •Dunn,North Carolina 28335 Alan Hargis (910)230-3500 • CityofDunn.org Dr.David L.Bradham City Manager Justin Hembree MEMORANDUM February 12, 2026 To: Honorable Mayor,City Council Members From: Cary McNallan,Finance Director Subject: January 2026 Financial Report(unaudited) • Cash & Investment Balances: Cash and investment balances for all funds totaled $9,494,050 as of January 31, 2026,compared to$10,149,104 a year ago. The decrease is due to a delay in state grant reimbursements of water&sewer project expenditures. The city also has a balance of$5,920,711 in the Eastside Pump Station Construction account. Cash Balances by Fund $14,00,000 $12,000,000 $10,000,000 $8,000,000 ° � 111-1 $6,000,000 — $4,000,000 52,000,000 -$2,000,000 ov° \ ° \os $4,000,000\ q,\ 0o y A\ \ 1\° 1lyotirO jiII -$6,000,000 -$8,000,000 •General&Grant Funds+Misc Projs •Powell Bill/Street Resurf ■Sewer/Water Ops&Projs(Swr only FY26) Stormwater Fund •Water Ops&Projs ■Water SRF Fund ■Sewer SRF Fund Cash and Investments 51,114,135, W 63 0,0.0% 7.0% r. ,920,711, , 01 $5 �37.0% 58,581,959, 53.6% [$392583 a NC Capital Mgmt Trust a First Citizen Bank •BAN Constr Acct KS Trust Investments •Misc Other Tgere cammuni y 6 fins! • The benchmark for this period is 58.3% of the budget,however, revenues and expenditures will continue to be recorded for the next few weeks. • General Fund Property Taxes collected by the County for the month of December 2025 totaled $2,083,376 compared to $2,069,067 for December 2024. FY26 year to date property tax revenues received are$4,589,193. Our total estimated taxes for FY26 are$5,931,100. These totals include taxes for Property,Motor Vehicles,&Downtown District. Ad Valorem Tax Revenues by Month Collected $2,soo,000.00 $2,000,000.00 $1,500,000.00 $1,000,000.00 $500,000.00 11111 . 111 Ililminill u V' � i L > CJ [� OD s.. > u sr) L L > C LfS OD �"� a+ > u o cv Li E Q g g cv 8 Z 8 cv� a E .2 `-y Q a, 8 Z a >. N • For Sales Taxes, our November receipts were $346,912. This is $43,792 more than the same period last year. Our budget for sales tax revenue for FY26 is set at$3,450,000, and so far,this year we have recorded$1,664,473,or 48.3%. Sales Tax Reports from the Department of Revenue are provided at least two months behind actual collections. Our next sales tax deposit will be March 15th. Sales Tax Collections by Month $400,000.00 $350,000.00 -. $300,000.00 — $250,000.00 --._. _-__ _. _... _. $200,000.00 $150,000.00 - $100,000.00 $50,000.00 1.6 � NsC — Z Q2 Q an o Z • Building Permit and Development Fees for the month of January were$10,510. To date we have collected a total of$109,569 or 59.5% of the budget. At the same time last year,our year-to-date revenue was$84,587. The budget for the 2026 budget year is $184,000. • The following charts and graphs include Budgeted and Actual, Revenue and Expenditures for the General Fund,Water&Sewer Fund,Stormwater Fund,and the Powell Bill Fund. FY26 YTDActuats vs Budgets-Expenditures FY25 YID Actpats vs Budgets-Expenditures All Funds-FY25 January FY26 All Funds-FY24 January FY25 Departments/Funds FY26 Budget MID Actuals YTD Actuals %ofBdgt Departments/Funds FY25 Budget MTDActuals YTD Actuals %of Bdgt General Govt 3,390,287.61 546,164.56 2,129,307.87 62.8% General Govt 3,156,827.15 165,872.79 1,488,207.28 47.1% Public Safety 5,538,290.00 502,641.69 3,234,402.74 58.4% Public Safety 5,345,922.83 365,693.04 3,097,724.88 57.9% Public Works 2,059,160.30 135,807.30 1,179,340.21 57.3% Public Works 2,012,515.26 97,846.98 1,103,362.76 54.8% Sanitation&Waste Removal 876,000.00 90,744.32 482,736.52 55.1% Sanitation&Waste Removal 857,000.00 76,904.82 417,182.94 48.7% Parks,Recreation,&Cemetery 1,739,820.62 103,888.79 1,175,558.22 67.6% Parks,Recreation,&Cemetery 1,690,341.75 145,814.03 958,327.58 56.7% Library 5,245.00 96.98 3,412.88 65.1% Library 6,006.00 65.00 2,534.25 42.2% GF Debt Service 806,708.00 87,028.14 616,933.61 76.5% GF Debt Service 2,529,718.00 99,276.50 711,787.47 28.1% GF Operating Trfs Out&Resrvs 685,360.00 15,975.00 458,948.31 67.0% GF Operating Trfs Out&Resrvs 3,146,995.30 14,600.00 193,329.30 6.1% General Fund Totals 15,100,871.53 1,482,346.78 9,280,640.36 61.5% General Fund Totals 18,745,326.29 966,073.16 7,972,456.46 42.5% Water Admin&Finance 883,463.53 56,340.68 366,694.42 41.5% W&S Admin&Finance 1,224,657.73 71,809.80 704,265.37 57.5% Water Distribution/Collection 1,306,868.92 63,626.64 839,906.14 64.3% W&S Distribution/Collection 2,798,726.34 108,502.27 1,602,538.64 57.3% Water Treatment Plant 2,101,159.00 95,182.17 1,025,824.21 48.8% Water Treatment Plant 2,237,896.69 142,335.50 1,110,580.76 49.6% Sewage Treatment Plant - - - #DIV/0! Sewage Treatment Plant 2,113,296.22 138,052.24 1,282,035.90 60.7% Water Debt Service 930,305.09 35,448.09 214,746.05 23.1% W&S Debt Service 1,671,593.00 57,573.37 373,594.33 22.3% Water Operating Trfs Out&Resrvs - - - #DIV/0! W&S Operating Trfs Out&Resrvs 1,327,675.08 - - 0.0% Water Fund Totals 5,221,796.54 250,597.58 2,447,170.82 46.9% W&S Fund Totals 11,373,845.06 518,273.18 5,073,015.00 44.6% Sewer Admin&Finance 934,269.79 73,074.91 406,534.30 43.5% W&SAdmin&Finance - - - #DIV/0! Sewer Distribution/Collection 1,054,551.38 59,475.90 504,743.76 47.9% W&S Distribution/Collection - - - #DIV/0! Water Treatment Plant - - - #DIV/0! Water Treatment Plant - - - #DIV/0! Sewage Treatment Plant 2,167,809.00 216,710.83 1,266,208.61 58.4% Sewage Treatment Plant - - - #DIV/0! Sewer Debt Service 1,641,585.13 174,159.87 318,261.41 19.4% W&S Debt Service - - - #DIV/0! Sewer Operating Trfs Out&Resrvs 14,772.00 - - 0.0% W&S Operating Trfs Out&Resrvs - - - #DIV/0! Sewer Fund Totals 5,812,987.30 523,421.51 2,495,748.08 42.9% W&S Fund Totals - - - #DIV/0! Stormwater Operations 444,650.69 4,006.39 36,901.47 8.3% Stormwater Operations 427,751.61 9,051.75 219,648.76 51.3% Stormwater Debt Service 177,303.00 - 2,777.70 1.6% Stormwater Debt Service 52,630.00 - 2,754.92 5.2% St/W Operating Trfs Out&Resrvs 39,210.00 - 29,753.01 75.9% St/W Operating Trfs Out&Resrvs 44,000.50 - 0.50 0.0% Stormwater Totals 661,163.69 4,006.39 69,432.18 10.5% Stormwater Totals 524,382.11 9,051.75 222,404.18 42.4% Powell Bill Operations 1,519,302.00 31,004.24 1,370,546.64 90.2% Powell Bill Operations 308,747.00 8,229.13 44,005.94 14.3% Powell Bill Debt Service 215,252.00 - 107,625.88 50.0% Powell Bill Debt Service 665,253.00 - 107,625.88 16.2% PB Operating Trfs Out&Resrvs - - - #DIV/0! PB Operating Trfs Out&Resrvs - - - #DIV/0! Powell Bill Totals 1,734,554.00 31,004.24 1,478,172.52 85.2% Powell Bill Totals 974,000.00 8,229.13 151,631.82 15.6% Budget to Actual-FY26 Expenditures General Govt Public Safety Public Works Sanitation&Waste Removal Parks,Recreation,&Cemetery Library , GF Debt Service GF Operating Trfs Out&Resrvs Water Admin&Finance Sewer Admin&Finance Water Distribution/Collection Sewer Distribution/Collection Water Treatment Plant Sewage Treatment Plant i Water Debt Service f Sewer Debt Service Water Operating Trfs Out&Resrvs Sewer Operating Trfs Out&Resrvs , Stormwater Operations Stormwater Debt Service St/W Operating Trfs Out&testes I. Powell Bill Operations Powell Bill Debt Service t PB Operating Trfs Out&Resrvs $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 FY26 YTD Actuals vs Budgets-Revenues FY25 YTD Actuals vs Budgets-Revenues All Funds-FY25 January FY26 All Funds-FY24 January FY25 Revenue Category/Fund FY26 Budget MTD Actuals YTD Actuals %of Bdgt Revenue Category/Fund FY25 Budget MTD Actuals YTD Actuals %of Bdgt GF-Ad Valorem Taxes 5,931,100.00 2,083,376.35 4,629,721.79 78.1% GF-Ad Valorem Taxes 5,759,728.00 2,030,831.26 4,495,398.04 78.0% GF-Sales Taxes 3,481,000.00 336,687.79 1,333,166.75 38.3% GE-Sales Taxes 3,387,400.00 278,469.72 1,141,131.95 33.7% GF-Other Taxes 783,450.00 - 213,075.69 27.2% GF-Other Taxes 718,150.00 - 219,840.39 30.6% GF-Licenses&Permits 564,250.00 43,631.00 355,451.71 63.0% GF-Licenses&Permits 563,650.00 50,285.00 316,681.33 56.2% GF-Charges for Services 1,698,779.00 142,480.01 989,297.61 58.2% GF-Charges for Services 1,566,162.73 134,215.23 949,874.66 60.6% GF-Other Revenue 2,535,948.53 626,338.21 1,033,364.72 40.7% GF-Other Revenue 4,702,346.56 573,545.01 1,095,308.06 23.3% GF-Operating Trfs In 106,344.00 - 106,342.00 100.0% GF-Operating Trfs In 2,047,889.00 - - 0.0% General Fund Totals 15,100,871.53 3,232,513.36 8,660,420.27 57.4% General Fund Totals 18,745,326.29 3,067,346.22 8,218,234.43 43.8% Utility Chgs-Water 4,777,600.00 408,445.84 2,865,816.38 60.0% W&S Utility Chgs-Water 4,362,325.00 355,375.99 2,410,411.74 55.3% Utility Chgs-Sewer - - - #DIV/0! W&S Utility Chgs-Sewer 3,897,450.00 314,657.21 2,101,291.01 53.9% Water Utility Other Rev 408,748.45 29,023.55 163,005.22 39.9% W&S Utility Other Rev 3,114,070.06 26,739.26 272,738.62 8.8% Water Utility Oper Trfs In 35,448.09 35,448.09 35,448.09 100.0% W&S Utility Oper Trfs In - - - #DIV/0! Water Fund Totals 5,221,796.54 472,917.48 3,064,269.69 58.7% W&S Fund Totals 11,373,845.06 696,772.46 4,784,441.37 42.1% Utility Chgs-Water - - - #DIV/0! W&S Utility Chgs-Water - - - #DIV/0! Utility Chgs-Sewer 5,071,232.00 420,965.17 2,721,184.04 53.7% W&S Utility Chgs-Sewer - - - #DIV/0! Sewer Utility Other Rev 688,583.17 2,639.39 23,320.27 3.4% W&S Utility Other Rev - - - #DIV/0! Sewer Utility Oper Trfs In 53,172.13 53,172.13 53,172.13 100.0% W&S Utility Oper Trfs In - - - #DIV/0! Sewer Fund Totals 5,812,987.30 476,776.69 2,797,676.44 48.1% W&S Fund Totals - - - #DIV/0! Stormwater Revenues 661,163.69 221,878.58 529,292.42 80.1% Stormwater Revenues 524,382.11 147,039.49 411,823.82 78.5% Stormwater Totals 661,163.69 221,878.58 529,292.42 80.1% Stormwater Totals 524,382.11 147,039.49 411,823.82 78.5% Powell Bill Revenues 1,734,554.00 185,308.58 837,548.53 48.3% Powell Bill Revenues 974,000.00 174,600.38 795,380.80 81.7% Powell Bill Totals 1,734,554.00 185,308.58 837,548.53 48.3% Powell Bill Totals 974,000.00 174,600.38 795,380.80 81.7% Budget to Actual-FY25 Revenues GF-Ad Valorem Taxes GF-Sales Taxes OF-Other Taxes `n GF-Licenses&Permits GF-Charges for Services 1.11111111111, GF-Other Revenue GF-Operating Trfs In Utility Chgs-Water Utility Chgs-Sewer Water Utility Other Rev N6. Sewer Utility Other Rev 6......1 Water Utility Oper Trfs In Sewer Utility Oper Trfs In I Stormwater Totals Powell Bill Revenues IIIIIIII $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 •YTD Actuals •FY26 Budget CITY OF 11 1887 NORTH CA<OLINA t1her&co-stoat/4Xeglits/ Regular Meeting, February 24, 2026 Agenda Item(s): Departmental Reports Presenter(s): Various Departments Responsible Staff: Various Departments Action Item: No Attachment(s): None Updates will be provided on the following: a. Code Enforcement b. Probation Office Page 1 of 1 Justin B. Hembree From: Brent Trout Sent: Friday,January 30, 2026 3:20 PM To: Justin B. Hembree Subject: Update on Probation and Parole Justin, I am following up with an email from our discussion at the conference. The County staff have been pursuing solutions and gathering information related to the issues identified with the Adult Probation and Parole Center in Dunn. County Staff met with Department of Corrections personnel at the Center on January 22, 2026, to discuss solutions to the identified issues. Key findings include: • The first-floor unisex restroom will be available for use by probation offenders, accompanying individuals, and the public. • Signage will be installed in the lobby within two weeks to notify visitors of restroom availability and require notification of lobby staff. • Review of publicly posted video footage identified two probation offenders, both of whom were cited by the Dunn Police Department. The remaining individuals were not probation offenders. Incidents occurred in December 2025 and January 2026. • Probation offenders are present between approximately 7:45 a.m. and 5:30 p.m. No staff observations support offenders being present outside these hours. • One behavioral incident involving vulgar language occurred in the past three months and was resolved promptly. Staff have procedures in place to manage similar situations. These findings indicate that access to restroom facilities and improved signage should help mitigate future issues involving probation offenders. Relocation of the Adult Probation office was also discussed. Department of Corrections leadership expressed openness to relocation within Harnett County. The current lease expiration is pending. The following options were identified: 1. Relocate to a newly leased facility within Harnett County 2. Relocate and construct a new facility while operating under the current lease 3. Take no action We are beginning to review options related to accomplishing options one and two of the possible options. The current building needs based on a space needs analysis is approximately 4700 square feet, 4 restrooms and capacity to park approximately 41 vehicles. If you are aware of a space that meets these parameters, please let us know. Please share this information with your Mayor and City Council. Should you have any questions or concerns, please feel free to contact me. i Brent Trout County Manager I Harnett County Manager's Office Phone: (910) 893-7555 I Fax: (910) 814-8300 Online: btroutharnett.org I www.harnett.org/ Address: 455 McKinney Parkway (Physical) I P.O. Box 759 (Mailing) I Lillington, N.C. 27546 Harnett COUNTY NORTH CAROL INA 2 •rnii\ NCentDepartm Correctionof Adult PROTECTION•INNOVATION REHABILITATION Josh Stein Leslie Cooley Dismukes Governor Secretary February 13, 2026 Justin B. Hembree City Manager City of Dunn P.O. Box 1065 401 W. Broad Street Dunn,N.C. 28334 RE: Dunn Probation/Parole Office Mr. Hembree: We acknowledge receipt of your earlier correspondence. The Division of Community Supervision ("DCS")reviewed the claims in Mayor Elmore's letter dated January 13, 2026,regarding our office at 107 East Broad Street,particularly public urination allegations. Our agency takes these claims seriously. District 11 Judicial District Manager Nicole Patterson reported only two incidents of public urination by offenders, both captured on live stream and followed by criminal citations by the Dunn Police Department. These incidents were not due to denial of restroom access; offenders have always been allowed to use our restrooms. To address concerns,we've reminded offenders to ask for restroom access when needed and reallocated a staff bathroom for their use. Regarding concerns about our office's location,the county is responsible for providing office space. DCS staff met with Harnett County representatives on January 22, 2026,to discuss current needs and potential solutions, including signage for restroom access and the potential for alternative office locations. Additional discussions are planned, and we invite your support in finding a long-term solution. Please feel free to relay any issues you or the Dunn Police Department experience to JDM Patterson at (919)934-9970 or via email at Nicole.Patterson@dac.nc.gov. Best regards, Tracy K. Lee Tracy K. Lee Chief Deputy Secretary �.. } FROM THE OFFICE OF: ,mac STRT��,x N,� '�.!_'' �°'', Tracy K. Lee MAILING ADDRESS: AP R ��y� p a 1 ���,► Chief Deputy Secretary 4250 Mail Service Center .(0: Telephone: 919-324-1112 Raleigh, NC 27699-5203 • http://dac.nc.gov Planning & Inspections Monthly Report TO: City Manager and City Council FROM: Stephanie Goodrich DATE: February 9, 2026 SUBJECT: Planning& Inspections - Monthly Report Please see the following report for the month of January 2026 from the Planning& Inspections Department. Planning Development Permits 38 Rezonings Conditional General 2 Site Plans 2 Subdivision Plans Plats Inspections Permits Issued Commercial 9 Demolition Electrical 1 Mechanical 14 Plumbing 3 Swimming Pools Residential 29 Signs 1 Tent/Temporary Membrane Permit Fees $ 46,085 Inspections Performed 333 Certificate of Occupancy/Completion Issued ±10 PUBLIC WORKS DEPARTMENT DECEMBER 2025 MONTHLY REPORT 101 E CLEVELAND ST, DUNN NC 28334 PHONE 910-892-2948 FAX 910-892-8871 www.dunn-nc.org CEMETERY DEPARTMENT TYPE NUMBER FILL GRAVE 34 OPEN/CLOSE 20 TOMBSTONE MAINTENANCE 2 TRASH PICKUP 4 TOTAL WORK ORDERS 60 PUBLIC WORKS DEPARTMENT DECEMBER 2025 MONTHLY REPORT 101 E CLEVELAND ST, DUNN NC 28334 PHONE 910-892-2948 FAX 910-892-8871 www.dunn-nc.org STREET DEPARTMENT TYPE NUMBER BRUSH-LIMB PICKUP 223 BULK 94 CUT 23 DRAINAGE ISSUE 2 LEAVES 524 ON CALL 7 PINESTRAW 1 POTHOLE/STREET REPAIRS 53 SIGN MAINTENANCE 1 STORM DRAIN MAINTENANCE 78 TOTAL WORK ORDERS 1006 PUBLIC WORKS DEPARTMENT DECEMBER 2025 MONTHLY REPORT 101 E CLEVELAND ST, DUNN NC 28334 PHONE 910-892-2948 FAX 910-892-8871 www.dunn-nc.org TONNAGE REPORT TYPE NUMBER SOLID WASTE IN TONS 244.26 YARD WASTE IN TONS 32.24 RECYCLING WASTE IN TONS 29.44 GRAND TOTAL TONS 305.94 *Data from Republic Services Report PUBLIC WORKS DEPARTMENT JANUARY 2026 MONTHLY REPORT 101 E CLEVELAND ST, DUNN NC 28334 PHONE 910-892-2948 FAX 910-892-8871 www.dunn-nc.org STREET DEPARTMENT TYPE NUMBER ASPHALT CUT 4 BULK ITEM 139 LEAVES-GRASS 9 POTHOLES/STREET REPAIRS 1 SIDEWALK REPAIR 1 *This is not an accurate count due my to being out of the office from 12/31/2025 -2/16/2026 TOTAL WORK ORDERS 154 PUBLIC WORKS DEPARTMENT JANUARY 2026 MONTHLY REPORT 101 E CLEVELAND ST, DUNN NC 28334 PHONE 910-892-2948 FAX 910-892-8871 www.dunn-nc.org TONNAGE REPORT TYPE NUMBER SOLID WASTE IN TONS 243.62 YARD WASTE IN TONS 15.44 RECYCLING WASTE IN TONS 30.78 GRAND TOTAL TONS 289.84 *Data from Republic Services Report PUBLIC WORKS DEPARTMENT JANUARY 2026 MONTHLY REPORT 101 E CLEVELAND ST, DUNN NC 28334 PHONE 910-892-2948 FAX 910-892-8871 www.dunn-nc.org CEMETERY DEPARTMENT TYPE NUMBER OPEN/CLOSE 11 TRASH PICKUP TOTAL WORK ORDERS 11 *This is not an accurate count due my to being out of the office from 12/31/2025 -2/16/2026 OCITY 01 EDUNN PUBLIC UTILITIES Public Utilities Dept January 2026 Monthly Report 101 E. Cleveland St., Dunn, NC 28334 phone 910-892-2948 fax 910-892-8871 www.dunn-nc.org Water/Sewer Department _— • - _ On Call 4 - Leak Repair 22 Water Tap 4 - New Sewer Tap 3 Sewer Tap Renewals Water Construction Sewer Stoppage 20 m Sewer Construction Manhole Inspection 35 Outfall Maintenance Hydrant Repair Utility Locates 927 Water Meter 95 Repair/Investigations Retire Water and Sewer Services „ Valve Maintenance 6 wiutsitveuw wi Taste and Odor Complaint Water Quality Flushing - Low Pressure Complaint 1 Other—Water 6 Other—Sewer Public Utilities Dept January 2026 Monthly Report 101 E. Cleveland St., Dunn, NC 28334 phone 910-892-2948 fax 910-892-8871 www.dunn-nc.org Black River Wastewater January Treatment Facility - Total Million Gallons Treated 44.909 -- Average Million Gallons Per Day 1.448 Treated _ Rainfall in Inches 1.44 *Data from NC DEQ DMR documents and Black River Wastewater Treatment Plant records :"Vii#:41- I' ,x qs� '� s • s 1 fl 4 it «,4...o-�..m a„i , :', � � �'Dt�. 1 � +'a' k,;. ,s� } Y:a �( z+`g`._ :�,. v=''� r r ::4 b t -t1 ir' a� z '� ��� -�'#. 1Y �,. 11"t'I tt;� +ti Pua'', '� '�� � fi ..} ,�" : r'`4 _ �, A�f, _.� , .Nik:+.A-° i tit Y .+'e�`F e, k3 '' s< f? ?:+ - t '�a` ,& .�+nw ,;��...`+�� --sl, (({,� ip ur Yx. 4 � I�x�� pr r=`L r,� � _ �r ,�,�- t> a ,_ �.##�;�.R. ''=�"F,�s3�P' �. t tk ,., ,,i t g am..''�e"a- :.+�� '1`fit' .�. vu-` T",.-,` '^ .t 's;, eA,+�•�-� �'ar! "r '1 4 dZ 3 c . u r d€f[ r ,:"mo "< ,,. '1 t f,4 . i ,y ci itt7,t" a' ,.s ,-4'.'ariy # f , ' h i ire �' €� f t P _ r Effluent Control Building AVERAGE DAILY FLOW 2.5 2 >- z 1.5 O J zit z 0 -_-_,- 0.5 cJ 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 JANUARY Rain Fall 0.9 0.8 0.7 C 0.6 0.5 0 0) 0.4 U C - 0.3 0.2 0.1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 January Total Million Gallons Treated 50 44.909 45 C40 0 C6— 35 v 30 0 25 20 G 15 10 5 0 Jan. Feb. March April May June 1 July Aug. Sept. Oct. Nov. Dec. 11111 Public Utilities Dept-WTP January 2026 Monthly Report 101 E. Cleveland St., Dunn, NC 28334 phone 910-892-2948 fax 910-892-8871 I www.dunn-nc.org A.B. Uzzle Water Treatment Facility Total Million Gallons Pumped 81.461 Average Million Gallons Per Day 2.628 Pumped Total Million Gallons Bulk Sales 47.300 Water Plant Averages and Total Million Gallons Pumped 2025 -2026 120 80 0 5 34 A 11 r 2 _ r 95 61 17 7 61 9 6: 6 5, .v 5 • 5 5 4 20 4 2 4 2.5 - 2.4 2.5 2 6 2.6 § 2.8 3.2 3.2 3.2• 3.0rits 2.7 2.6 2.6 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan 2025-2026 Li Daily Average Pumped Total Million Gallons Bulk Sales Li Total Million Gallons Pumped �mria'Vaaaa.�, Bulk Chemicals and Rain Fall Totals 2025-2026 90 80 70 60 50 40 30 20 10 0 ~� Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 -Chemicals Used X 1,0001bs -Rain Fall in Inches *Data from A.B. Uzzle Water Treatment Plant records, and Finance Department billing. 2026 CITY OF NC PARKS AND RECREATION 205 Jackson Rd • PO Box 1065 • Dunn, North Carolina 28335 (910) 892-2976 • CityofDunn.org January Monthly Report Dunn Parks & Recreation Facility Rentals,Programs & Etc. Numbers Rentals Facility Dunn Community Building 4 Clarence Lee Tart Memorial Park 0 Multipurpose Room 0 Codrington Park 0 Nathan Harris Athletic Complex @ Tyler Park 0 Baseball& Softball Field Rentals 0 Tennis Courts 0 Picnic Shelter Rentals 0 Winter Programs 8U Coed Indoor Soccer 31 l0U Coed Indoor Soccer 41 13U Coed Indoor Soccer 61 P K Vyas Center P K Vyas Recreational Walkers 221 Free Play 14-17 years old 6 Free Play 11-13 years old 9 Free Play 10 &Under years old 1 Adult Play 11 Batting Cage Rentals 0 Pickleball Players 132 Racquetball Court 0 Senior Center Attendance 236 Bingo 44 Exercise Class 70 Educational Class 65 Line Dancing 40 Cemetery Report Resthaven Cemetery Sections Total Spaces Purchased Available Existing section 1-9, 11, 13 & 15 6,960 6,547 413 Section 12(opened May 2023) 432 28 404 Section 14(opened May 2023) 488 35 453 Section 10 & 16 (not yet open) 1,248 0 0 Greenwood Cemetery Existin: Section A—Z 10,092 9,742 350 Memorial Cemetery Existing Section A—F 3,448 1,504 1,832 Existing section I,II,III 272 272 0 Section G—P(not yet open) 3,336 0 0 Monthly Recreation Report 2o26 LLP:uall CITY OF PARKS AND RECREATION January Monthly Narrative Report Basketball Basketball season went well this year. The jersey themed was inspired by some of our local HBCU schools in North Carolina. North Carolina A&T Aggies,North Carolina Central Eagles, Fayetteville State Broncos, Winston Salem State Rams, Elizabeth City Vikings. l0U standings: Billy Eason Aggies: 0-8 Derrick McKoy Broncos: 6-2 Rashawn Sparks Eagles:6-2 Due to both teams tying, we did a coin flip for first place, Eagles received the first place in the tournament. 13U Standings: Jay Taylor Aggies:6-2 Maurice Hicks Broncos: 6-2 Ryan Mayes: 0-8 Due to both teams tying, we did a coin flip for first place, Broncos received the first place in the tournament. Tournament results are: We concluded the season with an all-star day for the kids where the top 4 kids in each team compete in 3-point, free throw, and skills competition. They concluded with an All-star game. l0U results Free throw: Kayden Smith Skills: Brayden Evans Monthly Recreation Report 2026 13U results Free throw: Noah Ray 3-Point: Michael Williams Skills: Liam Blaggrove Indoor Soccer Registration for ages 7-13 started on December 9th and ended January 23rd. Drafts are scheduled to begin the week of February 2nd. There are 3 teams in our 8U league, 4 teams in 10U, and five teams in 13U. Senior Center The seniors were actively engaged in a variety of meaningful and enriching activities the included creating Valentine's Day cards for Meals on Wheels clients, spreading kindness and connection throughout the community. In addition, participants enjoyed a jewelry-making class that encouraged creativity and hands-on learning. The group also benefited from informative guest speakers, including representatives from Viya Health and St. Joseph of the Pines, as well as Dr. Glasco, who provided valuable insight and support. A dance showcase is scheduled to be held on January 30th at the Dunn Community Center. Recreation Advisory Board The last meeting was held on Thursday,November 20th, at 6:00 p.m. in the Dunn Community Center. The next meeting is on February 17th at 6:00 p. m. in the Dunn Community Center. CITY OF Lirigi DuNN ,. PARKS AND RECREATION Social Media Activity January 2026 DUNNSENIORCENTERPRESENTS Upcoming Overnight Trips with the Dunn Senior The Ark Encounter&Creation Museum Center! The Dunn Senior Center will be hosting two exciting . "" rqi� .. .r y,�; � Air „ overnight trips this year—one in June and another in tafc.IOtua m ct faturaft'" •Mafor..mach transportation $888* November! •S nights lodging including 3 consecutive nights in the Ctnetnnatl area � l If you are interested in participating in either trip, •e rpala;S breakfasts and 3 dinners 6 Da�f S Nyhti * '.-*. .' •Admission to the Famous erg.ARK ENCOUNTER! elynxwy t�._... please be sure to review the information listed below •Admission to the famous CREATION MUSEUM s •Admission to the CINCINNATI MUSEUM Olen• VOW from WWII the Ah CENTER,including An OMNIMAS SHOW /WI!:.27 Emem o for details. an much inure 2026 in Departure:Dunn Community Witting,205 Jackson Ftd.,Dunn,NC fa•am a • Have questions?Feel free to contact us at 910-984— Day 1 Doper,your group location in a spaciousit,video end rest/Qom equipped Mutorch end set oho on . •. 7394. We'd be happy to help! your exciting top'Tonight,settle into a comfortable en route horn fora good night's rest. a�,.k�} Day Today a •Continental Steadfast.you'll arrive in your detonation Later that t day enpy a relaxing <.g . Here's some additional information regarding our Dinner and check into your insommnudetrom m the(monism area for*three night stay Eigthi arming clay I Start the My with*Continental ttemklast before the tug event you w ise<a wairmgfor.ENE ARE Cnatirealruaeed fNCOUNTElt Sieger man imagrutwn,MN life sued Noah Mk Experience will emote you.The Ark upcoming trips! f lcounto features•lull cur Noah Ark built according to the dtmenuons given in the Arble Spanners 510 lett long 85 feet wile,and S 1 feet high,this modern repot wing marree smuts wnort young and old I rumthemeowet, the cornea the Arkcomes turne° reinto view to the friendly animals m the -_ These trips are open to any adult who would like to too or the pier bopping erhibds inside the Ark you.erpetient•the piles of the Bible hke never before this evening empty Dinner before Muting back to your hotel ,,a�d Day Stan the day with a Continental arakfast before you head to The Mk Cocoon.,s sister attraction THE�fEorsoa participate CREATION MUSEUM.prepare to believe es you explore 75.000 square feet of state state the art exhibits fag we Atto.om sketeten,stunning botanical gardens,petting too,and more.The suite e-t.-art Creation - - museum Mows you to yenta.tkrntgA Milt.homy Tonight enjoy•Dinner puny with Entertainment. to,strait hi dmimaa The Ark Encounter& Museum Day 5.Today after a Continental Meakfast youll head to the CINCINNATI MUSEUM CENTER•one of a kind. AA Enyowttfn4 multi museum complex housed m Union Terminal.•historic An Deco it.station and Natio.N historic landmark Tom vim axtudel eh admission to the Cincinnati History Museum Mouton of Natural Hsu,Ei Initial deposit: $75 due 2/22/2026 S:imce,and am OMNIMAt Show.The Robert D.Lindner f amity OMNIMAIr Theater takes you MO..you ran only worm as you immerse younee in epic ad0000nrs in the the dewy Waned theater TN*even,. relax Day your day OW ee"�n .., _.. Biltmore Estate &Asheville,NC Day a:Today.OW mpynnq a Comuwntd&<akfr>t,you depart for home a perfect time to that with your friends about rill the ism thing.you've done,tM gral sights you ve seen and whet<yout men group top mill { 1etie you, Initial deposit : $75 7/2/2026 coo SO.PAW o/atpq To 104.TIM... Ste bee upro,„...,•Ins tM+pa��knit.. Inoadibtti Ctnetnaatt Ott... etonnItom,.inewit~eeatt�r mentWi ,�.,, ,►Ams22, ,m .A. ., Museum Center mttpdm, If you have any questions, please don't hesitate to he lit.eie... ...wxt.. fatty tranwat lbw 4,15 TON, mOarniraaa Show MQaJWOiMpWMAItOIVAtEOISUCONTACT. • reach out to us. Amanda Baker (910)984.7394 Diamond TOYrs',. M....ta.+load w•NWu.seams _. Gratuities Included In Flyer Prkei Post Reach Viewers 1 . 9e2K 8K ....... (4i4t4 ,3 T gar w...w._ „Jo Page Overview Last 28 clays 0 . 6 Post Reach Post Views Page Followers 15K 58.2K 5.1K CITY OF DUNN�ss� POLICE DEPARTMENT 401 E Broad St. PO Box 1065 Dunn,NC 28335 (910)892-2399 CityofDunn.org Chief of Police Lynn Gay January 2026 Monthly Crime Stats (01/01/2026 to 01/31/2026) Crime Number Homicide 0 Rapes Robbery 0 Aggravated Assault Burglary Forcible Entry 3 Burglary Non-Forced Entry Larceny from Motor Vehicle 0 Larceny all-other 16 Simple Assaults 5 Criminal Investigations Division Assigned Cases Closed Recovered Property Search Warrants Cases Executed 22 19 $66,320 6 Cellebrite Forensic Digital Data Extraction Device: 3 Extractions Dunn Police Arrest & Citation Stats Month Felony Misdemeanor Citations January 21 45 331 Calls for service: 1,512 Overdose Stats Month Fatal Non-Fatal Total DPD Narcan Use January 0 0 0 0 ?thieve commune hens! CITY OF 1887 POLICE DEPARTMENT 401 E Broad St. PO Box 1065 Dunn,NC 28335 (910)892-2399 CityofDunn.org Chief of Police Lynn Gay Flock Safety Utilizations Total Plate Hot List Hits Recovered Leads Arrest Reads: Property Established 1,109,649 15,959 1 1 6 Dru:s seized: Marijuana 55.51 grams Amphetamines/Methamphetamines 4.61 grams Stimulants 3.80 grams Other Drugs 10 pounds Dru: Seizure Street Value: $5,680 70liere cammunI CITY OF Illik DuNN NORTH CAROLINA Gtiher&ca ,6eguts,/ Announcements : • The next Work Session of the Dunn City Council is scheduled for Tuesday, March 10th at 6:30 p.m. • The next Regular Session of the Dunn City Council is scheduled for Tuesday, March 24th at 6:30 p.m. • Community Input (Part 2) - Codrington Park on March 9th from 6 p.m. to 8 p.m. at the Senior Center. • The following boards have terms ending in June, 2026: Alcohol Beverage Control Board 'Community Appearance Board 'Dunn Housing Authority Board 'Parks & Recreation Board Planning Board Applications are available at City Hall or on-line at https://www.cityofdunn.org/boards-committees.asp NC DUNN HOUSING AUTHORITY BOARD OF COMMISSIONERS MEETING MINUTES MONDAY, NOVEMBER 17, 2025 The Commissioners of the Dunn Housing Authority ("DHA") met in regular session at 817 Stewart Street, in Dunn, North Carolina, on Monday, November 17, 2025. Following "Words of Encouragement" by Eddie Draughon,the meeting was called to order at 4:30pm. Upon roll call, the following were Present: Board Chair Kyle Thrower, Board Vice-Chair Eddie Draughon, Commissioners Lois Dail, Sharon Gant, and Secretary, Felicia Chester. Commissioner Angela Inman was absent due to not feeling well. Public Comment Period: No Public Comments were recorded. Approval of Meeting Minutes: A motion to accept the minutes from the regular September meeting was made by Lois Dail and seconded by Eddie Draughon. Ayes Nays Kyle Thrower Eddie Draughon Lois Dail Sharon Gant MINUTES OF THE REGULAR OCTOBER 2025 BOARD MEETING WERE READ AND UNANIMOUSLY ACCEPTED. Occupancy and Rent Report as of 11/17/2025: Dunn Housing Authority has a portfolio of 143 units. On the day of this meeting there were seven (7)vacant units.The total tenant revenue collected as of November 17, 2025, was $37,325.00. A motion to approve the 0 & R Report was made by Sharon Gant and seconded by Eddie Draughon. Ayes Nays Kyle Thrower Eddie Draughon Lois Dail Sharon Gant OCCUPANCY&RENT REPORTS WERE READ AND UNANIMOUSLY ACCEPTED. Review of Financial Balance Report: The Board reviewed the revised operating budget for 2025 and the proposed operating budget for 2026, both of which were distributed prior to the regular meeting. After careful review and discussion, the Board did not need further explanation from the accountants as it initially thought when the discussion was tabled during the October, 2025 meeting. 1 The Board voted unanimously in closed session to include salary increases for all staff in the 2026 Operating budget. Business: A motion to approve the revised Operating budget for 2025 was made by Sharon Gant and seconded by Eddie Draughon. Ayes Nays Kyle Thrower Eddie Draughon Lois Dail Sharon Gant A motion to approve the proposed Operating Budget for 2026 was made by Lois Dail and second by Eddie Draughon. Ayes Nays Kyle Thrower Eddie Draughon Lois Dail Sharon Gant MOTIONS APPROVED. Resolutions: #2025-09 and#2025-10 Other Business: The Board made a unanimous decision to continue working with Gregory Redman, CPA to complete the 2025 fiscal year end audit. Members decided not to have a December meeting. It was also decided that the January 2026 meeting would be held on Thursday,January 22, 2026, at 4:30pm. Adjournment: A motion to adjourn the meeting was made by Lois Dail and seconded by Sharon Gant. All members agreed and the meeting ended at 5:37pm. Kyle Thrower, Board Chair elicia Chester, Secretary 2 DUNN HOUSING AUTHORITY BOARD OF COMMISSIONERS MEETING MINUTES TH U RSDAY,JANUARY 22, 2026 The Commissioners of the Dunn Housing Authority("DHA") met in regular session at 817 Stewart Street, in Dunn, North Carolina, on Thursday,January 22, 2026. Following "Words of Encouragement" by Eddie Draughon, the meeting was called to order at 4:30pm. Upon roll call, the following were Present: Board Chair Kyle Thrower(via phone), Board Vice-Chair Eddie Draughon, Commissioners Lois Dail, Angela Inman, and Secretary, Felicia Chester. Commissioner Gant was not able to attend due to personal reasons. Public Comment Period: No Public Comments were recorded. Approval of Meeting Minutes: A motion to accept the minutes from the regular November meeting was made by Lois Dail and seconded by Eddie Draughon. Ayes Nays Eddie Draughon Lois Dail Angela Inman MINUTES OF THE REGULAR NOVEMBER 2025 BOARD MEETING WERE READ AND ACCEPTED. Occupancy and Rent Report as of 01/22/2026: Dunn Housing Authority has a portfolio of 143 units. On the day of this meeting there were seven (8)vacant units. The total tenant revenue collected as of January 22, 2026, was$43,805.00. A motion to approve the 0 &R Report was made and unanimously accepted by all present. Ayes Nays Eddie Draughon Lois Dail Angela Inman OCCUPANCY&RENT REPORT WAS READ AND UNANIMOUSLY ACCEPTED. Review of Financial Balance Report: The Board reviewed the December month end financial report.There were no questions, only a brief discussion about the interest rate reduction from United Community Bank. A motion to approve was made by Eddie Draughon and seconded by Lois Dail. THE DECEMBER 2025 MONTH END FINANCIAL REPORT WAS READ AND UNANIMOUSLY ACCEPTED. 1 Cmnnrnun|maiio�x: The Board was informed that Duke Energy had inquired about energy efficiency assistance with Dunn Housing Authority. Lois Dail confirmed that she had taken advantage of that assistance and that it was a great idea. The Board was made aware that Dunn Housing Authority had passed The N5P|RE inspection on November 12, 2025, and increased its score by 5 points. Angela Inman, and others complimented the staff because we had been understaffed during the months prior to the inspection. Adjournment: A motion to adjourn the meeting was made by Lois Dail and seconded by Eddie Draughon, All members agreed and the meeting ended atS:2Oprn. Kyle Thrower, Board Chair -- - ` Felicia Chester, Secretary