01052012MINUTES
CITY OF DUNN
DUNN, NORTH CAROLINA
The City Council of the City of Dunn held a Special Call Meeting on Thursday, January 5, 2012, at
11:30 a.m. in the Dunn Municipal Building. Present was Mayor Oscar N. Harris, Mayor Pro Tern N.
Carnell Robinson, Council Members Buddy Maness, Bryan Galbreath, Billy Tart, Chuck Turnage
and Billy Barfield. Also present was City Manager Ronnie Autry, Assistant City Manager Steven
Neuschafer, Public Works Director Billy Addison, Public Utilities Director Dean Gaster, Finance
Director Mark Stephens, Planning Director Samantha Lloyd, Chief Building Inspector Mike
Blackmon, City Clerk Debra West, and Daily Record Reporter Brian Haney.
Absent: City Attorney P. Tilghman Pope.
INVOCATION
Mayor Harris opened the meeting at 11:30 a.m. and gave the invocation. Afterwards, the Pledge of
Allegiance was repeated.
AGENDA ADJUSTMENT AND APPROVAL
Motion by Mayor Pro Tem. Robinson and seconded by Council Member Billy Tart to adopt the January 5,
2012 meeting agenda with changes, if any, as listed below.
Agenda Adjustment:
• Amend language in Section 3 to state Resolution instead of Letter
Items Added to the Agenda:
• none
Agenda Items Removed:
• none
Motion unanimously approved.
ITEMS FOR DISCUSSIONAND /OR DECISION
Approve Amendment to the
Eastover Sanitary District
Water Purchase Contract
Manager Autry stated that this special call meeting was necessary to assist Eastover Sanitary District (ESD)
with submitting their application to the Local Government Commission (LGC) on January 10h. ESD felt
this amendment needed to be adopted and in their hands prior to meeting with the LGC. He explained that
in reviewing the ESD contract, it was discovered that the contract stated a minimum five percent (5 %)
interest rate for the ESD twenty -year loan from the City of Dunn to be reviewed and adjusted upon the City
receiving a confirmed rate for their ten -year loan. It was discovered by the Cumberland County Finance
Office that the City of Dunn had not set a permanent interest rate for ESD's loan. The contract needs to be
amended to state the set interest rate.
Manager Autry explained the following modifications to the contract:
➢ Interest rate changed from five percent (5 %) per annum to four percent (4 %). This will be a
competitive loan for the ESD's twenty -year loan. The City's ten -year loan will be at a rate of
(2.3 %).
Monthly payment was modified to a minimum of $16,000 based on a project price of $2.6M. This
was changed from the original $18,000 minimum based on a project cost of $3M. Since the bids
received came in almost one -half million dollars under projection, this amount was modified.
This modification will be forwarded to ESD today to allow them to submit their documents to the Local
Government Commission in time for the meeting on January 10'".
Manager Autry stated that there continues to be some contention about ESD purchasing their water from
Dunn instead of PWC of Fayetteville. The City of Dunn has done everything possible to make this project
work.
Motion by Mayor Pro Tent Robinson and seconded by Council Member Maness to approve the amendment
to the Eastover Sanitary District Water Purchase Contract as presented. Motion unanimously approved.
A copy of the Amendment to the Eastover Sanitary District Water Purchase Contract is incorporated into
these minutes as Attachment #1.
Approve Resolution of Intent to
Lease the Harnett Training School Campus to
Dunn Community Development Corporation (DCDC)
Manager Autry stated that before the Council is a Resolution of Intent to lease the Harnett Training School
to DCDC. This Resolution of Intent formality must be included in the pre - application that will be
submitted in January. If all qualifications are met, the City will have to lease the land to DCDC and then in
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turn, they would lease back the properties the City uses for the PAL and senior center operations. The City
is not guaranteeing anything at this point. Should the pre - application be favorable, a final application will
be submitted in May and at that time all legal procedures would be put in place for this long term lease.
Council Member Turnage expressed his concern with the proposed seventy -five (75) year lease which
seems extreme in length. He stated that the documents should specify the buildings that will be maintained
by the PAL program and they should be delineated.
Mayor Hams stated that he would ask the Council to authorize him to amend the number of years to state
the lesser of seventy-five (75) years or the number of years required for the project to move forward.
Council consensus was fine with the language changed in the resolution to "minimum number of required
years"
Mayor Harris stated that the issue regarding the maintenance of the buildings (PAL and Senior Center) will
be decided when negotiations are made for the sublease between the City and the DCDC.
Manager Autry stated that the daycare will remain a separate entity and will not be part of this project.
Mayor Harris explained that this property is an old neglected property with lots of deferred maintenance
that will require funds in excess of $1M to repair. If they go through with this project as planned, and if it
is accepted by the NC Housing Finance Agency and if they can sell the historic tax credits, state and federal
low income housing tax credits, then there is a possibility that the City would have less than $750,000
invested in this property with a $9.3M value.
Motion by Council Member Maness and seconded by Council Member Galbreath to adopt the Resolution
of Intent to Lease the Harnett Training School Campus to Dunn Community Development Corporation
(DCDC) and to change the language regarding the lease term to being the lesser of seventy-five (75) years
or the minimum required number of years.
Mayor Harris entertained further discussion.
Council Member Barfield stated that since he wasn't involved during all the discussions about this project,
he had questions about the project with regard to the lease amount that would be charged to PAL and about
the City potentially paying $750,000.
Mayor Harris explained that all along the total campus has been included in their discussions. All of this
property qualifies for historic tax credits. The only part that qualifies for housing tax credits is the senior
apartments. The other property qualifies for historic and use tax credits because it is within the campus. �--
The buildings that the City receives will be renovated as well as the apartments. The City would have to
spend in excess of $1M to renovate these buildings if they don't take this opportunity. There is a
possibility that the City will not owe anything for the project or the City could potentially owe $740,000 as
proposed by the NC Housing Finance for twenty-five years at 2 percent interest. At completion of the
project, the City would get back a building that is worth $2.6M. This is a win -win for the City, PAL, and
DCDC. Also the DCDC will get development fees and they will manage the property that is not sub - leased
back to the City.
Council Member Maness pointed out that the value of the credits received depends upon the Federal
Government.
Mayor Harris stated there is a possibility that City dollars could be tied into this but at this point, that is
unknown.
Mayor Pro Tom Robinson called for the question.
Mayor Harris called for the vote.
Council Member Barfield stated that he would like to abstain from voting on this issue.
Motion unanimously approved. A copy ofResolution (R2012 -01) oflntent to Lease the Harnett Training
School Campus to the DCDC is incorporated into these minutes as Attachment #2.
*Clerks Note: NCGS§ 160A -75 states that no member shall be excused from voting except upon matters involving the
consideration of the member's own financial interest or official conduct or on matters on which the member is
prohibited from voting under G.S. 14 -234, 160 ,4- 381(d), or 160A- 388(el). In all other cases, a faiture to vote by a
member who is physically present in the council chamber, or who has withdrawn without being excused by a majority
vote of the remaining members present, shall be recorded as an affirmative vote.
With no further business to discuss, a motion was made by Council Member Maness and seconded by
Council Member Tumage to adjourn the meeting at 11:59 a.m. Motion unanimously approved.
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