Loading...
HomeMy WebLinkAboutMay 12, 2025 Work Session MeetingAGENDA Lillington Board of Commissioners Work Session Meeting Lillington Town Hall 102 E. Front Street Lillington, North Carolina 27546 May 12, 2025 8:30am CALL TO ORDER MAYOR GLENN MCFADDEN NEW BUSINESS Item #1 Discussion & Consideration of Property Management Policy Related to the Expenditure of American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds By North Carolina Local Governments Alicia Adams, Administrative Services Director Item #2 Discussion & Consideration of Internal Control Policy ARP/CSLFRF Award Alicia Adams, Administrative Services Director Item #3 Board of Adjustment Review Landon Chandler, Planning Director Item #4 Administrative Reports A.Presentation of the Monthly Financial Report Lisa Young, Assistant Town Manager B. Presentation of Town Manager’s Report Joseph Jeffries, Town Manager Item #5 Discussion of Regular Meeting Agenda for May 13, 2025 Joseph Jeffries, Town Manager Item #6 Closed Session to Meet per §143-318.11(a)(5) Joseph Jeffries, Town Manager ADJOURNMENT AGENDA ITEM SUMMARY Date of Meeting: May 12, 2025 Staff Work By: Alicia Adams, Administrative Services Director AGENDA ITEM Discussion & Consideration of Property Management Policy Related to the Expenditure of American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds By North Carolina Local Governments ITEM SUMMARY Discussion & Consideration of Property Management Policy Related to the Expenditure of American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds By North Carolina Local Governments RECOMMENDED ACTION Approve Property Management Policy Related to the Expenditure of American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds By North Carolina Local Governments AGENDA ITEM #1 1 PROPERTY MANAGEMENT RELATED TO THE EXPENDITURE OF AMERICAN RESCUE PLAN ACT CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS BY NORTH CAROLINA LOCAL GOVERNMENTS WHEREAS the Town of Lillington, has received an allocation of funds from the Coronavirus State and Local Fiscal Recovery Funds of H.R. 1319 American Rescue Plan Act of 2021 (ARP/CSLFRF); and WHEREAS the funds may be used for projects within these categories, to the extent authorized by state law. 1. Support COVID-19 public health expenditures, by funding COVID-19 mitigation and prevention efforts, medical expenses, behavioral healthcare, preventing and responding to violence, and certain public health and safety staff; 2. Address negative economic impacts caused by the public health emergency, including economic harms to households, small businesses, non-profits, impacted industries, and the public sector; 3. Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic; 4. Provide premium pay for essential workers, offering additional support to those who have borne and will bear the greatest health risks because of their service in critical infrastructure sectors; and, 5. Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet; and WHEREAS the ARP/CSLFRF are subject to the provisions of the federal Uniform Grant Guidance, 2 CFR Sect. 200 (UG), as provided in the Assistance Listing; and WHEREAS the Compliance and Reporting Guidance for the State and Local Fiscal Recovery Funds (v4.1 June 2022) provides, in relevant part: Equipment and Real Property Management. Any purchase of equipment or real property with SLFRF funds must be consistent with the Uniform Guidance at 2 CFR Part 200, 2 Subpart D. Equipment and real property acquired under this program must be used for the originally authorized purpose. Consistent with 2 CFR 200.311 and 2 CFR 200.313, any equipment or real property acquired using SLFRF funds shall vest in the non-Federal entity. Any acquisition and maintenance of equipment or real property must also be in compliance with relevant laws and regulations. WHEREAS Subpart D of the UG dictates title, use, management, and disposal of real property, equipment, and supplies acquired in whole or in part with ARP/CSLFRF funds; BE IT RESOLVED that the Lillington Board of Commissioners hereby adopts and enacts the following UG Property Management Policy for the expenditure of ARP/CSLFRF funds. Property Standards for Real Property, Equipment, and Supplies Acquired with American Rescue Plan Act of 2021 Coronavirus State and Local Fiscal Recovery Funds I. POLICY OVERVIEW Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly called Uniform Guidance (UG), specifically Subpart D, details post award requirements related to property management of property acquired or updated, in whole or in part, with funds from the Coronavirus State and Local Fiscal Recovery Funds of H.R. 1319 American Rescue Plan Act of 2021 (ARP/CSLFRF). 2 CFR 200.311 through 2 CFR 200.316, as modified by US Treasury ARP/CSLFRF Final Rule FAQs 13.15 & 13.16, detail property standards related to the expenditure of ARP/CLSFRF funds. The [LOCAL GOVERNMENT NAME], hereinafter Town shall adhere to all applicable property standards, as detailed below. Note that pursuant to ARP/CSLFRF Final Rule FAQ 13.15, the Uniform Guidance property standards do not apply to real property, equipment, or supplies purchased or improved with Revenue Replacement ARP/CSLFRF funds. II. DEFINITIONS The definitions in 2 CFR 200.1 apply to this policy, including the following: Computing devices: machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving, or storing electronic information. See also the definitions of supplies and information technology systems in this section. Equipment: tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the Town for financial statement purposes, or $5,000. 3 Information technology systems: computing devices, ancillary equipment, software, firmware, and similar procedures, services (including support services), and related resources. See also the definitions of computing devices and equipment in this section. Intangible property: property having no physical existence, such as trademarks, copyrights, patents and patent applications and property, such as loans, notes and other debt instruments, lease agreements, stock and other instruments of property ownership (whether the property is tangible or intangible). Personal property: property other than real property. It may be tangible, having physical existence, or intangible. Property: real property or personal property. Real property: land, including land improvements, structures and appurtenances thereto, but excludes moveable machinery and equipment. Supplies: all tangible personal property other than those described in the definition of equipment in this section. A computing device is a supply if the acquisition cost is less than the lesser of the capitalization level established by the local government for financial statement purposes or $5,000, regardless of the length of its useful life. See also the definitions of computing devices and equipment in this section. III. REAL PROPERTY Title to Real Property: Title to real property acquired or improved with ARP/CSLFRF funds vests with the Town. 2 CFR 200.311(a). Use of Real Property: During the period of performance of the ARP/CSLFRF award, the Town may use real property purchased or improved with ARP/CSLFRF funds for a purpose other than the purpose for which it was purchased or improved if such other purpose is also consistent with the ARP/CSLFRF eligible use requirements. If the Town changes the use of the real property to an ineligible use or sells the real property prior to the end of the period of performance, then it must follow the disposition procedures detailed in the Disposition of Real Property section below. After the period of performance of the ARP/CSLFRF award, the Town must use the real property consistent with the purpose for which it was purchased or improved or for any other eligible purpose in the same category as the purpose reported to US Treasury as of the final reporting period, as set forth in the table below: Category Use Requirements 4 Public Health and Assistance to Households and Individuals Property, supplies, or equipment last reported as being used to respond to the public health impacts of the public health emergency, as outlined in 31 CFR 35.6(b)(3)(i), or being used for the provision of services to households provided in 31 CFR 35.6(b)(3)(ii)(A), are authorized to fulfill any eligible use of funds provided in these subparagraphs of the Final Rule. Assistance to Small Businesses, Nonprofits, and Impacted Industries Property, supplies, or equipment last reported as being used for the provision of services to small businesses, nonprofits, and impacted industries outlined in 31 CFR 35.6(b)(3)(ii)(B)-(D) are authorized to fulfill any eligible use of funds outlined in the public health and negative economic impacts eligible use category. Water, Sewer, or Broadband Infrastructure Property, supplies, or equipment last reported as being used to make investments in water, sewer, or broadband infrastructure pursuant to 31 CFR 35.6(e) are authorized to fulfill any eligible use of funds outlined in the water, sewer, and broadband infrastructure eligible use category. Government Services/Revenue Loss N/A Premium Pay N/A If the real property’s use shifts outside the parameters of the eligible purpose according to this table after the period of performance, then the Town (and any subrecipients) must follow the disposition procedures in the Disposition of Real Property section below. The Town is responsible for being able to substantiate its determination on whether the use of the real property is authorized and maintain a record of that determination in accordance with the requirements set forth in the financial assistance agreement accepted in connection with the ARP/CSLFRF award. The Town is not required to seek or obtain the approval of US Treasury prior to changing the use within the parameters of these authorized purposes. Insurance of Real Property: The Town must provide the equivalent insurance coverage for real property acquired or improved with ARP/CSLFRF funds as provided to property owned by the Town. 2 CFR 200.310. No Encumbrance of Real Property: The Town may not encumber the real property unless authorized by US Treasury. 2 CFR 200.311(b). Disposition of Real Property: If the Town changes the use of real property to an ineligible use or sells the asset during the period of performance of the ARP/CSLFRF award or changes the use of the asset outside the eligible category after the period of performance ends, then the Town must obtain disposition instructions from US Treasury. The instructions must provide for one of the following alternatives: 5 1. The Town retains title after compensating US Treasury. The amount paid to US Treasury will be computed by applying US Treasury’s percentage of participation in the cost of the original purchase (and costs of any improvements) to the fair market value of the property. However, in those situations where the Town is disposing of real property acquired or improved with ARP/CSLFRF funds and acquiring replacement real property under the ARP/CSLFRF, the net proceeds from the disposition may be used as an offset to the cost of the replacement property. 2. The Town sells the property and compensates US Treasury. The amount due to US Treasury will be calculated by applying US Treasury’s percentage of participation in the cost of the original purchase (and cost of any improvements) to the proceeds of the sale after deduction of any actual and reasonable selling and fixing-up expenses. If the ARP/CSLFRF award has not been closed out, the net proceeds from sale may be offset against the original cost of the property. When the Town is directed to sell property, sales procedures must be followed that provide for competition to the extent practicable and result in the highest possible return. 3. The Town transfers title to US Treasury or to a third party designated/approved by US Treasury. The Town is entitled to be paid an amount calculated by applying the Town’s percentage of participation in the purchase of the real property (and cost of any improvements) to the current fair market value of the property. 2 CFR 200.311(c). IV. EQUIPMENT Title to Equipment: Title to equipment acquired or improved with ARP/CSLFRF funds vests with the Town. 2 CFR 200.313(a). Use of Equipment: During the period of performance of the ARP/CSLFRF award, the Town may use equipment purchased or improved with ARP/CSLFRF funds for a purpose other than the purpose for which it was purchased or improved if such other purpose is also consistent with the ARP/CSLFRF eligible use requirements. If the Town changes the use of equipment to an ineligible use or sells the equipment prior to the end of the period of performance, then it must follow the disposition procedures detailed in the Disposition of Equipment section below. After the period of performance of the ARP/CSLFRF award, the Town must use equipment consistent with the purpose for which it was purchased or improved or for any other eligible purpose in the same category as the purpose reported to US Treasury as of the final reporting period, as set forth in the table below: Category Use Requirements Public Health and Assistance to Households and Individuals Property, supplies, or equipment last reported as being used to respond to the public health impacts of the public health emergency, as outlined in 31 CFR 35.6(b)(3)(i), or being used for the provision of services to households provided in 31 CFR 35.6(b)(3)(ii)(A), are authorized to 6 fulfill any eligible use of funds provided in these subparagraphs of the Final Rule. Assistance to Small Businesses, Nonprofits, and Impacted Industries Property, supplies, or equipment last reported as being used for the provision of services to small businesses, nonprofits, and impacted industries outlined in 31 CFR 35.6(b)(3)(ii)(B)-(D) are authorized to fulfill any eligible use of funds outlined in the public health and negative economic impacts eligible use category. Water, Sewer, or Broadband Infrastructure Property, supplies, or equipment last reported as being used to make investments in water, sewer, or broadband infrastructure pursuant to 31 CFR 35.6(e) are authorized to fulfill any eligible use of funds outlined in the water, sewer, and broadband infrastructure eligible use category. Government Services/Revenue Loss N/A Premium Pay N/A If the equipment’s use shifts outside the parameters of the eligible purpose according to this table after the period of performance, then the Town (and any subrecipients) must follow the disposition procedures in the Disposition of Equipment section below. The Town is responsible for being able to substantiate its determination on whether the use of equipment is authorized and maintain a record of that determination in accordance with the requirements set forth in the financial assistance agreement accepted in connection with the ARP/CSLFRF award. The Town is not required to seek or obtain the approval of US Treasury prior to changing the use within the parameters of these authorized purposes. During the time that equipment is used on the project for which it was acquired, the Town must also make equipment available for use on other projects or programs currently or previously supported by the Federal Government, provided that such use will not interfere with the work on the project for which it was originally acquired. First preference for other use must be given to other programs or projects supported by US Treasury and second preference must be given to programs or projects under Federal awards from other Federal awarding agencies. Use for non- federally-funded programs or projects is also permissible. User fees should be considered if appropriate. 2 CFR 200.313(c)(2). Noncompetition: The Town must not use equipment acquired with the ARP/CSLFRF funds to provide services for a fee that is less than private companies charge for equivalent services unless specifically authorized by Federal statute for as long as the Federal Government retains an interest in the equipment. 2 CFR 200.313(c)(3). 7 No Encumbrance: The Town may not encumber the equipment without approval of US Treasury. 2 CFR 200.313(a)(2). Replacement Equipment: When acquiring replacement equipment, the Town may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property. 2 CFR 200.313(c)(4). Management of Equipment: The Town will manage equipment (including replacement equipment) acquired in whole or in part with ARP/CSLFRF funds according to the following requirements. 1. The Town will maintain sufficient records that include a) a description of the property, b) a serial number or other identification number, c) the source of funding for the property (including the Federal Award Identification Number (FAIN)), d) who holds title, e) the acquisition date, f) cost of the property, g) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, h) the location, use and condition of the property, and i) any ultimate disposition data including the date of disposal and sale price of the property. 2. The Town will conduct a physical inventory of the property and reconcile results with its property records at least once every two years. 3. The Town will develop a control system to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft will be investigated by the Town. 4. The Town will develop and implement adequate maintenance procedures to keep the property in good condition. 5. If the Town is authorized or required to sell the property, it will establish proper sales procedures to ensure the highest possible return, in accordance with state and federal law. Insurance of Equipment: The Town must provide the equivalent insurance coverage for equipment acquired or improved with ARP/CSLFRF funds as provided to property owned by the Town. 2 CFR 200.310. Disposition of Equipment: If the Town changes the use of the equipment to an ineligible use or sells the equipment during the period of performance of the ARP/CSLFRF award or changes the use of the equipment outside the eligible category after the period of performance ends, then the Town may either make the equipment available for use in other activities funded by a Federal agency, with priority given to activities funded by US Treasury, dispose of the equipment according to instructions from US Treasury, or follow the procedures below. 2 CFR 200.313(e). 8 1. Equipment with a per-item fair market value of less than $5,000 may be retained, sold or transferred by the Town, in accordance with state law, with no additional responsibility to US Treasury; 2. If no disposal instructions are received from US Treasury, equipment with a per-item fair market value of greater than $5,000 may be retained or sold by the Town. The Town must establish proper sales procedures, in accordance with state law, to ensure the highest possible return. The Town must reimburse US Treasury for its federal share. Specifically, US Treasury is entitled to an amount calculated by multiplying the current market value or proceeds from sale by the ARP/CSLFRF funding percentage of participation in the cost of the original purchase. If the equipment is sold, US Treasury may permit the Town to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for its selling and handling expenses. 3. Equipment may be transferred to US Treasury or to a third-party designated by US Treasury in return for compensation to the Town for its attributable compensation for its attributable percentage of the current fair market value of the property. V. SUPPLIES Title to Supplies. Title to supplies acquired with ARP/CSLFRF funds vests with the Town upon acquisition. 2 CFR 200.314(a). Use of Supplies: During the period of performance of the ARP/CSLFRF award, the Town may use supplies purchased or improved with ARP/CSLFRF funds for a purpose other than the purpose for which it was purchased or improved if such other purpose is also consistent with the ARP/CSLFRF eligible use requirements. If the Town changes the use of supplies to an ineligible use or sells the supplies prior to the end of the period of performance, then it must follow the disposition procedures detailed in the Disposition of Supplies section below. After the period of performance of the ARP/CSLFRF award, the Town must use supplies consistent with the purpose for which they were purchased or improved or for any other eligible purpose in the same category as the purpose reported to US Treasury as of the final reporting period, as set forth in the table below: Category Use Requirements Public Health and Assistance to Households and Individuals Property, supplies, or equipment last reported as being used to respond to the public health impacts of the public health emergency, as outlined in 31 CFR 35.6(b)(3)(i), or being used for the provision of services to households provided in 31 CFR 35.6(b)(3)(ii)(A), are authorized to fulfill any eligible use of funds provided in these subparagraphs of the Final Rule. 9 Assistance to Small Businesses, Nonprofits, and Impacted Industries Property, supplies, or equipment last reported as being used for the provision of services to small businesses, nonprofits, and impacted industries outlined in 31 CFR 35.6(b)(3)(ii)(B)-(D) are authorized to fulfill any eligible use of funds outlined in the public health and negative economic impacts eligible use category. Water, Sewer, or Broadband Infrastructure Property, supplies, or equipment last reported as being used to make investments in water, sewer, or broadband infrastructure pursuant to 31 CFR 35.6(e) are authorized to fulfill any eligible use of funds outlined in the water, sewer, and broadband infrastructure eligible use category. Government Services/Revenue Loss N/A Premium Pay N/A If the supplies use shift outside the parameters of the eligible purpose according to this table after the period of performance, then the Town (and any subrecipients) must follow the disposition procedures in the Disposition of Supplies section below. The Town is responsible for being able to substantiate its determination on whether the use of supplies is authorized and maintain a record of that determination in accordance with the requirements set forth in the financial assistance agreement accepted in connection with the ARP/CSLFRF award. The Town is not required to seek or obtain the approval of US Treasury prior to changing the use within the parameters of these authorized purposes. Noncompetition. As long as the Federal Government retains an interest in the supplies, the Town must not use supplies acquired under the ARP/CSLFRF to provide services to other organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute. 2 CFR 200.314(b). Disposition of Supplies. If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. The amount of compensation must be computed in the same manner as for equipment. 2 CFR 200.314(a). VI. PROPERTY TRUST RELATIONSHIP Real property, equipment, and intangible property, that are acquired or improved with ARP/CSLFRF funds must be held in trust by the Town as trustee for the beneficiaries of the project or program under which the property was acquired or improved. US Treasury may require 10 the Town to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with a Federal award and that use and disposition conditions apply to the property. 2 CFR 200.316. VII. IMPLEMENTATION OF POLICY Administrative Services Director or their designee shall adopt procedures to track all real property, equipment, and supplies (collectively, property) acquired or improved in whole or in part with ARP/CLSFRF funds. At a minimum, those procedures must address the following: •Ensure proper insurance of property •Document proper use of property •Working with the Finance Department, record and maintain required data records for equipment •Conduct periodic inventories of equipment, at least every two years •Create processes for replacement and disposition of property •Establish other internal controls to safeguard and properly maintain property AGENDA ITEM SUMMARY Date of Meeting: May 12, 2025 Staff Work By: Alicia Adams, Administrative Services Director AGENDA ITEM Discussion & Consideration of Internal Control Policy ARP/CSLFRF Award ITEM SUMMARY Discussion & Consideration of Internal Control Policy ARP/CSLFRF Award RECOMMENDED ACTION Approve Internal Control Policy ARP/CSLFRF Award AGENDA ITEM #2 Internal Control Policy: Coronavirus State and Local Fiscal Recovery Funds (“ARP/CSLFRF Award”) CONTENTS Definitions . . . 2 Policy Overview and Purpose . . . 3 The Green Book Recognizes Five Components of Internal Control: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring . . . 3 1. Control Environment . . . 3 2. Risk Assessment . . . 4 Risk Identification . . . 4 Uniform Guidance Compliance & Risk Identification . . . 4 Risk Analysis . . . 4 Risk Response . . . 5 3. Control Activities . . . 5 4. Information and Communication . . . 6 5. Monitoring . . . 6 Financial Management, 2 CFR § 200.302 . . . 7 Segregation of Duties: . . . 7 Documentation: . . . 7 Reporting: . . . 8 Reconciliation: . . . 8 Eligibility (See Award Terms & Conditions for ARP/CSLFRF Eligibility Requirements) . . . 8 Allowable Costs/Cost Principles, 2 CFR §§ 200.400 to 200.476 . . . 9 Period of Performance (See Award Terms and Conditions) . . . 10 Procurement, Suspension & Debarment, 2 CFR §§ 200.317 to 200.327 . . . 11 Property Management, 2 CFR §§ 200.310 to 200.316 . . . 13 2 Internal Control Policy: ARP/CSLFRF Award Definitions • Management refers to employees who have direct responsibility for the day-to-day operations of the entity, including the implementation of internal controls. For the purposes of this policy, “management” includes: Town Manager, Assistant Town Manager, Administrative Services Director, Finance Director, and Assistant Finance Director. • Oversight Body, as referenced in the Government Accountability Office’s Standards for Internal Control in the Federal Government, refers to an appointed body designated to perform oversight at the direction of the governing board. The oversight body of a local government is, by default, the governing board. Internal Control Policy: ARP/CSLFRF Award 3 Policy Overview and Purpose Internal control is a process effected by an entity’s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. This policy outlines the internal control process established by the Town of Lillington to provide reasonable assurances that the unit will expend ARP/CSLFRF award funds in compliance with governing laws and regulations. This document is adopted in accordance with the following directive from U.S. Treasury’s Compliance and Reporting Guidance: “Per 2 CFR Part 200.303, your organization must develop and implement effective internal controls to ensure that funding decisions under the ARP/CSLFRF award constitute eligible uses of funds, and document determinations.”2 Internal Control Framework: The Town of Lillington’s internal controls are modeled after the internal control framework set forth in the Government Accountability Office’s Standards for Internal Control in the Federal Government (the “Green Book”). As described in the Green Book, Management is responsible for establishing and maintaining the internal control system in compliance with the duties outlined in this policy. The Oversight Body’s primary role is to ensure management performs its internal control responsibilities. However, every employee bears some responsibility for the internal control process. The Green Book Recognizes Five Components of Internal Control: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring The Town understands that each component must be present and functioning for the internal control process to operate at the optimal level. The responsibilities tied to each of the components are discussed below. 1. Control Environment The control environment is the foundation for all other components of internal control, providing discipline and structure. Management values integrity, ethics, and competence in all operations, including the administration of federal awards. Management communicates and reinforces its expectations throughout the organization. Examples of management’s commitment to internal controls over expenditures of ARP/CSLFRF funds include, but are not limited to, the following: • Management demonstrates a commitment to integrity and ethical values through its leadership, communications, personnel practices, and daily actions. • Management conducts ongoing risk assessments to identify internal control weaknesses that may negatively impact the proper administration of the ARP/CSLFRF award. • Management is committed to educating itself and staff on the compliance requirements tied to the administration of the ARP/CSLFRF award. • Management adopts policies necessary to ensure compliance with the Uniform Guidance and the ARP/CSLFRF award terms and conditions. 1. U.S. Department of the Treasury, Compliance and Reporting Guidance, p. 8 (updated Sept. 20, 2022). 4 Internal Control Policy: ARP/CSLFRF Award 2. Risk Assessment Management is committed to identifying and managing the risks that may arise during the administration of the ARP/CSLFRF award. The risk assessment component of internal control involves management evaluating the risks the entity faces that could negatively impact its ability to achieve its objectives. These objectives include: • Operational Objectives: All assets are appropriately safeguarded against risks of fraud, theft, loss, or abuse. • Reporting Objectives: Finance systems and processes produce accurate and reliable financial reporting for federal award expenditures. The Town’s Schedule of Expenditures for Federal Awards (SEFA) is complete and accurate. • Compliance Objectives: Ensure ARP/CSLFRF awards funds are expended in compliance with the award terms and conditions, federal and state law, and U.S. Treasury guidance. Risk Identification Management shall identify risks that may impair the Town’s ability to achieve its objectives. Management shall focus its risk assessment on areas of opportunity for employees to commit fraud. Specific areas and types of risk include: • rapid growth in operations, • changes in personnel, • organizational restructuring, such as centralizing or decentralizing, • new activities or service areas, • new or revised information systems, • new technologies in service delivery or information systems, • changes in the operating or regulatory environment, and • new or updated accounting and/or financial reporting practices. Uniform Guidance Compliance & Risk Identification There are specific risks that arise in the administration of a grant award. Management will identify areas of risk that may impair the Town’s ability to comply with the ARP/CSLFRF award’s terms and conditions and/or applicable state and federal law and regulations. Specifically, the Town will evaluate risks of non-compliance in the following compliance areas: • Eligibility, • Allowable Costs/Cost Principles, • Period of Performance, • Financial Management, • Property Management, • Procurement, • Subrecipient Monitoring, and • Program Income. Risk Analysis Management shall determine the potential severity of liabilities associated with the risks identified by weighing the likelihood of occurrence against the degree of impact. Internal Control Policy: ARP/CSLFRF Award 5 Risk Response Management shall review the results of the risk analysis and determine whether to implement control activities to mitigate risks. Management will respond to identified risks in one of three ways: • accept the risk, • reduce the risk by implementing control activities to help prevent or detect issues, or • avoid the risk by not pursuing certain activities. Management shall consider the relative cost of implementing controls versus the benefit(s) offered in deciding whether to mitigate risk(s) through the implementation of control activities. When possible, control activities will be implemented to mitigate risks that rate “High” or “Very High” on the Likelihood/Impact scale. 3. Control Activities Control activities are the actions taken by management to respond to risks that may prevent the entity from achieving its objectives. The internal control activities are either preventative or detective. The Town uses a variety of control activities that support strong internal controls, including, but not limited to the following: • written policies and procedures, • segregation of duties: separating authorization, custody, record-keeping, and reconciliation functions, • authorizations to undertake projects/programs/expenditure, • reconciliation of accounts and records, • documentation and record-keeping, • physical controls, including locks, physical barriers, and security systems to protect physical assets, • IT controls, including passwords, access logs, and firewalls to protect sensitive data and restrict access to electronic data and files, • staff training, or • a combination of the above. 6 Internal Control Policy: ARP/CSLFRF Award 4. Information and Communication The Town communicates accurate and quality information to internal staff and personnel and to external stakeholders and community members. Communication plays an integral role in the internal control system by helping to promote transparency regarding the use of public funds. Management shall be responsible for communicating internal control processes to those employees directly involved in finance and/or grant administration. Management will communicate its policies, procedures, and internal controls through various handbooks, programs, training, and electronic communication. Information regarding pertinent policies, processes, and control activities will flow down, across, and up the organizational structure. Internal control deficiencies should be reported upstream, with serious matters reported immediately to top-level management and/or to the governing board. Employees are required to report any critical issues within the internal control system to management as soon as possible after the discovery. To ensure transparency regarding the use of ARP/CSLFRF funds, the Town shall communicate quality information to community members and external stakeholders. The communication channels may include: • Governing board members and management are willing to engage directly with community members and answer questions via email and/or provide updates during regularly scheduled meetings. 5. Monitoring The Town shall conduct ongoing monitoring of the internal control system to identify its strengths and weaknesses. Internal and external audits will be conducted pursuant to federal and state law. These audit processes will test the effectiveness of internal controls over federal and state awards. Internal Control Policy: ARP/CSLFRF Award 7 Internal Controls & Uniform Guidance Compliance Financial Management, 2 CFR § 200.302 Overview: Each unit must have a financial management system in place to satisfy the requirements set forth in 2 CFR 200.302. A unit may rely on existing accounting processes and procedures, provided such processes adequately track the obligations and expenditures of ARP/CSLFRF funds. Objectives: Ensure compliance with the following requirements set forth in 2 CFR 200.302, as follows: 1. Track all federal awards received and related expenditures separately for each federal program. 2. Provide accurate, current, and complete financial data to enable the disclosure of the results of each federal award. 3. Identify the source and application of funds (i.e., the system must be able to track authorizations, obligations, and disbursements, and tie any expenditures to eligible uses of ARP/CSLFRF funds. 4. Maintain control over, and accountability for, all funds, property, and other assets. 5. Compare budgeted amounts with actual expenditures. 6. Expenditures must be supported by the Town’s written procedures for determining the allowability, reasonableness, and allocability of costs. Control Activities: • A recommended practice is to set up a grant project ordinance to separately account for and track expenditures of ARP/CSLFRF funds. • Utilize a financial management system that meets the standards outlined in 2 CFR 200.302. Segregation of Duties: Duties and functions related to financial reporting are segregated to ensure no one person has control over all parts of a financial transaction. Documentation: Documentation of financial transactions is complete and accurate and facilitates tracing the transaction from authorization and initiation through disbursement. • Administrative Services Director or their designee shall ensure that, at a minimum, accounting records evidencing authorizations, obligations, and expenditures of ARP/CSLFRF funds are created and retained according to record retention requirements. • Source documentation is retained, including paid invoices, payrolls, time and attendance records, contracts, and subaward documents. 8 Internal Control Policy: ARP/CSLFRF Award © 2022. School of Government. The University of North Carolina at Chapel Hill. Reporting: Administrative Services Director or their designee shall prepare monthly reports for the governing board that includes updates for grant project expenditures and a comparison of budget to actuals. Reconciliation: General ledger and subsidiary ledgers used to account for the receipt and disbursements of ARP/ CSLFRF funds are reconciled monthly against account balances by someone who does not have record-keeping/bookkeeping functions. Communication & Monitoring: The Administrative Services Director or their designee is responsible for communicating the financial management requirements and associated control activities to the appropriate personnel. All employees within the finance and accounting office have responsibility for internal controls, including the ongoing assessment of the effectiveness of internal control activities over the financial management system. Eligibility (See Award Terms & Conditions for ARP/CSLFRF Eligibility Requirements) Overview: The unit is responsible for ensuring ARP/CSLFRF funds are expended on eligible projects and programs. The process for making eligibility determinations is described in the Town’s Eligible Use Policy. Objectives: 1. Ensure that supported projects and programs under the ARP/CSLFRF are eligible under one of the expenditure categories. (Eligible uses include projects identified in the Final Rule that fit within one of the four eligible use categories: COVID-19/Negative Economic Impacts, Revenue Replacement, Premium Pay, Investment in Necessary Broadband and Water/Sewer Infrastructure.) 2. Document eligibility review and project determinations. 3. Establish processes to ensure funds are not expended on ineligible uses. (Prohibited uses include bulk deposits into pension funds, debt services, replenishing financial reserves, the satisfaction of settlements and judgments, support for programs that undermine the effort to stop the spread of COVID-19, and any use that would violate state or local law.) Control Activities: • Eligible Use Policy: The Town has adopted an ARP/CSLFRF Eligible Use Policy that explains the eligible uses of ARP/CSLFRF award funds and includes the Town’s process for reviewing and documenting eligibility determinations. • Authorization: Administrative Services Director or their designee has reviewed applicable Treasury guidance, including the Final Rule, and has trained staff to conduct initial eligibility reviews for all project or program requests. Internal Control Policy: ARP/CSLFRF Award 9 • Documentation: Each department is encouraged to use the SOG’s Sample Eligibility Worksheet to document the review process. This documentation is retained for the five-year record retention period. Administrative Services Director or their designee is responsible for overseeing compliance with documentation and record retention requirements. Communication & Monitoring: Management will communicate eligibility requirements and project determinations internally to staff and externally to community members and stakeholders. Management will periodically review a sample of eligibility determinations to ensure that documentation is being maintained and that the supported projects are eligible. Allowable Costs/Cost Principles, 2 CFR §§ 200.400 to 200.476 Overview: The Uniform Guidance Cost Principles provide guidance on how to charge specific items of cost to a federal award. A written Allowable Cost/Cost Principles policy is required for compliance with 2 CFR 200 § 202. Cost items charged using Revenue Replacement ARP/CSLFRF funds are subject to an allowable cost review. Cost items charged under the COVID-19/Negative Economic Impacts and Infrastructure Investment categories are subject to additional compliance requirements, including the Selected Item of Cost review. See Final Rule FAQ 13.15. Objectives: 1. Ensure all costs charged to the federal award are allowable as defined in the Uniform Guidance, Subpart E—Cost Principles. 2. Consistently apply local policies to both federally financed and non-federally financed activities. 3. Treat costs consistently as direct or indirect costs. 4. Adequately document evidence of allowable cost review and other compliance requirements as necessary. 5. When applicable, appropriately charge indirect costs using either the Negotiated Independent Cost Rate Agreement (NICRA) or the de minimis rate of 10 percent. Control Activities: • Policy: The Town has adopted an Allowable Cost/Cost Principles Policy, as required by 2 CFR 200.302. • Segregation of duties: When possible, duties are segregated between those who initiate, approve, and record financial transactions. • Training: Management trains staff to conduct an allowable cost review in compliance with the UG Cost Principles. (See Cost Principles Policy for specific compliance requirements.) 10 Internal Control Policy: ARP/CSLFRF Award • Documentation: Administrative Services Director or their designee shall ensure that documentation evidencing compliance with the Cost Principles is created and maintained through December 31, 2031. At a minimum, cost items will be reviewed for allowability prior to being charged to the federal award. Communication & Monitoring: Management shall ensure that staff is adequately trained to recognize allowable costs and associated compliance requirements for each eligibility category. Management shall periodically test the control activities by reviewing a sample of cost items charged to the ARP/CSLFRF award for allowability. Management will also test whether costs are charged to the proper project codes within the grant project ordinance. Period of Performance (See Award Terms and Conditions) Overview: The Period of Performance covers the period of time the Town may obligate and expend ARP/ CSLFRF funds. ARP/CSLFRF funds must be used for costs incurred between March 3, 2021, and December 31, 2024. For a cost to be incurred, the funds must be obligated (e.g., contract executed/pre-audit stage). All obligated funds must be expended by December 31, 2026. Any unspent award funds must be returned to the Treasury. Objective: Ensure that all obligations and expenditures are incurred during the ARP/CSLFRF award’s period of performance. Control Activities: • Management reviews obligation dates to ensure that all obligations are made for costs incurred between March 3, 2021, and December 31, 2024. • Management trains staff to review obligation and expenditure dates on contracts, or when performing eligibility and allowable cost reviews. Communication & Monitoring: Management shall communicate pertinent dates, including the period of performance, to any staff responsible for obligating or expending federal award funds. Periodic testing by management will ensure that all obligations are incurred between March 3, 2021, and December 31, 2024. Internal Control Policy: ARP/CSLFRF Award 11 Procurement, Suspension & Debarment, 2 CFR §§ 200.317 to 200.327 Overview: Expenditures of ARP/CSLFRF funds under the revenue replacement category are exempt from federal procurement. When expending ARP/CSLFRF funds in other expenditure categories, the unit is required to adopt written procurement procedures and follow all federal procurement rules outlined in the Uniform Guidance (2 CFR §§ 200.318–200.327) as well as its own internal policies. Where established local or state rules are more strict than federal rules, the recipient must follow the most restrictive rule. Objectives: The Town recognizes it must satisfy the minimum federal procurement requirements, as follows: 1. Adopt a written procurement policy that considers the procurement standards in § 200.318, which includes bidding contracts in compliance with federal bidding thresholds, oversight of contractors’ performance, and maintaining records to document the history of procurements. 2. Provide full and open competition in conducting procurements, consistent with the standards outlined in § 200.319 and § 200.320, which allow for non-competitive procurements only in limited circumstances. 3. Comply with the requirements of § 200.320(a) when using the micro- purchase and small purchase methods of procurement. 4. Use the sealed bids method for procurement contracts exceeding the simplified threshold. Utilize the competitive proposals method when sealed bidding is not possible. 5. Ensure noncompetitive procurement methods meet the conditions set forth under § 200.320(c). 6. Perform a cost or price analysis for every procurement action in excess of the simplified acquisition threshold, including contract modifications. 7. Pursuant to 2 CFR 200.319(b), if a firm assists in the development or drafting of specifications, statements of work, or bids or RFPs, the firm must be excluded from competing for the procurement. 8. Ensure that all contracts include the applicable contract provisions required by § 200.327 and described in Appendix II of 2 CFR 200. 9. Verify that a contractor is eligible by reviewing the suspended and debarred list on SAM.gov. 10. Restrict access to sensitive contractor information, such as Social Security numbers or federal tax ID numbers. 12 Internal Control Policy: ARP/CSLFRF Award General Procurement Control Activities: • Procurement Policy: The Town maintains documented procurement procedures that are consistent with the standards outlined in §§ 200.317 through 200.327. This policy contains detailed processes and control activities for procurements made with federal funds. • The Board must approve the following types of contracts [INSERT GOVERNING BOARD CONTRACT APPROVAL PROCESS]. • [INSERT POSITION] is responsible for monitoring and documenting the performance of a contract for compliance with contract terms, conditions, and other specifications. • Prenumbered purchase orders are used. • A pre-audit certificate that is signed by the finance officer or designated deputy is attached to all purchase orders, invoices, or other contract obligations. • Ensure purchasing forms have multiple copies so other departments, such as receiving and accounts payable, can be notified of the authorization. • Micro-purchases may be awarded without soliciting competitive quotes if a determination is made that the price is reasonable. • Cost items shall be reviewed for allowability pursuant to the review process set forth in the Allowable Cost Policy. • [INSERT POSITION] is responsible for identifying qualified vendors and rotating purchases made under the micro-purchase threshold among different suppliers. Management shall periodically check compliance with this control activity. • [INSERT POSITION] shall verify that contractors are not on the suspended or debarred list. A screenshot of the record check shall be maintained. • Access to sensitive contractor information, such as Social Security numbers or federal tax ID numbers, is restricted. Segregation of Duties: • Duties are segregated between authorization, custody, record-keeping, and reconciliation. • The person who sets up new contractors in the accounting system or edits information on existing vendors (record-keeping) is not the same as the person writing the checks (authorization). • Reconciliations are performed by an employee who does not have record-keeping duties. • Invoices and other supporting documentation are thoroughly reviewed prior to the invoice being approved Documentation: Documenting the history of procurements is a top internal control priority for the Town. All request personnel shall be trained on documentation and record retention policies. [Ideally, management will require the use of standard forms and templates for purchase orders, contracts, requests for proposals/bids, cost/price analyses, bid evaluation, etc.] • Bid documents shall reflect all steps in the procurement process, including: 1. bid specifications and proof of advertisement (if required), 2. bid submissions 13 Internal Control Policy: ARP/CSLFRF Award 3. evaluation criteria if applicable 4. basis for contractor selection or rejection, 5. justification for lack of competition, when applicable, 6. basis for award cost or price, and 7. contract agreement, including required UG contract clauses. • Source documentation relating to procurements must be retained and should include sufficient details to support the transaction, including: 1. cost and quantity of items purchased, 2. model numbers, 3. purchase orders with and pre-audit certificates, and 4. personnel who authorized the sale, if applicable. • All records shall be maintained for a period of five (5) years after the ARP/CSLFRF period of performance (through December 31, 2031). Communication & Monitoring: Management shall ensure purchasing and finance staff understand federal procurement laws. Additional training shall be provided as necessary. Management will periodically review purchase orders and contracts to ensure that all charges are accounted for in the period in which the cost occurred and fall within the period of performance. Property Management, 2 CFR §§ 200.310 to 200.316 Overview: Except for property, supplies, or equipment acquired using revenue loss funds, the unit must follow the applicable provisions of the Uniform Guidance regarding property standards (2 CFR 200.310–316), subject to the requirements set out in FAQ 13.16. Per FAQ 13.16, during the period of performance, the Town may use property, supplies, or equipment purchased with ARP/CSLFRF funds for a purpose other than the purpose for which the initial purchase was made, provided the new use is consistent with another eligible use. After the period of performance, the Town is more limited in how it may use the property purchased with ARP/CSLFRF funds. Objectives: 1. Ensure real property, personal property, supplies, and equipment are used in compliance with the UG property standards (2 CFR 200.310– 316), and subject to the requirements set out in FAQ 13.16Ensure documentation is maintained to substantiate any determination on whether the use of an asset is authorized for a particular purpose during and after the award period of performance. 2. Establish adequate safeguards to prevent loss, damage, or theft of property. 3. Follow adequate maintenance procedures to keep equipment in good condition. 4. Ensure proper disposition of real property and equipment in accordance with § 200.311(c) and § 200.313 (e). Control Activities: • Insurance Coverage: Purchase equivalent insurance coverage for real property and equipment as is provided to other property owned by the Town. 2 CFR § 200.310. 13 Internal Control Policy: ARP/CSLFRF Award •Property Management Policy: The Town has adopted a Property Management Policy that sets forth property management processes, including procedures for record-keeping, reporting, and disposition responsibilities for real and personal property. •Real Property Reporting: Administrative Services Director or their designee shall oversee the annual reporting requirements for any real property or personal property acquired with federal awards funds. Standard Form 429 shall be used to report real property and the Standard Form 428 shall be used to report tangible personal property, including equipment. •Equipment Management: The Town has procedures for managing equipment, whether acquired in whole or in part under a federal award, until disposition takes place. The Town will, at a minimum, meet the following requirements: 1. Maintain equipment records that include a description of equipment, serial number/ model number, source of funding, acquisition date, location and condition of equipment, unit acquisition cost, and final data, including date of disposal, sales price, and method used to determine fair market value. § 200.313(d). 2. Ensure adequate safeguards to prevent loss, damage, or theft of property. Such safeguards may include attaching property tags to federally owned equipment that includes the FAIN. Any loss, damage, or theft will be investigated. § 200.313(d). 3. Regular maintenance will be performed to keep the property in good condition. 4. A physical inventory of equipment will be performed, and the results reconciled with the property records, at least once every two years. 5. If the Town is authorized or required to sell equipment, proper sales procedures will be used to ensure the highest possible return. Communication & Monitoring: Management will train employees to understand the various compliance requirements set forth in the Uniform Guidance property management standards. Periodic testing of established controls shall be performed to ensure that all reporting and property management requirements are satisfied for both real property and equipment. Internal Control Policy: ARP/CSLFRF Award 14 Policy Checklist Required UG Policies: The following policies are required to ensure compliance with the Uniform Guidance: •Eligible Use Policy (details the allowable activities under the ARP/CSLFRF award), •Cost Principles/Allowable Cost Policy, and •Conflict-of-Interest Policy. Optional UG Policies: These policies should be adopted if the programs or activities undertaken by the unit trigger compliance with any of the following UG compliance requirements: •Subaward Policy, •Property Management Policy, and •Program Income Policy. Required Policies Under the ARP/CSLFRF Award Terms & Conditions: •Procurement Policy, •Records Retention Policy (ARP/CSLFRF records shall be maintained for five years after the period of performance), •Civil Rights Compliance Policy, and •Nondiscrimination Policy. Expenditures of revenue replacement ARP/CSLFRF funds are exempt from UG procurement. State and local procurement requirements apply. Any unit that triggers a federal Single Audit, even if only expending funds under revenue replacement, must adopt written procurement procedures and procure single audit services in accordance with 2 CFR §§ 200.320 and 200.509. AGENDA ITEM SUMMARY Date of Meeting: May 12, 2025 Staff Work By: Landon Chandler, Planning Director AGENDA ITEM Board of Adjustment Review ITEM SUMMARY Review Rules and Procedures for a Board of Adjustment Meeting RECOMMENDED ACTION None AGENDA ITEM #3 Lillington Board Of Adjustment Categories of Decisions of Appointed and Elected Boards 1.Legislative 2.Quasi-Judicial 3.Advisory 4.Administrative Quasi-Judicial Decisions •Involve the application of ordinance policies (the UDO) to individualsituations •Examples: Variances, Special-Use Permits, Appeals of Zoning Administrator’sAdministrative Decisions •Involve two key elements: 1.Findings of Fact 2.Exercise of judgment and decision Quasi Judicial Hearings •BOA is subject to Open Meetings law (G.S. 143-318.9 – 143-318.18) •All meetings must be open to the public •Closed sessions only permitted for limited purposes (i.e. receive legal adviceregarding pending litigation) •Must deliberate and discuss matters in open session •Must provide public notice of meetings •Liability •Limited exposure to personal liability as a result of actions while on BOA •Exceptions: Intentional Torts (i.e. assault) or Willful Misconduct (i.e. intentionally denyinga permit because of a personal vendetta against the applicant •Good faith mistakes or errors in judgment do not expose members to liability Preliminary Matters Quasi Judicial Hearings •Must mail notice of hearings to the following: 1.The applicant 2.The owner of the affected property 3.The owner of abutting properties 4.Anyone else required to receive notice under the UDO •Public Notice of the meeting must be posted on the site that is the subject of the hearing or on adjacent street or highway right-of-way Preliminary Matters Quasi-Judicial Hearings •Burden of Proof •The person requesting a variance or special-use permit has the burden of producingsufficient evidence to conclude the standards have been met •If conflicting evidence is presented, the BOA must determine which facts it believesare correct •Subpoenas •BOA has authority to issue subpoenas to compel testimony or to produce evidence •Requests for subpoenas and objections to subpoenas are made to the Chair prior tothe hearing, who then rules on and issues the subpoena. •Subpoenas shall only be issued if the Chair determines it to be relevant, reasonable in natureand scope, and not oppressive •The Chair shall rule on any motion to quash or modify a subpoena •If an individual appeals the Chair’s ruling, the full Board shall make a ruling Conduct of Hearings Quasi-Judicial Hearings •Collecting Evidence •The applicant, the Town, and any person who would have standing to appeal may participateas a party at the hearing •Other witnesses may present competent, relevant evidence as allowed by the BOA •Parties to the action have the right to cross-examine witnesses •All questions and comments must funnel through the board. Applicants and audiencemembers should not address anyone other than the chair. •All witnesses providing testimony must be put under oath. All those who wish to speak mustbe sworn in. “Do you swear [or affirm] that the evidence you shall give to the board in thisaction shall be the truth, the whole truth, and nothing but the truth, so help you God?” •Hearsay testimony generally not allowed •The BOA may receive hearsay testimony, but must decide the weight or credibility of such evidence •Time Limits on Testimony •Chair can limit unduly repetitious or irrelevant testimony •Cannot set an arbitrary time limit on the hearing or testimony Conduct of Hearings Quasi-Judicial Hearings •Collecting Evidence •Opinions should be limited to qualified expert witnesses. •Use of opinion testimony is prohibited by nonexperts on how a project would affectproperty values, how traffic would affect public safety, and any other matter whichwould require an expert. •Exhibits •Witnesses may present exhibits such as photos and maps. •Once presented for consideration by the BOA, the exhibits become part of the record. •Each exhibit should be labeled and numbered as received into evidence. •Objections •The Chair must rule on all objections as they are made by a party •Objections are “sustained” or “overruled” •Rulings by the Chair may be appealed to the full board Conduct of Hearings Quasi-Judicial Hearings •Summarizing Evidence and Findings •BOA’s decision must be reduced to writing •The decision must be based upon competent, material, and substantialevidence in the record •Cannot use outside evidence. Must rely on what’s presented to the BOA •BOA must decide which facts are credible and apply them to the applicablestandards •Cannot simply state that a standard has been met •Written decision must be signed by the Chair and filed with the clerk to theboard. •When hearing an appeal, the written decision may reverse, affirm, wholly orpartly, or may modify the decision appealed from and make any order,requirement, or decision, or determination that should be made. Conduct of Hearings Quasi-Judicial Hearings •Voting •Most decisions require a simple majority of the BOA (i.e. special use permits,reviewing Administrator determination) •Variances require a 4/5 majority •If an individual has been recused due to a conflict or if there is a vacant seat, thatindividual or vacancy are not considered when computing the required majority •Precedents •Prior decisions are not legally binding on the BOA •Each case must be decided on its own individual merits •BOA should be aware of previous decisions and try to reach similar results for similar cases •Continued Hearings •If conducted over multiple days, a member may miss part of the hearing, but must bepresent when a vote is called •Must review minutes or recording if absent for part of the hearing Conduct of Hearings Quasi-Judicial Hearings •Conflicts of Interest •Parties have a constitutional and statutory right to an impartial decision maker •Members must recuse themselves if they have a conflict of interest •Includes discussions of an issue and voting •Types of Conflicts •Financial impact •Bias •Undisclosed ex parte communication •Close family or business ties Conduct of Hearings Quasi-Judicial Hearings •Every quasi-judicial decision is subject to review by the superior courtin the nature of certiorari. Ref.§ 160D-1402 •Superior Court hears and decides all issues raised by the petition by reviewingthe record •Court may also allow the record to be supplemented with affidavits, testimony,documentary, or other evidence to the extent that the record is not adequate to allow anappropriate determination •The Court may affirm, reverse and remand the case with appropriateinstructions, or remand the case for further proceedings •The Court may also an injunctive order requiring a party to take certain action or to refrain from taking action. Appeals Types of Quasi-Judicial Decisions •Variances •Purposes is to give an owner permission to do something that is contrary to requirements of the UDO •A powerful tool that is subject to substantial abuse if not carefully administered •Variances are not substitutes for amendments to the UDO •Can’t let own judgment dictate what the UDO should be •May be granted only if 3 general standards are met: 1.Applicant must show that strict application of rules would create unnecessaryhardships 2.Applicant must show that the variance would be consistent with intent and purpose ofthe UDO 3.Applicant must show that variance would be consistent with overall public welfare andsubstantial justice will be done (i.e. it can’t create a nuisance or violate other laws) Types of Quasi-Judicial Decisions •Special Use Permits •Proposed land that is not permitted by the zoning district, but use is in keeping with the intent and purposes of the zoning district. •Must determine an impact on the area around that property. 1.Does not materially endanger public health and safety 2.Meets all required conditions and specifications 3.Does not substantially injure the value of adjoining property 4.Must be in harmony with surrounding area and in general conformance withcomprehensive plan •May set specific conditions such as buffering and landscaping, setbacks,minimum lot sizes •Conditions must be related to the standards that are already set in the UDO Types of Quasi-Judicial Decisions •Appeal/Review of Administrative Decision •Persons with standing may appeal a staff determination. •Must allege there is an error in any order, requirement, decision, interpretation, or determination made by staff. •Must state the grounds for the appeal •Staff that made the determination must appear as a witness •BOA should give due consideration to the professional judgment of the zoning administrator, taking into account his or her training and experience •However, the BOA must make its own independent assessment of what the terms of the UDO mean and the intent of the governing board that adopted the UDO. •Can’t let personal opinion dictate what the UDO should say •BOA has authority to waive penalties if staff determination is overturned or amended UDO References… •Membership and Quorum •1. The Board of Adjustment shall consist of five voting members from within the town corporate limits and two voting members from the extraterritorial jurisdiction (ETJ) of the town. The five voting members of the Town Board of Commissioners shall serve ex officio as the five intown representatives on the Board of Adjustment. •2. The two out-of-town members shall serve three-year terms and shall be appointed by the County Board of Commissioners or as otherwise provided by the NCGS. •3. ETJ members shall have the right to vote upon matters arising within the corporate limits. In addition, there shall be one in-town alternate and one ETJ alternate. The in-town alternate shall be the Mayor ex-officio as described below. •4. The Mayor of the town shall serve as the Chairperson of the Board of Adjustment. •5. The Chairperson may not vote on matters before the Board of Adjustment unless fewer than six members are present and the Chairperson’s participation would create a quorum. •6. The Mayor pro-tem shall serve as Vice Chairperson but retains the right to vote on all matters before the Board. 7. The Administrator shall serve as Clerk to the Board of Adjustment. …UDO References Continued •8. Meetings of the Board shall be held at the call of the Chairpersonor at such other times as the Board may determine. •9. The Chairperson, or in his or her absence, the Vice Chairperson, may administer oaths and compel the attendance of witnesses. •10. All meetings of the Board shall be open to the public. The Boardshall keep minutes of its proceedings, showing the vote of eachmember or his or her absence or failure to vote and of its other official actions. •11. A quorum of five members shall be necessary to transact business(four in-town members and one ETJ member). AGENDA ITEM SUMMARY Date of Meeting: May 12, 2025 Staff Work By: Joseph Jeffries, Town Manager Lisa Young, Assistant Town Manager Alicia L. Adams, Administrative Services Director Ashley Wimberly, Public Works Director Frank Powers, Police Chief John Bethune, Fire Chief William Baker, Parks & Recreation Director Brandon Harris, Assistant Parks & Recreation Director Josh Perry, Planning & Inspections Christy Norris, Youth Programs AGENDA ITEM Administrative Reports. ITEM SUMMARY Monthly reports covering administrative and department activities, financial summaries and public utility usage information RECOMMENDED ACTION Receive information and direct staff, if applicable. AGENDA ITEM #4 AGENDA ITEM SUMMARY Date of Meeting: May 12, 2025 Staff Work By: Joseph Jeffries, Town Manager Lisa Young, Assistant Town Manager Lindsey B. Lucas, Town Clerk AGENDA ITEM Discussion of Regular Meeting Agenda ITEM SUMMARY The purpose of this agenda item is to allow the Town Board an opportunity to ask questions regarding the Regular Meeting agenda for May 13, 2025. RECOMMENDED ACTION No Action Required. AGENDA ITEM #5 AGENDA ITEM SUMMARY Date of Meeting: May 12, 2025 Staff Work By: Joseph Jeffries, Town Manager AGENDA ITEM CLOSED SESSION ITEM SUMMARY The purpose of the closed session per NCGS §143-318.11(a)(5) § 143-318.11. Closed sessions. (a)Permitted Purposes. - It is the policy of this State that closed sessions shall be held onlywhen required to permit a public body to act in the public interest as permitted in this section. A public body may hold a closed session and exclude the public only when aclosed session is required: (5)To establish, or to instruct the public body's staff or negotiating agents concerning the position to be taken by or on behalf of the public body in negotiating (i) the price and other material terms of a contract or proposed contract for the acquisition of real property by purchase, option, exchange, or lease; or (ii) the amount of compensation and other material terms of an employment contract or proposed employment contract. RECOMMENDED ACTION Approve motion to move into closed session discussion. AGENDA ITEM #6