council member byron buckels (in 6:05 p.m.) council member

MiNUTES OF MEETING OF THECITY COUNCIL OF THE CITY OF SANFORD

SANFORD, NORTH CAROLINA

The City Council met at the Sanford Municipal Center, 225 E. Weatherspoon Street, on Tuesday,October 15, 2019, at 6 p.m., in Council Chambers. The following people were present:

Mayor T. Chet Mann Mayor Pro Tern Rebecca Wyhof SalmonCouncil Member Byron Buckels (in 6:05 p.m.) Council Member Sam GaskinsCouncil Member Jimmy Haire Council Member James Williams (in 6:10 p.m.)Council Member Charles Taylor Council Member Norman Charles Post, IIICity Manager Hal Hegwer City Attorney Susan PattersonCity Clerk Bonnie Davis Deputy City Clerk Vicki Cannady

CALL TO ORDERMayor Mann called the meeting to order. Council Member Taylor led the invocation. The Pledge

of Allegiance was recited.

PUBLIC COMMENT (Exhibit A)Mandy Moss, of 299 Perry Pond Road, Sanford, read information about Sanford from the WRAL

website paid for by SAGA, including information on new businesses, our growing life sciencescommunity, central location, robust business environment, downtown revitalization, job recruitment,and community pride. She noted that industrial space is available on Colon Road at the 400-plus acresite proposed for the Galvin’ s Ridge subdivision, where utilities are already available across from theexisting industrial park.

Ron Noles, of 2009 Cedar Lake Road, stated that the proposed Galvin’ s Ridge project does notconform to the County development plan and if Council does not follow those guidelines, a precedentwould be set for any future development. Since the last meeting, he stated that the paving contractors onthe Deep River Road project have commented in the community that they were to put their work on holduntil decisions on this project were made. He stated that that neighborhood residents do not want to stopprogress but want to ensure that Lee County and the Deep River area can become model communitiesthat others in the country would seek to emulate.

Rodney Wilder, of 1204 Zion Church Road, explained that property is valued by evaluating salesof comparable properties in comparable neighborhoods. He noted that homes in Deep Riverneighborhoods such as Doe Roe, Copper Ridge and Providence Landing range from $225,000 to$450,000 but the builder’s representative confirmed that homes in Galvin’s Ridge will be entry-level.He also suggested that the developer will not have a representative onsite after development concludesand many people moved here to get away from what is proposed at Galvin’s Ridge. He encouragedCouncil to allow the property to remain for industrial use.

Teresa Wall, of 363 Perry Pond Road, responded to the question of how neighborhood residentswould respond if the Colon Road property were to remain commercial and businesses locate there. Shestated that Council members were elected to represent the best interests of citizens of Sanford, includingthe Deep River conununity. She questioned whether this is the type of impact Council members want tobe known for and encouraged Council members to vote with the mindset that if they wouldn’t want thisdevelopment in their own backyard, they shouldn’t expect Deep River residents would want it in theirs.

City Council MeetingOctober 15, 2019

She stated they aren’t opposed to growth, industrial or residential, but the proposed development goesdirectly against the UDO, Land Use Policy and valid concerns brought by the community before Council.

Jerry Atkins, of 270 Atkins Lane, suggested that guidelines regarding non-compatible residentialuses are not being followed and questioned what happens when a development such as Galvin’ s Ridgelocates to a community such as Highway 55 in Apex and Morrisville or extends down Highway #1, andbegins to transform our county into another bedroom community for Wake, Orange and Durhamcounties. He suggested that Deep River residents who have spoken to Council prove Deep River is astrong community of respectful, mindful, persistent citizens who did their homework to present theircase against the development. He also suggested that the issue is about money and power and suggestedthat using the property for industry would generate more money with less expense for infrastructure andschools and lower congestion. He also noted that the Colon Road property is located in the City butCouncil’s decision will impact the Deep River community, where the citizens have no Cityrepresentative and no accountability at the ballot box since they can’t vote.

APPROVAL OF AGENDAMayor Pro Tem Salmon made the motion to approve the amended agenda. Seconded by Council

Member Buckels, the motion carried unanimously.

CONSENT AGENDAApproval of City Council Work Session Minutes Dated July 9, 2019 (filed in Minute Book 9$)Approval of City Council Meeting Minutes Dated July 16, 2019 (filed in Minute Book 98)Approval of Special City Council Meeting Minutes Dated August 6, 2019 (filed in Minute Book 9$)Approval of City Council Work Session Minutes Dated August 13, 2019 (filed in Minute Book 98)Approval ofJoint Interlocal Committee Meeting Minutes Dated August 16, 2019 (filed in Minute Book 9$)Approval of Special City Council Meeting Minutes Dated September 10, 2019 (filed in Minute Book 9$)

Council Member Haire made a motion to approve the Consent Agenda; seconded by CouncilMember Gaskins, the motion carried unanimously.

SPECIAL AGENDARecognition of Citizens Academy Graduates

Mayor Mann explained that Citizens Academy is an interactive twelve-week twelve sessionseries that educates residents about the municipal decision-making process. Participants get to see howand why City departments function the way they do. The aim is to create better informed and engagedcitizens and there have been more than 150 graduates to date. Public Information Officer Kelly Millershared a short video of the sessions. Mayor Mann presented certificates and ceremonial keys to the Cityto participants, including Melissa Caddick, Christine Cline, Rosalinda Cruz, Christine Hilliard, EmilyMierisch, Allison Sills, Joseph Brad Simpson, Jennifer Soper, and Lynn Ziobro. Participants who werenot present but were recognized included Val Marcy, Stephanie Phillips and Tomitha Zimmerman.

Recognition of Jonesboro Rotarian Terry McMillianMayor Mann explained that Terry McMillian was being recognized because of his service to

Sanford and Lee County. He graduated from W.B. Wicker High School; earned his Bachelor’s degreefrom Campbell University and Master’s degree from NC A&T University; retired from the Marine Corpsin 1995 and did contract work with the military after retiring. He now resides in Cameron and ownsBrick Capital Video, donating countless hours of video for community events over the past years. Hehas been recognized as a Paul Harris Fellow by the Jonesboro Rotary Club and recently filmed events

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for the visit by the Sister City delegation from Atizapan, Mexico. Mayor Mann thanked Mr. McMillianfor his work and his service to our country.

CASES FOR PUBLIC HEARINGPublic Hearing- Franklin Drive Waterline Petition (Exhibit B)

City Engineer Paul Weeks explained that this petition involves six parcels with an estimatedconstruction cost of $53,000. The per lot cost is $8,235 which will be assessed to the homeowners andthe City will finance at eight percent annual interest for ten years. Three of the five property ownershave signed the petition (60 percent) and they own three of the six lots (50 percent). Maps show thegeneral location of the project between Chancellor’s Ridge and Pendergrass Road and the actual projectmap involving about 640 feet of waterline extending south from Chancellor’s Ridge on Franklin Drive.

Mayor Mann opened the public hearing.

Meghan Chewning, of 408 South Franklin Drive, stated that she is seeking City water for herfamily and neighbors and explained why it is the only way they will have access to safe, clean drinkingwater. The subject properties are located just outside the city limits, with her home being about 450 feetfrom the entrance to Chancellor’s Ridge, which is in the city limits and is served by city water. One ofher children has a hyperplastic right heart with only one working ventricle. Her home is served by wellwater and the testing done prior to purchase indicated it was safe to drink; however, after HurricaneFlorence in September 2018, well water ran brown and tested positive for bacteria and has consistentlytested positive for total coliform bacteria since that time (Exhibit B-2, page 3). The NC Department ofHealth and Human Services says that most coliform bacteria will not likely cause illness but thosebacteria are used as indicators because their presence indicates disease-causing organisms. Since theirson has a health issue, they do everything possible to keep him healthy, including providing safe, cleandrinking water. Bacteria, which cannot be easily filtered out of water, must be killed by ultra-violet lightin a filtration system or chemicals. Tests by the Lee County Environmental Health Department (ExhibitB-2, page 5) indicated, among other things, the iron level in the ground water is more than 760 percenthigher than acceptable, so they do not allow their children to drink the water and don’t cook or rinseproduce with it.

For the last year, she and her neighbors have researched options such as grants and privatecontractors but none will work for this situation. They had their well updated, hoping that was the issue,and they were given two options: update it or dig a new one. They worked on theirs, hoping it wouldbe cheaper than digging a new one, and spent more than $5,000 on a new wellhead, pump, screen andgravel on their well that is more than 95 feet deep, so there are no issues with the quantity, just thequality. After work was completed, the well was “shocked” (chlorinated to disinfect it after opening thewellhead) several times but clear bacteria readings are available only immediately after it has been“shocked,” suggesting it is not an issue with the well but with the groundwater. Once the water circulatesand replaces the chlorinated water, bacteria is re-introduced into the system. After talking withneighbors, who have baffled water issues for years, the majority on their section of the street determinedthey need City water and after exploring all options, found the only feasible option is to tap onto Citywater and noted that they are surrounded by City water (Exhibit B-2, pages 9 and 10).

Regarding the petition, Mrs. Chewning explained that they came to the City in October 2018 tobegin the process, including estimating costs for each property owner since infrastructure costs are paidtotally by homeowners. She was told that the entire road would be included but approval of only 50percent of property owners were needed to move forward. Petitions for the parcels shown on Exhibit

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B-2, page 11, came out in December and this petition had support of 60 percent of property owners asshown by green circles on Exhibit B-2, page 12. Only one parcel owner, who owns a rental house onone side of Franklin Drive and a vacant lot on the other side (listed for sale at $96,500 when they movedinto their home in August 2018) did not sign this petition. After this petition was submitted, they weretold a title search would be done and after the search was done, the petition was revised to add a lot asshown on Exhibit B-2, page 13 (see next paragraph) and the owner of that lot did not sign the petition.This brought the owners’ approval rate down from 60 percent to 50 percent; however, she noted thatthe 50 percent of the owners who approve represent more than 50 percent of the road frontage, themeasure used by the City to calculate the cost of the first petition. She informed Council that this fightfor clean, safe drinking water that is less than 500 feet from her doorstep is a fight she did not anticipateand concluded by repeating what she was told at City offices when this process began: water is abusiness for the City. She stated that she and her neighbors need safe, clean drinking water; they needto be customers of the City’s Water Department; they will make excellent customers; and requested thatCouncil approve the petition.

Mr. Weeks confirmed that notices were mailed to all affected parties on October 2, as certifiedby the City Clerk. A notice of this public hearing was advertised in The Sanford Herald on October 3and in that time period, one call was received from Ronald Miller, of 320 South Franklin Drive, whostated his opposition to the project because he cannot afford it and staff encouraged him to attend thishearing. Regarding changes to the petition described above, he explained that the original petition wasfor the full length of Franklin Drive from Chancellor’s Drive to Pendergrass Road since it has no accessto city water but when the petition was returned, a majority of homeowners did not support the projectso the project was reduced, originally to five lots but then the Miller lot was added. There is a smallsection of land north of his property that adjoins Chancellor’s Ridge that staff believed was right-of-way but it is owned by the homeowners’ association and an easement would be needed to access thewaterline so the Miller lot was included in the petition. He also confirmed that staff has not heard fromMichael Coldren, who owns two lots (a vacant lot between the Chewnings and Miller and a rental houseacross the street) included in the project and did not sign the petition. Mr. Weeks confirmed the Citywill finance the $8,835 cost per lot at eight percent annual interest for up to ten years, with an annualpayment of $1,317. He confirmed that staff guidelines call for approval of those who own more than50 percent of the lots and this petition has the approval of 60 percent of the property owners who own50 percent of the property. The City Manager added that this is a staff guideline and Council hasauthority to determine what percentage is adequate to direct that the project be undertaken.

Stephen Chewning, of 403 South Franklin Drive, informed Council that he and his wife havetried everything they can to get clean, safe drinking water and this process is their only option.

Council Member Buckels questioned whether there were any options or suggestions other thanassessing those who don’t want this project to proceed. Mr. Hegwer explained there are no other optionsat this point. Mayor Mann noted that issues are generally supported or opposed overwhelmingly andthis is almost evenly split but the decision is up to Council. Mr. Hegwer commented that value wouldbe added to the vacant lot that currently does not have water.

With no other speakers or questions, Mayor Mann closed the public hearing.

• Resolution Directing that the Project be Undertaken (Exhibit B-3)Council Member Post made a motion to approve the Resolution Directing that the Projectbe Undertaken. Seconded by Council Member Gaskins, the motion carried unanimously.

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Public Hearing- Community Development Block Grant (“CDBG”) for Project ForgeCity Engineer Paul Weeks explained that the City will be applying for three grants on Project

Forge and Catherine Renbarger, with WithersRavenel, the City’s grant writer and administrator, willprovide information on the process.

Mayor Mann opened the public hearing.

Ms. Renbarger gave a broad overview of grant-funding opportunities for the project formerlyknown as “Project Forge” (Kalyani Precision Machining, Inc. and Bharat Forge Aluminum USA, Inc.)and WithersRavenel is assisting the City with three separate applications. The first is a Golden LEAFEconomic Catalyst Grant application for $1.5 million to provide assistance with sewer infrastructure tothe site. It has been submitted and approved by the Golden LEAF board and Council will consider thatGrantee agreement later at this meeting. The second is a CDBG application for $1.25 million in economicdevelopment and sewer infrastructure funding that is administered through the Department ofCommerce. The City has submitted a pre-application for this grant and it will go before the state’s RuralInfrastructure Authority on October 17, 2019. This public hearing is a requirement of that applicationprocess and there is a three-to-one ratio match requirement: for every $3 CDBG committed, $1 localmust be committed, for a local match requirement of $416,667. They are also working on an IndustrialDevelopment Fund Utility Grant application for $500,000 administered through the NC Department ofCommerce. The pre-application for this grant will also go before the state Rural Infrastructure Authorityon October 17 and it also requires a three-to-one local match of$166,667; however, funds committed asthe match for the CDBG grant can be used as the match portion for this grant. These grants total$3,250,000 toward the roughly $4 million cost of sewer infrastructure for Project Forge.

Mrs. Renbarger explained that this CDBG application is the first of two public hearings requiredas part of the application process. Suggestions, both verbal and in writing, for potential projects arewelcome, as advertised in the Notice of Public Hearing. The range of projects eligible under CDBGinclude housing, planning, infrastructure and economic development projects. Federal funds are madeavailable annually through the US Department of Housing and Urban Development to the State ofNorthCarolina for the Small Cities CDBG program. This particular public hearing is in reference to ProjectForge and Bharat Forge Aluminum, USA. The CDBG Economic Development program in NorthCarolina is designed to benefit low and moderate-income persons through job creation and job retention.Funding eligibility is contingent upon the creation or retention of permanent full-time jobs of which atleast 60 percent are made available to persons earning 80 percent or less of the median income for thearea within the previous twelve months. As part of Project Forge, the Kalyani Group is planning to opena combined machining and forging facility which will be incorporated as two separate entities, BharatForge Aluminum USA and Kalyani Machining, Inc. This planned CDBG application would request$1.25 million in funds to assist with sewer infrastructure. As a part of the grant requirements, BharatForge would commit to creating 87 jobs by the end of 2022.

Ms. Renbarger explained that no formal action is required of Council tonight as a result of thispublic hearing and reminded Council there will be an additional public hearing as part of this grantapplication, which is tentatively planned for October 29. City Manager Hal Hegwer confirmed that thesecond public hearing will be held at a Special-Called Council Meeting on October 29, 2019 at 1:00 p.m.

Council Member Williams questioned whether the matching fund payments will be spread overten years or a lump payment. Mrs. Renbarger explained that matching funds for the CDBG Industrial

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Fund grant will be included in the City’s total construction cost of approximately $4 million for sewerinfrastructure and over $3 million will be funded through grants. Mr. Weeks confirmed that sitedevelopment is underway and a consultant with Freeze and Nichols will review that portion ofthe projectwhich will be bid in different ways and explained to Council, and roadway work is coupled with that.He reminded Council that DOT will contribute $964,600 to construct the road into the site and that isunderway as well. He hopes funds will be released in January and we can be reimbursed immediately,so as the City spends funds, we can be reimbursed up to those amounts. Ms. Renbarger confirmed thatall grant funds are reimbursement based.

With no one else speaking, Mayor Mann closed the public hearing.

DECISIONS ON PUBLIC HEARINGThere were no decisions on public hearings.

REGULAR AGENDAConsider Resolution Approving Economic Development Incentive (Exhibit C)

City Attorney Susan Patterson explained that the attached Exhibit C, the Economic DevelopmentIncentive Agreement between the City and Kalyani Precision Machining, Inc., and Bharat ForgeAluminum, USA, Inc., as principals, and Bharat Forge America as a guarantor, which was given as ahandout, replaces the drafl version of the document originally included in the agenda. The resolutionstates that the project represents an investment $170,363,980 in building construction and the purchaseof machinery and equipment and the creation of approximately 460 new jobs in Sanford, in which theCity will share approximately $5,001,166 of the cost of the project, plus an additional $700,000contributed to the City by Lee County toward site preparation costs, which includes but is not limited to,acquisition of road right-of-way, clearing, grading, preparation of a site pad and grants of approximately$3,536,024 over the ten-year life of the project; however, the total amount of future incentive paymentsmay be more or less than the above-stated amount with revenues from the City’s General Fund. KalyaniPrecision Machining, Inc., has a goal of creating 156 new full-time jobs at an annual wage of $47,992and making an investment of $43 million. Bharat forge Aluminum USA, Inc., has a goal of creating 304new full-time jobs with an annual average wage of $47,056 with an investment of $127,363,980.

On the resolution, Attorney Patterson explained that Council will need to find that the projectstimulates the local economy; promotes additional business activity; results in the creation of asubstantial number of new jobs that will pay at or above the median average wage in the City; andestimates that the City will recover its consideration for the project within ten years or less, taking intoaccount perspective tax revenue from the improvements on the property, sales tax revenue generated inthe area and other perspective tax revenues or income coming to the City as a result of the project.

Regarding the Economic Development Incentive Agreement, Attorney Patterson explained thatin addition to information stated earlier, it calls for investments to be made before December 31, 2025,and at least 80 percent of the jobs to be hired before December 31, 2026. They have a goal of creating acertain number of jobs but they will not have any penalties as long as they create at least 80 percent ofthem (in connection with both the “JDIG” grant and City grant). The City will spend approximately $2million in site preparation for road acquisition, access to public water and sewer, grubbing, grading andsite pad construction and the County will contribute $700,000 toward site preparation costs to the City.The City will seek grants described earlier, specifically $1.5 million from the Golden LEAF Foundation,$1.25 million from CDBG, $500,000 from IDF and $964,600 from the NC Department of Transportationfor an entrance road. It is projected that the City will grade the pad by January 15, 2020; acquire the road

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right-of-way by February 15, 2020; complete the road and provide access to public water and sewer byJuly 1, 2020. Ifthose milestones are delayed, the Company gets an equivalent extension to perform theirperformance measures. Ifthey are six months delayed, the Company’s performance will be extended bya year. Clawbacks are also included in this contract: ifthe Company abandons its operations or fails toinvest as required or fails to employ 80 percent of the jobs, they must reimburse a portion of the up-frontcosts for site improvements up to $2 million and the clawback decreases by one-tenth each year. If theCompanies have a change in use and fail to meet 100 percent of the investment or 80 percent of the jobs,they will pay back a pro-rata share of one-tenth of the $2 million in site preparation or actual costs, if itis less. This will be determined collectively, so one Company’s average jobs will be counted to coverthe other Company’s shortfall and the same will be done with investment. The City will also payincentive grants, which will be calculated to be an amount equivalent to 58.495% of the property taxespaid by each Company over basically ten years. If the Company fails to meet the performance criteria,the incentive will be reduced, as the taxes paid will be lower. If they create less than 20 percent of thejobs, payments are also reduced pro-rata. The Companies are required to install a state-of-the art modemfacility for the purpose of manufacturing critical components for the automobile and allied industry.

Regarding logistics for executing documents, Attorney Patterson requested that Council delegateauthority to the Mayor or Mayor Pro Tern, and City Clerk or Deputy City Clerk (depending on who isavailable) since the Companies would like to hold a signing ceremony for this agreement. She alsorequested that in the event there are any small typographical errors or other minor non-substantiveadjustments or corrections needed, the motion include authority to modify the documents.

Regarding infrastructure improvements committed to by the City, Council Member Taylorquestioned why they were co-mingled in the incentive agreement rather than being treated separately,especially with participation by the Golden LEAF Foundation. He noted that the City made someinfrastructure improvements to the site that will benefit more than this just this company but they areincluded in the agreement. Attorney Patterson explained that the agreement states that we will seek grantsto help provide for some of the infrastructure and we also need to provide infrastructure to the site paditself— that is why both aspects are included. Mr. Hegwer added that other entities and property ownerswill also benefit from those grants and the City’s participation in infrastructure costs. Attorney Pattersonnoted that the line may be run to allow another parcel to be connected to it. Mr. Hegwer noted that theagreement is tied to more infrastructure improvements than the site itself, and water and sewer inside thesite for the Company. Public Works Director Victor Czar explained that there are two separate types ofutility improvements needed: publicly owned and privately held. The publicly owned water and sewerextensions will be in excess of $4 million. Included in some of the items explained by Attorney Pattersonare “services,” such as the individual line from the public line to the building pad that was negotiated.The portion that was “co-mingled,” or included in the agreement, is actually the service that will beprivate and on property that will be owned by the company. The public portion is $4 million and therewill be additional benefits to surrounding property owners from this, including potential expansion ofindustrial property. This is being installed with the anticipation that it will be capable of handling morethan just the Kalyani project. The Kalyani site is across US Highway #1 from Caterpillar at the IndustrialPark, where the railroad track goes over going up the highway. Mr. Hegwer confirmed that this sewerextension will open this area to potential investment. Attorney Patterson explained that the Countypurchased this property and plans to retain about 20 acres for future use. Mr. Czar explained thatextending gravity sewer about one mile will help open this area to development and some landownersare interesting in partnering for potential expansion of an industrial park on this side of US Highway #1and extending this gravity sewer will help make that happen. Mayor Mann noted this could be the answerto the potential loss of industrial property to the proposed residential neighborhood.

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Council Member Haire noted that the Companies’ investment as of December 31, 2022, is $74million and three years later increases to $96 million. He questioned whether that was because theyadded to the physical structure or from equipment that was moved into the facility and Attorney Pattersonconfirmed that it was because of both.

Council Member Gaskins made the motion to approve the Resolution Approving the EconomicDevelopment Incentive. The motion was seconded by Council Member Buckels. Regarding terms ofwhat the City is spending for infrastructure, Council Member Taylor requested it be detailed separatelyrather than being included only in the Economic Development Incentive Agreement (what is includedfor the project and what is for the public portion, which is 95 percent or more, according to Mr. Hegwer).Mr. Hegwer and Mr. Czar confirmed this could be done later in the process. Mayor Mann called for avote on the resolution which carried by a vote of six to one, with Council Member Taylor voting against.

• Economic Development Incentive Agreement (Exhibit D)Council Member Gaskins made the motion to approve the Economic Development IncentiveAgreement, with authority to amend any minor non-substantive language and to delegateauthority for execution to the Mayor or Mayor Pro Tern and Clerk or Deputy City Clerk.Seconded by Council Member Williams, the motion carried by a vote of six to one, withCouncil Member Taylor voting against.

NEW BUSINESSUpdate on the Police Initiative in Downtown Sanford by Kelli Laudate, Downtown Sanford, Inc.Executive Director

Kelli Laudate, Downtown Sanford, Inc. Executive Director, thanked Council for investing in thedowntown police initiative and explained that it has exceeded expectations. She thanked the PoliceDepartment and noted they found the right man for the job in Captain Singer. She has received feedbackfrom officers, merchants and patrons. She thanked the Mayor, Manager, Public Works and ParksDepartments and encouraged everyone to attend the first “One Table, One Depot” supper ftrndraisingevent on Thursday, October 17.

Resolution in Support of the Temporary Closure of a Portion of Moore Street for Community Tree andTrain Lighting (Exhibit E)

Transportation Administrator Phil Lawrence explained that Downtown Sanford, Inc. hasrequested a street closure in connection with its annual tree and train lighting on South Moore Street,from Wicker Street to Carthage Street, on Friday, December 6, from 2:00 p.m. until 10:00 p.m. KelliLaudate stated there was some concern expressed by store owners on Moore Street regarding parkingbut she assured them she would make things as easy as possible for them. Approximately 1,500 to 2,000people attended the event last year.

Council Member Gaskins made the motion to approve the Resolution in Support of theTemporary Closure of a Portion of Moore Street for the Community Tree and Train Lighting. Secondedby Mayor Pro Tem Salmon, the motion carried unanimously.

Resolution in Support of the Temporary Closure of Several Streets for the Sanford Sloth Event and Race(Exhibit F)

Transportation Administrator Phil Lawrence explained that Tim Emmert with Hugger MuggerBrewery has requested street closures in connection with the Sanford Sloth Event and Race for Saturday,November 16, between 9:00 a.m. and 7 p.m. with closures as indicated on the attached map.

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Council Member Gasldns made the motion to approve the Resolution in Support of theTemporary Closure of Several Streets for the Sanford Sloth Event and Race. Seconded by CouncilMember Buckels, the motion carried unanimously.

Resolution in Support of the Temporary Closure of Portions of Several Streets for the Central CarolinaJaycees 2019 Sanford Christmas Parade (Exhibit 0)

Transportation Administrator Phil Lawrence explained that the Sanford Jaycees have requestedclosure of portions of several streets as shown on the attached maps on Monday, December 2, 2019,between 5:30 p.m. and 8:30 p.m. or until deemed safe by the Police Department. Council Member Taylorasked whether it was necessary to extend parking beyond the Parkview Retirement Village driveway,noting this would accommodate visitors and staff of the facility. City Manager Hegwer agreed that staffwould discuss this with the Jaycees.

Council Member Taylor made the motion to approve the Resolution in Support of the TemporaryClosure of a Portions of Several Streets for the Central Carolina Jaycees 2019 Sanford Christmas Parade,contingent on asking the Jaycees whether they could avoid staging past the Parkview Retirement Villagedriveway. Seconded by Council Member Gaskins, the motion carried unanimously.

Resolution Directing the Clerk to Investigate the Sufficiency of Annexation Petition by Lee County(Exhibit H)

David Montgomery, Senior Long-Range Planner with the Community DevelopmentDepartment, explained this is the first step of a three-step process. Staff received a petition on October11, 2019, requesting non-contiguous annexation of property located on Tabitha Lane owned by LeeCounty as described on Exhibit H. This resolution, if approved, would direct the City Clerk to investigatethe sufficiency of the petition and certify the results as soon as possible to Council.

Mayor Pro Tern Salmon made the motion to approve the Resolution Directing the Clerk toInvestigate the Sufficiency of the Annexation Petition by Lee County. Seconded by Council MemberGaskins, the motion carried unanimously.

Ordinance Amending the Annual Operating Budget of the City of Sanford FY 20 19-2020 (Fire) —

(Exhibit I)Financial Services Director Beth Kelly explained that this budget amendment appropriates the

recently announced $10,000 grant awarded to the Fire Department from Duke Energy and appropriates$6,537 to the Fire Department for additional funds required for our agreement with the Northview FireDepartment related to the Central Carolina Enterprise Park property.

Council Member Buckels made the motion to approve the Ordinance Amending the AnnualOperating Budget. Seconded by Council Member Gaskins, the motion carried unanimously.

Grant Project Ordinance Amendment — Project Forge — Infrastructure Improvements (Exhibit J)City Engineer Paul Weeks explained that this amendment to an existing grant project ordinance

reflects the $1.5 million grant from the Golden LEAF Foundation.

Council Member Gaskins made the motion to approve the Grant Project Ordinance Amendment— Project Forge — Infrastructure Improvements. Seconded by Mayor Pro Tem Salmon, the motion carriedunanimously.

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Acceptance of Golden LEAF Grant for Project Forge (Exhibit K)City Engineer Paul Weeks explained that this agreement acknowledges the $1.5 million in grant

funds for the Project Forge sewer extension.

Council Member Gaskins made the motion to accept the Golden LEAF Grant for Project Forge.Seconded by Council Member Haire, the motion carried unanimously.

Adopting Design-Build Criteria for Project Forge (Exhibit L)City Engineer Paul Weeks explained that staff typically uses the “design-bid-build” process for

construction projects, through which an in-house designer bids the project that is awarded to the lowestresponsive bidder. This agenda item is the first step in the proposed “design-build” process which hasnever been used by the City, although it has been done in other areas for years. Since it is new to us,Brian Jenn, a consultant from freeze and Nichols, will explain the process that must be approved byCouncil.

Mr. Jenn explained that the “design-bid-build” process is the typical process used by the City forconstruction projects and is based on the lowest bid. The “design-build” process is different in that thebuilder is hired first based on qualifications, not necessarily on price, and the designer is then teamedwith that builder. Some of the advantages of this process include having one point of contact; being avery collaborative effort between owner, designer, and builder; budgets are reviewed as the projectprogresses and the price is eventually negotiated. Another advantage, and the reason it is appropriate forthis project, is the schedule because the schedule is driving this project. January 15, 2020, is the deadlinefor pad completion and that would be impossible with a typical “design-bid-build” process. This processwould reduce quite some time from the procurement process since there is one procurement process, acontract is signed with the design-builder, and both are on board at the same time, which allows them tomeet the required schedule. The NC General Statutes dictate process requirements and approving criteriafor “design-build” is the first step in the process. If approved, a Statement of Qualifications can be issued,the design-build team selected and they can go to work. There are two steps: once a design-builder isselected, an agreement for Phase I pre-design will be presented for Council approval. As the processmoves along and a guaranteed maximum cost is known, that will be presented for Council approval.

Mr. Jenn explained that “design-build” can now be done in North Carolina for buildings, verticalconstruction, water and sewer, and general infrastructure, but this method has been used in other statesfor quite some time. He confirmed that weather has been factored into the schedule. Victor Czar, PublicWorks Director, explained that our role in preparation of the pad is to clear trees and level and compactthe dirt on 15 acres; concrete work and construction of vertical elements will be done by the Company.

Mayor Pro Tem Salmon questioned whether our budget would be discussed early in the designphase to ensure we will have a good sense that costs will be near target. Mr. Jenn confirmed costs shouldnot be a surprise and typically, in the Statement of Qualifications, the budget is noted up front, everyoneis working toward that goal and there is good collaboration. There are ways the designer and contractorcan reduce costs but noted there are some costs that unfortunately cannot be reduced. Mr. Czar explainedthere are “off ramps” and opportunities to opt out of the process if that becomes necessary.

Council Member Buckels asked Mr. Jenn if he knew of other projects Council members may befamiliar with to give them an idea of this process. Mr. Jenn explained he has seen it in other states wherehis company has worked but it is new in North Carolina and they have direct experience with it here, not

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only on the designer side but on the owner-advisor side. He also informed Council that his staff wouldguide our staff members through the process and provide advice along the way.

Council Member Williams questioned whether the designer-builder will be familiar with Cityordinances and construction requirements. Mr. Jenn confirmed that selections are based on qualificationsand experience with this type of work in this area and that designers who submit for the project will mostlikely be local. He also confirmed that the work will be subject to inspections by our local InspectionDepartment, just like any other construction project.

Council Member Gaskins made the motion to adopt the Design-Build Criteria for Project Forge.Seconded by Council Member Post, the motion carried unanimously.

Community Development Project Ordinance Amendment (Exhibit M)Community Development Manager Karen Kennedy explained that this amendment reallocates

funds from the 1996 Community Development Block Grant program income to go toward the S3Housing Connect Homeless Initiative that has been working with the Bread of Life Ministries on a roofreplacement at their facility’s extreme weather shelter. Four bids were received from local contractorsand staff would like to award the bid for $17,000 and allocate funds through this amendment.

Council Member Buckels made the motion to approve the Community Development ProjectOrdinance Amendment. Seconded by Council Member Taylor, the motion carried unanimously.

Ordinance Amending the Annual Operating Budget of the City of Sanford FY 20 19-2020 (Legal) —

(Exhibit N)financial Services Director Beth Kelly explained that this budget amendment appropriates

$25,000 to the Legal Department for additional fees required for consulting work on Project forge.

Council Member Gaskins made the motion to approve the Ordinance Amending the AnnualOperating Budget and the motion was seconded by Council Member Haire.

Council Member Taylor requested more information on the fees. Attorney Patterson explainedthat they included drafting and negotiating the agreement with the company from India; negotiating anddrafting various performance measure aspects for the Company and incentives to be paid; many phonecalls; drafting documents; and negotiations that were still ongoing through 5:00 p.m. today. The fmalbill has still not been received from the consultant and the attorney is still working on our behalf so theremay be additional costs. Mayor Mann confirmed that there had been many hours of work involved withthis unique project. City Manager Hal Hegwer explained that dealing with a foreign companycomplicated the deal. Attorney Patterson noted that the State of North Carolina was also involved. Mr.Taylor questioned whether fees had already been paid and Attorney Patterson explained they had beenincurred but not paid. Mr. Taylor expressed concern that the request was being made after the fact andrequested that projections be made prior to requests. Attorney Patterson explained that a projection wasmade but there were overages due to the extreme amount of detail required. Mrs. Kelly confirmed thatfunds are always budgeted for outside counsel and funds are available in that total budget line but thebudget will be exceeded with this so the request is being made prior to the bill being received. Sheconfirmed that no funds have been paid and this is only an estimate based on time spent to date andestimated in the next month. Council Member Gaskins noted that it is quite unusual for a project to bereceived and closed within such as short period of time (we were first told of this project in May and theannouncement they would locate in Sanford was made in September) and the terms were continually

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changing due to the extreme competition involved. South Carolina was offering incentives up to about$56 million and the company was receiving phone calls from Kentucky right before the 2:00 p.m.meeting and announcement at the Governor’s Mansion on September 17. Mayor Mann agreed that legaland accounting fees are not unusual, particularly when a company is investing $170 million, and that agreat deal of negotiation was necessary to ensure a good deal for Sanford and Lee County. Mrs. Kellyagain reminded Council that this amount is only an estimate and that fmal costs should be received inthe next few months.

Mayor Mann called for a vote on the motion to approve the budget ordinance which carriedunanimously.

Participation in Class Action Lawsuit on Opioids (Exhibit 0)City Attorney Susan Patterson explained that many cities and towns have sued opioid

manufacturers and information on settlements have recently been in the news. A multi-state jurisdictionallawsuit, being handled out of Ohio, will be certified as a class. Unlike the County, which decided to suethe opioid manufacturers themselves, this class action means that cities and counties are included in thesuit that already exists, so in the event there is a settlement, funds may be distributed to all cities andcounties. The information on the exhibit includes a question as to whether the City wants to opt out ofthat settlement class and Attorney Patterson recommended that the City remain within the class. Wehave until November 22 to opt out and if we choose to do so, we would not participate in any settlementthat may be negotiated or distributed to the class and we would have to bring our own lawsuit. Byremaining within the class, we are included in the national settlement. She also pointed out thatMecklenburg County is the named class representative for North Carolina who would make some of thedecisions as to whether they thought the negotiated settlement was adequate. If funds are paid and theCity incurs expenses less than $500, that would be paid to the County and it would be up to them todistribute it to us, so we may want to talk to the County about an arrangement for distribution in theevent a settlement is made. She suggested that the City and County Managers have these discussions.

Council Member Taylor made the motion to participate in the Class Action Lawsuit on Opioids.Seconded by Mayor Pro Tern Salmon, the motion carried unanimously.

OTHER BUSINESSCouncil Member Taylor stated that Commission on the Opioid Abuse Epidemic met recently and

he is glad we are addressing this issue.

Council Member Williams commented on the high school reunion held this past weekend at therenovated W.B. Wicker School and many people came to see it.

Council Member Post stated that the first meeting of Sanford Commission on the Opioid AbuseEpidemic was held last Wednesday. Becky Whitaker was appointed by the Board as Chair and Dr. DanielMaurer was appointed as Vice-Chair. The meeting was an informative organizational meeting but manyattended. The next meeting will be held December 11, at 6:00 p.m., in the West End Conference Room;meetings will typically be held on the second Wednesday of every other month and the public is welcometo attend. They hope to eventually divide into subcommittees and the public is welcome to join and offeradvice on how to combat this epidemic.

Council Member Buckels reminded everyone that early voting begins October 16 andencouraged citizens to exercise their right to vote.

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Mayor Mann stated that the public, staff, and Council are invited to the Kiwanis Family Parkdedication on Friday, October 18 at 11:30 a.m. and thanked everyone who attended the recent airportdedication for the new terminal. He read a thank you note from Chris Chung, President of the EconomicDevelopment Partnership of NC for the warm welcome extended at the EDPNC’s recent conference,“Energizing Rural NC” and thanked everyone working in the hospitality business in Sanford who havedone such great work recently. More than 250 tickets have already been sold to our first CommunityDinner ($50 per plate) at Depot Park and funds will go toward renovating the Depot to create a WelcomeCenter. The public is invited and there will be an art dedication at 5:00 p.m. at the Depot and the lastmusic festival will be held afterward.

CLOSED SESSIONMayor Pro Tern Salmon made a motion to go into closed session in accordance with NCGS 143-

318.1 1(a)(3), to consult with an attorney employed or retained by the public body in order to preservethe attorney/client privilege. Seconded by Council Member Gasldns, the motion carried unanimously.

ADJOURNMENTMayor Pro Tern Salmon made the motion to adjourn the meeting; seconded by Council Member

Taylor, the motion carried unanirnously.

ALL EXHIBITS CONTAINED HEREIN ARE HEREBY INCORPORATED BY REFERENCEAND MADE A PART OF THESE MINUTES.

Respectfully Submitted,

T. CHET MANN, MAYOR

BO E DAVIS, CITY CLERK

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council member byron buckels (in 6:05 p.m.) council member

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