November 23rd, 2015 Minutes


November 23 2015 – 7:00 PM

Present: Mayor Bundren, Mayor Pro Tem Tichy, Alderman Clemmons, Alderman Sharpe, Alderman Crouse, Alderman Tichy, and Clerk York

Absent: Alderman Davis Gregory

Alderman Crouse gave the invocation.

Alderman Clemmons moved to approve the October 26, 2015 meeting minutes. Mayor Pro Tem Tichy seconded the motion. The motion passed unanimously.


Report on Cabin Pump Station Project

Mark Reich reported that progress has been made this month. The bore has been done underneath Pond Road. The contractor has installed carrier pipe over to the dosing tank. Pipe has been laid from that point, almost up to the creek. There are 105 more feet to go. Then, they will turn and go 50 feet across the creek, and tie back on the other side. That portion of the project will then be ready. They will not cut the pipe until the dosing tank is set. The contractor doing the drilling underneath the river has remobilized back to the site. He is concerned with the other work activities going on, and thought it would be safer if he waited until the others were done. He is using an 18 inch diameter head to ream back, starting from the other side and coming back to Pond Road. He has completed 220 feet. This puts it right at the edge of the river; he has just a little more to go, probably 150 feet. He hopes to be finished with this portion by tomorrow or Wednesday. He will pull the HDPE pipe under the river, after the Thanksgiving holiday. Mayor Bundren thanked Mr. Reich for his report.

ORC Report

Arnold Allred was not present for the meeting. Copies of the report were distributed for Board review.

There was no further Old Business.


Mike Davis, Finish Work on Town Hall

Mike Davis was unable to attend the meeting. This item was tabled until the next meeting.

Zoning Request: Permitting Car Sales in the MU District

Clerk York referred to the Zoning Request in the packet. The application is to amend the schedule of permitted uses in the Zoning Ordinance. An application has been submitted to make car sales a permitted use under the Mixed Use district. If the Board were to approve it, car sales would be allowed anywhere in the Mixed Use district. Clerk York referred to the map outlining Mixed Use districts. There is a lot on Cardinal Lane, across from the building that Mr. Senecal owns. The sales are proposed to be there. There is a brick building there where he plans to have his office, if this is allowed as a permitted use. The Planning Board recommended approving this as a special use, not a permitted use. Adding it as a special use means that anytime someone wants to do car sales in the mixed use district they will have to come before the Board of Aldermen. The Board can take whatever action it chooses. The Planning Board basically makes a recommendation. The Planning Board does recommend approval as a special use. Mayor Bundren questioned whether the Board could vote on this before the application was changed. Attorney Koonts addressed the issues involved. Right now, car sales is not a permitted use, at all. It is really an amendment to the Village ordinance. Making it an amendment is deciding whether to add this as a use to the table. Also, is it added as a use by right or as a special use permit? First, it must be added. Then, the application will come through. If it is added as a right, the Board is really finished. If it is zoned that way, it can be used that way. If it is added as a special use permit, then the applicant will need to apply under the special use permit. Or, the Board can do nothing if the decision is not to make this a permitted use at all. Tonight, a public hearing must be set. Any modification to the land use ordinance requires a public hearing to be held. Attorney Koonts reminded that a 30 day notice would be required. Alderman Sharpe made the motion to hold the public hearing at the January 2016 meeting. Mayor Pro Tem Tichy seconded the motion, with the clarification that this be considered a special use. The motion passed unanimously.

Approval of County Hazard Mitigation Plan

Clerk York stated that Alamance County develops a Hazard Mitigation Plan every five years. It is part of the requirements for receiving federal assistance with disasters. The County puts the plan together, while the municipalities sign onto it. Mayor Bundren asked Board members if they had read the plan. Clerk York noted that the entire plan should be completed by November. Someone from the County could attend a Board meeting to talk about the plan, if the Board desired. Most of the other municipalities have simply passed it. Alderman Dan Tichy commented that he would like time to read it. Alderman Sharpe observed that she was part of the group when this first started, noting it is a good thing. Mayor Pro Tem Tichy asked whether the Village would be eligible for FEMA, if the plan was not adopted by the end of the year. Clerk York responded he did not know. The other municipalities have always adopted it. Alderman Sharpe made the motion to approve the Hazard Mitigation Plan. Mayor Pro Tem Tichy seconded the motion. The motion did not pass, with Alderman Crouse, Alderman Clemmons, and Alderman Dan Tichy voting in the negative. The consensus was to bring this up again at the next meeting on November 30, 2015. This would give the Board members time to look at the plan.

Finance Report

Clerk York first presented a budget amendment. There have been a lot of expenses relating to the Water and Sewer Fund, with pumps that needed repair. He referred to information in the Board packet. He pointed out the $3081 remaining in Water and Sewer Maintenance. Originally, $2800 had been budgeted. With what needs to be spent before the end of the year, there is another $4900 to be expended, in addition to monthly costs for the ORC. The total of $11300 in upcoming expenditures will not be covered by the $3081 in the account. The budget amendment proposes to add $5000 to Water Maintenance and $20000 to Sewer Maintenance. Clerk York advised that this does not mean they will spend those amounts. Rather, this will ensure that funds are available if needed. He explained he is taking funds from the Appropriated Fund Balance. The Water and Sewer fund is basically funded through water and sewer charges. They don’t budget to expect to get impact fees. The Village will be receiving impact fees as lots are built. This cannot be planned for, without knowledge of the rate that it will come. Clerk York pointed out the impact fees already received in Revenue. There is approximately $8000 in impact fees. Rather than use this, Clerk York is using funds from the Appropriated Fund Balance. This guarantees funds available in the line items needed by the end of the year. Clerk York asked if there were any questions. Alderman Dan Tichy made the motion to approve the budget amendment, as presented. Alderman Clemmons seconded the motion. The motion passed unanimously.

Clerk York also presented the Finance Report. The CD that just matured earned $1488 in interest. It was deposited again at the rate of 1%. Interest rates are starting to go back up. He also pointed out the total amount of cash on hand, in the report.


Mayor Bundren observed that Becky Loy of Cobb, Ezekiel, Loy could not attend the meeting as expected. The meeting will not be adjourned, but rather suspended. The meeting will reconvene on November 30, 2015.

Mayor Pro Tem Tichy stated he had a question for Mark Reich. He asked about progress on the street repairs. Mr. Reich reported they contacted five different contractors. They only received two bids. Mr. Reich distributed bid information. The bid is within the budget amount. Work can be done before the end of the year. Wall Asphalt is the low bidder at $5835.00. They have been told to “go ahead.”

Mr. Reich also presented a map of the stop signs in Heritage Glen. It is good to have more monitoring and more of a police presence, to deter speeding. There are a couple of opportunities, coming off of Heritage Lane, to put a 3-way stop sign. They are not the most preferred method, but are the least expensive method. Stop signs, as opposed to speed humps, are better for fire trucks. There could be a 4-way at the intersection with Quad. That is one possibility. Then, between there and NC 62, about halfway, near Century Court or Cornerstone. If one is done at Cornerstone, you may not want to do one at Quad. Going down Freedom Lane or Brookstone, one could be placed at the second intersection, where Freedom comes back in on the north side. One could also be placed at Yorkshire, but the curvature of the road does not lend itself to fast driving. The long straightaways need something to slow down the traffic. The intersection of Freedom and Brookstone could possibly be a location. Also, Londonderry Court would be about halfway for a 3-way stop sign. One could be placed at Cornerstone or Serenity. When the new subdivision comes in, that may be more of a factor. Alderman Clemmons has promised to get a photo of a subdivision, where his in-laws live. There is a nice sign that shows the speed, that fits the neighborhood well. This may be something the HOA would be interested in doing.

Mr. Reich has sent review comments to the engineer, relating to the plans for Heritage Glen. Mr. Reich has not received comments back. They are still looking at the original preliminary plan, done by Simmons. There is a note about an emergency access entrance, down near Alamance Baptist Church Road. Mr. Reich has looked at this; there is a dam and a pond to the left. As you get in a little way, it widens out. Near the road, it is less than 15 feet wide. Typically, for fire code, they want a 20 foot travel lane. Mr. Reich is not sure if the dam would support a fire truck. Alderman Crouse responded he wouldn’t trust it. Mr. Reich also observed there may be potential environmental issues also. There is a 1-1 slope on the bank. There are questions that may need to be worked through. Bollards would likely need to be installed so that normal vehicles could not be driving across it. It would be for emergency access only. Part of the lawsuit noted that there could be no connection to Elder Lane, Caprice Lane, or Baptist Church Loop Road. This was the original agreement. Attorney Koonts remarked that this was a case that did not go to trial. It was a settlement that was reached. It really only applied to the owners of the property that were out there. They are the only ones that could enforce it. Attorney Koonts doesn’t know if they still own the property out there. Mr. Reich observed there is just one property owner. Attorney Koonts stated the property owner could, by consent, “undo” what has been done. If the one owner has changed their mind, it can be done. It’s not as if a court has ruled on it. It is a matter of working with the property owners out there. Mayor Bundren commented on the second entrance needed for Heritage Glen. Mr. Reich suggested they probably would want to have a public hearing on this, when moving forward. The other question is, if the preliminary plan is changed, how does that affect the ability to develop lots, as approved? Attorney Koonts added this is possible, it would just take some work. It is the question of whether general access is desired, or just an emergency access. Jeremy Vestal, who lives on Alamance Loop commented. He would be okay with emergency use only, but not anything else. He does not want more traffic on his street. Alderman Crouse added there is not enough room to put two cars, side by side, on that highway. Alderman Clemmons suggested that half of the people in Heritage Glen would be against this, thinking it would be a short cut to E.M. Holt.

Attorney Koonts reminded that public notice for the public hearing must be run in the newspaper, two weeks in a row, between 10-25 days. They could do this by the 21st of December, if desired. The notice would have to be run, December 3rd and December 10th. The last notice has to be more than 10 days; the first notice, not more than 25 days. Alderman Clemmons reminded the Board about the holidays, suggested that people who were interested would benefit from delaying this until the January meeting.

Attorney Koonts also suggested the Board look at modifying the sign ordinance, to give some size restrictions. It would not prohibit putting a normal “For Sale” sign in the yard, or a realtor sign, for instance. However, in order to do something different, they would need to come to the Village to get approval. It would have to go through an approval process. Attorney Koonts will draft something to “tweak” the current ordinance. He will keep it simple, but make sure the Village doesn’t have to deal with giant, flashing signs.

Attorney Koonts reported that Sam Unsworth has approached the Village about developing a property that is past the end of Rob Shepard Road. This is the Coble property that backs up to Dr. Patterson’s property. He hasn’t made any application yet. It raised the issue about developments where there is a large tract of land, and it is divided up into 10 acre tracts. The Board has dealt with this a couple of times in the past. There is a conflict between the subdivision ordinance and the zoning ordinance. The zoning ordinance says that any lot, any residential lot, has to front on either a private road, or public road. The public road is easy to determine. The private road is not so easy. The subdivision ordinance says private roads shall not be platted. If it’s not on the plat, it makes it difficult to figure out whether it fronts on the private road. A 10-acre subdivision is exempt from the subdivision ordinance, unless a right-of-way is included. Attorney Koonts will look at a couple that have been done in the past, and see how they worked out. Discrepancies between the subdivision ordinance and the zoning ordinance need to be sorted out. Requirements for private roads need to be considered. If you live at the end of 60 acres, and you have a heart attack, how will emergency help get to you? Ten acre subdivisions are normally exempt; however, when that plat comes in, the Village needs to have some rules and regulations about what that plat looks like. Attorney Koonts stated he thought access should be shown on the plat. He also recommended private road requirements—in terms of width, whether it is paved or not. Then it is an approved plat. When they come to get the building permit, which may not be issued for years, then the Town Clerk can sign off on it. Now, he looks at the zoning ordinance and asks about the road frontage. This needs to be ironed out. The first question is a policy question. Do you want roads shown on the subdivision plats? Criteria is also needed, relating to standards. Emergency access must also be considered. The same regulations apply to the ETJ. Appropriate roads need to be put in to serve the sites. Mayor Bundren noted the DOT Bypass, which is pre- planned and pre-platted. She wouldn’t want someone to be surprised later when they’ve bought 10 acres and suddenly they have a bypass running through the property. This came up earlier and the gentleman wasn’t telling people about it. The Mayor has instructed the Town Clerk to make sure that people know about the planned bypass. Mr. Reich reported that a copy of that map has been given to the individuals today. Attorney Koonts remarked that this property is a little different in circumstance. What they had proposed was a plotted easement coming off the end of Rob Shepard Drive, across Dr. Patterson’s property, back to the Coble property. Private easements are not platted. Mayor Bundren stated the Land Use Plan calls for this to go out to the bypass. This was going to be used for commercial development, as needed. Attorney Koonts stated that one person can always grant an easement to someone else. The Village doesn’t want to sign that private easement plat, saying it’s exempt. That shows approval. Private easements are not part of what the Village does. In reality, the Village would require a dedicated right-of- way, at least to the edge of Dr. Patterson’s property. The subdivision ordinance, now, would require those 10 acre lots to meet all of the subdivision requirements, if a right-of-way is involved. Just a short right-of-way there would mean the individual would have to comply with all the subdivision requirements. It would still be easy to do, but then it would be under all the road requirements. Attorney Koonts summarized that this needed to be looked at. He has discussed this with Mr. Reich. They would look at how other subdivision ordinances deal with a private road. They wouldn’t make them build a DOT standard road, though a number of municipalities around the state have done this, after going through the HOA private maintenance world. They have said “no more” and are only doing DOT standard roads, no matter where it is, unless it is a driveway to a house. Otherwise, everything is DOT. The problem with private road maintenance agreements is the enforcement. Who enforces that; how do you get potholes repaired? Typically, all the complaints come back to the municipality. Alderman Clemmons asked if plans were to do a subdivision. Attorney Koonts thinks they are simply looking at options for beginning to market the property. They do not have any drawings or anything else. They are likely looking at a couple of other 10 acre subdivisions that were done in the past. Initially, their thought was that they could just do that. They will have to come for approval for that, because of the right-of-way, from Rob Shepard Drive. Mayor Bundren added that the Land Use Plan also has bearing on this. Attorney Koonts remarked that the ordinance needs to be cleaned up, relating to this. There are probably some other large tracts in the ETJ that would fall under that, exempt from the plat. A subdivision can be built, and it is the innocent buyer who comes in for the permit. Then, the Village would struggle to make sure everything can be checked off. If the Village is being strict with everyone else, in terms of road frontage, the same rules must apply to everybody. Mayor Bundren thanked Attorney Koonts. He will work on this and bring it back to the Board.

There was no other business.

Public Comment

There was no public comment.

Alderman Clemmons moved to suspend the meeting until November 30, 2015. Alderman Dan Tichy seconded. The motion passed unanimously and the meeting was suspended.

The meeting was reconvened on November 30, 2015 at 7:00pm. All Board members were in attendance, except for Alderman Gregory and Alderman Crouse.

Becky Loy: Cobb, Ezekiel, Loy

Becky Loy, of Cobb, Ezekiel, Loy, addressed the Board, thanking them for the opportunity to be present and for working with her on the deadline. Everything looks good regarding the audit. She is excited to announce that again, realizing that some Board members will not be present in the future. She expressed thanks for the help in going through the audit process, over a period of several years. Ms. Loy referred to the copy of the audit report. It is an unmodified opinion. This is new terminology, but means the same thing as unqualified. This means that there was nothing the audit found that would cause them to change their opinion. When they do the audit, they do not look at every single transaction. They look at the controls, to make sure they are operating the way they need to. They do a test of the controls. They look at the numbers for consistency and make sure the Board is still applying the same principles and policies, as they are reported and recorded. At the beginning of the audit report, on page 4, is the management discussion and analysis. This was added a few years ago to enable the financial statement to have a narrative, to “read through” what has happened during the year. Ms. Loy encouraged the Board members to read this narrative. It highlights the different changes between this year and last year, and the major reasons for those changes. These pages may answer any questions Board members may have. Ms. Loy began reviewing the audit with Page 14, the Balance Sheet. The first two exhibits are full accrual, including long-term assets and long-term liabilities. This year, the net pension was added to that. The pension being earned now, is being reported and recorded on the full accrual statements. This is a big change for most municipalities. It created a couple of extra statements in the financial statement this year, along with two pages of notes. The Village liability is one person, who hasn’t been in the system for very long. The liability is around $13,000-$14,000. It is not a huge liability. As the retirement is being earned, it is being recorded. This is the first year that this has to be reported. When comparing this year’s audit to last year’s audit, this change will be noted. There are actually three different numbers: the assets, the current year contributions, and the liability that are reported on the first two pages. Exhibits 1 and 2 detail all of the assets and liabilities. If everything stopped June 30th, this is where the Village would end up. Exhibit 3 is the modified accrual, which means this is current assets and current liabilities. Anything that is due within a year, and anything that the Village receives that is due, currently, is what is included in this statement. This, is more or less, cash basis, or budgetary basis. These are the things dealt with every month, as the Village has bills to pay and money coming in for water and sewer. This is what the Village is usually doing, month to month. At this point, Mayor Bundren offered copies of the report to others present at the meeting. Ms. Loy referred again to Page 14. The cash is at $1,666,384 in unrestricted funds. There is $187,896 in restricted cash. The restricted cash is the Powell Bill money. It is required that this is restricted. The total cash is “down” by $90,000.00. This is because of the transfer to the Water and Sewer Fund. Cash went out of the General Fund into the Water and Sewer Fund. The Village took $360,000 out, but the total is only down by $90,000. This means there was a positive inflow of revenue, over the expenses, for the year. The other items are very consistent, compared to last year. The accounts receivable is mostly sales tax and franchise tax, not in cash as of June 30th. This will be paid in July, August and September. That was an increase over last year— about $15,000. This is mostly timing. Assets are very strong. Liabilities and property tax receivable are all very consistent with last year. Looking at Fund Balances, stabilization by state statute is the receivables that have not been turned into cash yet. It is not allowed to be called “available” until it is in cash. The Powell Bill is $187,896. The amount labeled “Assigned” is the amount earmarked for maintenance and repair of the Town Hall. The unassigned amount is almost $50,000.00. That is a decrease of almost $100,000.00 over the last year. This is because of the transfer to the Water and Sewer Fund. The General Fund Balance is $1,906,111. As the project proceeds, more money will go out. When you look at the required amount of fund balance, the Village far exceeds the requirements. This is a very strong fund balance. Looking at the bottom of the page, it reconciles back to the full accrual. It adds the assets and subtracts the liabilities for a total of $2,437,918.00. On the full accrual basis, the Village is at $.4 million. On the current assets, the Village is at $1.9 million. Once the assets are added, the total is $2.4 million. Ms. Loy directed the Board’s attention to Page 15, Exhibit 4, Revenues and Expenditures. Revenues are “up” by $62,000.00. Ad valorem taxes are flat. This is because there was a spike in taxes last year, because of overlap in motor vehicles. Some people received credit for them twice last year. The amount went up by $2000.00, but the value actually went down a little. The Village is currently at 98% for both motor vehicles and ad valorem taxes. This is the impact the state wanted to see, that the motor vehicle collection percentage would go up, and it did. When you look at two years ago, this is very consistent. The next line item is Taxes and Licenses. This increased by $25,000.00. This is the Local Options Sales Tax. The Village is currently at $215,000.00, almost $216,000.00. In 2010, the Village was at $57,000.00. It takes time for this change, when doing a development, for this to get into the system, and into the census counts, and for the allocations to change. The impact can now be seen. The same thing applies to the next line item, the Franchise Tax. This is an increase of $14,000.00. Mayor Bundren pointed out that the Village took the initiative to count the residents, in order to do this. Ms. Loy observed this makes a big difference. The same thing affects the Powell Bill money. It increased from $13,800 in 2010 to almost $28,000. This is because of the increase in population, based on the allocation that they do. All of these are the reason for the increase of $62,000.00. The Village also had an increase in insurance, as a result of the accident with the Town Hall building. This amount totaled $27,000.00. Last year, there was FEMA money, so that offsets this a little. The total increase in revenue is $62,000.00. This is consistent with the trend being seen. Looking at expenditures, they have not, in total, fluctuated that much. There is an increase of $14,000.00. This is impacted by several different things. The $158, 289 for General Government does include the cost of the repairs to the Town Hall building. In full accrual, this is taken out and capitalized. On the modified accrual, it shows as revenue for the insurance and expense for the repairs that were done. That totals $35,000 of that increase. Because there is only an increase of $14,000.00 in total, some other things have gone down. There was a decrease of $16,000.00 in transportation. Last year, there were roadway repairs that totaled $28,000.00. There was also a decrease of $5,000 in the Environmental Protection, due to a decrease in Yard Waste Collection. Clerk York remarked that this was because of FEMA. Ms. Loy noted the excess of revenues over expenditures, a total of $285,000.00. This is an increase of $48,000.00 compared to last year. The trending up has been very consistent. Once the revenues cap off, the Village will see another year or two where it is even, and then, when the other phase comes in, it will go up again. As long as the increase in population doesn’t require the expenditures to go up, in the same incremental amount, the Village will see this kind of results. There will be infrastructure costs, but the Village is in a great position. Mayor Bundren observed this will pay for some of the projects the Village is in the middle of, within the next 2 or 3 years. Mayor Pro Tem Tichy commented that the transportation cost a couple of years ago was for the paving at the end of Liberty Drive. Ms. Loy pointed out that the bottom line is negative still, because of the transfer of funds for the project. The $357,869.00 is the transferred amount for the project. The Village has a net change of $72,000.00 in the actual fund balance. When you transfer $360 thousand, you expect a larger negative. The negative was offset by the increase in revenues. The General Fund looks very, very good. When you look at the 8% requirement,that would be $50,000.00. The Village is well over the minimum requirement. Ms. Loy next referred to Page 18, the Statement of Net Position. This is the Proprietary Fund, the Water and Sewer Fund. The General Fund is modified accrual. The Water and Sewer Fund, here, is full accrual. Because it is run like a business, it is reported like a business. It has all the Village’s long-term assets and all the long-term liabilities. It is a little different from what was reviewed with the General Fund. The cash is almost “up” double from last year. The cash is $691,561.00. The other items, receivables and restricted cash, are very consistent. The increase was $383,000, minus the transfer, to determine the operating increase which was $23,000.00. For years there was the situation where the revenue of operations did not cover the cost; costs were more than revenue. The Board has worked very hard to correct that. Ms. Loy referred to Page 20, Cash Flow. The first category is the Operating Cash Flow. Operating Cash Flow is $57,000.00. The money that came in from customers covered the cost of salaries, and all the direct costs of providing those services. That yielded the operating income of $58 thousand. It was $62 thousand last year. The year before that was $45 thousand. For the last five years, it has been positive. The years before that were negative. It was negative for many, many years. The franchise tax used to have an allocation to the Water and Sewer Fund. Fifteen years ago, this was changed. You could no longer allocate, you had the option of allocating some of that franchise tax into the Water and Sewer Fund. You can’t do that any longer. That money can’t be allocated to the Water and Sewer Fund. It is not intended to fund the Water and Sewer Fund. When that changed, the negatives started to come in for a lot of entities. You have to manage it, look at costs and revenues, and whether or not you are charging enough. The Board has addressed that, and has done a good job of making sure that it is breaking even. The net pension asset is split between the Water and Sewer Fund and the General Fund. The State split this into 3 pieces. Because it is a funded retirement, hat is the asset portion that is earning money to pay these future costs. Capital assets are $3.6 million. All of the lines, pumps, etc. are captured and recorded here (Page 18). It actually went down by $49,000.00 because of depreciation. Every year, there is depreciation of the value of the assets. There was an addition of $21,000.00 in assets. The construction- in – progress is just sitting there. Mayor Bundren asked how this would impact future years. Ms. Loy replied that, once it is completed, it will be recorded as an asset. The total value will be added as an asset and depreciated. Mayor Pro Tem Tichy asked about the depreciation timeline for sewer and water. Ms. Loy answered that it is 67 years. It is expected to last a long time. That is a recommendation. For the Village, it doesn’t really matter because there is no income tax. It is a big issue in income tax. If you depreciate faster, you’re getting a deduction for that. Alderman Clemmons added it is a tool as the Village makes plans for future investments, and repairs and maintenance. Mayor Pro Tem Tichy noted the failures in water lines, with repairs being made. They are probably looking at 30 years now on that equipment. Failures are occurring from wear. Ms. Loy stated that the Board could set depreciation where they want it to be. There is no impact. The Board sees cash out, but not depreciation. Depreciation is policy that the Board can set. They can certainly consider setting depreciation over fewer years. Mayor Pro Tem Tichy commented on the rebuilding of the main pump station. It hasn’t been 30 years since the last rebuild. Sixty-seventy years is optimistic, but the Board won’t worry about it right now. Ms. Loy reminded that this definitely could be considered. She referred to the total assets for the Water and Sewer Fund. That totals $4.4 million. A lot of that is in the infrastructure, almost $3.7 million. This includes the lines, the pumps, and the stations. Liabilities are very consistent between this year and last year. The total liabilities are $237,000.00, which is $11,000 less than last year, because of the debt payment. The net position is $4,185,000.00—where the Village would be if it stopped after June 30th. This would be the “book value” for the Village. Ms. Loy next referred to Page 19, Exhibit 7, Revenue and Expenses. Charges for service were very consistent between this year and last year. Taps and impact fees increased by $22,000.00. Costs went up by $25,000.00 for this year. This yielded a negative of $20,000.00 in operating loss. This is not the cash basis. This is the accrual basis. There is a positive cash operating inflow of $57,000.00. Depreciation is subtracted from that. That’s why there is a negative; there is so much depreciation. This is supposed to be operated like a business. The goal is always to break even. You want to spend only what you bring in. The amount of $20,000.00, when you’re talking about $300,000.00, is not a bad amount for a loss, pretty close to breaking even. Ms. Loy referred to other income that offsets that. There is also the transfer of $357,869.00. This gives the Village a positive net position of $345,534.00. This is still very positive. The Village is using some of its General Fund revenues to fund this project. It is a big project in the Village. The Local Government Commission does not want to see operating transfers. Project transfers are not a problem. The Commission would have an issue with operating tranfers. The Village is in a position to fund this project, and not to pay interest on a loan. Ms. Loy summarized the financial activity as being very strong. She asked if there were any questions. Clerk York asked if any of the construction that took place in the new section was reflected in the audit report. Mayor Pro Tem Tichy responded that the water and sewer taps were included. Clerk York asked when the value of the lines in the new section would be added in. Alderman Clemmons answered that this would be when the project was fully finished. Mayor Pro Tem Tichy asked how the value was determined when D.R. Horton paid McPherson to put in the lines. Ms. Loy suggested that Mark Reich would be the best person to help with that. They will be added when everything is done. Mayor Pro Tem Tichy pointed out that the bond was issued, the streets were accepted and belong to the Village. Clerk York will look into this. Ms. Loy pointed out they added $21,000.00 to fixed assets. If the streets need to be added as of July 1st, they can do that. Clerk York noted that the final plat was accepted in December. The bond expires December 16, 2015. Alderman Clemmons reminded that this needs to be renewed. Next, Ms. Loy referred to the notes. These will give more details about the numbers that are recorded. She referred to Page 46, the Tax Levy information. The Village is at $93 million in value. Last year, it was $94 million. It did decrease a little, but this is, again, the overlap on the vehicles. Vehicles were at $25,000.00 last year. That value is what made that fluctuate a little. In 2013, it was $90.5 million. Comparing this to $93 million, you see there is a good, reasonable increase there. For every cent on the tax rate, the total would be $9000.00 in revenue. The Village is at 98.89% in collection percentage: 98.76% for ad valorem and 100% for motor vehicles. This is because it is levied when you pay it. There is some residual that causes some fluctuation in this; however, the Village ended up at 100%. This is very positive. Ms. Loy referred to two letters. She first addressed the letter about responsibility. As required, Cobb, Ezekiel, Loy follows the generally accepted accounting principles. They follow the governmental principles that are required in doing the audit for the Village. They have all the training that they need to have. They complete the ethics and look at policies and procedures. They look at journal entries. They investigate if journal entries have an issue. They do all the accrual journal entries. The Village manages on a cash basis, money in and out. This is typical of what Cobb, Ezekiel, Loy does, as an audit firm. Ms. Loy will meet with Ben, before the end of the year, to review journal entries, and get them recorded. They look at those to make sure there is no indication of a problem. They look at accounting estimates and disclosures, but follow the guidelines of the government commission very closely. The financial statement looks very similar to the commission’s manual. When they put out an annual, it is what they expect to see. If they see that the manual is followed, they have more confidence in the audit. Hopefully, that eliminates some questions from the Local Government Commission when they review the statement. There is no identified or suspected fraud or any difficulties in performing the audit. There were no disagreements with anyone, relating to the audit. They did get a representation letter that Alderman Clemmons and Clerk York signed. This basically says the information they gave the accounting firm was true and accurate, and reflective of the activity of the Village. The second letter is the management letter. It has the same comment on it, that it has had for many years. It is the segregation of duties comment. Basically, this tells the Board the risk of misappropriation is higher because there is only one person in the accounting department. To spread out all of the duties would take a minimum of three staff members. It doesn’t make sense for the Village to hire in order to segregate those duties. This is where the Treasurer’s position comes into play. Alderman Clemmons has fulfilled a lot of the controls. There is a higher risk when only one person deals with the financial side. Nothing has been found that is indicative of fraud or any issues. The comment is there, so that the Board knows of the higher risk, and will always look to fill any opportunities seen. There is still some risk in the CDs because the full-time employee could take these out. Ways to consider off-setting these risks should be considered. Mayor Bundren asked how this scenario could happen with the requirement of dual signatures. Alderman Clemmons addressed this question, stating it would be unlikely that Carter Bank would allow that to happen. Clerk York added that he signs the front of the CDs. He does not have access to the Wells Fargo account. He can make deposits, but Alderman Clemmons and the Mayor are signatories to checks. When Clerk York does the change-out on the CDs each month, he signs the authorization for withdrawal of the funds and the front of the CD. Mayor Bundren asked why the bank doesn’t require dual signatures on that as well. Alderman Clemmons commented that it relates to how the Board sets this up. Mayor Bundren asked if this could be set up to require two signatures. Alderman Clemmons pointed out that this would be time consuming for the Treasurer’s position. Ms. Loy observed this needed to be considered. Controls can be put into place that require too much time and effort. Clerk York added that the Treasurer could meet him once a month at Carter Bank. Carter Bank has stopped doing the automatic renewals. Mayor Bundren expressed that she was trying to tighten this up, but realized how time consuming this would be. Ms. Loy summarized that this was the whole issue—is the cost of doing the control worth the benefit? The Board has to evaluate this. Dual signatures are a good example. Are two sets of eyes on the check worth the effort? The Board has to consider whether it makes sense to do a control. Sometimes controls can be very difficult to implement. Evaluation is the key. With the staff this size, the key is Board involvement. Any opportunity that the Board sees as a risk, should involve consideration of a control that would offset the risk. Then, there must be consideration as to whether it makes sense for the organization to have that control in place. Ms. Loy encouraged the Board to do this continually. It is a small office and staff. Think about the position as if someone not trusted was there. Consider this as when hiring a new person. What controls would the Board want in place? The Board should always think this way. It protects the Board and the staff member, as well. It is important. Ms. Loy thanked the Board for the opportunity and for work on the audit. She asked if there were any questions. Mayor Bundren invited Ms. Loy to the December meeting. Ms. Loy expressed that she would miss working with the Mayor and with Alderman Clemmons.

Mike Davis, Finish Work on Town Hall

Mike Davis addressed the Board. Several people have evaluated the crawlspace condition. Sawyer is the best resource, financially. All seem to suggest installing a dehumidifier in the crawlspace. Mr. Davis explained that he is still not clear on a couple of issues. He is trying not to spend any more money than needed. He referred to the quote from Sawyer. This includes sealing the foundation vents, laying the plastic down around all the piers (12 mil plastic, which is double), and installing the dehumidifier for the crawlspace. Mr. Davis has the outstanding question of whether the insulation still needs to be installed, if the dehumidifier is installed. So far, no one can answer the question. This would save approximately $2000.00. Alderman Dan Tichy stated that the insulation would still be needed. That is his understanding based on work done on his house. He had quotes from multiple, different companies. There was also the option of doing French drains. Mayor Bundren asked about the option of doing French drains. Mr. Davis stated this was possible. In his opinion, a drain needs to be placed underneath the building that captures the water. Right now, there is no plastic under the building. When the insulation was removed, the plastic came out. Plastic needs to be put down, especially with all the recent rain. Now there is some standing water. Alderman Dan Tichy explained how French drains could be installed, with the use of a sump pump. He did not like the idea of a sealed environment that constantly has a dehumidifier running. Mr. Davis expressed he was reluctant to see the amount of money spent that would be needed for the dehumidifier. Mayor Bundren told how a French drain has made a lot of difference at her house also. Mr. Davis referred to the issues related to the sidewalks around the Town Hall. There is not access to the entire exterior foundation. What is done, will need to be done on the inside of the foundation. Mayor Bundren asked if they could bore underneath the sidewalk. Mr. Davis pointed out the location of the low point, so that wouldn’t work in this situation. Mr. Davis noted that Marvin, the Air Quality Specialist, owes the Village one final trip. However, Mr. Davis doesn’t want the air quality test done until the work on the crawlspace is completed. He does like the idea of addressing the drainage system. The water needs a way to go out. Alderman Dan Tichy observed that this was his basic concern. If you do the sealing, there is no option for the water to get out. The dehumidifier cannot handle it. Then there are a slew of other problems. Mr. Davis stated he was glad that the Sawyer quote is more affordable, since they are local. He is still not convinced that the dehumidifier is the right thing to do. Mayor Bundren stated that she agrees with Alderman Dan Tichy about not sealing in the water. Alderman Dan Tichy addressed the electric costs of the dehumidifier running constantly versus the sump pump running only when needed. Mr. Davis noted that they can’t stop the intrusion of water, but now, it doesn’t have a way out. Mayor Pro Tem Tichy observed that a sump pump wouldn’t be needed at the Town Hall, because of gravity. Mr. Davis summarized that something needs to be done. The fogging needs to be done. The insulation needs to go in. The plastic needs to be put back in place in the crawlspace. If the drainage is put in, this may solve the problem. Mayor Bundren asked about the cost of installing French drain. Mr. Davis estimated $1500.00-$1800.00. He would like to put together an update. The Village would owe Marvin $1490.00 to do his report, but they don’t need to spend that money until the fogging, the plastic, and insulation are done. He would like for the crawlspace to dry out. The Sawyer quote would be “off the table.” Costs would still involve $6000.00-$7000.00. Mr. Davis offered to have

an update for the December meeting. Alderman Dan Tichy summarized that he would rather see the French drain option used. Mr. Davis said these measures could be taken. Then, if it was determined, after annual checking, that the dehumidifier was needed, they could do that later. Mayor Bundren asked about the fogging. Mr. Davis pointed out that the decking in the crawlspace is exposed. The fogging is done before the insulation is installed. Then the plastic is put down. Alderman Dan Tichy asked about the moisture problems. Mr. Davis referred to the earlier problems. Several Board members pointed out concerns with the new flooring. Mr. Davis responded that Allen will look into these problem areas.

Approval of County Hazard Mitigation Plan

Alderman Dan Tichy reported that he has read the plan. He made the motion to approve the Hazard Mitigation Plan. Alderman Clemmons seconded. The motion passed unanimously.

Mayor Bundren asked if there was any public comment. There was none. She thanked everyone for attending the meeting.

Alderman Clemmons made the motion to adjourn the meeting. Mayor Pro Tem Tichy seconded. The motion passed unanimously and the meeting was adjourned.