2012-09-04 Regular Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
REGULAR MEETING,SEPTEMBER 4,2012 PAGE 472
ASSEMBLY
The New Hanover County Board of Commissioners met in Regular Session on Tuesday, September 4,
2012, at 6:00 p.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street,
Wilmington,NC.
Members present: Chairman Ted Davis, Jr.: Vice-Chairman Jonathan Barfield, Jr.: Commissioner Jason R.
Thompson: Commissioner Brian M.Berger:and Commissioner Richard G. Catlin.
Staff present: County Manager Chris Coudriet: County Attorney Wanda M. Copley: and Clerk to the
Board Sheila L. Schult.
NON-SECTARIAN INVOCATION AND PLEDGE OF ALLEGIANCE
Vice-Chairman Jonathan Barfield, Jr. provided the invocation and led the audience in the Pledge of
Allegiance to the Flag.
APPROVAL OF CONSENT AGENDA
Chairman Davis asked if anti- member of the Board would like to remove or discuss anti- item on the
Consent Agenda.
Hearing no comments, Chairman Davis called for a motion to approve the items on the Consent Agenda.
Motion: Commissioner Thompson MOVED, SECONDED by Commissioner Catlin, to approve the Consent
Agenda as presented. Upon vote, the MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA
Approval of Minutes—Governing Body
The Commissioners approved the minutes from the following meetings as presented by the Clerk to the
Board:
Regular Meeting held on August 20,2012
Work Session held on August 20,2012
Adoption of Constitution Week Proclamation—Governing Body
The Commissioners adopted the proclamation recognizing September 17-23, 2012 as Constitution Week in
New Hanover Count-ti-.
A copy of the proclamation is hereby incorporated as a part of the minutes and is contained in Exhibit Book
XXXV,Page 15.1.
Adoption of Resolution Donating Expired Dental Supplies to Cape Fear Community College — Health
Department
The Commissioners adopted the resolution approving the donation of expired dental supplies to Cape Fear
Community College to be used to train dental students.
A copy of the resolution is hereby incorporated as a part of the minutes and is contained in Exhibit Book
XXXV,Page 15.2.
Approval of New Hanover County Board of Education Capital Outlay Fund Budget Amendment #10 and
Capital Outlay Fund Budget Amendment#1—Budget Department
The Commissioners approved New Hanover County Board of Education Capital Outlay Fund, Budget
Amendment#10 and Capital Outlay Fund,Budget Amendment#1.
Copies of the budget amendments are available for review in the Budget Department.
Adoption of Budget Ordinance Amendments—Budget Department
The Commissioners adopted the following Budget Ordinance Amendments:
13-027-Finance
13-031 -Finance
13-035 -Budget
13-038-Parks, Gardens& Senior Resource Center
2013-15 - Sheriffs Office
Copies of the budget ordinance amendments are hereby incorporated as a part of the minutes and are
contained in Exhibit Book XXXV,Page 15.3.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
REGULAR MEETING,SEPTEMBER 4,2012 PAGE 473
REGULAR ITEMS OF BUSINESS
INTRODUCTION OF PUBLIC AFFAIRS MANAGER CAREY DISNEY RICKS AND STRATEGY AND
POLICY MANAGER BETH SCHRADER
County Manager Chris Coudriet introduced newly hired Public Affairs Manager Carey Disney Ricks and
Strategy and Policy Manager Beth Schrader.
ADOPTION OF LITERACY AWARENESS MONTH AND INTERNATIONAL LITERACY DAY IN NEW
HANOVER COUNTY PROCLAMATION
Cape Fear Literacy Council Executive Director Linda Lytvinenko submitted the request for the Board's
consideration to proclaim September 2012 as Literacy Awareness Month and September 8, 2012 as International
Literacy Day in New Hanover County and was in attendance to accept the proclamation.
Vice-Chairman Barfield read the proclamation into the record and moved for adoption
Motion: Vice-Chairman Barfield MOVED, SECONDED by Commissioner Thompson, to adopt the proclamation
recognizing September 2012 as Literacy Awareness Month and September 8, 2012 as International Literacy Day
in New Hanover County. Upon vote, the MOTION CARRIED UNANIMOUSLY.
A copy of the proclamation is hereby incorporated as a part of the minutes and is contained in Exhibit Book
XXXV,Page 15.4.
ADOPTION OF NATIONAL ALCOHOL AND ADDICTION RECOVERY MONTH PROCLAMATION
Recovery Month Committee Member Sandy Bell submitted the request for the Board's consideration to
proclaim September 2012 as National Alcohol and Addiction Recovery Month in New Hanover County and was in
attendance to accept the proclamation.
Commissioner Catlin read the proclamation into the record and moved for adoption.
Motion: Commissioner Catlin MOVED, SECONDED by Commissioner Thompson, to adopt the proclamation
recognizing September 2012 as National Alcohol and Additional Recovery Month in New Hanover County. Upon
vote, the MOTION CARRIED UNANIMOUSLY.
A copy of the proclamation is hereby incorporated as a part of the minutes and is contained in Exhibit Book
XXXV,Page 15.5.
APPROVAL OF MEMORANDUM OF AGREEMENT WITH THE UNITED STATES ARMY CORPS OF
ENGINEERS FOR BEACH RENOURISHMENT FOR CAROLINA BEACH AND KURE BEACH AND
ADOPTION OF BUDGET ORDINANCE AMENDMENT 13-039
County Manager Chris Coudriet reported that beach renourishrnent projects have been authorized by the
Federal government for both Carolina Beach and Kure Beach. Federal fimding in the amount of$4,400,000 has
been allocated for the Carolina Beach renourishment project but no fiords have been allocated for the Kure Beach
renourishment project.
The State govermnent has authorized fimding in the amount of$1,180,000 for the Carolina Beach project,
for which Carolina Beach has been authorized to transfer to Kure Beach who is receiving no Federal fiords. Both
beaches are on a three-near renourishment cycle where fiscal near 2013 is the next renourishrnent cl-cle for these
beaches. The breakdown of fimding is as follows:
Federal Funds: State Funds: Local Funds: Total:
Carolina Beach $4,400,000 $1,180,000 $2,120,000 $ 7,700,000
Kure Beach $0 $0 $6,400,000 $ 6,400,000
Total $4,400,000 $1,180,000 $8,520,000 $14,100,000
Under contributory authority, which was recently approved by Congress, projects can now be designed
with an expanded scope above the minimum standards authorized by the Federal government.Both the Carolina
Beach and Kure Beach projects are designed with an expanded scope. However, under this design, the Federal
govermnent is only responsible for 65%of the costs of the minimum standard and the state and local govermnent are
responsible for the remaining 35%of the minimum standard plus 100%of the costs above the minimum standard.
Minimum Design: Expanded Scope: Total Project Cost:
Carolina Beach $6,900,000 $ 800,000 $7,700,000
Kure Beach $0 $6,400,000 $6,400,000
Under the contributory authority scenario, the State of North Carolina is not willing to sign the
Memorandum of Agreement with the United States Army Corps of Engineers to accept their share of the liability
above the estimated project amounts. These liabilities could result from bids received at higher costs than the
estimated project or other unforeseen risks such as dredged sand being inferior quality, lawsuits, insurance claims,
etc. This translates into increased exposure to the County for those potential liabilities. Staff has estimated this
could be as much as$3,525,000 excluding any unforeseen risks as noted above. FY2013 ending ROT Fund Balance
including additional exposure is projected in the amount of$30,752,017. Budget Ordinance Amendment 13-039 is
available to allocate$6,185,872 from Room Occupancy Tax fiords.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
REGULAR MEETING,SEPTEMBER 4,2012 PAGE 474
Chairman Davis and Commissioner Catlin voiced their concern that supporting our area beaches and
keeping our wateiNvays open are critical to the tourist industiv and our local economy. The County cannot inn the
risk of losing the Federal allocation as it may be the last Federal money allocated. It is very important to continue to
work together on obtaining fixture beach nourislnnent finding. The MOA is not meant to be a template for fixture
funding scenarios.
Hearing no further discussion, Chairman Davis requested direction from the Board.
Motion: Vice-Chairman Barfield MOVED, SECONDED by Commissioner Catlin, to approve the Memorandum of
Agreement with the United States Army Corps of Engineers and adopt Budget Ordinance Amendment 13-039
allocating finds for beach nourishment for Carolina Beach and Kure Beach as presented. Upon vote, the MOTION
CARRIED UNANIMOUSLY.
A copy of the Memorandum of Agreement is available for review in the Legal Department.
A copy of the budget ordinance amendment is hereby incorporated as part of the minutes and contained in
Exhibit Book XXXV,Page 15.6.
DISCUSSION AND CONTINUANCE OF REQUEST BY TOM TUCKER TO REZONE 11.67 ACRES OF
PROPERTY LOCATED AT 7740 MARKET STREET AND 115 AMARYLLIS DRIVE FROM B-2
HIGHWAY BUSINESS TO CONDITIONAL R-10,RESIDENTIAL(Z-922,08/12)
Planning and Inspections Director Chris O'Keefe reported that over the weekend it was brought to the
attention of planning staff that residents of the apartment complex, The Apartments at Three Oaks, had not been
notified of the developers community meeting which is a requirement in the zoning ordinance. As citizens in the
county turn more to leasing as a way to secure a home for themselves and their families, the importance of including
leaseholders in public notification has become far more critical. Because of this shortcoming in the notification,
staff feels that this item should be continued to allow the developer time to hold an additional public meeting where
all the tenants of the apartments are invited. The County Manager and County Attorney concur.
In response to Board questions, County Attorney Wanda Copley confirmed that staff has discussed the
recommendation and that they concur that it is in the County's best interest to continue the request to allow the
Petitioner time to meet with the leaseholders, not doing so could potentially be the basis for a lawsuit: the language
in the zoning ordinance needs to be tightened up.
In response to Board questions, the Petitioner, Tom Tucker, reported that he was just made aware of the
requirement a few hours ago. In further discussion, Mr. Tucker agreed to continue the request until the Board's
meeting on October 1,2012 to allow time to meet with the residents of the apartment complex.
Hearing no further discussion, Chairman Davis requested direction from the Board.
Motion: Commissioner Catlin MOVED, SECONDED by Commissioner Berger, to continue the request by Tom
Tucker to rezone 11.67 Acres located at 7740 Market Street and 115 Amarvllis Drive from B-2 Highway Business
to Conditional R-10, Residential until the Board's October 1, 2012 meeting. Upon vote, the MOTION CARRIED
UNANIMOUSLY.
PUBLIC HEARING AND APPROVAL OF REQUEST BY CAPE FEAR PUBLIC TRANSPORTATION
AUTHORITY TO CLOSE A PORTION OF DIVISION DRIVE LOCATED BETWEEN THE 1500 BLOCK
OF CASTLE HAYNE ROAD EAST TO THE RAMP OF MARTIN LUTHER KING,JR. PARKWAY (SC-
92,07/12)
Chairman Davis opened the Public Hearing and requested Staff to make the presentation.
Senior Planner Sam Burgess reported that Cape Fear Public Transportation Authority is requesting to close
a portion of Division Drive located between the 1500 Block of Castle Hayne Road east to the ramp of Martin Luther
King Jr. Parkway to construct a new facility and presented a slide overview of the request. Since the completion of
the Martin Luther King Parkway this portion of the road no longer provides access: staff recommends approval of
the request.
Chairman Davis asked if anyone from the public wished to speak in opposition to the request.
Cape Fear Public Transportation Authority Director Albert Eby reported that the Authority owns all the
parcels and that the existing buildings will be torn down to allow construction of a new facility.
Hearing no further comments, Chairman Davis closed the Public Hearing and requested direction from the
Board.
Motion: Vice-Chairman Barfield MOVED, SECONDED by Commissioner Catlin, to approve the request by the
Cape Fear Public Transportation Authority to close a portion of Division Drive located between the 1500 Block of
Castle Hayne Road east to the ramp of Martin Luther King Jr. Parkway not effective until the fifty-foot easement
agreement is provided between the authorities as presented. Upon vote, the MOTION CARRIED
UNANIMOUSLY.
A copy of the Order to Close a portion of Division Drive is hereby incorporated as a part of the minutes and
is contained in Exhibit Book XXXV,Page 15.7.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
REGULAR MEETING,SEPTEMBER 4,2012 PAGE 475
PUBLIC COMMENTS ON NON-AGENDA ITEMS
Chairman Davis announced that time has been reserved to allow the public to present an item that was not
listed on the regular agenda. No items were presented.
BREAK
Chairman Davis called for a break from 6:56 p.m.until 7:05 p.m.
ADDITIONAL REGULAR AGENDA ITEM
COVANTA CONTRACT PRESENTATION FOR THE RETROFIT AND TWENTY-YEAR OPERATION
OF THE SUSTAINABLE ENERGY FACILITY
County Manager Chris Coudriet reported that staff has concluded the contract negotiations with Covanta
for the retrofit and twenty-year operation of the Sustainable Energy Facility (SEF) requesting staff to make the
presentation.
Environmental Management Director Joe Suleyman presented a history of the landfill highlighting that the
County's landfill has six years of permitted life remaining at the current trash volume.
Eric J. (Rick) Sapir, Attorney with Hawkins, Delafield, and Wood, presented an overview of the Covanta
contract highlighting the following information:
• Scope of Responsibilities:
• Covanta (Facility Operator) - design, permit, retrofit, test, operate, and perform all maintenance
to the SEF in accordance with contract standards,including performance guarantees.
• New Hanover County (Facility Owner) - finance and pay Phase 1 retrofit price: pay Phase 2
sei ice fee: and dispose of residue and unacceptable waste.
• Company Guarantees of Price:
• Phase 1 retrofit price in the amount of$32,622,460
• Limited Adjustments(escalation)
• Phase 2 sei ice fee:
• Base Operating Fee(BOF)_ $12,499,000 for 150,000 tons
• Excess Operating Fee(EOF)_$25/ton above 150,000 tons
• Pass Through Items(PT)= Sales tax:non-processible waste
• Revenue Credits(RC)=Electricity and ferrous metal incentives
• Extraordinaiv Items(EI)=Performance Damages or Credits
• Sei ice Fee=BOF+EOF+PT+RC+/-EI
• Company Guarantees of Schedule:
• Construction commencement date
• Anticipated sixteen months from contract execution date
• Title V permitting expected to take up to sixteen months: construction cannot start until permit in
hand
• Guaranteed construction schedule
• 450 days from construction commencement date
• Delay damages= 125%of tipping fee
• Company Guarantees of Performance:
• Throughput guarantee of 150,000 TPY(Adjusts for HHV)
• Electricity production guarantee
• 34,000 MWHr in Year 1;Retest end of Year 1
• Resets to higher of 34,000 MWHr/year or Retest setting Years 2-20
• Environmental Guarantee(Title V and Netting)
• Residue Guarantee
• Ferrous Metal Recovery Guarantee
• Damages for Non-Performance
• Company gets revenue sharing as incentives
• Uncontrollable Circumstances:
• Changes in law
• Acts of God
• Exclusions
• Company Accepts*'As-Is"Risk(limited exceptions)
• County Termination Rights:
• Events of default
• Without cure rights
• With cure rights
• Convenience termination rights
• Regulatory trigger rights
• Mutual right upon extended delay prior to construction commencement date
• Limitation on remedies/termination damages
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
REGULAR MEETING,SEPTEMBER 4,2012 PAGE 476
• Securit-v for Performance:
• Parent company guarantee
• Plus$2 million additional Line of Credit enhancement for material change in guarantor's credit
• Payment and Performance Bond
• Letter of Credit
• Required insurance
• Retainage(during Phase 1)
• Term:
• Initial term-twenty years from acceptance date
• Renewal terms:
• First five-near extension at County sole discretion
• Second five-year extension upon mutual agreement
Strategy and Policy Manager Beth Schrader presented an oveiview on how the competitive proposal
improved during the contract deliberations highlighting the following areas:
• Phase 1 Retrofit(Netting Option):
• $32,468,000 increased to$32,622,460 and includes stack repair/replacement
• *'As-Is" risk exclusions limited to turbines and asbestos
• Phase 2 Seivice Fee(Netting Option):
• $13,589,000 per year decreased to$12,499,000 per year
• CPI Fee Adjustment changed from unlimited adjustment based on annual change to CPI-U Southeast
to adjust based on amoral change to CPI-U Southeast but with a 1%floor and 5%cap
• Electricit-v Guarantee:
• 34,000 MWHr Year 1 (minimum)
• Retest End of Year 1-guarantee resets to higher of minimum or new value for Years 2-20
• Electricity Revenue Sharing:
• Changed from 50 0/o/50% split from 34,000: 39,000 MWHr/year to 90% Covanta/10% NHC
above 39,000 MWHr/year to 100%NHC up to 39,000 MWHr/year: 50 0/o/50%split above 39,000
MWHr/year(or reset guarantee level, if higher)
• RECs and other Green Credits:
• 50 0/o/50% share of RECs changed to 100% REC/Green credits to NHC: performance damage
limitation of$150,000A-ear for environmental credits
• Ferrous Metal Revenue Sharing:
• 100%revenue to NHC until capex repaid; 50 0/o/50%thereafter changed to 100%revenue to NHC
until capex plus interest repaid; 55%NHC/45%Covanta thereafter
• NHC Special Waste Revenue Sharing:
• No excess fee,but 50 0/o/50%revenue split changed to NHC pays$25/ton excess fee: no revenue
split(currently$100/ton)
• Excess Waste Fee:
• $15/ton> 150,000 TPY changed to$25/ton> 150,000 TPY
• Projected Tip Fee:
• Up to$93/ton changed to$88 -$90/ton
• The bottom line:
• A sustainable/self-supporting solid waste solution requires$88 -$90*/ton tip fee for the life of
project
• Residential impact: annual increase$23.49-$25.11:monthly increase$1.96-$2.09
• Small retail impact: annual increase$169.65-$181.35:monthly increase$14.14-$15.11
• Fast food establishments impact: annual increase$1,176.24-$1,257.36:monthly increase$98.02-
$104.78
• The next steps include a Work Session, September 13, 2012 from 2:00 pm — 4:00 pm at the
Govermnent Center immediately prior to Agenda Review: Regular Meeting, September 17, 2012 at
9:00 a.m.with fifteen minutes allotted for public comments.
In response to questions by Commissioner Catlin concerning air quality permit limits, Ms. Schrader
presented the following information for Board consideration:
• Prevention and Significant Deterioration (PSD) of Air Quality Permit Limits Avoidance goes beyond
existing Title V and proposed netting permit requirements.
• Accomplished by $1.8 million of capital modifications to all three scrubber units and bag houses at a
cost of$200K/year additional operating expenses for reagents
• Equates to approximately$1.65/ton increase to tip fee
• PSD Avoidance would significantly reduce lead and mercury and regulates additional emissions
A complete copy of the Power Point presentation is available for review on the County's website.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
REGULAR MEETING,SEPTEMBER 4,2012 PAGE 477
ADJOURNMENT
There being no further business, Chairman Davis adjourned the meeting at 7:49 p.m.
Respectfully submitted,
Sheila L. Schult
Clerk to the Board
Please note that the above minutes are not a verbatim record of the l ew Hanover Couno)Board of Commissioners
meeting. The entire proceedings are available for review and check-out at all Aei-Hanover Couno)Libraries and
on innr.nhcgov.com HC'Live or innr.nhcgov.com pyges.BOCas py