NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE BRUNSWICK COUNTY SUPERIOR COURT DIVISION FILE NO.: 17-CVS-2243
TOWN OF LELAND, NORTH ) CAROLINA, and H2GO BRUNSWICK ) REGIONAL WATER & SEWER, ) ) Plaintiffs, ) ) vs. ) ) TOWN OF BELVILLE, NORTH ) CAROLINA ) ) Defendant. ) __ ) ) TOWN OF LELAND, NORTH ) CAROLINA, ) ) Plaintiff and Cross-Claim ) Plaintiff ) NOTICE OF SUBMISSION OF ) EXHIBITS IN BRIEF IN vs. ) OPPOSITION TO JOINT ) MOTION BY PLAINTIFF H2GO TOWN OF BELVILLE, NORTH ) AND DEFENDANT BELVILLE CAROLINA ) TO MODIFY JULY 12 ORDER ) Defendant ) ) and. ) ) H2GO BRUNSWICK REGIONAL WATER ) & SEWER, ) ) Cross-Claim Defendant. ) ______) ) INTERLOCAL RISK FINANCING FUND ) OF NORTH CAROLINA,
Intervenor. NOW COMES Plaintiff Town of Leland, North Carolina (“Leland”), through counsel, and submits this Notice of Submission of Exhibits in Brief in Opposition to Joint Motion by Plaintiff H2GO and Defendant Belville to Modify July 12 Order. The List of Exhibits in Leland’s Brief are below as follows:
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Exhibit A Permanent Injunction, Partial Final Judgment and Stay Pending Appeal (the July 12 Order) Exhibit B Preliminary Injunction Exhibit C Order on Summary Judgment Motions (the April 22 Order) Exhibit D Affidavit of Joseph S. Dowdy Exhibit E Affidavit of Debra Willis Exhibit F Affidavit of Mike James Exhibit G Steve Hosmer Deposition Excerpts Exhibit H Town of Belville’s Motion for Contempt Exhibit I Sept. 11, 2018 Letter from C. Baldwin to Judge Henry Exhibit J Aug. 29, 2018 E-mail from G. Warren to Judge Henry Exhibit K Aug. 16, 2018 E-mail from J. Eldridge to J. Dowdy Exhibit L Leland and H2GO’s Opposition to Belville’s Motion to Stay Exhibit M Port City Daily article “Did Belville violate state law by endorsing some H2GO candidates, accusing others of lying?” Exhibit N StarNews Online “OUR VIEW: Why H2GO should not kill the reverse-osmosis plant” Exhibit O Town of Belville Notices of Appeal Exhibit P Feb. 21, 2020 Letter from Leland to R. Jenkins Exhibit Q Aug. 13, 2019 Press Release Exhibit R Interlocal Agreement Exhibit S Port City Daily article “Still no H2GO vote on proposed settlement, Belville says it won’t sign latest version” Exhibit T “Belville declines proposal aimed to settle H2GO dispute” Exhibit U Jan. 24, 2020 Settlement Proposal from H2GO Exhibit V Feb. 19, 2020 Supplement to Settlement Proposal from H2GO
Respectfully submitted this the 19th day of March, 2020.
TOWN OF LELAND, NORTH CAROLINA, By Counsel,
Joseph S. Dowdy Joseph S. Dowdy (NC Bar # 31941) Todd S. Roessler (NC Bar #28046) Phillip A. Harris, Jr. (NC Bar #39740) KILPATRICK TOWNSEND & STOCKTON LLP 4208 Six Forks Road, Suite 1400 Raleigh, NC 27609 Phone: (919) 420-1700 Fax: (919) 420-1800 [email protected] [email protected] [email protected]
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CERTIFICATE OF SERVICE
I, the undersigned attorney, hereby certify that on the date indicated below, I served a true copy of the foregoing NOTICE OF SUBMISSION OF EXHIBITS IN PLAINTIFF TOWN OF LELAND’S BRIEF IN OPPOSITION TO JOINT MOTION BY PLAINTIFF H2GO AND DEFENDANT BELVILLE TO MODIFY JULY 12 ORDER via electronic mail to the following:
Charles S. Baldwin IV Andrew L. Rodenbough BROOKS, PIERCE, McLENDON HUMPHREY & LEONARD, LLP [email protected] [email protected] Counsel for the Town of Belville, North Carolina
James E. Eldridge ELDRIDGE LAW FIRM, P.C. [email protected] Counsel for the Town of Belville, North Carolina
Donalt J. Eglinton Edward J. “Trip” Coyne III WARD AND SMITH, P.A. [email protected] [email protected] Counsel for H2GO Brunswick Regional Water & Sewer
Cathryn M. Little LITTLE & LITTLE, PLLC [email protected] Counsel for IRFFNC
Respectfully submitted on March 19, 2020,
Joseph S. Dowdy Joseph S. Dowdy (NC Bar # 31941)
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EXHIBIT “A” NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE BRUNSWICK COUNTY SUPERIOR COURT DIVISION FILE NO.: 17-CVS-2243
) TOWN OF LELAND, NORTH CAROLINA, and ) H2GO BRUNSWICK REGIONAL WATER & ) SEWER, ) ) Plaintiffs, ) ) VS. ) ) TOWN OF BELVILLE, NORTH CAROLINA ) ) Defendant. ) ) ) TOWN OF LELAND, NORTH CAROLINA, ) ) Plaintiff and Cross- ) PERMANENT Claim Plaintiff ) INJUNCTION, PARTIAL ) FINAL JUDGMENT AND vs. ) STAY PENDING APPEAL ) TOWN OF BELVILLE, NORTH CAROLINA, ) ) Defendant ) ) and ) ) H2GO BRUNSWICK REGIONAL WATER & ) SEWER, ) ) Cross-Claim'’ Defendant. ) ) ) INTERLOCAL RISK FINANCING FUND OF ) NORTH CAROLINA, ) ) Intervenor. )
This matter is before the undersigned Rule 2.1 judge following the entry of this court's interlocutory April 22, 2019 Order (the "April 22 Order") ruling on the parties' cross-motions for summary judgment. In that Order, the court indicated that it would enter a permanent mandatory injunction. Since the filing of the April 22 Order,
Defendant Town of Belville ("Belville") filed a notice of appeal dated April 30, 2019 and a motion for stay pending appeal dated May 13, 2019. On May 16, 2019,
Plaintiffs Town of Leland ("Leland") and H2GO Brunswick Regional Water & Sewer
("H2GO") served a motion for entry of permanent injunction or, in the alternative, motion for entry of injunction pending appeal. The court held a hearing in Brunswick
County Superior Court to address these matters on May 17, 2019.
After carefully considering the materials submitted and the presentations of counsel, the court hereby: (1) enters a permanent injunction, (2) certifies this Order, which incorporates the Court's April 22 Order, as an immediately appealable, partial final judgment, and (3) stays the permanent injunction pending the outcome of any appeals from the April 22 Order and this Order.
I. ENTRY OF FINAL PERMANENT INJUNCTION
The court makes the following findings of fact:
1. This action arises from November 28, 2017^ transactions involving the
transfer of all of H2GO's assets and debts to Belville pursuant to the following
documents:
a. An Agreement to Convey Water Systems (the "Conveyance
Agreement"), which is recorded at Book 3990, Pages 0144 to 0153, and which
is attached hereto as Exhibit 1.
^ The transaction documents are dated November 28, 2017, but Belville's Board of Commissioners met and approved the transaction and Belville signed the transaction documents on November 29, 2017. As used herein, the November 28, 2017 transaction refers to the transactions set out in the documents signed by H2GO and Belville on November 28 and 29, 2017. -2- b. An Assignment and Bill of Sale (the "Assignment"), which is
recorded at Book 3990, Pages 0154 to 0163, and which is attached hereto as
Exhibit 2.
c. A North Carolina Special Warranty Deed (the "Deed"), which is
recorded at Book 3990, Pages 0404 to 0422, and which is attached hereto as
Exhibit 3.
2. The property, including real property, assets and debts (hereinafter the
Property"), subject to the transfer is described in the foregoing instruments.
3. As part of the November 28, 2017 transaction, Belville and H2GO's prior
Board also entered into an Agreement for the Operation and Maintenance of Water and Sewer Systems (the "Operating Agreement").
4. The April 22 Order determined that there is no genuine issue of material fact, and the Town of Leland, North Carolina ("Leiand") and H2GO are entitled to judgment as a matter of law on their first three of their causes of action asserting that the transfer to Belville violated North Carolina law. Applying that standard, the
court determined that the transfer to Belville unlawfully disempowers H2GO as a body
politic and corporate, unlawfully impairs H2GO's governmental discretionary
functions, and is the result of a manifest abuse of discretion and disregard for the
law. The April 22 Order granted summary judgment to Belville on the remaining
causes of action in the First Amended Complaint, except Leland's Open Meetings Law
claim against H2GO and Belville, and granted summary judgment in favor of H2GO
on Belville's Counterclaims.
5. The April 22 Order stated: "A permanent mandatory injunction shall be
entered by the court consistent with and in support of the rulings of the court which
-3- will order that the public records state that H2GO is the lawful owner of all assets and debts described in the special warranty deed and the assignment and bill of sale.
6. As a result of the court's determination that the November 28, 2017 transactions are unlawfui, Belville is not entitled to possession of the Property.
7. The April 22 Order states:
[The November 28, 2017 transactions] have produced or will produce these results: (1) the H2GO board of commissioners will lose all ability to exercise its statutory authority under N.C. Gen. Stat. §130A-55; (2) all real property and personal property owned by H2GO including its infrastructure, facilities, structures, vehicles, equipment, supplies, and funds, used to operate the water and sewer system, with a total value in excess of $57 million would be conveyed by the district to the Town of Belville; (3) included in that conveyance is approximately $16.5 million in capital improvement funds, debt service reserve funds, operating reserves, and customer deposits; (4) H2GO's debt associated with the sewer system of approximately $6 million would be transferred to the Town of Belville; (5) a public water distribution system and a public sanitary sewer collection system that served a population in excess of 25,000, with over 10,000 customer accounts, would be conveyed to the Town of Belville; (6) the Town of Belville would have the authority to charge those customers who did not live in Belville higher rates; (7) 29 H2GO employees would be terminated and the Town of Belville would be required to employ most, if not all of them, so they could operate the system; (8) major portions of the Town of Leland and those who reside in the unincorporated areas would be dependent on the Board of Commissioners of the Town of Belville for their economic planning and expansion requirements; (9) the elected H2GO Board of Commissioners have been locked out of their district office and meeting place except when entry is permitted by Town of Belville officials; (10) the Town of Belville, in order to manage and operate the systems, would have to exercise all of the power and authority set out in N.C. Gen. Stat. §130A-55 for sanitary districts, including the sole authority to set rates and fees for utility customers; and (11) of the approximately 17,800 registered voters in the district, 16,500 (approximately 11,200 of those voters reside in Leland) would be voting for sanitary district commissioners who no longer had the -4- authority or ability to manage and operate their water distribution and public sanitary collection systems. That authority would fall into the exclusive hands of the town commissioners for the Town of Belville. Those living outside of that town cannot vote for those commissioners.
The April 22 Order further states:
N.C. Gen. Stat. §130A-47 provide[s] specifically that 'no municipal corporation or any part of the territory in a municipal corporation shall be included in a sanitary district except at the request of the governing board of the municipal corporation.' That was not done [with respect to Leland being in a sanitary district owned by Belville as a result of the transactions] nor is it likely to occur.
And that:
[I]t was unreasonable for Belville to acquire and operate the[] [Sanitary District's] water and sewer public enterprises outside its corporate limits. Such an acquisition would be in violation of Article 16 of Section 160A of the General Statutes, and beyond its statutory authority.
The court concludes as matter of law that:
1. There is no genuine issue of material fact, and Plaintiffs are entitled to the injunctive relief granted herein as a matter of law.
2. Plaintiffs are irreparably harmed by the November 28, 2017 transaction
and Belville holding title and maintaining possession of the Property, including in the
ways identified above.
3. Plaintiffs lack an adequate remedy at law.
4. A permanent, mandatory injunction is also in the public interest and in
the interests of justice.
5. The balance of the equities favors the relief granted herein.
-5- 6. Plaintiffs have established that a permanent, mandatory injunction is proper.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED THAT:
1. H2GO is hereby declared to be the lawful and rightful owner of the
Property and is entitled to immediate possession of the same;
2. Belville is hereby declared to be unlawfully holding title to and unlawfully in possession of the Property;
3. All rights, title and interest in the Property are hereby conveyed to H2GO by operation of this Order;
4. The public records shall reflect that H2GO is the lawful and rightful owner of all of the Property;
5. The Brunswick County Register of Deeds shall record and index this
Order as a conveyance of the Property by the court from Belville to H2GO and the establishment of title and the right of possession of the Property in H2GO;
6. Belville shall immediately return to H2GO the transferred cash assets and any other tangible or intangible property that Belville received from H2GO in connection with the November 28, 2017 transactions;
7. Belville shall take any reasonable steps (such as signing documents) that may be required to consummate the transfer of the Property back to H2GO and
Belville shall not withhold any such reasonable efforts;
8. Belville is enjoined and prohibited from maintaining ownership or control of the Property pursuant to the Conveyance Agreement, the Assignment, the Deed or the Operating Agreement (the "Transaction Documents"), from interfering with
-6- H2G0's lawful ownership or control thereof based on the Transactions, or from taking any actions that would have the effect of enforcing the Transaction Documents;
9. Both Belville and H2GO shall take reasonable steps to ensure that, in the process of Belville returning the Property and H2GO receiving the Property, there is no disruption or interference with the delivery of water and sewer services to the
District's customers and no disruption of or lapse in the insurance of the District's
Property; and
10. Nothing in this Order shall be deemed to impair any bondholder's lien or any lien established by Chapter 159 of the General Statutes.
II. CERTIFICATION OF ORDER AS IMMEDIATELY APPEALABLE. PARTIAL FINAL JUDGMENT
The Court makes the following additional findings of fact:
1. The April 22 Order did not fully adjudicate all claims as to all parties because it did not grant Leland and H2GO the injunctive relief to which they are entitled on the First Amended Complaint's first three causes of action and did not adjudicate Leland's twelfth cause of action and first crossclaim, which is a claim alleging that H2GO's prior Board violated the North Carolina Open Meetings Law.
2. With the entry of this Order, the Court has granted Leland and H2GO all relief to which they are entitled on the causes of action on which they prevailed, with the exception of their request for recovery of attorneys' fees and litigation costs.
3. Upon entry of this Order, the first ten causes of action asserted in the
First Amended Complaint have been fully and finally adjudicated, except for the issue of fees and costs.
-7- 4. The denominated eleventh cause of action is a request for a form of relief, and the court has granted that relief in this Order.
5. Belville's counterclaims against H2GO have been fully and finally adjudicated.
6. That leaves for disposition only Leland's twelfth cause of action and first crossclaim.
7. By Consent Order entered January 11, 2019, this court stayed proceedings on the Open Meetings Law claim pending determination of the remaining claims.
8. This court maintained that stay in effect in its April 22 Order.
9. It is appropriate for the Open Meetings Law claim to remain stayed pending the outcome of the appeal(s) regarding the other causes of action.
The court concludes as a matter of law that:
1. Entry of partial final judgment is proper pursuant to Rule 54(b), as there is no just reason to delay entry of final judgment as to the first ten causes of action asserted in First Amended Complaint and as to Belville's Counterclaims.
2. It is the court's intention that the parties be able to appeal from this
Order, which incorporates the Court's April 22 Order, as a final judgment as to all claims other than Leland's Open Meetings Claim.
IT IS THEREFORE ORDERED ADJUDGED AND DECREED THAT:
1. This Order which incorporates the Court's April 22 Order, is entered and certified as an immediately appealable partial final judgment pursuant to Rule 54(b);
-8- 2. Leland's Open Meetings Law claim shall remain stayed pending the outcome of any direct appeals in the North Carolina appellate courts;
3. The court defers ruling on any request for attorney fees and litigation costs until after the parties' appeals from this order have concluded.
III. ENTRY OF STAY PENDING APPEAL
The court makes the following additional findings of fact:
1. On May 13, 2019, Belville filed a motion for stay pending appeal, in which Belville contended that there was an automatic stay pending appeal and alternatively moved for a discretionary stay pending appeal and requested that the court leave the Preliminary Injunction Order in place.
2. On May 17, 2017, Leland and H2GO filed a motion for entry of permanent injunction or in the alternative motion for injunction pending appeal and a response in opposition to Belville's motion for stay.
3. All parties waived the notice and service requirements, and this court conducted a May 17, 2019 hearing in Brunswick County Superior Court. No party objected to this court proceeding with the hearing on May 17, 2017.
4. The April 22 Order does not affect Belville's title or interests in property.
The court, having reviewed and considered the parties' respective motions. arguments of counsel, and other matters of record, additionally concludes as a matter of law that:
1. Belville's April 30, 2019 Notice of Appeal takes an appeal from an interlocutory order that does not affect a substantial right and is not otherwise immediately appealable pursuant to N.C. Gen. Stat. § 7A-27.
-9- 2. There is no automatic stay as a result of the filing of Belville's April 30,
2019 Notice of Appeal.
3. The court has the discretion to enter a discretionary stay pending appeal pursuant to North Carolina Rule of Civil Procedure 62(c), which provides:
When an appeal is taken from an interlocutory or final judgment granting, dissolving, or denying an injunction, the court in its discretion may suspend, modify, restore, or grant an injunction during the pendency of the appeal upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party.
4. The court, in exercise of its discretion, has decided to stay and suspend the permanent injunction granted herein while any appeals from the April 22 Order or this Order are pending and to leave the Preliminary Injunction Order filed on
December 28, 2017 In place during the pendency of such appeals.
IT IS THEREFORE ORDERED ADJUDGED AND DECREED THAT:
1. Pursuant to North Carolina Rule of Civil Procedure 62(c), the Permanent
Injunction set out in Section I of this Order is hereby stayed and suspended pending resolution of any appeals regarding the court's April 22 Order or this Order.
2. The Preliminary Injunction Order entered on December 28, 2017, shall remain in effect during the pendency of any appeals regarding the April 22 Order or this Order.
3. Consistent with North Carolina Rules of Civil Procedure 62(e), no bond. obligation, or other security from Belville is required to effect the stay ordered herein.
4. The Court's Order Staying Open Meetings Law Claim entered January 3,
2019 shall remain in effect.
-10- 5. If the April 22 Order or this Order are overturned by the Court of
Appeals, the Preliminary Injunction shall remain in effect pending final adjudication of Leland's Open Meetings Law claim or of any claim reinstated by an appellate court.
Entered this/^^^day of kJuly 2019.
Charles H. He , Jr. Rule 2.1 Superior Court Judge
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EXHIBIT “B” NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE BRUNSWICK COUNT 28 CCt - SUPERIOR COURT DIVISION D!. FILE NO.: 17-CVS-2243 COUNTY, C.S.C. TOWN OF LELAND, NORTH. ) CAROLINA, ) Plaintiff, ) ) vs.
H2GO BRUNSWICK REGIONAL WATER & SEWER; TOWN OF BELVILLE, PRELIMINARY INJUNCTION NORTH CAROLINA; WILLIAM H. BROWNING, Chairman, H2GO Brunswick Regional Water & Sewer; RON JENKINS, Vice Chairman, H2GO Brunswick Regional Water & Sewer; CARL ANTOS, Secretary, H2GO Brunswick Regional Water & Sewer, ) ) Defendants. ) )
THIS MATTER came before the undersigned superior court judge on Plaintiff's Motion for a Preliminary Injunction ("Motion") pursuant to N.C. Gen. Stat. § 1A-1, Rule 65, following entry of a December 1, 2017 Temporary Restraining Order (the "TRO"). The Defendant Town of Belville's ("Bellville") also brought a motion to hold H2GO Brunswick Regional Water &
Sewer ("H2GO") and certain of its commissioners in contempt of court for alleged violations of the TRO, but Belville has withdrawn its motion. Plaintiff's Motion for a Preliminary Injunction is GRANTED on the terms set out in this Order.
IT APPEARS TO THE COURT, having carefully reviewed the affidavits submitted by the parties and having carefully considered the briefs and arguments of counsel for the respective parties and the authorities cited, that:
1. Plaintiff has standing to bring this action;
2. Plaintiff has demonstrated a likelihood of success on the merits in that, among
1 other things, the transfer of H2GO's assets and liabilities to Belville was done without the approval of the North Carolina Local Government Commission or H2GO's bondholders when such approvals were conditions precedent to the transfer and when the transfer may violate
Chapters 130A and 160A of the North Carolina General Statutes;
3. After balancing the equities between the parties and the public interest, Plaintiff will suffer irreparable harm absent injunctive relief in that, among other things, Plaintiff has shown that the construction of the reverse osmosis water treatment plant (the "RO Plant") will likely cause its water rates to rise, the current Operating Agreement term extends only through
January 30, 2018, the Plaintiff has an obvious interest in the uninterrupted operation of its water and sewer systems, the Plaintiff would suffer harm if H2GO's debt were to go into default status such that the operation of the sanitary district was threatened, and Plaintiff and the public will be harmed if H2GO ceases to act and operate pursuant to Chapter 130A of the General Statutes; and
4. Issuance of a preliminary injunction is necessary, in the Court's opinion, for protection of Plaintiff's rights during the course of this litigation, and the present status quo should be maintained.
IT IS THEREFORE ORDERED THAT:
1. Belville will retain title to and ownership of the real and personal property of the water and sewer system and its liabilities (the "Assets" and "Debts"), but shall not transfer, use, pay, pledge, encumber, or dispose of the Assets without the express approval of H2GO, through its current Board of Commissioners (H2GO's "Current Board");
2. H2GO shall remain a body politic and corporate and shall operate as a sanitary district pursuant to Chapter 130A, Article 2, Part 2 of the General Statutes and shall continue, while this Order is in effect, to provide water and sewer services to the district's customers;
2 3. Except as modified herein, the Agreement for the Operation and Maintenance of
Water and Sewer Systems dated November 28, 2017 (the "Operating Agreement") between
H2GO and Belville shall remain in effect beyond January 31, 2018, and H2GO and Belville shall not terminate the same, pending resolution of this action;
4. During the pendency of this Order, the following provisions of the Operating
Agreement shall be deemed inoperable:
a. Article 4 and Section 10.01, governing the term of the Agreement and
termination thereof; Belville and H2GO are enjoined from deeming the Operating
Agreement expired January 31, 2018, and H2GO shall continue to manage and operate
the water and sewer systems and to provide water and sewer services to the district's
customers pending further order(s) of this Court;
b. Section 6.01(J) to the extent it is deemed to allow Belville, as opposed to
H2GO, to enter into any new contracts or to request new permits associated with water
and sewer systems or to proceed with any contracts or permits regarding the RO Plant
and to the extent it divests H2GO with authority to enter into or to terminate contracts
pursuant to Chapter 130A, Article 2, Part 2 of the General Statutes;
c. The portion of Section 6.01(K) that states that Belville is "the governing
authority with regard to committing to provide water and sewer services to future
customers," and Belville is enjoined from interfering with decisions of H2GO to provide
water and sewer services to future customers;
d. Section 6.01(P) to the extent it may be deemed to require H2GO to obtain
the Town's approval for capital improvements deemed necessary for the operation of the
water and sewer systems;
3 e. Section 6.01(Q), which addresses the RO Plant, in its entirety;
f. The portion of Section 6.01(S) which provides that "[p]ast, current, and future members of the District's governing board are not licensed nor [sic] permitted to use any Town vehicles or equipment and are expressly not licensed or permitted to enter upon any Town property associated with the Town's Water and Sewer Systems excepting the Town Hall public building," and Belville is enjoined from in any way denying
H2GO's Commissioners or any of H2GO's employees or agents access to any property associated with the water and sewer systems or to any of H2GO's employees or staff to any offices or facilities in which H2GO's employees or staff perform their work, including but not limited to H2GO's corporate office;
g. Section 6.02(B) to the extent it permits Belville, as opposed to H2GO, to manage the water and sewer systems in the district or to make rate adjustments for water and sewer services;
h. The portion of Section 7.02 that requires H2GO to forward utility payments and other fees collected from customers to Belville; H2GO may keep and maintain those funds and use and apply them consistent with the terms of this Order;
i. Article 8, governing indemnification;
Article 11 governing default by, and liquidated damages against, H2GO;
k. Sections 1.04 and 12.09 to the extent they are inconsistent with this order;
1. Any provision of the Agreement that may be read to permit Belville to deny, interfere with, or refuse to make prompt payment of H2GO's invoices for funds to manage and operate the water and sewer systems, to perform maintenance or repairs, to purchase water from Brunswick County, to pay for wastewater treatment from the
4 County, new water meters, or any liability insurance H2GO deems necessary, to pay any
debt obligations, or to pay contract payables pursuant to Section 5.03 of the Operating
Agreement; and
m. Any other provision that impairs H2GO's corporate and political powers.
5. H2GO and Belville shall not permit a default of any bond obligation originally incurred by H2GO, including, without limitation, the SunTrust 2012 Bond; Belville is enjoined from declining to promptly pay any invoices hereafter submitted by H2GO to make payments of bond indebtedness, and Belville is enjoined from making any bond payments concerning H2GO that H2GO, acting under the authority of its Current Board, does not specifically direct;
6. H2GO and Belville shall not permit a default of any contractual obligation originally incurred by H2GO, except to the extent H2GO challenges any such contractual obligation or gives notice that it intends to do so; Belville is enjoined from declining to promptly pay any invoices hereafter submitted by H2GO to make payments of contractual indebtedness or any item referenced in paragraph 4(1) of this Order, and Belville is enjoined from paying any contractual obligations originally incurred by H2GO that H2GO, acting under the authority of its
Current Board, does not specifically direct;
7. Belville and H2GO are enjoined from seeking approval from the North Carolina
Local Government Commission or H2GO's bondholders for the challenged transfer;
8. Belville and H2GO are enjoined from proceeding with any ongoing or future construction of the RO Plant or making arrangements to do so including, but not limited to, any work related to the water supply wells, site work, piping, and any other work related to the RO
Plant, and nothing in this Order shall prevent H2GO from directing any contractors to
5 discontinue any work that may be in progress or to wait to begin any work that is planned to begin pending resolution of this lawsuit;
9. H2GO and its individual commissioners are enjoined from taking any action which would have the effect of rescinding or voiding the present contracts between Belville and
H2GO and from taking any action to reclaim property already transferred to Belville under the conveyance agreement, including taking any additional steps in furtherance of the Current
Board's December 4, 2017 Resolution declaring the challenged transaction null and void and demanding a return of the Assets and Debts from Belville;
10. Belville is enjoined from construing any representations, actions, or inactions of
H2GO occurring prior to December 4, 2017 as giving H2GO's consent or requesting payment regarding any item addressed in this Order;
11. Nothing in this Order shall be deemed to preclude H2GO or Belville from bringing, joining in, or responding to, or taking positions in, this or any other litigation;
12. This Preliminary Injunction shall remain in effect until it is modified by further order of this Court or until this civil action is resolved;
13. No bond is required of Plaintiff pursuant to Rule 65(c); and
14. The Court retains jurisdiction to interpret and enforce this Order.
Entered this the day of December, 2017.
The Hon. Thomas H. Lock Superior Court Judge Presiding
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EXHIBIT “C” STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION COUNTS OF BRUNSWICK 17 CVS 2243
TOWN OF LELAND, NORTH CAROLINA, and H2GO BRUNSWICK REGIONAL WATER & SEWER,
Plaintiffs, vs.
TOWN OF BELVILLE, NORTH CAROLINA,
Defendant.
TOWN OF LELAND, NORTH CAROLINA,
Plaintiff and Cross-
Claim Plaintiff vs. ORDER TOWN OF BELVILLE, NORTH CAROLINA,
Defendant, and H2GO BRUNSWICK REGIONAL WATER AND SEWER,
Cross-claim
Defendant.
INTERLOCAL RISK FINANCING FUND OF NORTH CAROLINA,
Intervenor. (" C
This cause of action was filed by the Town of Leland on December 1, 2017
against H2GO Brunswick Regional Water & Sewer (hereinafter H2GO) and the Town
of Belville. The parties, by order of the court were realigned to make H2GO a
plaintiff. Cross motions for summary judgment by the parties, along with
accompanying briefs and exhibits, were filed and came on to be heard before the
undersigned on February 28, 2019. All parties were present and represented by
counsel at the time of the hearing of the motions. All exhibits, not hereinafter
excluded by this order, were received and admitted in evidence at the summary
judgment motion hearing.
The court finds, pursuant to Rule 56(c) of the North Carolina Rules of Civil
Procedure, that there are no genuine issues as to the following material facts:
1. The towns of Leland and Belville are incorporated local governments in Brunswick
County, N.C.
2. H2GO Brunswick Regional Water and Sewer ("H2GO") is a sanitary district, organized
and existing pursuant to Chapter 130A of the North Carolina General Statutes. The
original district was formed pursuant to Article 12 of Chapter 130 for the purpose of
providing treated water to the citizens living in the district. On March 1, 1976 a
petition executed by 51% of the resident freeholders within the proposed district was
presented to the Brunswick County Board of Commissioners. The petition was
submitted to the North Carolina Department of Human Resources. A joint public
hearing was held with the representatives of the Department and the county Board
of Commissioners after the proper notices were published. Afterwards, the Board of
Commissioners adopted a resolution approving the creation of the district and,
through it, requested that the Commission of Health Services create the district. On
2 May 8, 1976, the Commission duly created the Leland Sanitary District. The
organizational meeting of the district was held on July 13, 1976.
3. Prior to November 28, 2017, H2GO was properly permitted and provided sewage
collections, water distribution and wastewater treatment to approximately 10,300
residential and commercial customers who resided generally in the northeastern
section of Brunswick County. Residing within this district was 25,500 people. This
area serviced by H2GO included the entire Town of Belville, a majority of the Town
of Leland, part of the Town of Navassa and other unincorporated areas outside of
those towns. Of the approximate 26 square miles in the district, the percentage
geographical makeup consists of 44.3% from the Town of Leland, 11.5% from the
Town of Navassa, 7.4% from the Town of Belville and the remaining 36.7% from
unincorporated areas of that part of Brunswick County.
4. In November of 2017, H2GO had 29 full-time employees requiring an annual payroll
in excess of over $1.54 million.
5. At the end of H2GO's fiscal year in June of 2017, it had overall assets of over $65
million with liabilities of $8.4 million. It was receiving annual revenue of over $10.6
million (down about $.5 million from the 2016 fiscal year) with total annual expenses
of $7.9 million.
6. Prior to November 28, 2017, H2GO owned and operated a public sanitary sewer
collection system consisting of approximately 157 miles of gravity and pressure
sewers, a 400,000 gallon-per-day wastewater treatment plant, a 684,970 gallon-per-
day allocation from the Brunswick County Northeast Wastewater Treatment Plant,
and in partnership with a wastewater transmission system, a collection system
together with manholes/ lift stations, force mains, valves, air release valves, service traps, service laterals, clean-outs, tracts of land, easements, rights-of-way, and other
related facilities.
7. Prior to November 28, 2017, H2GO owned and operated a public water distribution
system consisting of approximately 184 miles of distribution water mains, a 500,000
gallon ground storage tank and boost pump station, a one million gallon elevated
water storage tank, together with fire hydrants, valves, service line, customer
meters, tracts of land, easements, rights-of-way, and other related facilities.
8. On November 28, 2017, H2GO had in capital improvement funds, debt service
reserve funds, operating reserves, and customer deposits totaling approximately
$16.6 million.
9. On November 28, 2017, H2GO had debt associated with the sewer system of
approximately $6 million.
10. Currently and for many years previously, H2GO purchased its finished water from
Brunswick County Public Utilities. Its sources are a six million gallon per day
treatment plant which received its water from a freshwater well field and a 24 million
gallon per day Northwest water treatment plant, which is supplied raw water from
the Cape Fear River by the Lower Cape Fear Water and Sewer Authority.
11. H2GO adopted a bond order in July of 2012 authorizing the issuance of water and
sewer system revenue bonds to provide additional funds to finance the water and
sewer systems. This order authorized an initial bond in aggregate principal amount
not to exceed $6,855,000. The issuance of this order was approved by the North
Carolina Local Government Commission.
12. H2GO, pursuant to N.C. Gen. Stat. § 130A-50, is governed by a board of five
commissioners who are elected by the voters residing within the district. The total ("
number of registered voters eligible to vote in the H2GO Brunswick Regional Water
and Sewer commissioners' election is 17,805. Of that number 11,244 reside in
Leland, N.C. and 1,331 reside in Belville.
13. Going into the November 7, 2017 elections, the five elected commissioners were
William Browning, Carl Antos, Ron Jenkins, Jeff Gerken and Trudy Trombley. The
terms of Gerkin and Trombley had not expired. The remaining three seats faced
election. Jenkins and Antos sought re-election, but Browning chose not to run for re-
election. The voters elected William Beer and Rodney McCoy and re-elected Jenkins
to fill those three commissioner seats.
14. Prior to the election, Browning, Jenkins and Antos had voted to construct at a cost
of $34 million a reverse osmosis plant which consisted of a water treatment plant, a
new well field network, raw water transmission lines and a reverse osmosis
concentrate discharge line to the Brunswick River. This partially constructed reverse
osmosis plant would draw water from a 600 foot deep water aquifer for treatment
and containment removal and produce clean and sustainable potable water.
15. The construction of the reverse osmosjs plant was one of the issues discussed and
debated by the candidates running for election to H2GO's Board of Commissioners.
16. The present majority of H2GO Board of Commissioners consisting of Gerkin,
Trombley and Beer now do not favor the construction of the reverse osmosis plant.
17. Shortly after the election, H2GO commissioner Ron Jenkins met with H2GO executive
director Robert Walker to inquire if "there was any way we could transfer the assets
...from H2GO to Belville." Walker promised Jenkins he would look into it. Town of
Belville attorney James Eldridge later advised Walker of the contents of N.C Gen.
Stat. § 160A-274(b). That statute is contained in Article 12 "Sale and Disposition of c c
Property" of Chapter 160A and provides that "[a]ny governmental unit may, upon
such terms and conditions as it deems wise, with or without consideration, exchange
with, lease, lease from, sell to or purchase from any governmental unit any interest
in real or personal property."
18. Several months before December 1, 2017, there were discussions between Belville
Mayor Mike Alien and town attorney, James Eldridge, related to the issues of H2GO's
merger with Belville or the dissolution of H2GO. Preliminarily, Eldridge determined
that (1) a merger could not take place; (2) a dissolution could not take place where
Belville could take over H2GO's assets; and (3) H2GO could not self-dissolve and
have Belville take over the assets.
19. On the day after the 2017 election, November 8, 2017, town attorney Eldridge in a
"private and confidential" email to executive director Walker asked when H2GO would
hold its organizational meeting and posed this hypothetical question to him: "In the
event some or all of its assets were "sold" to a governmental unit, do you agree that
under [N.C.G.S.] 130A-55(6), H2GO (in its continued existence) is authorized to
contract with that [governmental] unit to operate and manage its water/ sewer
services?" He also asked Walker if that governmental unit would be able to sustain
the operations of the sanitary district on the revenues raised from its water and sewer
services after it paid the operating and management costs without additional funding
from that government unit. Walker responded that the organizational meeting for the
new board was December 19, 2017 and any transfer of assets had to take place by
its next scheduled meeting on November 28, 2017. He also responded that H2GO
transferred $1.4 million to reserves during the last fiscal year. Walker indicated of
his "excite[ment] over this strategy." 20. On November 12, 2017, in an email from Walker to Eldridge, Walker indicated that
he had spoken with Joe Breault, a Belville town commissioner, Mayor Alien and three
of the H2GO board members (Browning, Antos, and Jenkins), and "it appear[ed that]
all three are on the same page to transfer H2GO property (real, personal, cash, and
other assets, etc.) to Belville." He inquired: "Should we meet to strategize as time
is of the essence?" Walker characterized the transfer as "the nuclear option" and
realized that it was a "tail order," but was ready to assist in this effort. In response,
Eldridge recognized the "extraordinary compressed timeframe within which to
prepare for, produce the instruments needed and close the transfer of assets
transaction." He admitted that some of this work he could not "readily do or am not
competent to provide" such as setting up all of the revenue, costs and accounting
items.
21. A series of emails were exchanged between Walker and Eldridge over the next
twenty days, mostly marked "private and confidential/' that set out the proposed
details of a transfer of all assets from H2GO to the town of Belville pursuant to the
authority provided in N.C Gen. Stat. § 160A-274(b).
22. Many of these emails were copied to Mayor Alien and Belville town commissioner
Joseph Breault. Walker advised Eldridge that the board needed to get this transfer
done by the board's next meeting on November 28, 2017.
23. Eldridge, in a November 27, 2017 email to Walker, expressed concerns by the
board members whether the board was "stepping beyond their authority" in its
transfer and conveyance of assets to Belville. Eldridge explained that those
concerns were why they were relying on N.C Gen. Stat, § 160A-274(b). Prior to
the November 28, 2017 meeting, executive director Walker only disclosed the C1 C
planned transfer to Sanitary District Finance Officer Scott Hook, Sanitary District
Clerk Teresa Long, the PIO officer Tyler Wittkofsky, public relations officer Mike
McGill, and lead project engineer and designer for the reverse osmosis plant,
Charles Davis of the Wooden Company. All were told about the plans for the
transfer, but they were expected to keep this information confidential and not
reveal it to the public.
24. On the morning before the last board meeting on November 28, 2017, before the
new members were sworn in, Eldridge was unsure whether to include the "usual
'Approved as to Form' signature line for the attorneys on the agreements" because
he was concerned that the attorney for the Sanitary District, Steve Cable, may "not
sign until he has reviewed the doc[ument]s which impede the closing." No one,
however, could find any statute, ordinance, or charter language that required that
approval language. It was decided not to include that signature line for H2GO
attorney Coble. Excluding that signature line would allow the documents to be
considered by the Board without Coble ever reviewing them.
25. With the continued assistance of Walker over a several week period, Eldridge
prepared the drafts of the transaction documents in time for the November 28, 2017
commissioners meeting. The thirty-eight warranty deeds conveying all of H2GO's
real estate holdings to the town of Belville were prepared by an outside law firm.
Walker met with Clement Goodson, Belville's outside certified public accountant, who
"was surprised to hear of a transaction of this scope." They discussed the H2GO's
checking and savings accounts and its property. Goodson had previously told Mayor
Alien that, after reviewing H2GO's June 30, 2016 audit, he concluded that H2GO
could continue to pay their bills and operate the systems without additional Belville c
funding. H2GO had an auditor, but he was not asked about the planned conveyand
nor did he participate in the transaction or its discussions. There was no discussion
with H2GO's bond attorney prior to the Board's meeting.
26. Eldridge, through the last week before the November 28, 2017 H2GO commissioners'
meeting, prepared the documents attached as Exhibit 1, "Agreement to Convey
Water and Sewer Systems," Exhibit 2, "Assignment and Bill of Sate", Exhibit 2A
"Special Warranty Deed" (prepared by attorneys Price & Williams), Exhibit 3
"Agreement for the Operation and Maintenance of Water and Sewer Systems," Exhibit
4, "Resolution of the Brunswick Regional Water and Sewer H2GO," and Exhibit 5,
"Resolution by the Town of Belville Accepting Agreements With and Conveyances
From Brunswick Regional Water & Sewer H2GO."
27. In preparing the documents, Eldridge did not consult with the attorney for H2GO or
bond counsel. Commissioners Browning and Jenkins had instructed executive
director Walker not to discuss the transaction with attorney Coble. No other
attorneys were consulted or retained.
28. Previously, on November 20, 2017 at 6:30 p.m. the town of Belville had its regular
meeting of its Board of Commissioners. Its written agenda did not include any
mention of a transfer of assets and liabilities from H2GO to the Town of Belville, Its
only closed session during the meeting was held in order to consult with the town
attorney regarding "litigation with Urban Smart Growth and Michael White." There
were no reports offered from the town attorney, mayor, mayor pro tem or the
commissioners under "Other Items and Reports." This meeting was recessed until 8
a.m. on November 29, 2017. No reason for the recess was offered at the meeting or
recorded in the minutes. 29. Sometime during November 28, 2017, the North Carolina Local Government
Commission ("LGC") learned of the proposed transfer of its assets and liabilities by
H2GO to the Town of Belville. That commission became concerned that the
transaction would include the transfer of H2GO's bond indebtedness. Sharon
Edmundson, Director of the Fiscal Management Section of the Finance Division of the
commission, sent an email at 4:43 p.m. on that date to Executive Director Walker,
Mayor Alien, town attorney Eldridge and to the Belville town administrator. Copies
of the email were sent to North Carolina State Treasurer Dale R. Folwell and other
state treasurer officials. It stated:
SLGFD staff has learned that the elected officials for H2GO plan to vote tonight on transferring the assets and related debt of the District to the Town of Belville. The debt is secured by system revenues. We cannot confirm that the bond counsel for H2GO has been consulted on this plan.
We cannot recommend strong enough that H2GO consult with its bond counsel before taking any action involving its debt or the assets that generate the revenue that supports that debt. Actions such as those you are considering may cause the debt to go into default status, which is surely not your intent. In addition, any transfer of debt will require the approval of the Local Government Commission before such a transfer can occur (emphasis added).
We also recommend that the Town of Belville take the time to consider the full responsibilities of taking on a water and sewer system, including not only the costs and expertise needed to operate the system but the costs and long term commitment to adequately maintaining and eventually replace such a system.
We are happy to discuss these issues with you at your convenience.
30. In spite of the Edmundson email, the duly noticed H2GO board of commissioners
meeting scheduled for 6:00 p,m. on November 28, 2017 went forward as planned.
No contact with the LGC or bond counsel was made by Eldridge, Walker, Alien, or the
town administrator. One unsuccessful attempt was made by Finance Director Hook
to make contact by phone.
10 31. All of the commissioners attended that meeting. The prepared agenda did not have
anything listed under new business. The meeting was called to order by Chairman
Browning at 6:00 p.m. The minutes maintained by the clerk indicate that Commission
Antos requested that discussion on H2GO "Operations" be added to New Business,
The consent agenda with that modification was approved unanimously.
32. After the meeting progressed to New Business, the minutes recorded that
Commissioner Antos, after hearing public comments on addressing the issue of the
quality of the water, "set forth" a resolution to sell, convey, transfer and assign all
H2GO real and personal property to the Town of Belville. Afterwards he distributed
for the first time copies of the recently prepared resolution and supporting documents
to the other commissioners. The minutes indicate that Antos stated that he had
"found out about this" two days before Thanksgiving which would have been
November 23, 2017. He further stated that "he believed that Belville had initiated
this" and n[I]n order to save the RO Plant I'm doing something that I never imagined
that I would do by selling H2GO to another municipality, but if that's what we have
to do then that's what we have to do." In response to questioning. Antes stated that
the documents had been written for days. Commissioner Gerkin, Commissioner
Trombley, and H2GO's attorney Steve Coble had not seen or reviewed the documents
prior to the meeting. Executive Director Walker stated that he had seen the four
documents during the last two days and that he was operating according to the
consensus reached by Commissioners Browning, Antos and Jenkins. Walker
explained that there were three documents, the Conveyance Agreement, Bill of Sale,
and an Operations Inter-local Agreement. He also advised that the conveyance
agreement was subject to the conditions contained in the conveyance agreement
11 being met and subject to the "LGC approving the transfer of the SunTrust Bond"
which in his opinion was transferrable. Prior to the vote on the resolution, the LGC
email of that afternoon was read to the board by Commissioner Gerken. The motion
to approve the resolution (Exhibit 4) passed by a vote of 3 (Browing, Antos, and
Jenkins) to 2 (Trombley and Gerken). The meeting adjourned at 6:53 p.m. less than
one hour after it convened.
33. Immediately after the meeting Chairman Browning executed the agreement (Exhibit
1) which was delivered to the Town of Belville that evening or early the next morning.
34. The Town of Belville Board of Commissioners, at 8:00 a.m. on the next day,
November 29, 2017, reconvened its November 20, 2017 meeting. No reason had
been publicly given for recessing that November 20, 2017 meeting. Belville later
admitted that the meeting was recessed until November 29, 2017 "in the event that
any matter should arise from the November 28, 2017 meeting of H2GO's Board of
Commissioners that would require immediate consideration by Belville's Board."After
a closed session was held to consult with the town attorney, the meeting reconvened
on the public record. With a unanimous vote, the resolution "Accepting Agreements
With and Conveyances From Brunswick Regional Water and Sewer (H2GO)" (Exhibit
5) was adopted. The "Resolution Authorizing Certain Capital Outlay Projects and
Expenditures From Water and Sewer Operating Funds" was also unanimously adopted
along with the designation of various financial banks as official depositories.
35. The recitals to both the "Agreement to Convey Water and Sewer Systems" (Exhibit
1) executed by H2GO and to the "Resolution by the Town of Belville Accepting
Agreements with and Conveyances From Brunswick Regional Water & Sewer H2GO"
12 (Exhibit 5) contain identical sections which set out the reasons for these transactions.
Those identical sections are:
• GenX, and other unregulated contaminants, potentially harmful to humans,
have been detected in water drawn from the River.
• The county is unable to filter GenX and other chemical contaminants out of the
water before selling it to the District.
• A reverse osmosis ("RO") water treatment system, sourced from deep-well,
confined aquifers will provide contaminant free finished water for customers
within the District, thus immediately removing the served population of 25,000
from the contaminated and vulnerable River Source.
• In compliance with its statutory mandate to promote and preserve public
health and welfare, and as an inherent element of its long term Water System
plans, the District has been proactively planning and working to construct and
operate a new 4.0 MG per day RO water treatment plant, and has invested
over $6 million and awarded construction contracts exceeding another $8
million in that project to date.
• The RO water treatment plant will be located on real property owned by the
District within the Town's corporate limits.
• The District's efforts to complete the RO water treatment plant have been
unjustjfiably impeded, and recent events indicate the project may be
effectively terminated by rescinding the RO-related contracts thereby wasting
the $14 million the District has already invested towards safe, clean,
contaminant-free water supplies.
13 c c
35. The H2GO Commissioners described in their recitals the "recent events,"
referenced to above, to be (1) legislative consideration of House Bill 587, having a
local effect in Brunswick County, that would have required the District to undertake
an additional, redundant, and superfluous economic impact study for the RDO water
treatment plant; (2) the County and the Town of Leland adopting resolutions
requesting that the District delay the RO project until after the November 2017
election; and (3) the results of that election which will leave the District's divided
governing board with a majority strongly opposed to the RO water treatment plant.
36. The Town of Belville commissioners described in their recitals that those "recent
events" included: (1) Commissioner Trombley openly questioning the need for the
District and stating that construction of the RO water treatment plant will likely be
stopped; (2) Commissioner Jeff Gerken stating that he knows a majority of the
board, when newly-elected Commissioner Beer is seated in December, and "he plans
to vote to kill the project;" and (3) Newly elected William Beer, who campaigned on
a platform to "stop further construction on the RO plant," stated that he was working
closely with Trombley and Gerken and will seek to "abolish all activities and contracts
related to the reverse osmosis plant."
37. The "recent events" described in the Town's recitals, contained in ^36 above,
were also included in H2GO's recitals.
38. Additionally both the H2GO and Town of Belville commissioners recited that
based on those recent events, "it is reasonable to consider the risk to public health
and local economic development posed by the new board terminating the RO construction project and seeking to dissolve the District."
14 0 C
39. Both commissions also found and concluded that (a) "public health, safety, and
welfare will be improved by the construction of the RO water treatment plant which
will provide the only contaminant-free and sustainable source of water for northern
Brunswick County;" (b) "the projected $34 Million Dollar project cost for the RO water
treatment plant and the preservation of the District's 29 employment positions with
an annual payroll of $1,540,000 will improve and promote economic development
within the Town and In northern Brunswick County;" and (c) by entering into this
agreement "whereby the District conveys the Water and Sewer Systems to the Town"
and by agreement the District "operates, maintains, and manages those public
enterprises on behalf of the Town" will "effectively accomplish the public health and
economic development goals" described in the recitals.
40. The resolution passed by the H2GO Board of Commissioners provided the
authority to Chairman William H. Browning to execute the "Agreement to Convey
Water and Sewer Systems," (Exhibit 4) which was prepared by attorney Eldridge. It
provided that:
At Closing, the district shall convey to the Town, free and clear of liens and encumbrances, the Water and Sewer Systems by delivering Warranty Deeds for the District's real property and an assignment and Bill of Sale for the District's personal property including, inter alia, the Systems' infrastructure, facilities, structures, vehicles, equipment, supplies, funds, permits, contracts, easements, other property rights, liabilities, debt obligations, and all other materials and things associated with or required for the ownership, operation, and maintenance of the Water and Sewer Systems. Section 1.01 Conveyance by the District.
41. Article 2 of that agreement required that the District at closing deliver to the
Town of Belville a fully executed
15 c c
...Agreement, Warranty Deeds, an Assignment and Bill of Sale ...in satisfactory form/ conveying to the Town, free and clear of liens and other encumbrances, title to the District's Water and Sewer Systems including, but not limited to, the District's real property and personal property including, without limitation, easements, other property rights, water and wastewater treatment infrastructure, collection line, lateral lines, pump stations, facilities, structures, vehicles, equipment, supplies, account and customer information, funds, liabilities, debt obligations, and all other material and things associated with or required for the operation and maintenance of the District's Water and Systems. Section 2.01 A.l. Closing.
Article 2 of the agreement also required the Town to deliver to the District an
executed agreement and operating agreement. Section 2.01 B.
42. Article 3 required confirmation by the District that all of its representations and warranties are "true and correct" and that it has
complied with all of the obligations, covenants, and conditions required to be performed by this Agreement including providing the Town with satisfactory evidence that any third-party approvals have been obtained relative to assigning and/or transferring the permits, contracts, liabilities, and debt obligations, including the 2012 SunTrust Revenue Bond (the "SunTrust Bond"), required to consummate the transactions contemplated by this Agreement. Section 3.01 B. Conditions to Agreement: Performance of Obligations.
The District also had to expressly agree that "[P]rior to the expiration of the term under the parties' contemporaneous Operating Agreement, the District shall obtain the approval of the North Carolina Local Government Commission to transfer the SunTrust Bond to the Town. Section 3.01 C. Further, the District had to expressly agree that "no litigation/ proceedings, lawsuits, or investigations shall have been commenced with respect to the District, the Water and Sewer Systems, any permits, contracts, property interests, rights and obligations associated therewith nor ...have sought to enjoin or prevent the Closing or alter any material performance under this
Agreement." Section 3.01 D. Conditions to Agreement: No Litigation.
16 43. The Agreement allowed the Town to totally rescind the agreement if the District failed to satisfy any one of the conditions set out in section 3.01. Section 3.02.
Consequence of Failing to Satisfy Conditions.
44. The Agreement contained cross indemnification clauses that required the parties to:
reimburse, indemnify and hold harmless the other ...from and against all claims, causes of action, judgments, awards, demands, losses, settlement payments, deficiencies, liabilities, cost and expenses, including ...reasonable attorney fees and court costs suffered, sustained, incurred, or required to be paid by the other party ...which result from, relate to, or arise out ...[of]
(1) Any untruth, inaccuracy, or breach of any representation, warranty or statement of the District contained in this Agreement or in any other agreement, instrument or writing furnished by the [Town] [District] ...,
(2) Any breach of or the failure to fulfill or perform any obligation or covenant of the [Town] [District] contained in this Agreement.
(3) The ownership, operation and/or use of the District's Water and Sewer Systems ..." Section 5.01 A. and B. Indemnification.
45. In response to concerns about personal liability by H2GO Commissioner Antos, on the day before the Commission meeting, Eldridge modified the indemnity language contained in Section 7.01 of the Agreement. Liability of Officers, Employees and
Agents. That modified section provided that:
No elected or appointed member, officer, employee, or agent of either party shall be subject to any personal liability or accountability by reason of having voted to approve or having executed this Agreement or any other documents related to the transactions contemplated hereby. Such officials, officers, employees or agents shall be deemed to have executed any such documents in their official capacities only and not in their individual capacities. Section 7.01 Liability of Officers, Employees and Agents.
Eldridge remarked to Walker in an email the afternoon of November 27, 2017 that the commissioners7 concern was "whether they are stepping beyond their
17 authority." Eldridge contended that sections 5.01 and 7.01 meant that Antos should
not be named individually in any filed lawsuit, but if he is "he should be indemnified
under [an H2GO insurance policy that covered past, current and future elected
officials for 'operational practices'] and eventually off the hook anyway ... and for a
multitude of legal reasons, it is reasonable to assume the lawsuit would eventually
be dismissed against him." Eldridge's position was relayed to Antos by Walker, and
he apparently became satisfied with the indemnity provision.
46. The final draft of the conveyance agreement was modified again by Eldridge after the H2GO board of commissioners meeting recessed on November 28, 2017 to
address the North Carolina Local Government Commission's warnings about the
SunTrust Bond issue. The final document contained the provision that LGC approval
of the bond transfer was a condition of the agreement. Section 3.01 stated that
"[T]hjs agreement is expressly conditioned upon and subject to the District satisfying
... the following express condition: ... C. Prior to the expiration of the term under the
parties' contemporaneous Operating Agreement, the District shall obtain the approval of the North Carolina Local Government Commission to transfer the SunTrust Bond to the Town. Section 3.01 C. Conditions to Agreement: Sun Trust Bond. Eldridge confided in Walker, in a text message sent to him during the meeting, that he was not "overly optimistic" that LGC would approve the transfer.
47. Pursuant to Section 1.01 of the Agreement to Convey Water and Sewer Systems,
Chairman Browning "in consideration of the sum of Ten Dollars and other valuable consideration" executed on November 28, 2017 an assignment and bill of sale
(Exhibit n2") to the Town ofBelville of "certain personal property, contracts, permits, funds, easements and property rights" described on Exhibit A, which was attached to
18 the assignment and bill of sale, and shown on the Water System Map, Exhibit B, and
the Sewer System Map, Exhibit C. One hundred twenty-two items are listed in detail
on Exhibit 2, Attachment Exhibit A. These include easements, water and sewer
infrastructure, office and maintenance buildings, motor vehicles and equipment, real
property, engineering, consulting, and construction agreements, operating permits,
assessments, and cash totaling $16,596,282.55. It also listed as sold and transferred
the 2012 SunTrust Revenue Bond, Brunswick County Interlocal Debt, customer
accounts, pay plan receivables, customer deposits and unbilled receivables.
Generally, the Bill of Sale listed all of H2GO's real and personal assets as well as all
of its debts.
48. Chairman Browning and Town of Belville mayor Mike Alien, also on November
28, 2017, executed an "Agreement for the Operation and Maintenance of Water and
Sewer Systems" (Exhibit 3) in which H2GO would operate the systems that had been
transferred to the Town of Belville. The primary provisions of this agreement are
that:
a. The operating agreement was to terminate on January 31, 2018. Section
4.01.A Term of Agreement.
b. The agreement could be terminated upon 30 day notice by either party.
Section 10.01 Termination.
c. The Town shall pay to the District a weekly base fee of $70,000 for the
district's performance under this agreement. Section 5.01 Compensation. Listed in
section 5.02 are those performance items covered by this amount and in section 5.03 those that are not.
19 d. Article 6, Section 6.01 The Parties'Obligations addresses the obligations
of the District. The district is generally required to (1) provide trained and competent
personnel; (2) provide regular inspections and maintenance of the infrastructure; (3)
maintain maintenance and daily operation records; (4) manage and operate the
systems with good business and operating practices and standards; (5) bill customers
and collect payments; and (6) perform the Town's obligations under the contracts and permits associated with the water and sewer systems.
e. Perform the Town's obligations under the contracts and permits associated with the water and sewer systems. Section 6.01.J.
e. The Town is the "governing authority" with regard to committing to provide water and sewer services. Section 6.01.K.
f. The district is to provide notice in writing of any necessary capital improvements. Section 6.01.P.
g. The district shall assist the Town with seeking financing approval from the
Local Government Commission for the construction of the reverse osmosis water treatment plant. Section 6.01.Q.
h. The employees of the district are permitted to enter upon Town property and operate Town vehicles and equipment. Section 6.01.S.
i. The "past, current, and future members of the governing board are not licensed nor permitted to use any Town vehicles or equipment and are expressly not licensed or permitted to enter upon any Town property associated with the Town's
Water and Sewer Systems excepting the Town Hall public building." Section 6.01.S.
20 c c
j. The District shall perform the administrative and managerial duties required
for the operation of the public enterprise water and sewer systems. Section 6.01.U.
k. The District shall provide utility billing services for the Town's systems and
will bill the system's customers "based on the Town's then current adopted rate
schedules." Section 7.01 Billing.
I. The District shall collect the customers' utility payments and capital recovery fees in accordance with Town rates. All funds collected by the District shall be forwarded to the Town along with written accounting of usage, billings, payments
received and the status of all accounts. Section 7.02 Collections.
m. The district shall "indemnify, defend and hold harmless" the Town, its elected and appointed officials and its employees from any all costs, expense or liabilities caused by the District's default and breach of this Agreement. There was a reciprocal indemnification obligation if the Town defaults on or breaches this agreement. Section 8.01 Indemnification.
n. Default occurs when (1) the District fails to performs its obligations; (2) the
District materially breaches the agreement; and (3) the agreement is rescinded by the District's governing board priorto the expiration of its term. Section 11.01 Default
Defined.
o. Damages to the Town were liquidated "if the operation, maintenance, and management of its Water and Sewer Systems is not performed" by the District. The parties agreed that liquidated damages of $9,333.33 per day would be incurred by the Town for "delays in performance only" beginning on the date on which the default occurred and continuing each day until the Agreement expires. Section 11.02
21 c
Liquidated Damages Upon Districts Default. This remedy is in addition to any
"remedies available by other laws, regulations, warranty or guarantees, or by other
provisions of the Agreement." Section 11.03 Cumulative Remedies.
49. On November 29, 2019 a North Carolina Special Warranty Deed (Exhibit 2A),
executed by Chairman William H. Browning, was recorded in the Brunswick County
Register. Through that deed, thirty-eight parcels of real property were conveyed
from Brunswick Regional Water & Sewer H2GO in fee simple to the Town of Belville.
These thirty-eight tracts comprised all of the real property owned by H2GO.
50. On December 1, 2017, Town of Leland, North Carolina and H2GO Brunswick
Regional Water & Sewer filed the original complaint in this action. On the same date
a temporary restraining order was entered by the Honorable Thomas H. Lock.
51. On December 28, 2017 Judge Lock, after a hearing, entered a preliminary
injunction. The First Amended Complaint for Declaratory and Injunctive Relief was filed on April 5, 2018.
52. The court further finds that there is a legitimate public debate and concern in the communities of northeastern Brunswick County over the quality of the water distributed to the citizens through the H2GO system. Both the conveyance agreement and the Belville resolution recited, and the defendant contends, that
GenX, and other unregulated contaminants/ potentially harmful to humans, have been detected in water drawn from the River. Executive Director Walker, however, stated in his deposition that on November 27, 2017 at the time of the purported conveyance and in January of 2019, to the best of his knowledge, that the water provided by H2GO to its customers "met all state and federal water quality
22 c
standards." These findings, conclusions of law, and orders by the court are not meant to resolve those important issues. The court has found facts in an effort to determine whether the acts and procedures followed by the H2GO Board of Commissioners and the Town of Belville in November and December of 2017, in an attempt to address these issues, complied with public policy and with the relevant North Carolina statutory enactments and the decisions handed down by the appellate courts.
Based upon the foregoing, the court concludes as a matter of law:
Motion to Strike Affidavit of William H. McBride
The affidavit of attorney William H. McBride, was offered by Leland as expert legal testimony which constituted legal arguments and conclusions regarding the ultimate issues of law to be decided by the court. The motion of the Town of Belville to strike the affidavit of William H. McBride is allowed.
I.
First Claim for Relief by Town of Leland and H2GO against the Town of
Bel vil Ie:
For a Declaration that the Challenged Resolution, Putative Transfer and
Putative Agreements are Void Because They Impair H2GO as a Body Corporate and Politic in Contravention ofN.C. Gen. Stat. Chapter 130A, Article II, Part 2
Pursuant to N.C. Gen. Stat. §130A-55, a sanitary district board is a "body politic and corporate." That board can exercise those powers delineated in subsections (1) through (25) of that statute. In this case H2GO Brunswick Regional
Water & Sewer is a sanitary district existing and operating pursuant to Chapter 130A
23 of the North Carolina General Statutes. Prior to end of November, 2017, H2GO
provided sewage collection, water distribution and wastewater treatment to
approximately 10,300 residential and commercial customers in an area of about 26
square miles, populated by over twenty five thousand people. The entire Town of
Belville, with its approximately one thousand customers and over thirteen hundred
voters eligible to vote in the commissioners' election, is served by H2GO. A majority
of the Town of Leland, with its approximately five thousand customers and over
eleven thousand voters eligible to vote in the commissioners' election is served by
H2GO. A total of 17,805 voters are eligible to vote in those elections. The Town of
Belville has three employees and an annual budget of about one million dollars.
The "Agreement to Convey Water and Sewer Systems," executed by the H2GO
commission on November 28, 2017, was comprehensive. It transferred to the Town
ofBelville the
Water and Sewer Systems, by delivering Warranty Deeds for the District's real property and an Assignment and Bill of Sale for the District's personal property including, inter alia, the Systems' infrastructure, facilities, structures, vehicles, equipment, supplies, funds, permits, contracts, easements, other property rights, liabilities, and all other things associated with or required for the ownership, operation, and maintenance of the Water and Sewer Systems.
This meant that the transfer to the Town of Belville was valued at over $16 million
dollars in cash and $40 million in assets. This wholesale transfer and assignments
eviscerated the ability, authority and power of the incoming H2GO Board of
Commissioners to independently operate and manage the water and sewer systems
at a level and quality necessary to fulfil its purpose mandated by N.C. Gen. Stat.
§130A-47 to "preserve and promote the public health and welfare" of its customers.
Although the "Agreement for the Operation and Maintenance of Water and Sewer
24 c
System," executed also on November 28, 2017 by the parties, required the District
to "provide operational, maintenance, and management services for the Town's
Water and Sewer System," it was to expire on January 31, 2018 "unless earlier terminated."
On the date of the operation agreement's expiration or its termination, the
elected commissioners would be left with no water or sewer system to operate, no employees, staff and assets to exercise the powers granted to the board by N.C. Gen.
Stat. §130A-55 and other specific enactments. In essence, it ceased to be "a body
politic and corporate" created by statute. It would not be feasible or practical for the
H2GO board of commissioners, after the operating agreement expired, to create or operate, or attempt to create or operate, parallel water and sewer systems that would compete with the ones already in existence. If such attempts were made, it would probably result in allegations by Belville that H2GO had violated and breached Section
4.04 and other sections of the conveyance agreement.
Article 2, Part 2 of chapter 130A, in addition to creating sanitary districts, also describes an orderly and detailed means and procedures required to dissolve them.
N.C. Gen. Stat. §130A-72 "Dissolution of certain sanitary districts" requires that:
1. 51% or more of the resident freeholders of a sanitary district, which has no outstanding indebtedness, may petition the board of commissioners of the county to dissolve the district.
2. Upon receipt of the petition, the county board of commissioners shall notify the Department of Health and Human Services as well as any board of commissioners in which a portion of the district lies of the receipt of the petition.
25 3. The county board of commissioners shall request that the Department hold
a joint public hearing with the county commissioners concerning the dissolution. The
secretary and the chairperson of the county board of commissioners shall identify the
place and time for a public hearing.
4. The county board of commissioners shall give notice of the hearing by
posting a notice at the courthouse door of the county or counties and by publication
in a local newspaper or newspapers at least once a week for four consecutive weeks.
If all matters pertaining to the dissolution cannot be concluded at the hearing, it can
be continued to a later date and time.
5. If after the hearing has concluded, the Commission of Public Health and the county board(s) of commissioners "deem it advisable to comply with the request of the petition," the Commission shall adopt a resolution to dissolve the sanitary district.
6. After the resolution to dissolve the sanitary has been adopted, the local sanitary district is authorized to convey all assets, including cash, to any government unit or public utility company operating under the authority of a certificate of public convenience and necessity granted by the North Carolina Utilities Commission in return for the assumption of the obligation to provide water and sewage services to area served by the district.
None of these provisions were followed or attempted in the H2GO to Belville transaction which brought about the same results as a dissolution/ a conveyance of all assets and cash in return for assumption of the obligation to provide water and sewage services.
The legislature in N.C. Gen. Stat. §130A-73 required similar procedures when the boundaries of a sanitary district are entirely located within or coterminous with
26 n
the corporate limits of a city or town. Also as a condition precedent to the dissolution
under this provision, the sanitary district had to be "without indebtedness." N.C.
Gen. Stat. §130A-73.1 addresses another distinct situation where there has been an
annexation of the area within the district by a city or town. It also requires petitioning
the board of county commissioners, notifications to the Department of Health and
Human Services and governing body of the city or town and adoption. If the county
commissioners, the governing body of the city or town, and the Commission of Public
Health deem it advisable to comply with the petition request, the Commission shall
adopt a resolution of dissolution.
Mergers of sanitary districts and a city or town also results in terminating the
district as a political subdivision. To accomplish this, N.C. Gen. Stat. §130A-80
requires that in the case of a merging of a district contained within a city or town,
where the district and the city or town do not have coterminous boundaries, the
governing boards have to petition the board of commissioners requesting an election
by the voters within the sanitary district and city or town. A majority of the votes cast in the district and a majority of the votes cast in the city or town is necessary for the merger.
The procedure to allow the merging of a sanitary district with a coterminous city or town is defined in N.C. Gen. Stat. §130A-80.1. It requires that an election be
held with all of the voters of the district or the city or town being eligible to vote. A
majority of all the votes cast would be necessary for the merger. An election would also be required by N.C. Gen. Stat. §130A-80.2 for a merger of a sanitary district with a non-coterminous city or town.
27 Under N,C. Gen. Stat. §130A-81(1), a dissolution of a sanitary district can
occur through a referendum when the General Assembly incorporates a municipality,
which includes within its boundaries a sanitary district or is coterminous with a
sanitary district. An alternative to N.C. Gen. Stat. §130A-81(1) is provided in
subsection la. In counties having a population in excess of 275,000 the county board
of commissioners may dissolve a sanitary district by a referendum on the question of
dissolution and assumption by the county of any outstanding district indebtedness.
Pursuant to N.C. Gen. Stat. §130A-82, a county board of commissioners may dissolve
a district which has no outstanding indebtedness when members of the district vote
in favor of dissolution. A plan for continued operation of services and functions must
be adopted by the county commissioners before the dissolution can become effective.
Also, N.C. Gen. Stat. §130A-85 provides for dissolution of a sanitary district when there are 500 or less resident freeholders living within the district, it has no outstanding bonded indebtedness, and the county board of commissioners adopts a plan for continued operations and agrees to assume any other legal district indebtedness.
As is evident from the above enactments, the General Assembly has adopted a complete, orderly and detailed procedures whereby a sanitary district can be dissolved, merged or incorporated with another government entity. Based upon the above, it is clear that the General Assembly concluded that in order for a sanitary district to be dissolved, merged or incorporated into another governmental body, these statutory procedures and prerequisites have to be adhered to.
The Agreement by H2GO to Convey Water and Sewer Systems was drafted and executed to avoid all of these safeguards and requirements and to avoid any
28 reconsideration of the reverse osmosis decision by the newly elected board. The
language of the recitals in both the Agreement and Belville's Resolution Accepting the
Agreement clearly supports that conclusion.
Belville contends that the H2GO sanitary district still exists and remains an
independent body politic and corporate. It further contends that the district remains
functional as long as the operating agreement is in effect, but the agreement in
Section 4.01 provides that it "shall expire on January 31, 2018 unless earlier
terminated." Although an extension is possible, this language indicates that it was
the intention of the town to terminate the operation agreement as soon as practically
possible. After the operation agreement expires or is terminated, the district's board
of commissioners will not have a water or sewer system to operate, no employees,
no customers, no assets, no permits, no infrastructure, and no income. It would exist in name only but could not function as a sanitary district or exercise the powers granted to a sanitary district in N.C. Gen. Stat. §130A-55 and its subsections which
provides that "[A] sanitary district shall be a body politic and corporate" and "may exercise all of the powers granted to sanitary districts by this Article."
Generally, the statute grants the district the power (1) to acquire, construct,
maintain and operate sewage collection, treatment and disposal systems and water supply systems as well as water purification or treatment plants; (3) to levy taxes on property in order to carry out the powers and duties conferred and to pay the principal and interest on bonds and notes of the district; (4) to acquire either by purchase, condemnation or otherwise and hold real and personal property, easements, rights- of way and water rights; (5) employ engineers, counsel and other necessary persons;
(6) to negotiate and enter into agreements with owners of other existing sewer
29 ('
systems and water supplies; (7) to adopt rules necessary for the proper functioning
of the district; (8a and 8b) to contract with any person to supply raw water or filtered
water and sewer service; (8c) to contract with any person for the treatment of the
district's sewage in a disposal or treatment plant owned by that person; (9) after
adoption of a plan required under G.S. 130A-60 to alter or modify the plan if approved
by the Department which must determine that the alteration or modification does not
constitute a material deviation from the objective of the plan and is in the public
health interest of the district; (11) to collect and dispose of garbage, waste and other
refuse by contract or otherwise; (14) to have privileges and immunities granted to
other governmental units in exercise of its governmental functions; (15) to use the
income of the district and, if necessary, to levy and collect taxes upon all taxable
property in the district to pay the costs of collecting and disposing of garbage, waste and other refuse; (16) to adopt rules for the promotion and protection of the public
health and to possess the listed powers to do so; (17) to establish zoning units on property not controlled by other jurisdictions for the purpose of promoting and protecting the public health; (18) to acquire by contract any distribution system located outside of the district when the water for the distribution system is supplied by the district; (20) to dispose of real or personal property belonging to the district according to the procedures prescribed in Article 12 of Chapter 160A; (22)to make special assessments against benefitted property within the district for the purpose of constructing, reconstructing, extending the water systems or sanitary collection, treatment and sewage disposal systems; and (25) to negotiate and enter into agreements with other municipal corporations or sanitary districts for the purpose of implementing an economic development plan.
30 N.C. Gen. Stat. §130A-64 also gives the sanitary board the power to "apply service charges and rates upon the exact benefits derived" in order to maintain and operate the work of the district and pay the principal and interest on any outstanding bonds. It is also authorized to modify and adjust those rates.
According to the conveyance agreement, once the operation agreement expires or is terminated by the Town, by design, all of these powers would be surrendered to the Town of Belville Board of Commissioners to be exercised as the members of that board saw fit. By doing so, the newly elected H2GO board of commissioners would be without the ability to govern meaningfully as mandated by
Chapter 130A.
The operation and maintenance agreement, recites that "the Town owns and is responsible" for a public water distribution system and a public sanitary sewer collection system. An obligation of the town set out in Section 6.02 of this agreement required it to "[.c]ontinue to properly manage and fund the Water and Sewer operations through necessary rate adjustments."
Town attorney Eldridge, the author of the resolutions and agreements, correctly and completely understood the practical and legal ramifications and intent of the "Agreement to Convey Water and Sewer Systems", "Assignment and Bill of
Sale" and the "Agreement for the Operation and Maintenance of Water and Sewer
Systems." He concluded in his deposition testimony that after the transfer, the H2GO board would not have much business to conduct. It would not have any infrastructure, customers or property, and the former employees of H2GO would become employees of the Town of Belville. In fact, Section 6.02 of the operation and maintenance agreement further provided that "all past, current, and future members of the
31 c c
District's governing board are not licensed nor permitted to use any Town vehicles or
equipment and are expressly not licensed or permitted to enter upon any Town
property associated with the Town's Water and Sewer Systems excepting the Town
Hall public building." This provision clearly demonstrates the intent of the Town and the former majority of the District Board of Commissions to dismantle the sanitary
district as a body politic and corporate and completely remove all significant power from the new District Board of Commissioners in contravention of N.C. Gen. Stat.
Chapter 130A, Article II, Part 2.
Based upon the above, the summary judgment motion of the Town of Leland and H2GO Brunswick Regional Water & Sewer as to the first cause of action is
Granted. The summary judgment motion of the defendant Belville is Denied.
II.
Second Claim for Relief by Town of Leland and H2GO against the Town of Belville:
For a Declaration that the Challenged Resolution, Putative Transfer and Putative
Agreements are Void Because It Involves an Improper Transfer of Government
Functions.
The leading case of Plant Food Company v. City of Charlotte, 214 N.C. 518,
519-520, 199 S.E. 712, 713-714 (1938) addresses this issue. Its rule is that:
[W]here governmental discretionary powers are involved, a board can make no contract which would bind its successors in office with respect to the exercise of the discretion. Amongst the powers generally conceded to be accompanied by such governmental discretion, and which cannot be suspended or controlled by contract, are usually classed the legislative powers of the governing body—the power to make ordinances and decide upon public questions of a purely governmental character (and under this head must be classed most of the strictly governmental discretionary powers, since the body acts as a whole and usually by ordinance or resolution); the power to lay out and maintain
32 streets, to build bridges and viaducts over which they lead, preserve civil order; to regulate rates (where power to do so is given in the charter); to levy taxes, make assessments, and the like. These are mentioned simply by way of illustration and only roughly indicate the quality of the power we are discussing. "A public function is one which is exercised by virtue of certain attributes of sovereignty delegated to a city for the health and protection of its inhabitants, or the public." [citation omitted].
Where governmental powers of this kind are not involved or disadvantageously affected, the right to make contract, otherwise unobjectionable to the law, is one of the most important incidents of municipal government, [citation omitted.] In the administration of its proprietary affairs, the commissioners or councilmen of the town may make reasonable contracts binding upon their successors running through a term of years.
A local government may enter into a contract that is binding on itself "unless
the contract purports to bind the government on a matter on which public policy
requires that the government retain discretion as to whether and how to act." David
Lawrence, Contracts that Bind the Discretion of Governing Boards, POPULAR
GOVERNMENT, Summer, 1990, p. 39. Professor Lawrence suggests that the categories of discretionary powers basically involve the exercise of either the government's
police power or the government's taxing and spending powers. On the other hand,
local government can enter into a contract that binds future boards if it involves
proprietary activity such as ordinary commercial transactions. "The true test is whether the contract itself deprives a governing body, or its successor, of a discretion which public policy demands should be left unimpaired." Plant Food, 214 N.C. at 520,
199 S.E. at 714.
The court admitted that "the line between powers classified as governmental and those classified as proprietary is none too sharply drawn, and is subject to a change of front as society advances and conceptions of the functions of government are modified under its insistent demands." Id. 214 N.C. at 520, 199 S.E. at 715.
33 In N.C. Gen. Stat. §130A-47, the State of North Carolina declared as its public
policy that the Commission for Public Health may create sanitary districts without
regard for county, township or municipal lines "for the purpose of preserving and
promoting the public health and welfare." In order to accomplish that purpose it
granted a sanitary district the powers contained in N.C. Gen. Stat. §130A-55.
A governmental function is "an activity that is 'discretionary, political,
legislative, or public in nature and performed for the public good in behalf of the State
rather than for itself/" "When a municipality is acting 'in behalf of the State' in
promoting or protecting the health, safety, security, or general welfare of its citizens,
it is an agency of the sovereign. When it engages in a public enterprise essentially
for the benefit of the compact community, it is acting within its proprietary powers."
Britt v. City of Wilmington, 236 N.C. 446, 450, 73 S.E.2d 289, 293 (1952) (citing
Millar v. Town of Wilson, 222 N.C. 340, 23 S.E.2d 42 (1942)). The courts have
established that the construction of a sewerage system is a governmental function.
McCombs v. City of Asheboro, 6 N.C. App. 234, 235, 170 S.E.Zd 169, 170 (1969).
The power to establish rates for water and sewer is a governmental function and not
a proprietary one. Candler v. Asheville, 247 N.C. 398, 407, 101 S.E.2d 470, 477
(1958).
A "proprietary" function, on the other hand, is one that is "commercial or
chiefly for the private advantage of the compact community." Estate of Williams v.
Pasquotank Cty. Parks & Rec. Dep't, 366 N.C. 195, 199, 732 S.E.2d 137, 141 (2012).
In the case where a governing board "enters a contract which restricts it in the
performance of its governmental function or in the exercise of its legislative authority,
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such a contract is ultra vires and is of no legal effect. Raintree Corp. v. Charlotte, 49
N.C. App. 391, 396, 271 S.E.2d 524, 527 (1980) citing, Bessemer Improvement Co. v. City of Greensboro, 247 N.C. 549, 101 S.E. 2d 336 (1958).
Thus, actions are void or invalid from the beginning if it is beyond the power of local government to enter into a contract (emphasis added). However, "in the administration of its proprietary affairs [local governing boards] may make reasonable contracts binding upon their successors running through a term of years."
Plant Food, 214 N.C. at 520, 199 S.E. at 715.
The Sanitary District on November 28, 2017 conveyed to Belville
[T]he Water and Sewer Systems by delivering Warranty Deeds for the District's real property and an Assignment and Bill of Sale for the District's personal property including, inter alia, the Systems' infrastructure, facilities, structures, vehicles, equipment, supplies, funds, permits, contracts, easements, other property rights, liabilities, debt obligations, and all other materials and things associated with or required for the ownership, operation, and maintenance of the Water and Sewer Systems,
Section 1.01 Agreement to Convey Water and Sewer Systems.
The "Agreement for the Operation and Maintenance of Water and Sewer" included Belville's obligation under Section 6.02 B to "[C]ontinue to properly manage and fund the Water and Sewer Systems' operations through rate adjustments."
(emphasis added). Clearly, by this conveyance, the Town of Belville would acquire the ability to oversee and manage the systems and set the rates for present and future services under the systems. After the expiration of the operation agreement, or if it is terminated by the Town, the operation of these systems by the Town would require making key policymaking decisions that are governmental functions in addition to other proprietary functions. The setting of rates, and the levying of taxes
35 and special assessments are some of the specific governmental functions listed in
Plant Food which had been conveyed to the Town of Belville.
In order to manage and operate the water and sewage systems, the Town of
Belville, once the operating agreement expired, would solely and permanently have to exercise those powers contained in N.C. Gen. Stat. §130A-55, many of which are governmental or legislative functions and designated for the governing authority of sanitary districts. Those powers that are or may be legislative or governmental include the authority (1) to acquire, construct, maintain and operate sewage collection, treatment and disposal systems and water supply systems as well as water purification or treatment plants; (3) to levy taxes on property in order to carry out the powers and duties conferred and to pay the principal and interest on bonds and notes of the district; (4) to acquire either by purchase, condemnation or otherwise and hold real and personal property, easements, rights-ofway and water rights; (5) employ engineers, counsel and other necessary persons; (6) to negotiate and enter into agreements with owners of other existing sewer systems and water supplies; (7) to adopt rules necessary for the proper functioning of the district; (8a and 8b) to contract with any person to supply raw water or filtered water and sewer service;
(8c) to contract with any person for the treatment of the district's sewage in a disposal or treatment plant owned by that person; (9) after adoption of a plan required under G.S. 130A-60, to alter or modify the plan if approved by the
Department which must determine that the alteration or modification does not constitute a material deviation from the objective of the plan and is in the public health interest of the district; (11) to collect and dispose of garbage, waste and other refuse by contract or otherwise; (14) to have privileges and immunities granted to
36 r.
other governmental units in exercise of its governmental functions; (15) to use the
income of the district and, if necessary, to levy and collect taxes upon all taxable
property in the district to pay the costs of collecting and disposing of garbage, waste
and other refuse; (16) to adopt rules for the promotion and protection of the public
health [it would be problematic for the Town of Belville to exercise and enforce the
powers delineated in subsections (a) through (f) on any person who resided outside
of its town's limits]; (17) to establish zoning units on property not controlled by other jurisdictions for the purpose of promoting and protecting the public health; (18) to
acquire by contract any distribution system located outside of the district when the water for the distribution system is supplied by the district; (20) to dispose of real or
personal property belonging to the district according to the procedures prescribed in
Article 12 of Chapter 160A; (22) to make special assessments against benefitted
property within the district for the purpose of constructing, reconstructing, extending the water systems or sanitary collection, treatment and sewage disposal systems; and (25) to negotiate and enter into agreements with other municipal corporations or sanitary districts for the purpose and implementing an economic development plan.
Based upon the foregoing, the court concludes that the cumulative effect of the resolutions, transfer and operating agreements was to enter into an agreement which eliminates the district's governmental discretionary power and binds the commission's successors permanently. This is contrary to public policy and an unlawful transfer of governmental functions by the H2GO Board of Commissioners to the Town of Belville.
37 Based upon the above, the summary judgment motion of the Town of Leland and H2GO Brunswick Regional Water & Sewer as to the second cause of action is
Granted. The summary judgment motion of the defendant Belville is Denied.
m.
Third Claim for Relief by Town ofieland and H2GO against the Town of Belvifle:
For a Declaration that the Challenged Resolution, Transfer and Agreements are Void
Because They are Oppressive, the Result of Manifest Abuse of Discretion, in Wanton
Disregard of the Public Good, and Contrary to N.C. Gen. Stat. §130A-55 and N.C.
Gen. Stat. §160A, Article 12.
The case of Reese v. Mecklenburg Cty., 204 N.C. App. 410, 422-23, 694 S.E.2d
453, 462 (2010) provides the standard and guidance as to when governmental action can be set aside by a court.
North Carolina law recognizes a strong presumption that governmental bodies act in good faith. Painter v. Wake County Board of Education, 288 N.C. 165, 178, 217 S.E.2d 650, 658 (1975). "The courts may not interfere with the exercise of the discretionary powers of local administrative boards for the public welfare 'unless their action is so clearly unreasonable as to amount to an oppressive and manifest abuse of their discretion.'" Mullen v. Town of Louisburg, 225 N.C. 53, 60, 33 S.E.2d 484, 489 (1945). A "manifest abuse of discretion" must be "so clearly unreasonable as to amount to an oppression]," James v. Nash Cty. General Hospital, 1 N.C. App. 33, 34-35, 159 S.E.2d 252, 253 (1968) (quoting Mullen, 225 N.C. at 60, 33 S.E.2d at 489 (1945)); or amount to action "in wanton disregard of the public good." Barbour v. Carteret County, 255 N.C. 177, 181, 120 S.E.2d 448, 451 (1961). If a party contends that public officials have failed to act in good faith, then that party has the burden of overcoming the presumption by competent and substantial evidence. Painter, 288 N.C. at 178, 217 S.E.2d at 658.
With little public disclosure or discussion, and the exclusion of the minority members from any prior notice or knowledge of the proposed board action, after a meeting that lasted less than one hour, the H2GO Board of Commissioners
38 0 C
transferred to the Town of Belville over $40 million in property and $16 million in
deposits. The effect of these actions are discussed previously in more detail, but it
took away the power and authority of the next H2GO board to maintain and operate
sewage collection, treatment and disposal systems and to maintain and operate the
water supply systems, water purification and treatment for all of the people in the
sanitary district.
Belville relies on N.C. Gen, Stat. §160A-274 "Sale, lease, exchange and joint
use of governmental property" to authorize and validate the transfer. Subsection (b)
provides that: "Any governmental unit [includes a sanitary district] may upon such terms and conditions as it deems wise, with or without consideration, exchange with,
lease to, lease from, sell to, or purchase from any other governmental unit any
interest in real or personal properly." A review of the cases decided under the authority granted by this statute does not give much guidance to the issue of the
propriety of a conveyance of this magnitude.
Except for Barbour, the courts in the above cases did not interfere with the actions of the municipal corporation. In each case the courts found that the decisions were reasonable and were made in good faith. None of the cases, however, rose to the level of H2GO's transfer of all of its functions, assets, real and personal property, revenue, infrastructure, contracts, permits and customers so that the sanitary district could not function or exercise its statutory powers thereafter.
In Barbour, the trial court's dismissal of an action brought by county taxpayers to prevent the county's purchase of a real estate lot to order to construct a hospital was reversed. The Supreme Court found that the allegations in the complaint were sufficient to allege that the county commissioners, in total disregard of their duty to
39 the public, intended to "squander" public funds. The plaintiffs alleged that the
property, due its size, location, character of the soil and other factors, was not
suitable for the purpose intended and was not worth half of the amount offered to be
paid by the county. The plaintiffs also contended that prior to the decision to
purchase, there was no appraisal of the value of the property and the action was for
some unknown reason "done in a spirit of haste." The court concluded that the
actions of the commission were "arbitrary, capricious, and without regard to what
[was] a proper price." The court went on to declare that the conduct of the
commission did not "comport with the duty which public officials owe those they
represent. It manifests bad faith, not bona fide action."
Fifty years later in Reese, the Court of Appeals rejected the taxpayer's claim
because, unlike the facts in Barbour, the county had the property appraised prior to
purchase and acted in compliance with established guidelines for obtaining approval
of the necessary financing by the Local Government Commission and that, even
though the purchase price was too high by 4% and up to 27%, the Board acted within
its discretion and judgment in the development and location of public parks and
recreational facilities. The court approved the findings of the trial court contained in
its order granting judgment on the pleadings in favor of county with respect to this
claim for relief. The court found that, "[a]s a matter of law, and standing alone, a
27% differential in price in relation to another isolated transaction is not so excessive
as to demonstrate the manifest abuse of discretion necessary to set aside a decision
of a governmental body." The trial court further found that "the Complaint is devoid of any allegation of corruption or self-dealing, payments to an insider or someone
40 c c
associated with the Board, or any other allegation that the price differential was the
result of corruption or a manifest disregard of the Board's public duty."
In this case, like the pleadings in Reese, there is no allegation nor is there any
evidence of corruption, self-dealing, payments to an insider or someone associated
with the Board or any other action precipitated by corruption. A good faith dispute
has arisen as to how best to provide safe water to the citizens of the sanitary district.
These transactions have produced or will produce these results: (1) the H2GO
board of commissioners will lose ail ability to exercise its statutory authority under
N.C. Gen. Stat. §130A-55; (2) all real property and personal property owned by
H2GO including its infrastructure, facilities, structures, vehicles, equipment, supplies,
and funds, used to operate the water and sewer system, with a total value in excess
of $57 million would be conveyed by the district to the Town of Belville; (3) included
in that conveyance is approximately $16.5 million in capital improvement funds,debt
service reserve funds, operating reserves, and customer deposits; (4) H2GO's debt
associated with the sewer system of approximately $6 million would be transferred
to the Town of Belville; (5) a public water distribution system and a public sanitary
sewer collection system that served a population in excess of 25,000, with over
10,000 customer accounts, would be conveyed to the Town of Belville; (6) the Town
of Belville would have the authority to charge those customers who did not live in
Belville higher rates; (7) 29 H2GO employees would be terminated and the Town of
Belville would be required to employ most, if not all of them, so they could operate the system; (8) major portions of the Town of Leland and those who reside in the
unincorporated areas would be dependent on the Board of Commissioners of the
Town of Belville for their economic planning and expansion requirements; (9) the
41 elected H2GO Board of Commissioners have been locked out of their district office and meeting place except when entry is permitted by Town of Belville officials; (10) the Town of Belville, in order to manage and operate the systems, would have to exercise all of the power and authority set out in N.C. Gen. Stat. §130A-55 for sanitary districts, including the sole authority to set rates and fees for utility customers; and (11) of the approximately 17,800 registered voters in the district,
16,500 (approximately 11,200 of those voters reside in Leland) would be voting for sanitary district commissioners who no longer had the authority or ability to manage and operate their water distribution and public sanitary collection systems. That authority would fall into the exclusive hands of the town commissioners for the Town of Belville. Those living outside of that town cannot vote for those commissioners.
The right to vote on equal terms is a fundamental right. Dunn v. Blumstein,
405 U.S. 330, 31 L.Ed.2d 274 (1972); Texfi Industries v. City of Fayetteville, 301
N.C. I/ 269 S.E.2d 142 (1980). Those people living outside of Belville have been deprived of this fundamental right. The court must use strict scrutiny in determining whether the equal protection of the laws was denied those individuals in this case.
The Town of Belville has not demonstrated that the differentiation between the classification of voters (those living in Belville as opposed to those living outside) is necessary to promote a compelling governmental interest in operating the systems.
Northampton Cty. Drainage Dist. No. One v. Bailey, 326 N.C. 742, 746-47, 392
S.E.2d 352, 356(1990).
Neither side has produced a case where N.C. Gen. Stat. §160A-274(b) has been relied upon to approve or disapprove such a comprehensive transfer of assets. that would result in such a dynamic change in the governance of a public entity such
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as a sanitary district. None of the cases cited or relied upon by the parties dealt with the sheer enormity of this transaction and its effect on the general public in this district.
Through the detailed statutory authority allowing dissolution .of sanitary districts (N.C. Gen. Stat. §130A-72, N.C. Gen. Stat. §130A-73, N.C. Gen. Stat. §130-
73.1, and N.C. Gen. Stat. §82), merger of districts and municipalities (N.C. Gen. Stat.
§130A-80, N.C. Gen. Stat. §130A-80.1, N.C. Gen. Stat. §130A-80.2, N.C. Gen. Stat.
§130A-80.3, and N.C. Gen. Stat. §130A-80.3) and incorporation of a municipality with dissolution of the district (N.C. Gen. Stat. §130-81), it appears that the legislature did not intend that N.C. Gen. Stat. §160A-274 be the means or the vehicle to accomplish what the outgoing H2GO board of commissioners and the Town of
Belville attempted. When a court has to consider these statutes that are in pan materia, it has to give effect, if possible to all these provisions without destroying the meaning of these enactments. Also, "[pjarts of the same statute dealing with the same subject matter must be considered and interpreted as a whole." State ex rel.
Comm'r of Ins. v. N.C. Auto. Rate Admin. Office, 294 N.C. 60, 66, 241 S.E.2d 324,
328 (1978).
It is a well-established principle of statutory construction that:
Where there is one statute dealing with a subject in general and comprehensive terms, and another dealing with a part of the same subject in a more minute and definite way, the two should be read together and harmonized, if possible, with a view to giving effect to a consistent legislative policy; but, to the extent of any necessary repugnancy between them, the special statute, or the one dealing with the common subject matter in a minute way, will prevail over the general statute, according to the authorities on the question, unless it appears that the legislature intended to make the general act controlling; and this is true a fortiori when the special act is later in point of time, although the rule is applicable without regard to the respective
43 dates of passage. Nat'I Food Stores v. N.C. Bd. of Alcoholic Control, 268 N.C. 624, 628-29, 151 S.E.2d 582, 586 (1966).
Also, courts will "normally adopt an interpretation which will avoid absurd or
bizarre consequences, the presumption being that the legislature acted in accordance
with reason and common sense," State ex rel. Comm'roflns. v. North Carolina Auto.
Rate Admin. Office, 294 N.C. 60, 68, 241 S.E.2d 324, 329 (1978), and "with full
knowledge of prior and existing law," State v. Benton, 276 N.C. 641, 658, 174 S.E.2d
793, 804 (1970). Rhyne v. K-Mart Corp., 358 N.C. 160, 189, 594 S.E.2d I/ 20
(2004).
N.C. Gen. Stat. §160A-321, contained in Article 16 of that chapter, specifically addresses the "Sale, lease, or discontinuance of city-owned enterprise" by a city. It authorizes a city to "sell ...any enterprise that it may own upon any terms and conditions that the council may deem best." However, that statute does not authorize a sanitary district to sell a public enterprise. The "sanitary district" inclusion language of N.C. Gen. Stat. §130A-55(20) does not apply to this Article. It is fair to conclude that the General Assembly intended to provide to a city the specific authority to sell or convey an entire public enterprise but not to a sanitary district.
The court concludes that the detailed statutory provisions of dissolution, merger and incorporation control in this situation where the final result is the transfer to the Town of Belville of all of the sanitary district's real and personal property, including "the Systems' infrastructure, facilities, structures, vehicles, equipment, supplies, funds, permits, contracts/ easements, other property rights, liabilities, debt obligations and all other materials and things associated with ...the ownership, operation, and maintenance" of said systems. N.C. Gen. Stat. §160A-274 grants a
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governmental unit the authority to sell to another governmental unit "any interest in
real or personal property" but not the wholesale transfer of the governmental unit in
its entirety.
Professor David M. Lawrence suggested in Local Government Property
Transactions in North Carolina, § 502 "Limitations on Disposition/' 2nd Edition, 2000,
that the courts have ruled that local governments cannot dispose of property held in
governmental use, and that general authority to convey only applied to property held
in the government's private capacity. He cites as authority the case of City of
Southport v, Stanly, 125 N.C. 464, 467, 34 S.E. 641, 642 (1899) in which the court concluded that the town could not convey in a long term lease property designated for the use of the town. It reasoned that to allow such a conveyance,
[I]t would be in the power of the governing authorities of a town or city to practically annul its charter—a thing which certainly could not be done except by the General Assembly, through a bill enacted for that purpose. If the Commissioners orAldermen could/ sell one public square or park, or building used for government purposes, why, they could logically sell every building owned by the town, and every public square, and by that means destroy the means of properly governing the municipality, and also greatly impair the value of all real estate within the city or town limits. It is true such action on the part of the Commissioners might not be probable, but it could be done—it is possible that it could be done—under the construction which the defendant put upon the Code section. The reasonable construction of the statute must be that the town or city authorities can sell any personal property, or sell or lease any real estate which belongs to the town or city as the surplus of the original acreage ceded for the town or city site, or such land as may have been subsequently acquired or purchased; but in no case can the power be extended to the sale or lease of any real estate which, by the terms of the act of incorporation, is to be held in trust for the use of the town, or any real estate with or without the buildings on it which is devoted to the purposes of government, including town or city hall, market houses, houses used for fire departments or for water supply, or for public squares or parks (emphasis added).
45 Of the court's conclusion in Stanly that "if a city could sell every parcel and
thereby effectively abolish itself," Professor Lawrence stated that it would certainly
be a "slippery slope", but in such a case the city would be protected by the abuse of
discretion standard. Absent "further judicial decision," Lawrence advised that
municipalities should consider that strict limitation regarding the sale of
governmental property still in force.
The court has already raised the profound effect of the transfer of the systems
and its governance on the ability of those who reside outside of Belville but within
the sanitary district. They would be limited to voting for members of the sanitary
district commission that does not have the authority or ability to address their
concerns or consider requests for service or expansion of services. They would be
forced to plead their needs and requests to the Town of Belville officials who are
elected solely by Belville residents. It is not difficult to see the conflicts that could
arise when competing interests for service and development of services, between
those who live in Belville and those who do not, come before the Belville commission.
In exchange for all that Belville will receive, the town has few obligations under the conveyance agreement. The obligations of the District are detailed and
comprehensive. Section 4.02 of the agreement defines the town's "representations
and warranties." They consist of only an acknowledgment (1) that the town is a
municipal corporation "with the power and authority to enter into and perform its
obligations under this Agreement and all other documents ..." (2) that the documents
and instruments have been duly authorized and executed and are valid and binding
instruments; and (3) that compliance with the terms of the agreement does not
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"conflict with or constitute a breach or violation of, or a default under any agreements to which the town is a party, any applicable, rule or regulation of any governmental
unit or agency thereon." Section 7.09 recites that "this agreement is the "complete,
entire and final agreement of the parties with respect to the subject matter hereof."
The operation and maintenance agreement for the water and sewer systems sets out in detail in section 6.01 the obligations of the district. It sets out the few obligations of the town in section 6.02 along with the same general representations of the town contained in the conveyance agreement. Under section 6.02 the town is obligated to (1) reimburse the district on a timely basis; (2) continue to properly
manage and fund the Water and Sewer Systems' operations through necessary rate adjustments; (3) consider the recommendations made by district personnel regarding any problems with the system; (4) pursue enforcement/ remedial actions against those who actions result in or reasonably likely to result in issues and problems with the systems operations; and (5) be responsible for regulatory enforcement. Even these rather general nondescript obligations, were to expire on
January 31, 2018 or sooner if terminated by one or both parties. Other than to
"continue to properly manage and fund the systems' operations," the town does not obligate itself in writing under the conveyance or operations agreement to accept the regular responsibilities and standards of service imposed by N.C. Gen. Stat. §130A-
47 and owed to the people of the district that the sanitary district commission was bound by and has complied with.
N.C. Gen. Stat. §160A-86 requires that governing boards of cities and sanitary districts adopt policies containing a code of ethics to guide their actions in the
47 performance of their official duties. Although the court was not presented the codes
for either board, it is apparent that the affairs and procedures followed in the H2GO
governing board by the majority members of that outgoing H2GO board of
commissioners and in the Belville Board of Commissioners by members of that board
were not conducted in an "open and public manner." N.C. Gen. Stat. §160A-87(5).
Although the court specifically does not find from what it has heard or has been
presented to it, that there are any open meetings violations, the court reluctantly comes to the conclusion that the affairs of the governing boards were not conducted
in an open and public manner due to:
(1) exchanges of emails between the Belville town attorney Eldridge and H2GO
Executive Director Walker marked "private and confidential" and communications that were transacted during the course of the November 28, 2018 H2GO board of commissioners meeting;
(2) the exclusion of H2GO attorney Cable from the ability to see, review or sign the conveyance documents before their consideration by the board;
(3) the decision by Executive Director Walker and commissioners Browning,
Jenkins and Antos to keep from commissioners Trombley and Gerken any mention of the plans to sell or transfer H2GO assets;
(4) arranging for a compact time frame of less than 24 hours starting with the rapid passing by the sanitary district board of the resolution of, the agreement to convey the water and sewer systems, and the assignment and bill of sale on the evening of November 28, 2017, the execution of the acceptance agreement
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resolution by the Town of Belville Board of Commissioners during the 8 a.m. meeting
on the morning of November 29, 2017, and the execution and filing of the assignment
and bill of sale in the Register of Deeds office at 11:34 a.m. on November 29, 2019
and the execution and filing of the special warranty deed in the office of the Register
of Deeds office at 12:39 p.m. on November 29, 2019 for the purpose of avoiding a
restraining order and other court intervention;
(5) the failure to include notice of the consideration of these actions on the
H2GO board agenda on November 28, 2017 and the later addition of an agenda item
described innocuously as "H2GO operations" by Commissioner Antos who would later
vote for the transfer;
(6) the failure to contact, consult beforehand, and seek prior approval from
the Local Government Commission or bond counsel for H2GO of the proposed transfer
of the assets and debt to Belville;
(7) the failure of Executive Director Walker or any commissioner with
knowledge of the proposed transfer to disclose to the other commissioners the receipt of the email hours before the board meeting from Sharon Edmundson, Director of the Fiscal Management Section of the Finance Division of the North Carolina Local
Government Commission which recommended that before action is taken that H2GO
consult with its bond counsel and consider the possible ramifications if it did not;
(8) the failure to disclose to the public any mention of the conveyance or the reasoning or justification for the reconvening of the Town of Belville Board of
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Commissioners meeting of November 20, 2017 although the commissioners had
known that any action by H2GO had to be immediately considered by them.
Further, N.C. Gen. Stat, §160A-312 authorizes cities and towns to acquire,
own and operate public enterprises in order to provide services to the city and its citizens. Water services and wastewater collection are identified as permitted public enterprises under N.C. Gen. Stat. §160A-311(2) and (3). However, the General
Assembly limited and qualified the ability of the city to operate a public enterprise outside its corporate limits only "within reasonable limitations."
Reasonableness can be found when the area to be serviced has a geographical proximity to the city's boundaries. See, Lumbee River Elec. Membership Corp. v. City of Fayetteville, 309 N.C. 726, 738-39, 309 S.E.2d 209, 217 (1983) (reasonable to extend electric service to a subdivision whose entrance was across the street from an. area serviced by the city even though it was outside the city limits).
That term "within reasonable limitations" does not refer solely to the territorial extent of the city's venture but "embraces all facts and circumstances which affect the reasonableness of the venture." Quality Water Supply, Inc. v. City of Wilmington,
97 N.C. App. 400, 406-07, 388 S.E.2d 608, 612 (1990). In Quality Water, the court found that the extension of a water line beyond the city limits to be reasonable because the land to be serviced by the water line lies adjacent to areas which have been studied by the City for annexation. In addition, the water line extension, which would be paid for by a third party, could service those newly annexed areas.
50 The Town of Belville has about 2,000 residents, 1/300 registered voters and
approximately 1/000 of the 10,000 metered customers of H2GO. The town is
governed by a mayor and a five member board of commissioners. It has three
employees and an annual budget of about one million dollars. Its geographical
configuration comprises about two square miles. It did independently have water and sewer services. The area that the Town of Belville attempted to acquire to provide
water and sewer services to was approximately twenty-four square miles. That area
included parts of the Town of Leland, 11.5 square miles of which is within the sanitary district, with its 5,000 sanitary district's metered customers. It also included the
Town of Navassa, a town of a population of about 1,800 residents.
The maps, attached as exhibits 6-12, were provided by Leland town planner
Benjamin Andrea. They demonstrate the areas that encompass the H2GO sanitary district and the municipalities of Leland, Belville and Navassa.
To service these customers, Belville is relying on a smooth transition of H2GO's
$10 million operating budget and the 29 H2GO employees to its employment.
Without them or without a seamless transition of those employees or any disruption in the transition, the customers of H2GO could face interruption and problems with their service. Presently, the three Belville employees are untrained and unqualified to undertake this additional workload.
This acquisition by the Town of Belville will result, according to an email inquiry by Eldridge, in revenue that exceeded the expenses required to operate and maintain the system. This profit would run counter to the ruling in Domestic Elec. Serv., Inc. v. Rocky Mount, 285 N.C. 135, 144, 203 S.E.2d 838, 844 (1974) in which the court
51 concluded that "the primary function of a municipal corporation is to provide local government within its limits and authorized services to its inhabitants, not to engage in business enterprises for profit outside its corporate limits." In addition, N.C. Gen.
Stat. §130A-47 provided specifically that "no municipal corporation or any part of the territory in a municipal corporation shall be included in a sanitary district except at the request of the governing board of the municipal corporation." That was not done nor is it likely to occur.
After considering all of the facts and circumstance, the court concludes that under N.C. Gen. Stat. §160A-312(a), it was unreasonable for Belville to acquire and operate these water and sewer public enterprises outside its corporate limits. Such an acquisition would be in violation of Article 16 of Section 160A of the General
Statutes, and beyond its statutory authority.
Less than two hours before the November 28, 2017 meeting of the H2GO's
Board of Commissioners, the director of the Fiscal Management Section of the Finance
Division of the North Carolina Local Government Commission sent an email to.H2GO
Executive Director Walker, Belville Mayor Alien and Belville town attorney Eldridge.
In it. Director Sharon Edmundson strongly recommended that, before transferring the assets and related debt of the district to Belville, that H2GO consult with its bond counsel before taking any action because any action on the debt or the assets that generate the revenue to pay the debt could cause the debt to go into "default status."
She also advised that any transfer of the debt would require the approval of the LGC before such a transfer can occur. She also recommended that the Town "take the time to consider the full responsibilities of taking on a water and sewer system[s],
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"including not only the costs and expertise needed to operate the system[s] but the costs and long term commitment to adequately maintain and eventually replace such a system." She invited the town and H2GO officials to contact her at any time. By statute, LGC is charged with reviewing and supervising all of the significant financial affairs of local governments which would include this transaction.
Within two hours after the receipt of the LGC email, the H2GO commission voted to convey the water and sewer systems and its assets, property rights, liabilities, and debt obligations. No attempts were made by the Belville or H2GO officials, as suggested, to contact LGC to inquire about their contractual and statutory obligations regarding the revenue bonds. Belville attorney Eldridge, instead of contacting LGC officials, modified the language of the agreement to require the
District, prior to the expiration of the operating agreement, to obtain the approval of
LGC to transfer the SunTrust Bond to the town. No further inquiry was made after receipt of the LGC email regarding the financial health of the town and the issue of a long term commitment and possible replacement of the systems. Modifications to the instruments were made during and after the commissioners' meeting. Executive
Director Walker believed that the district's bond was transferrable. He also believed that Scott Hook, who knew previously about the proposed conveyance, made one unsuccessful attempt to contact the bondholder once by phone. The vote was not delayed.
Conclusion
The court finds that there was competent and substantial evidence to support the legal conclusion that the commissioners of both governing boards of H2GO and
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Belville/ acting in concert, failed to act in good faith, and their actions were so clearly unreasonable as to amount to an oppressive and manifest abuse of their discretion.
Based upon the above, the summary judgment motion of the Town of Leland and H2GO Brunswick Regional Water & Sewer as to the third cause of action is
Granted. The summary judgment motion of the defendant Belville is Denied.
IV.
Fourth Claim for Relief by Leland and H2GO against Belville:
For a Declaration that the Challenged Resolution, Putative Transfer, and Putative Agreements Are Void Because They Involve an Illegal Debt Transfer that is Unauthorized by North Carolina Law and Contrary to H2GO's Bond Order
Fifth Claim for Relief by Leland and H2GO against Belville:
For a Declaration that the Challenged Resolution, Putative Transfer, and Putative Agreements Are Void Because They Involve an Illegal Debt Transfer In Violation of H2GO's Bond
Sixth Claim for Relief by Leland and H2GO against Belville:
For a Declaration that the Challenged Resolution, Putative Transfer, and Putative Agreements Are Void Because They Involve an Illegal Debt Transfer In Violation of N.C. Gen. Stat. Chapter 159, Article 5
The Seventh Claim for Relief by Leland and H2GO against Belville was previously dismissed by court order entered on August 20, 2018.
The plaintiffs contend that H2GO, in Section 1.01 of the Agreement to Convey
Water and Sewer System, agreed to convey at closing to the Town of Belville those systems free and clear of liens and encumbrances. In support of that conclusion, the plaintiffs cite the following sections and language in both the agreement and assignment and bill of sale. In Section 2.01(A)(1) of the agreement, the district was required to deliver fully executed documents to Belville at closing that conveyed its
54 funds, liabilities and debt obligations. In Section 3.01 the agreement was conditioned
on the expressed requirement that the district provide the town "with satisfactory
evidence that any third-party approvals have been obtained relative to assigning
and/or transferring the permits, contracts, liabilities, and debt obligations, including the 2012 SunTrust Revenue Bond ..."
In the Assignment and Bill of Sale executed by H2GO, chairman William H.
Browning, H2GO bargained, sold and assigned to the town, in addition to all of the real and personal property and other listed items, the 2012 SunTrust Revenue Bond which was listed as item 117. Also, counsel for Belville in correspondence with Judge
Lock on December 20, 2017, in reference to the preliminary injunction order, asserted that the bonds were among the assets and liabilities conveyed to Belville.
Many of the preliminary injunction provisions are premised on that assertion in that
Belville would "retain title to and ownership of the real and personal property of the water and sewer system and its liabilities." Also, Belville was ordered to make the payments on the bond promptly after presented with the invoices by H2GO.
Section 2.05 of the Bond Order prohibited the transfer of the SunTrust Revenue
Bond "to any person other than a bank, an insurance company or a similar financial institution" by the Bond Register without prior approval from the Local Government
Commission. No prior approval of the transfer to Belville was sought or received from the Commission by H2GO or Belville.
The plaintiffs argue that by the language of these instruments, the transfer of the SunTrust Revenue Bond and the revenue to meet the district's obligations was achieved in violation of the Bond Order.
55 (:
Defendant Belville, however, contends that H2GO's bond was not transferred,
because the consummation of the conveyance was conditioned on LGC approval of the conveyance. In support of this contention, Belville argues that Section 3.01 of the conveyance agreement provides that the agreement is "expressly conditioned upon and subject to the District satisfying, or the Town's waiving in writing, the following express condition[]" contained in subsection "C" captioned, "The SunTrust
Bond". This section required that "[p]rior to the expiration of the term under the parties' contemporaneous Operating Agreement, the District shall obtain the approval of the North Carolina Local Government Commission to transfer the SunTrust Bond to the town." Belville contends that this specific provision clearly demonstrates the intention of the parties that H2GO's obligations under the Bond would not be transferred to the Town of Belville until LGC approval was obtained.
If the bond indebtedness and obligation has not been transferred, as the defendant contends, then the transfer of the district's real property, personal property, "the systems' infrastructure, facilities, structures, vehicles, equipment, supplies, funds, permits, contracts, easements" and "all other materials and things associated with or required for the ownership, operation, and maintenance of the
Water and Sewer Systems" would violate section 7.09 of the Bond Order executed by H2GO on July 10, 2012. That section states: "[t]he District covenants that it will not sell, lease or otherwise dispose of the System or any part thereof except as expressly permitted by this Section or as agreed to by 100% of the Holders." There is no evidence the Holders have granted any permission.
It would also violate N.C. Gen. Stat. §159-92(a) which requires that "[a]ll revenue bonds issued under this Article shall be equally and ratably secured by a
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pledge, charge, and lien upon revenues provided for in the bond order ... in accordance with the provisions of this Article and of the bond order." This statute creates an automatic lien on all revenues provided for in the bond order. Section 5.03
Pledge of Net Revenues of the bond order reiterates that statutory mandate. It provides that the "District pledges the Net Revenues to secure the payment of the principal of, redemption premium, if any, and interest on the bonds. The Revenues, as received by the District, shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act and the lien of this pledge shall have priority over any or all other obligations and liabilities of the District..." Section
7.10 Creation of Liens requires that the district will not create any charge or lien on the net revenues that rank equally with or prior to the charge or lien on the net revenues. Under the terms of the conveyance, the district transferred the systems free and clear of all liens. As a result, this would mean that the holders of the bonds have lost their lien on the net revenues which would be received by Belville.
The sections of the agreement to convey and assignment and bill of sale cited by both parties seem to contradict each other on the issue of whether the SunTrust bond was conveyed. Statements by executive director Walker in his deposition regarding the transfer are also confusing.
In addition, the Local Government Commission, in spite of actual notice of these conveyances, has not acted, ordered a hearing on the issue, declared the bond in default, intervened in this lawsuit, nor has it revealed its position regarding approval of the transfer. If the transfer of the SunTrust Bond does not receive approval by the commission, the town, pursuant to section 3.02 of the agreement, can "rescind this Agreement and convey back to the district, by warranty deeds and
57 an assignment and bill of sale, ...the Water and Sewer systems including, without limitation" all of those materials and things described in Article 1.
By granting summary judgment for the plaintiffs in the first three issues and thereby nullifying the transfer and conveyances by H2GO to Belville, LGC will not have to consider a request of the Town for approval unless it chooses to, SunTrust also has not declared the bond to be in default or sought a declaration from LGC that the bond was in default. The preliminary injunction required that the payments continue while this suit progressed. Although LGC and SunTrust are not under the restrictions of the preliminary injunction, neither has acted or intervened.
The court is not in a position to determine what this non-action by the LGC and
SunTrust means or how this affects the parties' contentions regarding the bond.
The Bond Order, which authorized the issuance of the water and sewer revenue bonds of H2GO, was a contract between the district and the holders of the bonds.
The agreements therein are "to be performed by or on behalf of the District shall be for the equal benefit, protection and security of the Holders of any and all of the
Bonds so issued or to issued ..." Under Section 1.02 Definitions, a Bondholder means
"any person who shall be the registered owner of such Bond or Bonds." The customers who receive or could receive services from the water and sewer systems and the towns within the district are not parties to this contract.
Section 11.06 Parties Interested Herein of the bond order also provides that:
Except as herein otherwise expressly provided, nothing in this Bond Order expressed or implied is intended or shall be construed to confer on any person, firm or corporation other than the District, the Bond Registrar and the Holders of the Bonds issued under and secured by this Bond Order any right, remedy or claim, legal or equitable, under
58 or by reason of this Bond Order or any provision hereof, this Bond Order and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto and the Holders from time to time of the Bonds issued hereunder.
Under this section Leland did not acquire any rights nor secured any claims or causes of action under the Bond Order. The only parties to this contract that could be involved in any default with respect to the Bond debt are H2GO and the bondholders. In addition, no conduct of Belville could bring about a default.
Although a bond holder could claim that a default has taken place by the transfer of the assets to Belville under Section 8.01 Events of Default, there is no evidence that any holder has. One could claim that the transfer of the assets and revenues can trigger a default under Section 8.01(c) in that it could result in the district being "incapable of fulfilling its obligations" under the order. The court cannot, however, assert the rights of any bondholder and declare a default under the order or Chapter 159, Article 5 or ask or order the Local Government Commission to do so.
Based upon the foregoing, the defendant Belville's motions for summary judgment as to the plaintiffs' Fourth, Fifth and Sixth causes of action are Granted.
The plaintiffs motions for summary judgment as these same causes of action are
Denied and those causes of action are Dismissed.
Eighth Claim for Relief (For Preliminary and Permanent Injunctive Relief, Including
Mandatory Injunctive Relief)
(By Leland and H2GO against Belville)
59 This is not a cause of action but a request for a remedy which is addressed later in the order.
Ninth Claim for Relief (Undue Influence)
(By H2GO against Belville)
Plaintiff H2GO alleges that following the election it was subject to undue influence from Belville by having its attorney, James Ethridge, (a) improperly communicate with H2GO commissioners and employees to facilitate the transfer described in the Agreement to Convey Water and Sewer Systems; (b) intentionally exclude H260's municipal counsel from reviewing, considering or offering advice regarding the transfer; and (c) drafting the resolution and agreement.
Undue influence is defined as "a fraudulent influence over the mind and will of another to the extent that the professed action is not freely done but is in truth the act of the one who procures the result." In re Estate ofLoftin and Loftin v. Loftin, 285
N.C. 717, 722, 208 S.E. 2d 670, 674-75 (1974). There are four general elements of undue influence: (1) a person who is subject to influence; (2) an opportunity to exert undue influence; (3) a disposition to exert undue influence; and (4) a result indicating undue influence. Griffin v. Baucom, 74 N.C. App. 282, 286, 328 S.E.2d 38, 41
(1985).
Undue influence "must usually be proved by evidence of a combination of surrounding facts, circumstances and inferences from which a jury could find that the person's act was not the product of his own free and unconstrained will, but instead was the result of an overpowering influence over him by another (emphasis added)."
H2GO would have to show that for the influence to be undue, "there must be
60 something operating upon the mind of the person whose act is called in judgment, of sufficient controlling effect to destroy free agency and to render the instrument [in
Carl Antos' case, the vote; in Robert Walker's case, the cooperation with Eldridge],
...not properly an expression of the wishes of the maker, but rather the expression of the will of another. It is the substitution of the mind of the person exercising the influence [Eldridge] for the mind of" Antes and Walker causing them to take an action which each one would not have made. In re Will of Prince, 109 N.C. App. 58, 61,
425 S.E.2d 711, 713-14 (1993) (quoting In re Will of Kemp, 234 N.C. 495, 498, 67
S.E.2d 672, 674 (1951)).
The facts, circumstances and inferences from the evidence do not support these contentions as a matter of law.
H2GO contends that the source of the undue influence was Belville. No case supports the contention that an entity could be the subject of undue influence. Robert
Walker was an employee of H2GO and Carl Antos was only one of five of its elected commissioners. No case has ruled that an entity had a "mind" that could be operated upon or controlled.
The evidence shows that Walker, shortly after the election,'was asked by an
H2GO commissioner Jenkins "if there was any way we could transfer the assets ...from
H2GO to Belville." Walker promised Jenkins he would look into it. Eldridge would later in an email advise Walker of the purported authority contained within N.C. Gen.
Stat. §160A-274(b). Walker in a November 12, 2017 email to Eldridge stated that he had spoken with Belville Mayor Alien, Belville town commissioner, Joe Breault and
H2GO commissioners, Browning, Antos, and Jenkins and advised that the three
61 (;• C
commissioners were "on the same page to transfer H2GO property (real, personal,
cash and other assets, etc.) to Belville. Should we meet to strategize as time is of thee essence? I have questions in regard to existing construction contracts and
current liabilities." This was over two weeks prior to the vote. The evidence clearly shows that Walker was acting pursuant to the direction provided him by his commissioners. He had no independent authority to effect any transfer outside of the actions and votes of the commissioners. The vote to adopt the resolution to convey the systems and to enter into the agreement to convey those systems was the majority's effort to ensure the continued construction of the RO plant and not due to any undue influence from Belville or its attorney. The majority of the H2GO commissioners and the governing authorities of Belville all shared the same goal and worked behind the scenes together to attain it.
Just prior to the H2GO's commissioners meeting, Walker advised Eldridge on
November 27, 2017 that Antes remained concerned about personal liability and indemnification and asked Eldridge to, "if possible, include 'current and past elected officials' in the mutual indemnity language." Walker cited H2GO's liability insurance as additional coverage but asked that the indemnity language be added. As a result of that request, modifications were made and Eldridge rendered an opinion to Walker that Antos would not be individually named in a lawsuit, but if he was, he would be indemnified under that policy and probably be dismissed from the lawsuit. This was not legal advice to Antos but a general opinion as to the meaning and significance of the modified language. No undue influence was exercised over Antos or any other commissioner by Eldridge or Belville.
62 The defendant Belville's motion for summary judgment as to H2GO's Ninth claim for relief is Granted. H2GO's motion for summary judgement is Denied, and this claim is Dismissed.
Tenth Claim for Relief
(Breach of Fiduciary Duty, Constructive Fraud, and Constructive Trust)
(By H2GO against Belville)
H2GO contends that because Belville had its town attorney (1) give advice to members of the outgoing majority of district commissioners and district employees;
(2) draft the challenged resolutions and agreements; (3) exclude the district's municipal counsel from discussions concerning the resolution and agreements to transfer, it assumed a fiduciary duty to act in the best interest of H2GO concerning the transaction.
"To establish constructive fraud, a plaintiff must show that "defendant (1)owes plaintiff a fiduciary duty; (2) breached this fiduciary duty; and (3) sought to benefit himself in the transaction." Sullivan v. Mebane Packaging Grp., 158 N.C. App. 19, 32,
581 S.E.2d 452, 462, disc. review denied, 357 N.C. 511, 588 S.E.2d 473 (2003).
A fiduciary relationship can exist under a variety of circumstances, Stilwell v.
Walden, 70 N.C. App. 543, 546, 320 S.E.2d 329, 331 (1984), and it can extend to a case in which a fiduciary relation exists in fact and in which there is confidence reposed on one side and resulting domination and influence on the other. Abbitt v.
Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931). "Only when one party figuratively holds all the cards—all the financial power/ technical information, for
63 example—have North Carolina courts found that the 'special circumstance' of a fiduciary relationship has arisen." Broussard v. Meineke Disc. Muffler Shops, Inc., 155
F.3d 331, 348 (4th Cir. 1998). North Carolina courts generally find that parties who interact at arms-length do not have a fiduciary relationship with each other, even if they are mutually interdependent businesses. Tin Originals, Inc. v. Colonial Tin
Works, Inc., 98 N.C. App. 663, 666, 391 S.E.2d 831, 833 (1990).
The evidence does not show any special trust or fiduciary relationship between the parties. This was an arms-length transaction in which Belville and the outgoing majority of H2GO/s commission each sought and shared a common goal. There was no discrepancy in bargaining power. The governing authority of Belville and the outgoing majority concluded that this was the only way to assure that the RO project would continue before the new majority took over the voting control of the district commission. To have that goal achieved, it required the mutual approval by both the town and district commissions of the written instruments prepared by the town attorney with the explicit assistance and cooperation of the district employees within the time remaining.
This was an arms-length transaction in which Belville, its governing officials or its attorney did not exercise a domineering influence over H2GO, and no fiduciary relationship was created by its actions.
The defendant Belville's motion for summary judgment as to H2GO's tenth claim for relief is Granted. H2GO's motion for summary judgment is Denied, and this claim is Dismissed.
64 The amended complaint's Eleventh Cause of Action against Belville was dismissed on August 20, 2018 by the court.
The amended complaint's Twelfth Cause of Action against Belville and a cross claim against H2GO, in which a violation of the open meetings law is asserted, was stayed by an order of this court entered on January 3, 2019.
Counterclaims by Belville against H2GO and Leland
The Town of Belville in its first counterclaim asserts that it is entitled to a declaratory judgment declaring that the actions of H2GO and its subsequent conduct in the emergency meeting was unlawful, invalid and void. It raised the issues of (1) whether commissioner-elect Beer was qualified to execute the duties of commissioner at the December 4, 2017 meeting or afterwards; (2) whether the resolutions voted on by the H2GO board members on December 4, 2017 and afterwards was lawful, valid or binding; and (3) whether, prior to its organizational meeting on December
19, 2017, the H2GO board was duly sitting and authorized to conduct business on
December 4, 2017. The fourth issue was stayed from consideration by the order of the court entered on January 3,2019.
Commissioner Beer was properly sworn in because N.C. Gen. Stat. §130A-
50(e) Election and terms of office of sanitary district boards provides that "[t]he elected members of the board shall take the office on the first Monday in December following their election ..." December 4, 2017 was the first Monday in December following the election.
65 c
Pursuant to N.C. Gen. Stat. §143-318.12(f) an emergency meeting was called for December 4, 2017 to discuss the temporary restraining order, the resolutions and agreements, legal representation and the appropriate direction to the staff. Initially, at the meeting the newly elected commissioner. Bill Beer was sworn in. The other newly elected commissioner did not get sworn in at that meeting. The board approved a resolution declaring the previously approved and executed documents
"null and void" and declaring that "they could not be lawfully accepted by the Town of Belville and declared them withdrawn." The board also instructed the executive director to take certain listed actions under threat of termination.
An emergency meeting may be called due to "generally unexpected circumstances that require immediate consideration by the public body." N.C. Gen.
Stat. §143-318.12(f). The court finds that the facts and circumstances facing the board justified the emergency meeting at which it took necessary and appropriate action.
The court concludes that: (1) Beer, after he was sworn in, was qualified to execute the duties of commissioner at the December 4, 2017 meeting or afterwards;
(2) the resolutions voted on by the H2GO board members on December 4, 2017 and afterwards were lawful, valid and binding; and (3) on December 4, 2017 the H2GO board was duly sitting and authorized to conduct business.
The plaintiffs' motion for summary judgment as to the defendant's first counterclaim is Granted and concludes that the defendant is not entitled to a declaratory judgment declaring that the actions of H2GO and its subsequent conduct were unlawful, invalid and void. As a result, the defendant's first counterclaim is
Dismissed.
66 c
The town contends in its second counterclaim that the agreements were valid and binding contracts between H2GO and the town. It also contends that H2GO breached the agreements by (1) failing to cooperate with Belville to effectuate the intent and purpose of the agreements; (2) unilaterally passing unlawful resolutions declaring the agreements unlawful, void and of no legal effect; and (3) failing to indemnify the town with respect to all claims in this litigation, its attorney fees, costs and expenses.
Based upon the rulings of the court granting the plaintiffs' motions for summary judgment as to the first, second and third causes of action, the plaintiffs' motion for summary judgment as to the defendant's second counterclaim is Granted and the second counterclaim alleging breach of contract is Dismissed.
Based upon the foregoing findings of fact and the rulings on the various causes of actions and counterclaims, the court orders and declares that:
1. The challenged Resolution of the Brunswick Regional Water and Sewer
H2GO, the Agreement to Convey Water and Sewer Systems, and the
Assignment and Bill of Sale and Special Warranty Deed are unlawful, void
and of no effect.
2. The preliminary injunction previously entered by the court shall remain in
full effect.
3. A permanent mandatory injunction shall be entered by the court consistent
with and in support of the rulings of the court which will order that the
67 public records state that H2GO is the lawful owner of all assets and debts
described in the specialty warranty deed and the assignment and bill of
sale.
4. The court defers ruling on any request for attorney fees and litigation costs.
5. The previous order staying any consideration of open meetings law remains
in effect.
6. The court retains jurisdiction to entertain any further motions by the parties
regarding this order.
This the 22nd day of April, 2019.
Superior Court
68 ^ynioir / (I )
ll-y-28)?. 11l2B|G8iOflB t •Ww.-Jick' %u-nTy'"?'i;-{,i;p SfW-'^M''^
RatwnwKsUz^a- Tot AGREEMEm- TO CONVEY WATER AND SE'syERSYSTJBMS ("Agteeipent"), dat.ed as. oTthe.28111:dayQfNQvember,'20.17, by and b.etweepBriKiswick Regional 'VaterA gpwer H2GO, a.body politic apd coqiorate-oftiie.Sia(e:'.o£Nbrt}i Garoiina.( '$yB15PIi;AJS,,th6.13Jstrict owns wd fipwntes a public v/at?r.dis(ril)ufion system sonS&Hng o¥'a]ppy)xun^elY-184 iliiles-bfdiStrib'otioU Water mauis, ,a 500.000 gaUori.grouhd storage lanlc , undibpstputhjp.sfatibflt a one.(it) mUii'oA gallon (M<3). elevated wiitfsr s(orag6tfflik, togBthefwith •'fite. tiydrahts, valves^ isfervice line'Ei, (itfst6iiieriri6teK, land, eBsemeuts,.ngh'tSno6?iYay, .gftcbfelfited- Jqc>Uit!.es:(aIi.her.einafteroollectiyej[yyefen'sd.toasft^ I WBOERJ&AS, -thet plsUpl:..owns and operates a public 'sanitariy sewer. cqllecBoASYstem ''^tiiiaisteg-ofappwxiiiiUtelYlsy'iKlle^gtavity-Ba^i^siMe-s^^ •VastAv/9ter^Btlftem-pl^A'^84,970'galt6n-pei-d&ycap'a^^ NQrfteaB,t^aM6W9tsr.%eatoentJplwt?d.(n'^-p^?r?lu^ ceillpottoii.'.syst'em.tQgethu' v/ithman1iciles»'liftsta"tions, fonie mains, ytilVfiSi au-reIeaspyalye.B,. service, feps, tef»ice lat'erialsi .elean-outs,, lan'd, ea&emchts/rights-.of-wdy, .ana rfilflteiffacilitBis (all ..heKSiiiiitte'i cdUec.ti'telY';teiFennic('to as the "BistnCt SeW! Sp'eia11); ! :WItEiBlEAS;.d\B Dis.tcict h^. fjpproXiroately. 1-0,0.00 watei"cijst:<;itt:ers pu.d;approX»Bigt?iy 6,500 sww ougtomers; 'WHBREAS^the Disttict'has appi'oxiiliately $16.6 million in .cBpiifBlitoproYemeaffunas, debt:sgrYJip'e,;reservp fiuids, operafiiig reserves, anctcustomer'deposits; ! WB^]?AS»(hePi^.ctbas.debt'a?socbtedwlththBDis(r)ot?6we);8ys(9m-()f- arifjroxlteately $6 million'} , •• ' WHE(?AS,;the:Di^tfic('ftold's: aJ'ctirHt to. Operate a. .GommUrti^Pu^lto. Watok; SystBft, ]?WSID'N(?04;1:Q0.7Q;: I '%%a5SEAS,.thc. Dis(ri<;thol(jg.B..I?'?hwtto Operste Cpllectfop System/WQC30^ • I "tVKEREAS/tte.Oiiitrict cuWehtly'efflplbys 2? .Nl-timB •etaptoyees 'wiih aH. acnu.fll fiWj;o^.ofM,5aO,000(^cNjhgbese^:and7oyei^me>! ~ i 'WBlEKiSA'S, the Distnpt cunCTtl'y purdh.Bses its fimslicd wator.&oni.Srunswi.ok .Opunty- C'Courity"),the s'ovtw. QfwhfcK is.thQ-Cape Tear'RivA ("B.iVte");' ! •\S^Elp;AS,: OeriX, arid :othw unrc'guluted conttomimtSj potent!^ .have been detected Jn •(i/a'ter ficay/il.&onl'the River; I 'W,HnER®AS(tl?,!2qui)tyjsvn9.bl(? to filter OenX^riiJ otliefchetniclil cobtatninahtS oMt.of ;ihe waterl.ef6re;selling.It to-tlieDlstric4- • t WjSEREAS, areverse osmosis ("RO") water treatment syslem, sp.urc.e4 ftQuicleep-.wel.l, CQnf'K1^ aquifeis witl prbvid& coittaininant'fice finished water for .customers. •wilMh'lhe.tUs.tri.ct,- .-.I'-- Be|yi.lle_0000930 ir«ntfn..H;'(;:ftn«iuns. • ...PROP 'flrunflWlck Cbufttyi* NC Rflgistcr of Dcedg PR'BO t3 o< 'WHEREAS, N.C.aS, ;§ .160A-274'?;pressI)' prithorizos the.Distjriot'to cowey Its iriteres.ts. in real midpersonal.;prop.ertyto the Town "upon such turiiiaaftalcoitdi'ttonsjas it.deenaa- •wSse'[arid)tvl& orwlthotot c'onSidei'aticiA,,,^":ah'd. i WBUaRte^S, fl}e.paaiesin^Bd[.foy tKts ^gft!e,ii1ie»t.tQ pet.forttt those tenns.wdfiQntlitio.us and.to provide fl'lnsls fpr;thej)ar(ios.'''CQntemj)ormieov3:qpera'tii»g.a6(eenicnt,. NOW, TJHEMSEOlUSj in coBsideraiibaflftfie rteitala set';&rtl](:nl)oye,:atia t)tlle'(:'Valuable': c.Qffsi9erfttion,,W?.iscCTptflnd.wffiQieiisypfwKibAi8;l)er6by8ckno^ Tovto agree •95 fo)l6»$? ARTtOLM(.-<3Q??YANCE i SECTION t.Ol! c6NWANC:fi'By¥Hfi:DISTRICT. At-C.loslsg.^jDistrN'slwHcpAvey to.tto TOTO, fi;(!.c and|-.<,ileRrofliws,an(l'eni?uin1)ni(i;ss, fte.'^atw agdiSeww Sys(ems by •thGl>latrtet'.s.jwrson9lpwj»l foi-tlie. owwrsbip, opp)'fiti&s> atidjgn'Sijatciiaiiee oftli&'WdtBr Rnd.'S.eiiyw SyStcm^. AimCLBZ; .CLO.SING SBCnON.a.OL.CLOSJNOi '%eCipsing.sVlpc.cur..Ca.placeai»d;on;^.).tilt.em^;tim't9'i5<$ Sgreed iippn by-fUe ftartieS. A. At eiQsmg,::'lhe©>?t(ibt sbBlt.dellys-ito the Town (liefQUQWuig'fnllycweHted. ..das.unisid.ts;:_...___..,, ,._. . :_._.„ 1;, :Wg Agceewent<,WwarityPe.eds,:iW A^si®un?nt;((naSill pESale^andi.siioR pfterjns'it?entS';ri(!tisf!a &6ave^uig'to'th6. 'T&Vm^Aee.flfld-cle&i'.fltllei^aad\6tei*!ehCum^rauce^,ii8ft1o^ tod?Spwer,SystemsJwIndipg;;bu!tWflt1)eingJfanjl(e(i'to,ttie'pisft6t?s^ . etid:$CTiSonaJl,I"'i?P^ &oli<^ng,.-Witilou.t.;luii}tatlon, easetneai^.tiitor iproperty rijghts, watet'.'atttl wastewater.teBatmetit&fi-ash-uctiwet fl6Uj;o.ti6& llnes>;lataral UneStpurop station?, f8uiy(teSt8^cftiitefV'elijic^^^^ ariit^ustomer }uifbttaBycin,;.ftn3A UgbiliUes, deBS oHigatuins, wcl.gHstii.er iina{sri^1s^i3?mgs-asAOA9te4^ith.oi;.re^HUed.^^^^ jimintfateiii:iiiUE:tt(B: fiistUQt''iS;Water;&iia. S'eWer Sy8tems;:.and' 2,' •!I'he,])arBest Agte^ffsnt.-fcirfte Qp.?rattpn:avd.M^nt?^ce''9^^ater:f'n^ ge^e? §yM6nis'(lf6perfltiHg:ABi'eemenP,>), a 'tnie.aii.d accii^ate wpy/of-wtSch is attached Iteteto aiid ulBotj)ojtateillierein,:by tefeffince. .B. At eiosihfi, tt.te-Tbwn shaH' deU.v?r-to liie Dlst^Qt'lhd foH(i's?)^jGaHy fixccuted .1.. This Agreement; au3 ' :2, Ihs. Operating Agte^faipnti, i AimcU 3s GQNDmQNS SECWN S,t)J. CONDITI0NS TO'AGREEMBN'r.. Ws Agreement is exjpreA^ ^cl-ta,t^ep^ctsa(^^^^wthe:To^ •.espres? .(i.o^ifibn^ \ A.^ConectoessofReorMentatioris and'-Warrfuities;. All.of-the re^rescritaiiptis'ania •warc9nt}es.q^'the:t)i9trio't'Aet:ibrth,J(i'etein are true Bnifcorreo.t .wheA-TO94s an4l;sK9li be'itNe aod. cottectas ofthe'Eto'sing;. i B. J'drf6toian8e'd?0blleaiions. ^ ofth'e.'Q'&Hgations, •cftyBOHttter'.dnd. s.pftd.itjioris ,requlrea:;to be'petftftfned.^ tMs.A6fe!imcn?t inolvdiqg ixrwliaig :t)?'e .To'Wn'viltli sWisfa —,-;,-I<..U—.7.^—^;- U.i .-<,^-,,^,»-/-(^,,-^., BelvHl6_0000932 .11-2B-28I7 ;1.1t2BlM.I)B(l [(LHt'ClcAnona PROP RtBintDf-.of DecBs pBB« B of 10 SECTION .4.01',. THB-DIgTRlOT'S RBPRESENTATtON&AND WARRAVI'FIES. Tlie.Pistrict 'faffeby.represents apd \van;aiits Bs'Tollpya (all. s.uch T!pprB8entyipns:.and "^attiiti'ties surylyiiiig tlie ciflsitig); '' ' i A. Thte.Disitrict-has go'od'and in.iy'^et^bl.eitlt.le^.'ftesipd ckar p(fiens;flgd epevmbraacfes, tQ'tee.(e4.wdpcrsonal'prQperty''tirihgcdn^eye with eyeiy.Asitect fiflhe WatejK and,Se\wr. S^stetfiS.. ! B, Tlfs Wafer and S.Bwei'.S^stejriS;ire:ul.^b6d.coMd>tfep"an9-^p'^r^^ tear •pxcepted, aiuJ.HTe in-c.ofnplianCe ^rith-JBll.Ifiws, mles,. and Kigulntio)i8.ofaj)()Ucatlo governmental Irti.ts... . ! G. Wit)4n.^}Utee4(M)4ay8.^e?fe^te:o^ffi&'6^^ Town with.fcuc,:a(!6urat'^ aiifliotfplete iliopieso;Fltie.<e^iiig{lhsBisifoclTs;^^^^ WtSfWs for •Water, and 'seWer ijereic0; aU prii»at(ces^espli(itiofl.s,.Bn3/py rulpg %id.T6^u]ation^ .fefet.ipg-to .the WQtermd>SeWr;Systsm8,nflwlil i.oliUgdtiffns.liMBiii.n wftill f9WS i?d Pt:"9t^ei' ..ei-ifexcemeW^pfe^itdr'a j'lghts. i T. Th6t?isttloi:is.a:.bod;?^pUtip:.toa.ote^ROrtt's'dul)t tsrgaUflnd .^glldly'exlstfog un.dW.the lftWS'&f!the.SNQpfNor^^9Tiibavd 0., Tfiis;Agr6£ine-nt, aa'da1l,other.tic)oMm?Bts::antt'ws(Diroe;it.s i^tj?'d H, ?e,Di^<:(T?6xe.cutioA.and,dcliv.e^. pfTtUsiApepniCT^d^om^^^ ••teiW^ an&condittbnswHl'BOfccQn^pW^ uad?r'wy ayeemen(s,;|Mpli?.d:[n'g-tiie;SiniTrust^6^^^^^ yppii(»blb4&W,nfle,Di'rSi?lation.pJC.an^jgftYerwnenl|9l^ judgAent oi*.decre'&'ot.my-&ental ugericy ot'bbdy^ br& peimitaW4.l>y •I, The.eKewtiMaft4dey^^:6£tUs:Ayfi6m'6nl'an-affi8;conyeyiioceQY\thB:R falter ^d'SewM Systcm^to. ?®TQ^;'4o. not require tli^pjprpvri goAeronienliiluiut.or sg ^, .All,pbimi1sAeMlbythe;C!Ash;iR^regflj;aing.A^p^ •of its Water sM.^ewwSystpips are.^^flifoWe and .efferf, havphte :niot ...•5 • Be,jyi.lte_00009'34 Mrsa-iwn I. 11]2UiGO,COD .«nnnns"L . SHOP B, 'With.ir.isgaKJ :to the Town; ge: 7 of 10 1, Any unlruth, inaccuraoy, or.bieach of any representetipn, warf(H)ty, gr statement of the Tcrtm conlatned in.^ds AgreeineAt or in any .Qflier. agieetneht, instruhteAt, or writing flirnished byihe Town to: theDistrlc.tin poimsullon berewith; . ; 2i ^ny-breaoh of or (he.failwe.to'fijllill orperform;ahyofcligati'oh.O)' ffovenant of (lid Town.contaiflecUn this Agreewent titia any Qthelr.agre,eit}e».t,:inslffiiiBmt, or writing ftrffished'by th.e Tpwn to the Distiiet'in:c.onnectifip.Iietew.ith.;.£und. 3, The owneiship, operation, and/or useoftlie fiisfalct's ^V&itir and Sewer. •Systems arid/dr'the permits and conttaots asaooiate.d theicwjth nfter.the Closing. /UmCLE 6i DE^AULt SBGTIQK^.Oi. SPEClBlCSEKF.&KMAT'tGfi. Theparfies apluiowlcdge.tli.at.mon.eiEuy dnhl'oges-W&uld.not.ftTJy.compepsate.ehhetpaity-w:tfie.oyeniottoy^b^^^^ Agypwieat. T^ip p.arHes.tliietefb.re agteB'thnt m the event ofa.bre'ach or defanlt'by either- party, • tfeg:oU»pr-pit'r^r shall, inaddition to seeking aamages,'be.entitled-to .seek .nnd ab.tai.n.tl)'e 5j)?i;lfic pei'feriffQhce:olT.the clef^uliingyarty's-oyigatlons lieftunder.- AimCLE7(CaBNElBA£PRO.Y]SIONS. l .SE,GTiON7:Ol. LTABlLITy pT OFFICERS. EMPLOYEES. AND AGENTS'. NQ electe4'pr; ajpjppjiited member, offio{d',.officer, employee, ol-ageat of eftWyariy jp.ex.sDndllB^yo^R'^^tabiIltyfey.tefo^^^ ;A.0eiemQnt:(>r efty'.p.thier- ^QHiiineftts related •to the.ti'aniftoltQiis ctonteaiplatea, hei;dtiy,-,§Hoh. any qffioi^ o'fiicei;, empjoye?, or agpntfronrtlie perfpnns'n.ce 9¥pyio^i(?)al: •SBC'HQN 7.Q2. ISIOTIGES. ^11 Bpliccis', reports, afld:btlier:coiflmuni(!atfoB5';giveay]ursuBnt its •(hy Agreement sheEl.l be ;ih •witlng^iua wailed by ciertiiR^d.m a i;l, icehihvtetedpi reau.ca(ed'( or delilveredhfitirson.'tOithciintended'pddiM^ Ttoticeaent.by <;%dfi Djislrict!': :B?ce»rt.ive,Diu-e(il9r •Posfc.Q'ffics Box 22.3Q tel^Ad;NC 28451 TWns. Tp.wnAdnuiustfflt.or TO.W?OF]B?Y?-LE' 63IUverSP.&d. aelvme,Nl328 Copy.to.;' Jopi.esfeEldrldge. TownAttomey- EL£>Ri&(}BLAV3FlKM,'PC PwtOiri.cfi.fiox 138,0. Wilmlhgton/NC 28402, •SECTION'7.03. pDyBRNJNOL&V/. This Agreement Shall be.govpmed.'by, (imd'(!oit8tru6d,in. ,R^co^.ance^itUfheJiaws pfUip;State ofNtfrth Carolina. SECTION 7,04, MBfilATIONANDyBNUE, In (ho event any party l.elteyeErfh^Blhe.rpartx jii 'in-4c>?w1tpjporJaTnaterN.breBcKof^^ dcifault/bl'eaqb 4»nd the iti'Hiiuig of s&y upplicable period ol?'tinie-wifhih wlucli.t'o .(tuieiif, the ysj&w sNl' i A. Fjrst.m.nke a:goba' faith effort to'ftegoiwte.aresoluti.dtfof-ttxi d8faul«)reach. Belville, 0000936 d ) Bi~ •M^./s^ol^t\x^f,-^ ^;..."*' y- •j yo^yyr ^^^^^.... oyfiEX,^p]E ^ (Se'ug,;^'^0^:\SM&'l'^!.'^^5<^S!'.'i ASikb'.AHe^tetayS?' jAike.AHen.ivfavtor-~~ 'SC^— •'nw^' AlTESf'._f Athina'WiJJianiS, Town Clerk tliijs Agieew.ent .Ihos.-lieen pr C rtfo .fix DistritotSnnn-iicOfflcer Town SmBnce~(3!if!fimr -.?'• ;y/Tt-A-:T"''+-f*~r.?' ^^i,\(^,i\f^tt-l:'{-y,t'v^ .n.ft^.-."(...\^.r;"i.T--.'*(^-^^?;^'yt'*<^"^'a^^-rr^^'^h"*^ Belville. 0000938- r tEXHIBIT^ 2- "-29-2817 11i34;48.eBB y""ftc"lt."BW oTO.**^ J^TJr'y JZ.5- Return to ^.^-TypB- 77fr- 1Q Total. .Rev_Int.. cx$. -Cktf. Cash tf^jp Rsfum . Cash $_Flnanct QPortlona of document are llleglbls duo to condition of original, H Document contains seals voflflsd by original Inslrumonl that cannot bs reproduced or copied, STATE OF NORTH CAROLINA ASSIGNMENT AND BILL OF SALE COUNW OF BRUNSWICK THIS ASSIGNMENT AND BILL OF SALE, made this 28"' day of November 2017, by and between Brunswick Regional Water and Sewer H2GO ("Seller") and Town ofBelville ("Buyer"); KECITALS: Seller, for and in consideration of the sum of Ten Dollars and other valuable consideration, to Seller in hand paid, the receipt and sufficiency of which is hereby acknowledged, has bargained, sold and assigned, and ly these presents does bargain, soil, assign and convey unto the B.uyer, its successors and assigns, certain personal property, contracts, permits, funds, easements and property rights (collectively the "Property") more particularly described on Bxhjbit A, and shown on Water System Map Exhibit B, and Sewer System Map Exhibit C, attached hereto and made a part hereof, TO HAVE AND TO HOLD the Property to the Buyer and its successors and assigns in fee simple forever. The designation Buyer and Seller as used Herein shall include said parties, their heii-s, successors and assigns, and shall include singular, plural, masculine, feminine.or neuter as required by context, Seller represents and warrants to Buyer that it is seized of the Property In fee simple and has the right to convey the same in fee simple, that the same is free and clear of all encumbrances whatsoever, that it will warrant and defend the title thereto against the lawful claims of all persons whatsoever, and that it is not a party to any contracts to provide water ahd/or sewer service to anyone except pursuant to the contracts listed on ExhibitA hereof, This Assignment and Bill of Sale is given pursuant to an Agreement to Convey Water and Sewer Systems entered into between the parties dated November 28,2017. The parties agree that the representations and wammties of each party contained in said agreement shall survive the execution and delivery of this instrument. IN TESTIMONY WHEREOF, Seller has caused this instrument to be executed by its duly ';'i:':.:. J\'iw0^/'- fys, ''^\v(±^ '~t'^IQ '^.'v< Uliam H.'Browning, Chaimian ATTEST: At^i Teresa Long, Clerk to the EXHIBIT^ 2 irunswiok County, NC RegAittcr of &< bran.^^ ^ ^ ^ ^frr^ ao.^ ^ftrUHy Cc,n>e. ta^flre. me. •+h IS ^j «nd acfc-raT BnwsOtcfc. ReyoftAl UJatn°r <; &&t l^;+>\ess my hAnd a.n<( nc.+dffn/ -s^l, ^;s »2?'/7. ^Ueif- ^/- 1 Tt c. WSS,^ Ey-^x'3 pn Ofc(o>»er €, £t01 y ' J ,.,-.A;-» • j^^ . c EXHIBIT^ Z H-28-2BH Hi3», 1, All easements recorded In the Brunswlck County Register of Deeds listing Leland Sanitary District, and/or North Brunswlck Sanitary District, and/or Brunswlck Regional Water & Sewer, and/or H2GO as GRANTEE, 2, All water and sewer utility Infrastructure and associated easements, rlghts-of-way, and utility encroachments conveyed from Individuals, business entitles, developers, HOAs, builders, and/or contractors to the Leland Sanitary District, and/or North Brunswlck Sanitary District, and/or Brunswlck Regional Water & Sewer, and/or H2GO, 3, All water, water transmission lines, water distribution pipes, fire hydrants, valves, service taps, meters, registers, MXUs, remote meter reading equipment, and appurtenances to the overall water distribution system shown on Water System Map, Exhibit B. 4. All easements, rlghts-of-way, and utility encroachments associated with the water distribution system, •• 5, The 500,000 gallon ground storage tank, boost pump station (Including equipment and contents therein), generator, two (2) production wells (to-date stage of completion), and fencing.located on parcel 04700002,2.83 acres of land, deed recorded In Book 03032, Page 0963 of the Brunswlck County Register of Deeds. 6. The 1,0 million gallon elevated storage tank four (4) test.welts, and fencing located on parcel 0590001020,7.55 acres of land, deed recorded In Book 02890, Page 0417 of the Brunswlck County Register of Deeds, 7, Trade Street site, two (2) test wells located on parcel 0280000847,1,34 acres of land, deed recorded In Book 02841, Page 1219 of the Brunswlck County Register of Deeds. 8, Well site #3, two (2) production wells (to-date stage of completion) located on parcel 0570015002, 1.21 acres of land, deed recorded In Book 03905, page 0579 of the Brunswlck County Register of Deeds, 9, Well site #4, two (2) production wells (to-date stage of completion) located on parcel 0470001106, 1.20 acres of land, deed recorded In Book 3986, Page 0026 of the Brunswick County Register of Deeds. 10. Well site #S, two (2) production wells (to-date stage of completion) located on parcel 0370003502, 1.46 acres of land, deed recorded In Book 3981, Page 1370 of the Brunswlck County Register of Deeds, 11, RO Plant Site, two (2) production wells (to-date stage of completion), two (2) monitoring wells, fencing, 16' x 24' metal building, site Improvements (to-date stage of completion) located on parcel 0470003630,34.39 acres of land, deed recorded In Book 03622, Page 0459 of the Brunswlck County Register of Deeds, 12, SCADA monitoring and alarm system connected to and associated with all water system facilities, 13, All wastewater, wastewater collection sewers, manholes, lift stations, force mains, valves, air release valves, service taps, service laterals, clean-outs, and appurtenances to the overall wastewater collection system shown on Sewer System Map, Exhibit C. 14. All easements, rlghts-of-way, and utility encroachments associated with the sanitary sewer collection system. 15. Village Road #1 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 029LA03501, 0,03 acres of land (Inclu'dlng equipment thereon), deed recorded In Book 02215, Page 0773 of the Brunswlck County Register of Deeds. 16. Appleton ff2 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 029LA01813, 0.02 acres of land (including equipment thereon), deed recorded In Book 01636, Page 0534 of the Brunswlck County Register of Deeds, 17. Wayne #3 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 029KC02221, 0.02 acres of land (Including equipment thereon), deed recorded In Book 01.642, Page 0797 of the Brunswlck County Register of Deeds. 18, Sturgeon ff4 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel C129FB00901, 0.02 acres of land (Including equipment thereon), deed recorded In Book 01642, Page 0813 of the Brunswlck County Register of Deeds. 19. Sue Circle ff5 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 029JA02201, 0.02 acres of land (Including equipment thereon), deed recorded In Book 01642, Page 0805 of the Brunswlck County Register of Defeds. 20. Hotly Hills ff6 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcels 029FC00101 and 029FC00102,0,02 and 0,09 acres of land, respectively, (including equipment thereon), deeds recorded In Book 01642, Page 0801 and Book 03530, Page 0176, respectively, of the Brunswlck County Register of Deeds. 21, Old Mill #7 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 029CA00501, 0.02 acres of land (Including equipment thereon), deed recorded In Book 01642, Page 0809 of the Brunswlck County Register of Deeds.' c1 • r_ ' EXHTBmjirT 11-28-2B17 HlStllB.BBB Brenda.M, crnnons PROP Realster of DirdB" pige'T'of 19"" EXHIBITA 22, Lincoln School M lift station facilities, pumps, piping, valves, controls, alarm'systems, generator, and fencing located on parcel 0290009601, 0.02 acres of land (Including equipment thereon), deed recorded In Book 02298, Page 0922 of the Brunswlck County Register of Deeds. 23. East Brook #9 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 023JA00103. 24, Lake Forest S10 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 029CA029. 25. North Lanvale #11 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 0370002014,0,03 acres of land (Including equipment thereon), deed recorded In Book 01646, Page 1005 of the Brunswlck County Register of Deeds, 26. South Lanvale #12 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 0371A03G02,0.02 acres of land (Including equipment thereon), deed recorded In Book 01636, Page 0530 of the Brunswlck County Register of Deeds, 27. Wedgewood #13 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 047ADQ33, 0.04 acres of land (Including equipment thereon), deed recorded In Book 0384S, Page 0750 of the Brunswlck County Register of Deeds. 28, Old Lanvale ffl4 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 0470001904, 0,02 acres of land (Including equipment thereon), deed recorded In Book 01669, Page 1052 of the Brunswlck County Register of Deeds. 29. tanvale Forest #15 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 036MB00101. 30, Old Fayettevllle ffl6 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 037CE06705,0,02 acres of land (Including equipment thereon), deed recorded In Book 01642, Page 0817 of the Brunswlck County Register of Deeds. 31, Glendale 017 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0370005009. 32. Belvllle #18 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 038FA011. 33. North of School ttl9 lift station facilities, pumps, controls, alarm systems, generator, fencing (including equipment therein), and dedicated utility encroachment located on parcel 038FA01303. 34. South of School #20 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 048CA02003. 35. North Olde Towne #21 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 048GC00103,0,01 acres of land (Including equipment thereon), deed recorded In Book 01607, Page 1045 of the Brunswlck County Register of Deeds. 36, South Olde Towne #22 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 048FB00802,0.02 acres of land (Including equipment thereon), deed recorded In Book 01642, Page 0789 of the Brunswick County Register of Deeds. 37, Jackeys Creek #23 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 0480003603,0,18 acres of land (Including equipment thereon), deed recorded In Book 01909, Page 0287 of the Brunswlck County Register of Deeds, 38. Highland Shores ff24 lift station facilities, pumps, controls, alarm systems, generator, fencing . (Including equipment therein), and dedicated utility encroachment located on parcel 048FF00102. 39. Crofters H25 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 0480003202, 0.02 acres of land (Including equipment thereon), deed recorded In Book 01607, Page 1042 of the Brunswlck County Register of Deeds. 40. Creekslde #26 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 048NA00127, 0.02 acres of land (including equipment thereon), deed recorded In Book 01636, Page 0538 of the Brunswlck County Register of Deeds, 41. Egret Polnte #27 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0590000910. 42, Brunswlck Cove #28 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0590000707. 43, West Port 1 47, Blackwelt #33 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 038GA00101, 0.10 acres of land (Including equipment thereon), deed recorded In Book 01984, Page 1134 of the Brunswlck County Register of Deeds. 48. Arbors #34 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 04BHA07601, 49, Chappell Loop #35 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 0380002003,0,04 acres of land (Including equipment thereon), deed recorded In Book 01984, Page 1137 of the Brunswlck County Register of Deeds. 50. Westgate ft36 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 0470002429, 0.05 acres of land (Including equipment thereon), deed recorded In Book 02811, Page 1228 of the Brunswlck County Register of Deeds. 51, Ginger Lily #37 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 037NB00101, 0.07 acres of land (Including equipment thereon), deed recorded In Book 01909, Page 0287 of the Brunswlck County Register of Deeds. 52. Woodwlnrf#38 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 037NJ00101. 53, New Waterford Way #39 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0470003501. 54. Grayson Park ff40 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0460B026. 55. Stoney Creek #41 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcels 057NA042 and 057NA041. 56. Juniper Creek #42 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0290C00101. 57. Mill Creek #43 lift station facilities, pumps, piping, valves, controls, alarm systems, generator, and fencing located on parcel 029CA00501, 0,02 acres of land (Including equipment thereon), deed ' recorded In Book 01642, Page 0809 of the Brunswlck County Register of Deeds, 58. Compass Polnte 1 #44 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0220002204. 59, Sea Brook #45 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 046LC00102, 60, Compass Polnte 2 #46 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 0220002204. 61. Carol Lyan ff47 lift station facilities, pumps, controls, alarm systems, generator, fencing (including equipment therein), and dedicated utility encroachment located on parcels 046MA009 and 046MA010. 62. Hawthorne #48 lift station facilities, pumps, controls, alarm systems, generator, fencing (including equipment therein), and dedicated utility encroachment located on parcel 04700039. 63. Hawkeswater ff49 lift station facilities, pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 038KA00105. 64. Sunrise Terrace ffSO.IIft station facilities^ pumps, controls, alarm systems, generator, fencing (Including equipment therein), and dedicated utility encroachment located on parcel 029KA007, 65. US 17 Regional #51 lift station facilities (to-date stage of completion) located on parcel 0470001209, 0.45 acres of land, deed recorded In Book 03902, Page 1287 of the Brunswlck County Register of Deeds, 66. 400,000 gallon per ?Iay wastewater treatment plant and appurtenant facilities, generator, fencing, maintenance building (Including equipment and contents therein), located on parcel 04800029,4,75 acres of land (Including equipment and inventory thereon), deed recorded In Book 01909, Page 0287 of the Brunswlck County Register of Deeds, 67. 684,970 gallon per day capacity In the Brunswlck County Northeast Wastewater Treatment Plant and In the partnership wastewater transmission system. ' • 68. Monitoring and alarm .systems associated with all wastewater collection system and wastewater treatment facilities. . • 69, Parcel 04800003,105,67 acres of land, deed recorded In Book 03498, Page 0721 of the Brunswlck County Register of Deeds. 70, Parcel 030PA005, fencing, 1.07 acres of land (Including equipment, and Inventory thereon), • generator, deed recorded In Book 02323, Page 0597 of the Brunswlck County Register of Deeds. 71. Office building and maintenance building located at 516 Village Road, Leland, NC (Including equipment and contents therein), located on parcel 030PA006,1,32 acres of land (Including equipment and Inventory thereon), deed recorded In Book 01175, Page 0540 of the Brunswlck County Register of Deeds, £AHIBITIK» 11-2B-2017 11l34l46.BBB Brepda.erida.n, H.m ClmC lennons. .PROP W Reglst.r of Dnedn pag* B of 10 EXHIBIT A' 72. Summary of real property included In the above descriptions; PARCEL ID BOOK PAGE PARCEIID BOOK PAGE PARCEL ID BOOK PAGE 0471)0002 3032 0953 _02Src00102. 3530 0176 059BG00204 ZB87 0785 0590001020 2890 0417 P29CA00501 1642 0809 _05S0001005_ 2863 0154 0280000847 2841 1219 _029000S601_ 2298 0322 03BGAOQ10I 1884 1134 OS7001S002_ 3905 0579 037000ZOM isw 1005 0380002003 1984 U37 0470001106 3986 0026 0371A03E02 1636 OS30 0470002429 2811 1288 0370003502_ 39B1 1370 (M7AD033 3B45 0750 037NB00101 1903 0287 0470003630 3622 0459 0470001804 1669 1052 02SCA00501 1642 0809 0291A03501 2215 0773_ _037CE06705 1642 0817 0470001209 3SOZ 1287 0291A01813 1636 0534 048GC00103 1607 1045 04BOOOZ9 1909 0287 023KC02221, 1642' 0797 (M8FB0080Z 1642 0789 0480D003 3498 0721 02SFB00901 1642 0813 (M800P3603 1309 0287 030PA005 2323 0597 029LAOZ201 1642 0805 0180003202 1607 1042 030PA006 U7S 0510 ozgFcooioi 1642 0801 048NA00127 1.636 0538 73. Vehicles and Equipment; Description Year Mako VIN or Serial Number F-250 SERIES 2017 Ford 1FT7W2BT4HEE86410 F-150 Series Z018 Ford KTMF1C5UFA65225 PICKUP.UGHTDim'-UO 2017 Ford 1FTMF1CF7HFA27842 •PICKUP-UGHTDUTM50 2017 Ford 1FTMF1CF5HFA27B41 Biickhoe420DCAT 2002 CAT CAT0420DJFOP09744 2015 FORD FOCUS 2015 Ford 1FADP3F29FLS43'104 2015 Ford F1SO • 2015 Ford lFrMFlC88FFB7U38 2009 FORD F150 2009 Ford UTRFUW39KC22157 2009 FORD F150 2009 Ford 1FTRF1ZW19KC22156 2008 Sterling Crane Truck 2008 Sterling 3F6WJWAa8G352120 2007TrackhoeV10-3S-5 2007 Van Mar YMRV1035L7YY50369 07 Dodge Charger 2007 Dodge • 2B3KM3R77H8B66Z4 2007 Sterling Jet Vac 2007 Sterling 2FZACFCT87AV31316 2007 GMC Z007 GMC 1OTECMX37Z1250B7 2006 GMC 4x4 2006 GMC 3GTEK14V56G2U9G8 2007 GMC 2007 8MC 1STECMX67Z1Z2278 2007 Ford F150 2007 Ford 1FTRF12247NA87148 1S94 Chevy larga Dump 1994 Chevrolet 1GBM7HUOM106009 2011 Ford F150 20U Ford 1FTMF1CF9BFB05674 2012 6MC 4x4 2012 GMC IGTN2TEAOCZ239B12 2001 GMC Small Dump zooi 6MC 3SDKC31F41Mlieil7 2005 chevy Colorado 2005 Chevrolet 1GCCS19G158285336 2011 Ford F150 2011 Ford lFTMf=lCF4BF862168 2007 Ford F150 Z007 Ford 1FTRF12227KD42655 2013 GMC 4x4 2500 2013 6MC 16D22ZCS1DZ247864 2005 Chavy Colorado 2005 Chevrolet 1GCCS196658290919 2013GMCSIERR Z013 6MC 1GTN1TEASDZ266429 Z013GMC4X4 2013 GMC 1GTRZTE73DZ168936 ZOOB Hudson Trailer 2008 Hudson 10HHTD1C5B1000016 20D7 Superior Flatbsd Trailer 2007 Superior 1M8FZie257Q002i)56 200BJohnDearTractor 2008 JD 5500303 ZOOSJohn Deer Gator ATV zoos JD W04X2XD015335 2017 CATiWD Skid Steer 2017 CAT A4171BK20007 2009 Thompson Drl-Prime Pump 2009 Thompson 4JSVD.128 portable 30 Kw Generator Onan 0269032932 SP Portable Generator Welder Miller IEZ85023 Portable toad Bgnk Avtron 1127641-OOGRE Synchronous AC Generator Marathon 632160 EMCTrallar zoos EMC E9GMIU98M403021 IGSGA Enclosed Trailer 201B Pace 53BTEA17JU026522 Wackar Neuson Portabla Lights 2016 Wacker 5XFLV0511GN001919 Matal Dump Trailer 1997 Hlddenlte 1H9DBOB16VH295009 Comb Trailer 2017 Comb 1C9BU162SHCB9B060 Comb Trailer 2004 Comb 1C9BU08134C89B125 Belt Filter Press Model 155 McNell SN 760516 8pd».n. Clamnons. .PROP runsmoK County, NC ReBlnter of OuadB'" psga"7"of 18' 74, Contents of all existing buildings and structures located on real property to include, but not limited to office supplies, furniture, multl-functlon printer/copler/scanner/fax machines, telephones, cell phones, tablets, computers and computer hardware, monitors, TVs, servers, modems, software and operating IIcenses/cenlflcates, check and credit card readers, appliances, security systems, audio and video recording systems, file cabinets, flxtures, manuals, plans, drawings, paper and digital records/flles, lab and QA/QC equipment, small tools, hand tools, power tools, operating and field Inventory/supplles/materlals, safety equipment, equipment attachments, pumps, survey equipment. 75, Sewer Service Agreement dated July 26,2001, by and between the County of Brunswlck and Brunswlck Regional Water & Sewer H2GO (formerly North Brunswlck Sanitary District), with Amendment No. 1, 76. Water Purchase Agreement dated July 22,1985, by and between Brunswlck County and Brunswlck Regional Water & Sewer H2GO (formerly Leland Sanitary District), with Contract Amendment dated April 21,1987, and with Contract Amendment dated October 18,1993, and with Meter Installation Agreement dated September 8,2008. 77. Utility Billing Services Agreement dated May 18,2011, by and between Town of Leland and Brunswtck Regional Water &-Sewer H2GO, 78, Meter Reading and Service Disconnection Agreement dated October 3, 2011, by and between Brunswlck Regional Water & Sewer h2GO and County of Brunswick. 79. Sewer Service Agreement dated September 29,2005, by and between Brunswlck Regional Water & Sewer H2GO (formerly North Brunswick Sanitary District) and Oceangate, LLC, Including Promissory Note, 80. Water and Sewer Infrastructure Construction and Improvement Agreement for the Compass Polnte Real Estate Development, dated September 2,2008, by and between .YDV, 74 Holdings LLC/Hood Creek LLC, and Brunswlck Regional Water & Sewer H2GO (formerly North Brunswlck Sanitary District). 81, Cash Bonding for Hawkeswater on the River Phase 1B, dated July 17,2017, provided by DR Horton to Brunswlck Regional Water & Sewer H2GO. 82, Consulting Services Contract, Task Order Edition, dated December 1, 2008, by and between Brunswlck Regional Water & Sewer (formerly North Brunswlck Sanitary District) and The Wooten Company. a, Task Order 20, dated December 8,2015 b, Task Order 21, dated April 19,2016 c, Task Order 24, dated May 23,2017 83. Professional Engineering Services Agreement, dated July 19,2016, by and between Brunswick Regional Water & Sewer H2GO and The Woofen Company, with Amendment No, 1 dated September 21,2016 and Amendment No, 2 dated November 27, 2017. 84. Consulting Services Agreement, dated September 21,2016, by and between Brunswlck Regional Water &'Sewer H2GO and Marty D. Stone Consulting, 85, Professional Engineering Services Agreement, dated June 20,2017, by and between Brunswlck Regional Water & Sewer H2GO and The Wooten Company, 86. Professional Engineering Services Agreement, dated September 8,2015, by and between Brunswlck Regional Water & Sewer H2GO and Cape Fear Engineering, Inc. 87, Professional Engineering Services Agreement, dated December 8,2015, by and between Brunswick Regional Water & Sswer H2GO and East Coast Engineering & Surveying, P.C. 88, Service Agreement, dated January 6,2015, by and between Brunswlck Regional Water & Sewer H2GO and Utility Management Services, Inc. 89, Service Agreement, dated June 10,2015, by and between Brunswlck Regional Water & Sewer H2GO and McGIII Environmental Systems of NC, Inc. 90. Professional Service Agreement, dated February 22,2017, by and between Brunswlck Regional Water & Sewer H2GO and Davenport & Company, LLC. 91. Professional Service Agreement, dated May 12,2017, by and between Brunswlck Regional Water & Sewer H2GO and WaterPIO; LLC, 92. Construction Agreement, dated August 7,2017, by and between Brunswlck Regional Water & Sewer H2GO and Civil Works Contracting, LLC. 93, Construction Agreement, dated September 22,2017, by and between Brunswlck Regional Water & Sewer H2QO and Carolina Clvllworks, Inc. 94, Goods and Services Agreement, dated June 12,2017, by and between Brunswlck Regional Water & Sewer HZGO-and Harn R/0 Systems, Inc. 95, Construction Agreement, dated June 12,2017, by and between Brunswlck Regional Water & Sewer H2GO and Skipper's Well Drilling & Pump Service, Inc. 96, Construction Agreement, dated September 18,2017, by and between Brunswick Keglonal Water & Sewer H2GO and State Utility Contractors, Inc. Cl C_ ,v •=XHIBIT4i(-2—| H-2B-Z81T §?•"?» nv^s34'w,!^1'11l31l fe'BlstBr of'DBedn' pBB« 8 of 18 EXHIBITA 97. Construction Bids Received June 15,2017 and Certified Bid Tabulation for Water Supply and Treatment System, Contract 2 - Water and Raw Water Mains, and H2GO Board authorized contract award contingent upon LGC approval of revenue bond financing for the project. 98. Construction Bids Received June 15,2017 and Certified Bid Tabulation for Water Supply and Treatment System, Contract 3 ~ RO Plant Concentrate Discharge, and H2GO Board authorized contract award contingent upon LGC approval of revenue bond financing for the project, 99. Accepted proposal from Carmlchael Construction Co., dated September 19, 2017, for rehab work on the Two Pines ff31 Lift Station. 100, Request For Proposal (RFP) responses received from professional engineering firms, received on November 22,2017, for the US17 Interceptor South Sewer and US17 Regional Lift Station at Hewett Burton Rd project. 101, NC 811 Utility Locate Account 102, Permit To Operate.A Community Public Water System, PWS ID NC0410070 103. Permit To Operate Collection System, WQCSOOZ02 104. Belvllle WWTP NPDES Permit NC0075540 105, Reverse Osmosls Concentrate NPDES Permit NC0089613 106. All NCDEQ permits for water distribution'system extensions, 107, Ati NCDEQ permits for wastewater collection system extensions, 108, All Federal/State/Local regulatory permits, approvals, and/or certifications associated with wa.ter/sewer/bulldlng projects In the pre-bld, bidding, post-bld, construction, post-constructlon, warranty, and/or certified complete phase, 109, Adopted resolutions, ordinances, edicts, policies, rules, regulations, standards, and operational plans. 110. Engineering, financial, and other professional studies, reports, research, analyses, testing, Information, and correspondence 111. Application For Approval of Revenue Bonds and application fee (and any subsequent correspondence or supplemental documents) submitted by Brunswlck Regional Water & Sewer H2GO to the North Carolina Local Government Commission (LGC) for funding approval related to the water supply and reverse osmosls water treatment plant project. 112, Letter of Intent for Purchase and Sale Agreement dated May 4,2017, by and between Evolve Companies and Brunswlck Regional Water & Sewer HZGO, 113. Cash Assets: Cash, Cash Equivalent, and US Agancy Bonds Listing Amount* First Bank Mon.ey_ Market #785002192 . 9,333,000,00 First Bank CD #907858972 1,528,760.08 BB&T CD #0006896541165 404,603.77 North Carolina Capital Management Trust* 99936K-MI-4 (First Citizens Trust) 528,118.70 First Bank Trust#71-0612-01-1 US Government Agency Bond Portion at Cost/Face Value 4.803,800,00 16,698,282.65 *Plus accrued interest at time of closing. 114. Assessments/liens on real property In the Carol Lynn Estates subdivision (special assessment small diameter variable grade gravity sewer project) 115. Assessments/llens on real property In the Azalea Plaza Estates mobile home park (special assessment water distribution project) 116. Assessments/llens on real propsrty along Breman Lane (special assessment water distribution project) ^ 117, 2012 SunTrust Revenue Rond 118. Brunswlck County tnterlocal Debt 119, Customer Pay Plan Receivables 120. Customer deposits 121, Accounts receivable 122, Unbllled receivables -XHIBITA 2 rBu!i">!llA"(:'oluWy"'?l'C"R'«Bis^"r °-f lo.-eri-• p»B« 9 °f » THIS MAP MAYNOT BE A CBRTTP1ED SURVBY AND HAS NOT BEEN RBVIEWBD BY A LOCAL OOVERNMBNT AOENCY FOR COMPUANCB .WrTH ANY APPLICABLE UND DBVBLOPMBNT RSOULAWNS AND HAS NOT BEEN REVffiWED FOR COMPUANCE WITH KBCORDINO REQU1REMENTC FOR PLATS. -•XHIBIT H •H-29-2W. 11'3<1AB-& -Cftnmjmu^ p»ge"lB cf , TfflS MAP MAY NOT BB A CBRTIFIBD SURVBY . ANDHASNCyTBBBMRBVIBWBDBYALOCAL OOVBRNMBNTAOBNCYFOR.COMPUANCB WITH ANY APFUCABLE LAND DBVBLOPMBNT REGULATIONS AND HAS NOT BBBN RBV1EWED FOR COMFUANCS WITH RBCORDINO RBQUmBMBWS FOR PLATS. s li'l Si'.' fa-ll^r 2 A ••naa n. uienmpns S^=.2zy runsulcK County, NC Register of Deeds page 1 Of 19 • w."°tated bythe Bn'nwtekCpunty''" /••iBturn.to. ^- ^fl?f?.offlc8- m8'»not'awrt71flc NORTH CAROUNA SPECIAL WAJRRANTY DEED Prepared by; Price & Williams, P.A. Rehun to; James B. Bldridge 572501eanderDr,,STEC-3 Eldridge Law Fum, PC Wihnington, NO 28403 PO Box 1380 Wllmington, NO 28402 The frepnrer has made NO record search or exatalnaUon as to fbe property herein described, unless the saint la shown by his written and signed cciUficatc. Excise Tax: Parcel B3# See Exhibit A THIS DEED, made tfais 29th day ofNovember, 2017, by and between; GBANTOR GRANTEE Brunswick Regional Water & Sewer B2GO, a Municipal corporation, auccessor in interest to Town ofBeIvllle, a muntcipal corporation BrunswickRegloaaI Water & Sewer, and North Brunswick Sanitary District and Leland MaUuig Address; Sanitary District 63 River Road Mailing Address: Leland,NC 28451 516 Village Road Leland,NC 28451 PLEASE CHECK ONE: This property does D / does not El include the primary residence of at least one of the Grantors. (NCOS § 105-31 7.2) The designation Grantor and Grantee as used herein shall include said .parties, their heiis, successors, and assigns, and shall include singular, plural, masculine, femimne or neuter as required by context. WITNESSETH, that the Grantor, foi a valualle consideration'paid by the Grantee, the receipt ofwhfch ia hereby acknowledged, has and by these presents does grant, bargain, sell and convey unto the Grantee in fee simple, all that certain lot or parcel of land and more particularly described as follows: SEE ATTACHED EXfflBFT "A" WHICH IS INCORPORATED HEREIN BY KEEERENCE 1 •W~/-.."'1TW,'.~—•^:^'-' "H?»!!W» i?%?n" TO HAVE AND TO HOLD the aforesaid lot or parcel of land and all privileges and appurtenances thereto belonging to the Grantee in fee simple, And the Grantor covenants with the Grantee, that Grantor has done nothing to impair such title as Grantor received, and Grantor will warrant and defend the title agamst the law&l claims of all persons claiming by, under or through Grantor, other than for the exceptions hereinafter stated, if any. Title to the property hereinabove described is subject to the following exceptions; 1. Rights of way and easements of record, if any. 2. Zoning and/or subdivision orduiances and regulations, if any. 3. Restrictive covenants of record, if any. 4. Ad valorem-taxes for 2017 and future years. IN WITNESS WHEREOF, the Grantor has hereunto set his hand-aad seal, or if corporate, has caused this instrument to be signed la its corporate name by its duly authorized officers), the day and year first above written. Brunswicjg^teeisiwl Water & Sewer H2Go f i4ne: ^1 'I l/l /W H-'^0t^<^&- Title: Ghct'irn\ari yf -h,e &cicd State of North Carolina County ofBrunswick I certify that the following person(s) personally appeared before me this day, having been properly identified by a driver's license or other photo identification, each acknowledging to me that he or she voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated; \^S 11 /."d in. 14. Sro-KJ n •* n-i _ (name), C^a ;rAa n o-y -W-t. 0^ rt (title) of Brunswick Regional Water & Sewer H2Go il, this SL^ day of fj^-mun.be.r , 2017. JUA^a^- d' /6ny Notary Public 'Jc^-e.s.ft- H- Lo IA-^ Typed or Printed Name ofNofaiy My'ComlS^nTExpires; it,- os- 9.01 y TTt7T'^.^rr^V^n''T* Legal Description 'arcell - Tax parcel No. 04700002 BEING ALL of that approximately 3 acre tract of land more particularly described in a Consent Judgment recorded in Book 3032, Page 963 of the Brunswick County Registiy, reference to which is hereby made for a more particular description. Additionally, said tract is also more particularly described in file no 09 CVS 76 in the Brunswiok County Clerk of Court's Office, Parcel 2 - Tax parcel No.0590001020 Re: Well and Water. Tank site at l^allory Creek Plantation BEING ALL of that 7.552 acre tract as more particularly described in that deed from Mallory Creek Land & Timber Inc. to North Brunswick Sanitary District recorded February 26, 2009 m Book 2890, Page 417 oflhe Brunswick County Registry, reference to which is hereby made for a more particular description of same, 'arcel 3 - Tax parcel No.0280000847 Commence at a point located m the eastern line of Lot 63, Section 15, Lelarid Industrial Park as recorded at Map Book 21, Page 104, Brunswick County Registry at its intersection with the southern line of Trade Street (80' public right-of-way); said point also being the northeast corner of Lot 63, Section 15, 'Leland Industrial Park as recorded at Map Book 21, page 104, Brunswick County Reglshy; thence from said commence point along and with the southern right-of-way line of Trade Street (80' public right-of-way) North 85 degrees 54 minutes 25 seconds West a distance of 100.00 feet to the Point of Beginning; thence from said Point of Beginning along and with the northern line of Lot 63, Section 15, Leland Industrial Park North 85 degrees 54 minutes 25 seconds West a distance of 725.89 feet to a point located m the eastern line of the now or foimeriy V. A, Creech, Jr, tract as recorded at Book 312, Page 868, Brunswick County Regishy; thence along and with the eastern line of the now or formerly V. A, Creech, Jr. tract North 01 degrees 47 minutes 50 seconds West a distance of 80.43 feet to a point located in the southern line of the now or formerly CKC, LLC tract as recorded at Book 2684, Page 736, Brunswick County Registry; thence along and with the southern line of the now or formerly CKC, LLC tract South 85 degrees 54 minutes 25 seconds East a distance of 734.15 feet to a point; thence South 04 degrees 05 minutes 36 seconds West a distance of 80.01 feet to the Point of Beginning, containing 1.34 acres, more or less. Also being the same property described in that deed from WCM Enteiprises, LLC to North Brunswick Sanitary Disteict recorded September 24, 2008 in Book 2841, Page 1219 of the Brunswlok County Registay, ,.4, • }• vw •.t*.r7rR*.'*r^n;.,W7VTryc.~ s.? {. .„, :.i T;;'4T.*r.' ?,''n!'*-;."^~»*.-',< " •'• ^\'^: v..; • i .y. 1;'.;. .t^s /.-;•• .x^n-/-^ ...-*•.....,..•.../; .^•^n^i?-,'..-^ i./'i'^' .^•'j ly. v y »•. i 11-29-2B17 iZtaBiii,B_Ba lannpna PROP paga 4 of IS Parcel 4 - Tax parcel No.0570015002 BEMG ALL of Tract 1-1.21 Acres as the same is shown on a map entitled "Minor Subdivision for Brunswick Regional Water & Sewer (H20o) prepared by East Coast Engineering & Surveying. P.C. on December 14, 2016 and recorded in Map Cabinet 98, Page 81 of the Brunswick County Registry, reference to which is hereby made for a more particular description, Also being a part of the same property described in that deed to Jane Marie Farley recorded October 8,1996 in Book 1111, Page 587 of the aforementioned Registry. Also being the same property described in that deed from Jane Marie Farley to Brunswick. Regional Water & Sewer H20o recorded May 10, 2017 in Book 3905, Page 579 of the Brunswick County Registry. 'arcel 5 - Tax parcel No.0470001106 BEING the '1.19 acre +/- tract shown as the WELL SITE on a map duly recorded in Map Book 103, Page 92, Bronswiok County Registry. Also being the same property described in that deed from J. Belton Inc. to Bninswick Regional Water & Sewer (H2Go) recorded November 16,2017 in Book 3986, Page 26 of the Brunswick County Registry. parcel 6 - Tax parcel No.0370003502 BED4G ALL of Tract 1-1.46 Acres as the same is shown on a map entitled "Minor Subdivision for Brunswick Regional Water & Sewer (H2Go) prepared by East Coast Engineering & Surveying. P.C. on December 14, 2016 and 'recorded in Map Cabinet 98, Page 87 of the Bmnswick County Registry, reference to which is hereby made for a more particular description, Also being a part of the s.ame property described in deeds to James Waitus Mintz and wife,' Gloria Levonia Minte (both deceased) recorded in Book 438, Page 225 and Book 438, Page 43 of the aforementioned Registry. Parcel 7 - Tax parcel No.0470003630 Commencing at a point, said point being the northwest comer of the now or former K.E. Austin Corp. Tract (D.B, 799, Page 157), running thence &om commencing point and along the southern line of a tract of-land belonging to the now or former WDV, Inc. (D,B. 1996, Page 1212) South 89°46'50" West a distance of 1249.31 feet to the point of Beginning of this tract Running ftom said beginning point; • 1. Thence South 00°12'42" East a distance of 400.48 feet to a point; 2. Thence North 89°47'34" East a distance of 401,75 feet to a point in the northern right of way ofPoole Road (80' Private R/W); 3. Thence South 00°12'32" East a distance or 80.00 feet to a point in the southern right of way of said Poole Road, the northwest comer of the now or former J .B.S. Associates, LLC, Tract (D.B. 1067, Page 606); . c • c M-2B-2B17 12l3B!H.eBB lammons PBOP page S of 19 4. Thence along and with the western line of said J.B.S. Associates, LLC, tract South 00°12'32" East a distance of 481,88 feet to apointin said line; 5. Thence continuing along said western line of the J.B.S. Associates, LLC, tract South 06<>06'34" West a distance of 479,61 feet 1o a pomt in the northern right of way of Gregory Road (80' Private K/W), the southwest comer of the J.B.S. Associates, LLC, tract; 6, Thence South 06°06'34" West a distance of 80.03 feet to a point in the southern right of way of Gregory Road; 7. Thence along the southern right of way of Gregory Road South 83°50'43" East a distance of 52,17 feet to a point, the northwest comer of the J.B.S. Associates, LLC, tract- (D.B. 1067, Page 606); 8. Thence leaving the southern right of way of Gregory Road and running along and with the western line of the J.B.S. Associates, LLC, tract South 06°05'50" West a distance of 400.17 feet to a point in the northern line of the now or former HSP-1 , LLC, tract (D.B. 1350, Page 1357); 9. Thence along and with the northern line of the HSP-1, LLC, North 83°56'28" West ft distance of 656,13 feet to a point in the western right of way of a 170 feet C,P. & L. Transmission Line Easement recorded in Deed Book 263, Page 34; 10. Thence along and with the western line of said easement (170') North 11°56'08" West a distance of 1,889.83 feet to a point; 11. Thence leaving the western right of way of said C.P.& L Easement and running thence North 89°46150" Bast a distance of 173.62 feet to a point in the eastern right of way of said C.P. & L Easement and to the southwestern comer of a tract belonging to tho now or former Landmark Developers, Inc., tract (D.B. 1817, Page 0113); 12. Thence along and with the southern line of the Landmark Developers, Inc. tract North 89046150" East a distance of 514,62 feet to the point of Beginning. The above described tract contains 34.39 acres, more or less. Also being the same property described in that deed -from New Brunswick LLC to Brunswick Regional Water & Sewer H2Go recorded March 19, 2015 m Book 3622. Page 459 of the Brunswick County Registry. •Parcels- Tax parcelNo, 029LA03501 Lift Station Site 1 Beginning at a Rebar Set in the eastern right of way of SR 1472 (Village Road) having a 60' right of way. . Said POINT OF BEGINNING being located the following bearings and distances from a Mag Nail Fd in the centerline of a bridge where Sturgeon Crpek crosses SR 1472; N 39°16'12" W, 386.87' to a-point in the ccnterline of SR 1472; thence N 40°56'10'W 30.12' to a point in said centeriine; thence N 41°31'19" W 27.73' to a mag nail fd in said centerline; thence N 33° 06' 18" E, 30.93' to a.the PLACE AND POFNT OF BEOINNmG. > WM'WWM/1 «TrnTT^(W(?l7 Thence from the beginning leaving said right of way N 38°22'33" E, 38.36' to a Rebar Set; Thence S 42°03'12" E, 30.42' to a Rebar Set; Thence S 38°22' 33" W, 38.47' to a rebar set in the Eastern right of way of SR 1472; Thence with said right of way N 41°50'49" W, 30.44' to the PLACE AND POINT OP BEGINNING containing 0.03 Acres according to a map by Nonis & Ward Land Surveyors, PA, dated April 29th, 2002, revised July 25, 2002 and revised again on March 28,2005 to which reference is made for a more full and accurate description, Also being the same properly desctibed in that deed from Elmer Ganey et al, to North Brunswick Sanitaiy District recorded August 17, 2005 in Book 2215, Page 773 of the Brunswick County Regishy. Parcel 9 • Tax parcel No. 029LA1813 Lift Station Site 2 Beginning at a Point in the northern line of a 20' easement as recorded in DB. 497, PG. 922. Said Point being located S 81°49'25" E, 219.75' irom an Iron Pipe Found Disturbed; said pipe being the southwestern corner of a tract of land claimed in DB, 497, PG, 200, Thence from the beguming N 09°14t241" E 6.86' to a Rebar Set; Thence S 80°45'36" B. 30.00' to a Rebar Set; Thence S 09°14'24"W, 6.30' to a Point in the northern edge of aforesaid 20' easement; Thence S 09°14'24" W, 23.70 to a Rebar Set; thence N 80°45'36" W, 30.00' to aRebar Set; Thence N 09"14'24" E. 221.14' to the PLACE AND POINT OP BEOiyNINO containing 0.02 Acres together with a 15' Utility Easement according to a map by Norris & Ward Land Surveyors, P.A dated May 1st, 2002 which reference is made for a more fall and accurate description. Also being the same property described in that deed from Curtis E. Townsend and wife, Glenda Clemmons Townsend to North Brunswlck Sanitary District recorded September 26, 2002 in Book 1636, Page 534 of the Brunswick County Regishy. ParccllO - Tax parcel No. 029KC02221 Beginning at an IP Fd, in the northern right of way ofSR 1465 (Wayne Street) having a 50' right of way. Said IP Fd, being the southwest comer of a tract of land claimed in DB, 703, PC. 901. Thence &om the beginning with the western property line of the above mentioned tract N 20°40'30" W, 30.00' to a Rebar Set; Thence leBving said property line N 69° 23'00" E, 30.00' to a Rebar Set; Thence S 20°40'30" E, 30.00' to a Rebar Set In the northern right of way of SR 1465; Thence with said right of way S 69°23'00" W, 30.00' to the PLACE AND POINT OF BEGINNING'containing 0.02 Acres accordmg to a map by Norris & Ward Land Surveyors, F.A. dated June 28th, 2002 to which reference is made for a more full and accurate description. »mw.fiv><'v*' -f'v/'i c1 t n-2B-2817 1Zl3ai11.CIBB^ Wvlr oB??- pW'o-f is Also being the same property described in that deed from Linda T, Sue et al, to North Brunswlck Sanitary District recorded October 9, 2002 in Book 1642, Page 797 of the Brunswick County Registry. Parcel 11 - Tax parcel No. 029FB00901 Lift Station Site 3 Beginning at a Rebar Set in the western right of way of a cul-de-sac on Sturgeon Drive having a 50'radius. Said Rebar being the corner between Lots 18 & 19, Forest Oaks Estates recorded in MC. I, PG. 150, Thence &om the beginning with the right of way of said cul-de-sac curvipg'to the left- S 05°44'06" E, 31.62' Chord to a Rebar Set in said right of way; Thence N 77°18'00'W, 40.00' to u Rebar Set; Thence N 12°42'00" E, 30,00' to a Rebar Set in the lot line between Lots 18 & 19, Forest Oaks Estates; being located S 77°18'00" W, 5.36' from the northwest comer of Lot 18; Thence with said lot line S 77°18'00" W, 30.00' to the PLACE AND POINT OF BEGINNING containing 0,02 Acres according to a map by Norris & Ward Land Surveyors, P.A. dated April 29th, 2002 which reference is made for a more fitll and accurate description. Also being the same property described in that deed from Hector 0. Barajas and wife, Gloria R. Barajss to North Brunswlck Sanitaiy District recorded October 9,2002 in Book 1642, Page 813 of the Brunswick County Registry. Parcel 12 " Tax parcel No. -029LA02201 Lift Station Site 5 Beginning at a Rebar Set where the southern right of way of SR 1472 (Village Road) having a 60' right of way and the western right of way ofSR 1475 (Sue Circle) having a 60' right of way intersect. Said rebar being located S 81°25'27" W, 42.47' from. a PK Nail Found in the centerline intersection of SR 1472 & SR 1475. Said rebar also being located N 31°57'13" E. 637,33' from • an Concrete Monument Found Disturbed; said monument being the northwest corner of Lot 1, Marion Estates Thence ftom the beginning along the westeto right of way ofSR 1475 S 31°57'13" W, 30.00' to a Rebar Set in said right of way; Thence leaving said right of way N 50°48'0p" W, 30.00' to a Rebar Set; Thence N31°57'13"E, 23.46' to a Point; Thence N 31 °57'13" E, 6.54' to a Rebar Set in the southern right of way of SR 1472; Thence with said right of way S 50°48'00" W, 14.00' to a Point Thence continuing with said right of way S 50°48'00" W, 16.00' containing 0.02 Acres according to a map by Norris & Ward Land Surveyors, P.A. dated April 30th, 2002 to which reference is made for a more full and accurate description, tTffpy(Wrt^ta.V*^'M'^*"VJ^'^-t^!x'v>^^Tm.T^v.y'^^;r.l,^.:;; °""ty, NC'R-egi.Ee'r oT'O"^"- p"g'ra'% Also being the same property described in that deed ftom William Morris Sue and wife, Bidgie B. Sue to North Brunswick Sanitaiy District recorded October 9, 2002 in Book 1642, Page 805 of the Brunswick County Regishy. Parcel 13 - Tax parcel No. 029FC00101 Lift Station Site 4 Beginning at an Iron Rod Found in the northern right of way of SR 1708 (Holly Hills Drive) having a 50' right of way, said Iron also being the southwestern comer of Lot 18, Phase 1, Holly Hills Subdivision as recorded, Thence from the beghining and leaving said right of way N 14°42'15" E. 30.00' to a Rebar Set in the lot line of Lots 18, Phase 1 and Lot 8, Phase 2, Holly Hills Subdivision; Thence S 71°17'00" E. 30.00' to a Rebar Set; Thence S 14°42'15" W, 30.00' to-a Rebar Set in the northern right of way of SR 1708. (Holly Hills Drive); Thence with said right ofwayN71°17'00"'W, 30.00' to the PLACE AND POINT OF BEGINNING containing 0,02 Acres according to a map by Norris & Ward Land Surveyors, P.A, dated April 29th, 2002 to which reference is made for a more fall and accurate description, Also being the same property described in that deed from E.G, Dale and wife, Eleanor Dale to North Brunswick Sanitary District recorded October 9, 2002 ui Book 1642, Page 801 of the Brunswick County Registty. Paroell4. Tax parcel No, 029FC00102 BEING ALL of that triangular-shaped tract of land identified as "Common Area - Part of Lot 18, Section I, Holly Hills," as the same is shown on a map of Phase 2 of Holly Hills Extension recorded in Map Cabinet Z, Page 64 of the Brunswick County Registry, reference to which is hereby made for a more particular description, Also being part of the same property described in that deed to E.G. Dale recorded June 5, 1986 in Book 649, Page 239 of the aforementioned Registry. LESS AND EXCEPT that approximately 0,02 acre portion of the above-described tract akeady having been conveyed to Grantee by a deed from E.G. Dale and wife, Eleanor H. D?le recorded in Book f 642, Page 801, Bnmswick County Registry. Also bemg the same property described in that deed ftom B.G. Dale and wife, Eleanor Dale to Brunswick Regional Water & Sewer H2Go recorded May 27, 2014 in Book 3530, Page 176 of the Brunswick County Registry. s] 15 - Tax parcel No. 029CA00501 • Lift Station Site 8 Beginning at an Iron Pipe Pound in the southern right of way ofSR 1432 (Old Mill Road) having a 60' right of way. 8 ^y^n^^}.\'''^^,'\n^.^-w^jTr^^'i\t»uwpy7y/fY-wv\.^/^,..^^ \H^n^;/.;^.^ •^^<'.';'w.^-.vft';mi^7;^,*^ Said Iron Pipe being the northwest comer of a tract of land as recorded in MC, 24, PO. 138; also being located the following bearings apd distances, fi-om a PKL Nail Found in the centerline intersection of SR 1432 & SR 1433; S 82°09'00" E. 28.15' to 8 point in the centeriine of SR 1432; Thence S 06°22'00" W, 30.92' to the PLACE OF BEGINNING. Thence (rom the beginning S 82°09'00" E, 30.00' to a Rebar Set in the southern right of way of SR 1432; Thence leaving said right of way S 06°22'00" W, 30.00' to a Rebar Set; Thence N 82°09'00" W, 30.00' to a Rebar Set in the western property line of the above mentioned tract of land; Thenco with said property line N 06°22'00" E, 30.00' to the PLACE AND POINT OP BEGINNING containing 0.02 Acres aceordin'g to a map by Nonis & Ward Land Surveyors, P.A, dated May 6th, 2002 to which reference is made for a more fiill and accurate description. Also being the same property described in that deed from Brunswick River Community LLC to North Brunswick Sanitary District recorded October 9, 2002 in Book 1642, Page 809 of the Bnuiswick County Registry. Parcel 16 - Tax parcel No.0290009601 Lift Station Site 7 Beginning at a Rebar Set in the eastern right of way ofSR 1455 (Lincoki School Road) having a 60' right of way. Said POINT OP BEGINNING being located in the following bearings and distances from a PK NailFound in the centerline of a bridge where Diy Leaf Branch Crosses SR 1455; N 14° 47' 05" B, 283.45' to an IP Fd in the eastern right of way SR 1455; Thence with said right of way N 08° 46' 34" B 10.03' to the PLACE AND POINT OF BEGINNING. Thence from the beginning and with the eastern right of way ofSR 1455 N 08° 46' 34" E, 30.01' to a Rebar Set; Thence leavmg said nght of way S 86° 00' 00" E, 30.10' to a Rebar Set; Thence S 08° 46' 34" W, 30.10' to a Rebar Set; thence N 86° 00" 00" W, 30.10' to the PLACE AND POINT OF BEGINNING, containing 0,02 Acres according to a map by Norris & Ward Land Surveyors, P,A., dated May 9, 2002 and revised July 26, 2002 to which reference is made for a more fill) and accurate description. : Also being the same property described in that Correction deed from E.G. Dale and wife, Eleanor Dale to North Brunswick Sanitaiy District recorded December 15, 2005 in Book 2298, Page 922 of the Brunswick County Registry. ?arcel 17 - Tax parcel No,0370002014 Lift Station Site 9 Beginning at a Rebar Found in the western right of way of SR 1438 (Lanvale Road) having a 65' right of way. ^^?r?^ 11-28-28)7 l2i3BiH,Ben ClamnpnB "PBOP page 10 of 19 Said Rebar being located S 13°16'36" W, 113. 77' from a Railroad Spike Found in the centerline intersection SR 1438 & SR 1487 (King Road). Thence j&om the'beginning along the right of way of SR 1438 curving to the right having a radius of 783,51' and a chord bearing and distance of S 22040'34" W, 65.44' Ch. to a Rebar Set in said right of way; Thence leaving said right of way N 45°35'18" W, 36.46' to a Rebar Set in the southern property line of a tract of land claimed In DB. 1319, PO. 1012; Thence with said property line N 55°47'00" B, 62.00'.to the PLACE AND POINT OF BEOrNNWO containing 0.03 Acres according to a map by Norris & Ward Land Surveyors, P,A, dated May 6th, 2002 to which reference is made for a more full and accurate description. Also being the same property described in that deed from Olode Requa to North Brunswick Sanitary District recorded October 18,2002 in Book 1646, Page 1005 of the Brunswick County Registry. parcel 18" Tax parcel No. 037IA03602 Lift Station Site 10 Beginning at a Rebar Set in the western right of way of SR 1438 (Lanvale Road) having a 60' right of way, Said Rebar beihg located N 22°44'18" W, 85.24' from a Rebar Found said Rebar Pound also being the southeast comer of Lot 36, Old Forest Estates as recorded in MC. U, PG. 125.126. Thence from the beginning and leaving said right of way S 67°15'42" W, 30.00' to a Rebar Set; Thence N 22°44'18"W, 30.00' to a Rebar Set; Thence N 67°15'42" E, 30.00' to a Rebar Set in the said right of way of SR 1438; Thence with said right of way S 22°44'l8" B. 30.00' to the PLACE AND POINT OF BEGINNING containing 0.02 Acres according to a'map by Norris & Ward Land Surveyors, P,A. which reference is made for a more fiill and accurate description. Also being the same property described m that deed ftom William D, Wilson and wife, Marie E. Wilson to North Brunswick Sanitary District recorded September 26, 2002 in Book 1636, Page 530 of the Brunswick County Registry. Parcel 19 - Tax parcel No. 047AD033 Being all that certain tract or parcel of land lying arid being' in Town Creek Township, Town of Leland, Brunswick County, North Carolina and being particularly described as follows; Beginning at a point in the northern right of way line of Kingsbrldge Road (60' wide); said beginning point being located S68°30'56"E, 62.84 feet from the southeast comer of Lot 62, Phase 1, Revised Map For Record of Wedgewood at Lanvale Subdivision as recorded in Map Cabinet 31, Page 532, Brunswick County Registry. Thence from the Point of Beginning and leaving the right of way line of Kingsbridge Road, N21°29'04"E, 40.00 feet to' a point; thence S68°30'56"E, 40.00 feet to a point; thence 10 ^^^^•Wfi^y^lHyievsy'ffyf^wi'SRrVs^w^w^^^ 11-2B-ZB17 12l38!lt,BB8^ ?l.mmpnB^ POTP pagii 11 of 19 S21°29'04"W, 40.00 feet to a point in the northern right of way line of Kingsbridge Road aforesaid mentioned; thence with the northern right of way line of Kingsbridge Road, N68°30'56"W, 40.00 feet to the Plwe and Point of Beginning. Containing 1,600 square feet and being all the area labeled "Pump Station Site" as shown on a map titled "Revised Map for Record Wedgewood at Lanvale" recorded in Map Cabinet 31, Page 532, Brunswick County Registry. Together with a 20 foot Utility Easement as shown on Map Cabinet 31, Page 532 as described as follows: Beginning at a point in the northern right of way line of Kingsbridge Road (60' wide); said beginning point being located S68I>30'56"E, 2.84 feet from the southeast comer of Lot 62, Phasel, Revised Map For Record of Wedgewood at Lanvale Subdivision as recorded u Map Cabfaet 31, Page 532, Brunswick County Registry. Thence from the Point of Beginning and leaving the right of way line of Kingsbridge Road, N21029'04"B, 55,00 feet to a point; thence S68°30'56"E, 20.00 feet to a point; thence S2I°29'04"W, 55.00 feet to a point in the northern right of way line of Kings. bridge Road aforesaid mentioned; thence with the northern Mght of way line of Kingsbridge Road, N68'>30'56"W, 20.00 feet to the Place and Point of Beginning. Also being the same property described in that deed from Lanvale Corporation to Bninswiok Regional Water & Sewer H20o recorded December 1, 2016 in Book 3845, Page 750 of the Brunswick County Registry, Parcel 20 - Tax parcel No.0470001904 Lift Station Site 11 Beginning at a Rebar Set in the Western right of way (60'R/W) ofSR 1348, Lanvale Road. Said Rebar being located N 23 °- 15'- 16" B, 18.00' from an iron pipe found. Said iron pipe being the Southeast comer of that tract of land claimed in Deed Book 1163, page 340, Runs thenco N 65 o - 07 - 00" W, 30.00' to a rebar set; thence N 23 ° -15' -16" E, 30.00' to a Rebar set thence S 65 °- 07- 00" B, 30.00' to a Rebar set in aforesaid right of way. Said Rebar setalso being located N 61° - 24'- 31" W, 91,07' from a nail fd. in the centerline intersection ofSR 1348 Lanvale Road and SR 1700 Old Lanvale Rfiad; thence S 23 ° - 15' - 16" W, 30.00' with aforesaid right of way to the place and point ofbeguming containing 0,0.2 acres according to a map byNorris & Ward Land Surveyors, PA, dated November 20, 2002 to a which reference is made for a more full and accurate description. Also being tho same property described in (hat deed from Ronco Mobile Home Brokerage, Inc. to North Brunswick Sanitary District recorded December 6, 2002 in Book 1669, Page 1052 of the Brunswiok County Registry. 11 y.^>.^ H-29-2817 12:38.11.?0 ClommDna PROP png« 12 of IS :'arcel 21 • Tax parcel No. 037GE06705 Lift Station Site 12 Beginning at a Rebar Set in the southern right of way of SR 1437 (Old'Fayetteville Road) having a 100'right of way.- Said Rebar being located the following bearings and distances from a Drill Hole Found in the centerline of a bridge where Ricefield Branch crosses SR 1437; S 60°48'30" E, 291.68' to a PK Nail Found in the ceaterline intersection of SR, 1437 & Ricefield Branch Street; Thence S 18°14'47"W, 51.25' to a Concrete Monument Found; Thence along southern right of way ofSR 1437 N 60C>48'30"W, 30,56 to an Iron Rod Found Disturbed where the southern right of way of SR 1437 and the western right of way ofRicefield Branch Street intersect; Thence continuing with the right of way ofSR 1437 N 60°48'30" W, 156.39' to the BEGINNING, Thence from the beginning leaving said right of way S 290lll30" W, 30.00' to a Rebar Set; Thence N 60°48'30" W, 30.00' to a Rebar Set; Thence N 29'>11'30" E. 30.00' to a Rebar Set In the southern right of way ofSR 1437; Thence with said right of way S 60° 48'30" E, 30.00' 1o the • PLACE AND POINT OF BEGINNING containing 0.02 Acres according to a map by Nonis & Ward Land Surveyors, P.A.'dated May 3rd, 2002 and revised July 25,2002.to which reference is made for a more fiill and accurate description, Also being the same property described in that deed fi:om Alvin R, Humphrey to North 3nmswick Sanitary District recorded October 9,2002 in Book 1642, Page 817 of the Brunswick County Registry. sl22 - Tax parcel No, 048GC00103 Ref: Jacobs Run Utility lot Beginning at a point m the Northern right of way line of Olde Town Wynd North, said point being located North 00 degrees 04 minutes 18 seconds East 25.0 feet and south 88 degrees 26 . minutes 26 seconds West 19.76 feet from a point in the centerline ofOlde Town Wynd North, said point in the centerline of Olde Town Wynd North beug located North 65 degrees 58 minutes 19 seconds East 263.06 feet as measured along the centorline of-Olde Town.WyndNorth from its point of intersection with the centerline of Beech court; running thence, from said beginning point with the Northern right of way line of Olde Town Wynd North as it curves to the south to a point that Is located south 84 degrees 14 minutes 55 seconds West 31.02 feet ftom the preceding point; thence, North 08 degrees 58 minutes 21 seconds East 28.06 feet to a point; thence, south 81 degrees 01 minute 39 seconds East 30.0 feet to a point; runnmg thence, south 08 degrees 58 minutes 21 seconds west 20.18 feet to the point of Beginning, Also being the same property described in that deed from Jack 0, Stocks to North Brunswick Sanitary District recorded July 18, 2002 hi Book 1607, Page 1045 of the Brunswiok County Registry, 12 i^pTiT^rptTv^qi'i^^'yi ^i^'^wf'iiKivy^wF^'yci/'wyf'fti'. < •.'.i?;'.''i' '''-;.i"Vt- 11-2B-2B17 IIAi""jilj,lu"iiiM'», iara^o;1? ' j Parcel 23 - Tax parcel No.048FB00802 ' Lift Station Site 15 Beginning at a Rebar Set in the southern right of way ofOlde Towns South (60' right of way). Said Rebar being the northwest comer of Tract B as shown on a map recorded in MB. 11. PO. 75 and being located N 27°37'45" E 210.73' from an Iron Pipe Found at the southwestern comer of the above mentioned tract, • • Thence wilh the right of way ofOlde Towne Wynd South S 62°06'00" E. 30.00' to a Rebar Set in said right of way; Thence leaving said right of way S 27037'45" W, 30.00' to a Rebar Set; Thence N 62°06'00" W, 30.00' to a Rebar Set in the western property of the above mentioned tract; Thence with said property line N 27°37'45" E, 30.00' to the PLACE AND POINT OF BEGINNING containing 0.02 Acres according to a map by Norris & Ward Land Surveyors, P,A. dated May 3rd, 2002 to which reference is made for a more full and accurate description, Also being the same property described in that deed from Boyd Wllliamson to North Brunswic.k Sanitaiy District recorded October 9, 2002 in Book 1642, Page 789 of the Brunswick Coupty Regisby. sl24 - Tax parcel No. 0480003603 BEGINNING at a point in the Southern right of way line of Jackey's Creek Lane, said point being the most Northeast comer of Lot 1, Phase 1, Creeks Edge at Jackey's Creek Plantation, map of same being recorded in Map Cabinet 17, Page 39, of the Brunswick County Registry; runnmg thence, from said beginning point, with the Southern right of way lino ofJackey's Creek Lane as it curves to the North to a point that is located South 82 degrees 3] minutes 01 second East 23.51 feet, Soulh 84 degrees 28 minutes 18 seconds East 30.0 feet and South 86 degrees 00 minutes 00 seconds East 11.59 feet from the point of Beginning; running thence, South 14 degrees 40 minutes 23 seconds West 124.76 feet to a point; thence North 75 degrees 19 minutes 37 seconds West 70.0 feet to a point in the Eastern line of Lot 2, Phase 1, Creeks Edge; running thence, with the Eastern line of Lot 2, Phase 1, Creeks Edge North 19 degrees 53 minutes 49 seconds East ] 5.06 feet; running thence, with the Eastern line of Lot 1, Phase 1, Creeks Edge North 17 degrees-07 minutes. 56 seconds East 100.0 feet. to the point of Beginning. Containing 0.18 acres ±, Subject, however, to the easement of Bell South as described in Book 1103, Page 0838, of the Brunswick County Reglstiy. Together with an easement for sewer line, said easement being described as follows; Beginning at a point in the Southern right of way Ime ofJackoy's Creek Lane, said point being the Northeast comer of the above-described tract and runs thence, from said Begmning point, with'the Southern right of way line of Jacke/s Creek Lane as It.curves to the North to a point that is located North 86 degrees 47 muutes 51 seconds East 185.28 feet from the point of Beginning; thence, continuing with the Southern right of way line of Jackey's Creek Lane North 85 degrees 14 minutes 46 seconds East 219.38 feet to its point of intersection with the Western right of way line of River Road; running thence, with the Western right of way line of River 13 ^^3njrW^^^^^tSf^*7r^^w/ff^^^i?i^^t^ 11-28-2817 1Z;3B|11.BC[> ilemnona PROP page 14 of 19 Road South 09 degrees 59 minutes 04 seconds East 30.0 feet; running thence, North 75 degrees 32 minutes 07 seconds West 30.0 feet; thence, South 85 degrees 14 minutes 47 seconds West | 192,88 feet; thence. South 61 degrees 36 minutes 51 seconds West 30.0 feet; thence, with a curve |; to the North to a point that is located South 88 degrees 02 minutes 25 seconds West 169.0 feet from the preceding.point; running thence, North 14 degrees 40 minutes 23 seconds East 30.54 feet to the point of Beginning. , Also being described as Tract 2 in that deed fi-om Town ofBelville to North Brunswick Sanitary District recorded March 12,2004 in Book 19'09, Page 287 of the Brunswick County Regisby. Parcel 25 - Tax parcel No. 037NB00101 BEGINNING at the Northeastern corner of the James F, Rogers tract, said point being located the following bearing and distances from the intersection of the centerline offooje Road and the centeriine ofBackhoe Road (80 foot right of way) as shown on a map recorded in Map Cabinet 20 at Page 159 dated July 1998 of said Registry; North 00 degrees 13 minutes 56 seconds West 40.00 feet. South 89 degrees 46 minutes 04 seconds West 40.00 feet and North 00 degrees 13 minutes 56 seconds West 401.10 feet, running thence from said Beginning .point with the Northern line of the James P. Rogers tract South 89 degrees 46 mmutes 04 seconds West 40.00 feet to a point; thence leaving the Northern line of the James F. Rogers line and running North 00 degrees 13 minutes 56 seconds West 65.00 feet to a point; thence South 78 degrees 55 minutes 20 seconds Bast 50.99 feet to a point; thence South 00 degrees 13 muutes 56 seconds East 55.00 feet to a point; thence South 89 degrees 46 minutes 04 seconds West 10.00 feet to the point of Beginning. Containing 0.07 acres more or less. Together mth an access and utility easement along Wisteria Way as shown on a map of Phase 1, , The Fairways at Wilmington West as recorded In Map Cabinet 20 at Page 159 of the Brunswick County Registry. . • Also being described as Tract 3 in that deed from Town ofBelville to North Brunswick Sanitary District recorded March 12,2004 in Book 1909, Page 287 of the Brunswick County Registry. marcel 26 - Tax parcel No. 04800029 BEGINNING at a point in the Southern Right of Way line of S.R. #1524 (60 foot Right of Way), said point being the Northwest corner of the Bninswick County'3.432 acre tract as recorded in book 558, Page 322, of the Brunswick County Registry; nmnmg thence, from said Beginning point, with the western line of the above-mentioned Brunswiek County tract South 02 degrees 04 minutes East 702,97 feet to a point, said point being the Southwest comer of the above- mentioned Brunswiok County tract; running thence, South 87 degrees 56 minutes West 234.75 feet to a point; running thence, with the centerline of a ditch North 18 degrees 01 mmute 30 seconds West 291.83 feet to a point; thence, continuing with the centeriine of said ditch North 2 degrees 14 minutes 30 seconds East 17L33 feet to a point; thence, contmuing.with the centerline of said ditch North 14 degrees 05 minutes 30 seconds West 223.54 feet to a point in the Southern Right of Way line ofS.R. #1524; running thence, with the Southern Right of Way line of S. R. #1524 North 82 degrees 23 minutes 30 seconds East 350.24 feet to the point of Beginning, containing 4.7 acres, more or less. 14 ^BT^?V."^^^^^nK»'*.^.'w'^;-u''^^'k.<''^ •' <.'"^ ••-»-•-;•••<••» • Also being described as Tract 1 in that deed from Town ofBelville to North )3runswick Sanitary Dislrict recorded March 12,2004 in Book 1909, Page 287 of the Brunswick County Reglshy. Parcel 27 - Tax parcel No.0480003202 Ref; Columbus Landing Utility lot Beginning at a point in the western Right of way line ofN.C. Hwy. #133 (60 foot right of way), said point being located south 09 degrees 59 minutes 04 seconds East 1575.0 feet as measured along the Western right of way line ofN.C, Hwy, #133 from its point of intersection with the southern right of way line ofJackey's Creek Lane; running thence, ftom said Beginning point, with the western right of way line ofN.C. Hwy. #133 south 09 degrees 59 muutes 04 seconds East 30,0 feet to a'point; thence, South 80 degrees 00 minutes 56 seconds west 25,0 feet'to a point; thence, North 09 degrees 59 minutes 04 seconds west 30.0 feet to a po.int; thence, North 80 degrees 00 minutes 56 seconds East 25.0 feet to the point of Beginning, Also being the same property described in that deed-from Jack G, Stocks to North Brunawick Sanitary District recorded July 18, 2002 In Book 1607, Page 1042 oftiie Bruaswick County Registry. ccel 28 - Tax parcel No. 048NA00127 Lift Starion'Site 13 Beginning at a Rebar Set; said Rebar being located the followuig bearings and distances from a Concrete Monument Found in the western right of way of NC 133 (River Road) and the centwline ofCreekside Drive (Common Area) having a right of way of 60.00'; N 52°40'20" W, 267.50' to a Concrete Monument Found in the centorline of said drive; thence with a curve to the right having a centerline radius of 916.62' and a chord bearing and distance of N 48°06'44" W, 145.75' Ch. to a point in said centerline of drive; thence N 46°26'53" E, 1 14.04' to the POWT OF BEGINNING. Thence from the beginningN 07°15'14" E, 30.00' to aRebar Set; Thence S 82°45'1 '0" W, 30.00' to a Rebar Set; Thence S-07°15T4" W, 30,00' to the PLACE AND POINT OF BBGD-WING containing 0.02 Acres together with a 15' Access Basement from subject property to the right of way of Creekside Drive and a 15' Force Main Easement from subject property to the right of way ofNC 133 according to a map by Norris & Ward Land Surveyors, PA dated April 30th, 2002 which reference is made for a more full and accurate description, Together with a 25' wide utility easement, running from NC Highway 133 (River Road) to tho above described lift station site as said utility easement is shown on the plans and specifications for the North Brunswick Sanitaiy District's Sanitary Sewer Collection System, dated May 18, 1999. 15 i'T'H^w'IW^wn^ww'iwywWli.'-.'1*''.* i-^y-i i-'.-i'w'- Tj-^-^—T' \-l?^nvi^.- »,yvj( i.^. ir^v.l-i.^, r^-^^-l t^l'^T.l'i riS .*.;V<-t/* ill..*.-'. <'. A^ ^ ^',>1 •1-' •L'V;'<;^< r 11-2S-2B17 12ia8i»1,B88 Inmnpns PROP page 18 of 19 Also being the same property described in that deed from GTM Investments, Inc. to North Brunswick Sanitary District recorded September 26, 2002 in Book 1636, Page 538 of the Brunswick County Registry. parcel 29 - Tax parcel No, 059BG00204 TRACT 1: BEmo all of that tract of land entitled "Sanitary Sewer Pump Station Site", as shown on plat recorded in Map Cabinet 29, Page 438 of the Brunswick County Regishy. TRACT 2; BEFNG all of that tract of- land entitled "Sanitary Sewer Pump Station Site", containing 0.03 acres, as shown on plat recorded in Map Cabinet 32, Page 305 of the Brunswick County Registry. Also being the same property described in that deed from HWW, LLC to North Brunswick Sanitary District recorded FebruaiyZO, 2009 in Book 2887, Page'785 of the Brunswick County Registiy. parcel 30 - Tax parcel No.0590001005 BEING all of the tract of land entitled "Pump Station Site", containing 1,357 sq. ft,, as shown on plat recorded in Map Cabinet 31, Page 220 of the Brunswlck County Registry. Also being the same property described in that deed from Wilmmgton West, Inc. to North Brunswiok Sanitary District recorded December 5, 2008 in Book 2863, Page 154 of the Brunswick County Registry. Parcel 31 - Tax parcel No. 038GA00101 Beginning at a rebar fd. in t}ie Northern right of way (60' R/W) of old US Hwy 17 (Blackwell Road) said rebar being located as follows from a RR spike in the centeriine intersection of aforesaid Blackwell Road & SR 1524 (Chapel Loop Road) S 55° 02' 14" W, 548.57' to aPK nail found in the centerline of Blackwell Road; thence N 34° 57' 46" W 30.00' to the Point of Beginnwg; thence leaving said right of way N 00° 06' 30" E, 1.37.74' to a rebar set; thence S 34° 57° 46" E 112.73' to a rebar set in the right of way ofBlackwell Road; thence with said right of way S 55° 02' 14" W, 79.14' to the place and point of beginning'containing 0,10 acres and being more particularly described on a map by Noms & Ward Land Surveyors, P,A. for the North Brunswick Sanitary District, dated May 24,2004. Also being the •same property described in that deed from H.C. Williams Jr, and wife, Dorothy H. Williams to North Brunswick Sanitaiy District recorded July 23, 2004 in Book 1984, Page 1134 of the Brunswick County Registry. •". Parcel 32 - Tax pared No,0380002003 Beginning at an iron pipe fd. in the Northern right of way (60' R/W) of SR 1524 (Chapel Loop Road) said iron pipe fd. being in the dividing line of lands in deed book 569, page 132 and deed book 562, page 78, runs thence with right of way ofSR 1524 (Chapel Loop Rd.) S 81° 08' 16" 16 ^w^^mm^.<^''^AW^^'"l'ul'^'''>-^w • ••-1- •••; '• ' "'••' .•....-••.'•.'"'•/."^•.^W=^W<^T^T'^^^^>;<^*-'''"-.-''-.-''A^^ 11-;B-2B17 ]S^g^912l38l11.BB8» • S E W, 44.77'; thence S 82° 13' 29" W, 66.99' to a rebar set; thence .leaving right of way N 07° 21' 40" E, 30.00' to a rebar get in the aforesaid dividing line; thence with said dividing line S 82° 38' 20" B, 107.65' to the place and point of beginning containing 0.04 acres and being more particularly described on a map by Norris & Ward Land Surveyors, P A, for the North Brunswick Sanitaiy District, dated May 24,2004. Also being the same property described in that deed from George Uchman and wife, Dorothy Uchman to North Brunswick Sanitaiy District recorded July 23, 2004 in Book 1984, Page 1137 of the Brunswick County Registry. sel 33 - Tax parcel No.0470002429 Beginning at a point on the northern right of way of West Gate Drive (60' right of way), said point being the eastern terminus of West Gate Drive as shown on a map of West Gate Phase 1 Section 1 recorded in map cabinet 26 page 342 and is also the southeast comer of lot 12 of West Gate Phase 2 Section 2 as recorded in map cabinet 27 page 43 in the Bninswick County Registry: Proceed thence with a new line and the proposed northern right of way of West Gate Drive (60' right of way) and with a curve to the right and a radius of 340,00 ft. and a chord bearing and distance of S 56.05-15 B 276.52 ft. to a point, thence S 32-05-33 E 92,92 ft, to a point, thence with a curve to the left and a radius of 280,00 ft. and a chord bearing and distance of S 75-10-16 E 382.48 ft. to a point, thence N 61-45-01 E 140.52 ft. to a point, thence with a curve to the left and a radius of 370.00 ft. and a chord bearing and distance N 53-28-57 E 106.41 ft, to a point, thence N 45-12-53 E 20.46 ft. to a point, thence with a curve to the right and a radius of 348.02 ft, and & chord bearing and distance of N 69-41-07 E 288.32 ft. to a point, thence S 85-50-38 E 62.96 ft. to a point, thence with a curve to the left and a radius of 370.00 ft, and a chord bearing and distance of N 85.29-10 E 111.55 ft. to a point, thence N 76-48-58 E 80.78 ft. to a point, thence S 11-13-44 E 57.99 ft, to a point, thence S 09-11-43 E 2.05 ft, to a point on the proposed southern right of way of West Gate Drive (60' right of way), (hence with said proposed southern right of way S 76-48-58. W a distance of 78.65 ft, to a point, thence continuing with said proposed southern right of way and a curve to the right having a radius of 430.00 ft, and a chord bearing, aud distance of S 85-29-10 W a distance of 129.64 ft. to a point, thence continuing with said proposed southern right of way N 85-50-38 W a distance of 62.96 ft. to a point, thence continuing withproposearigHtofwayandacurve to the left having a radius of288.02 ft, and a chord bearing and distance of S 69-41-07 W a distance of 238.61 ft. to apoint, thence continuing with proposed southero right of way S 45-12-53 .W a distance of 20.46 ft. to a point, thence continuing with proposed right of way and a curve to the right having a radius of430.00-ft, and a chord bearing and distance of S 53-28-57 W a distance of 123.67 ft. to a point, thence continuing with proposed southern right of way S 61-45-01 W a distance of 140.52 ft, to a point, thence continuing with proposed right of way and a curve to the right having a radius of 340.00 ft. and a chord bearing and distance of N 75-10-16 W a distance of 464,44 ft. to a point, thence continuing with proposed southern right of way N 32-05-33 W a distance of 92.92 ft, to a point, thence continuing with proposed southern right of way and a curve to the left having a radius of 280.00 ft. and a chord bearing and distance of N 56-05-15 W 227.73 ft. to a potot and being the tennmus of West Gate Drive as recorded in map cabinet 26 page 342, thence N 09-55-04 E 60.00 ft, to the point of beginning and containing 2,246 acres more or less according to computations by 17 r \\-^ .2817 S? Esa?^'{si'12!38l".BBBn Hanover Design Services, P.A, only and has not been surveyed. All bearings are relative to deed book 1153 page 192. . ' ' . Also being the same property described as Exhibit A in that Deed of Dedication from Oceangate, LLC to North Brunswiok Sanitary District recorded June 30, 2008 in Book 2811, Page 1228 of the Brunswiok County Registiy. •Parcel 34- Tax parcel No. 0470001209 Being Tract #1 (19,792 sq. ft.), shown on map prepared by Christopher D. Stanly, P.L.S, said map recorded 12/28/16 in Map Cabinet 98, Page 72,'in the Brunswick County Register of Deeds. Also being the same property described in. that deed from Joseph Hemy Ooodman et al. to Brunswick Regional Water & Sewer H2Go recorded May 4, 2017 in Book 3902, Page 1287 of the Bnmswick County Registry, Parcel 35 • Tax parcel No.04800003 BEING ALL of that 105,98 acre tract of land as shown on a survey map entitled "Combination Survey for Brunswick Regional Water & Sewer (H2Go)" prepared by East Coast Engineering & Surveying, P.C. dated Januaiy 20, 2014, a copy of said map being recorded in Map Cabinet 82, Pages 36 and 37 of the Brunswick County Registry, reference to which is hereby made for a more particular description. Also being the same property as described in that Special Warranty Deed from Firat Troy SPE, LLC duly recorded in Book 3470, Page 525 of the aforementioned Registry. 3el36 - Tax parcel No. 030PA005 Beginning at a pipe in the northern right-of-way line and 30 feet from centerline ,of U.S. Highway 74-76 leadhg from Woodbum to Leland, said pipe being the southeastern comer of farm number 21 of the Woodbum tract, also being known as the old A.M. Chinnis tract, said beginning point also being located 1,000 feet northwesterly along said right-of-way line from its intersection with the centerline of Forest Hills Drive and also }?emg located.2959,8 feet along U.S. 74 in a northwestwardly direction from the centerlino of the old Wilmington-Brunswlck Railroad tracts; runs thence with the dividing line between Farms Number 21 and 22 north 39 degrees 15 minutes east 420 feet to a pipe; thence north 50 degrees 45 minutes west 105 feet to a pipe, thence south 39 degrees 15 minutes west 420 feet to a pipe in the above mentioned highway right-of-way line; thence with said right-of-way line south 50 degrees 45 minutes east 105 feet to the point of beginning, and being a southeastern portion of Farm Number 21 as referred to above; and being the same'lands as conveyed to Thomas E, Lancaster and wife, Bonnle Ban- Lancaster by Dotty De W&yne Duncan and wife, Betty Duncan, by deed dated May 14, 1974, and recorded in Book 316 at Page 388 of the Brunswick County'Regisby. Also being the same property described m that deed from Connie 0. Patrick et al. to North Brunswlck Sanitary District recorded Januaiy 30, 2006 m Book 2323, Page 597 of the Brunswiok County Registry. 18 11-29-2817 12ia8iH,8B_B__ innans . PROP paga 19 of 18 :>arcel 37 - Tax parcel No. 030PA006 . BECDWING at the Southern corner of Lot 1, Woodland Subdivision according to a plat recorded in Map Cabinet 0 at Page 346 of the Brunswick County Registry, at the intersection of Woodland Drive and Village Road; run thence in a westerly direction along the northern side of Village Road to the Northwest comer of Lot 1; run thence along the Northwestern edge of Lot 1 to the Northwest comer of Lot 2; run thence along the Northwestern edge of Lot 2 to the Northwest comer of Lot 3; run thence (in an easterly direction) along the Northeastern edge of Lot 3 to the Northern line of Woodland Drive; run thence in a Southwestern direction along the Northern line of Woodland Drive to the point of beginning, being all of Lots 1, 2, and 3 of Woodland Subdivision as shown in the above-referenced plat. Also being the same property described in that deed from Vets Investments Inc. to Leland Sanitaiy District recorded November 29,1988 in Book 752, Page 1055 of the Brunswick County Regtsfay. Parcel 38— Easements, Rights of Way, Etc. Ef BEING ALL easements, rights of way and all other property interests, either possessory or non- possessoiy, including all dedioBtions of utility lines and systems, currently owned and controlled ^ by Grantor as reflected within the public records ofBrunswick County, North Carolina. 19 Em^3 PERA^JQN;AN]OiVWTENANCT5 OF WATER.ANO SEWER-SWJ3MS THIS' AGITOWNTWR 3CHE;' O^ERATION.AND. MAI^.T.ENANCJE. OF WAT3BR AND SEW.ER SYSrFEM§ ("AgreeWeny^, .d'at^ •&&6f&e.:'28t11 Qay ofNo.vember, fh? i^al&QWorth CarQHjfia'(t}ie't-'To^'ril?); RECITALS: I WHEREAS, the To\yn p-wps ptid i^respQ.nstblQ for .apuhliQ waiter distiibutiou system Qb.nsisting iof.approximately .it 8:4 miles .Qf4ii§telbutioQ ^/at.er.mauis, a.;30Q,OQO ga.U.Ott.gro'und storage tank and boo^pump station, a:one.(l);minion^ together'vnfliSre hycir^t$i^y.6§,-Sei^ WEty, related: .f^iylties, ^ the^.ogosed.ieve'rse QsjhlosiS-'water. treatment plant (ati 'hereinafter colleotiyely referred to q? .fh.e "Tb'wa W&fer System'^ WBESiEASI, fhe Tb.-wm o'wms aad.{s'respons,iblerfQi;.^pul3Hts:Baflitairy:s:ewei--&0lle.t;ti6tt system. conSi'sttog 0fAj)pro:xjj±t'ately-157 fml& offfswity and.pressure .se'wer^. 409,0.00 .gallon-. 'p?c}a7->y;as1EB%terife.9fia6^ Norttieast 'Wq^tewAter'Tteateieirt.lpimt ?d in &e p'wtoersMp •'w^:gWafer''U(arisinission:system, a. .e.ollectioxi. sygtem tpge-&py •wlt&jnafiholss,. lift :statipiis,.'forc!6. .maiuis, .Valves, air' rpleas'e. valves, seryii3e..Mps,.seMc,e:Iatei'd% cl'ean-outs,land,;^? herjSaujtdfeii; c^ll.e.c^vely'-fefeirred'tQ astiie^TjS'wai -Se^er Sy§'fesip,??|);i •WHEI^AS,'teT0.^wjias^p^o»?fttdy 10,000-water ousto^^ customers; WHEREAS, ihe.-.Distr'ict'.erigages in.fhe^ysiness pf-ope^tttig, ixiamtaitDi&g, auni. managing •water, jand. s&Wet syste:£fts$ | "WHEKEAS, tlieDlstrN's opemtio»Qft}i6TOwtf"$ Wat@f,~aod,Sewer Sysfeffls'^ai ensure ef£cient.op:era1;ton,...mamtenance,. and.wajftagem.eAf :o.f:t}io^ei sy'sf^ms aud.-wUl resultin lov/pr otj'eMihg :aiia niairit?Aajace CQ.st? .diflntag'lfce te0ti.9;E^Iiis; Agre'eliaeRti WJ?REAS, :&e' DistriGt is auiiiorized under:fart 2,. 'Chapter t30A ofti)te,?rt}i Carolipa .G'ener.al.S^tg.tes.lej^egetde.'pAd'enfor^ owners pfwater and s.ewey system :8a4.^aS; WHEBSAS the Town-has; agreed: to ;co^a,ptwJ[t^-theDts^ mainten'anee, iand'tttaflagement bf:'its ^ater-.and. § ewer ..System^,, 311^. I TOER3M$, 'the.pmiifes Nend for ,thigAgre6Mefit to set.forih fhe'femu?' ^ condltioas QffHe^.pperatttig.&gi.'-eemmt. -I- Belville_000087.4 go-yemmental unit pit-agency thereof, i3r.ariy applicablejudgtfteiit.or decree ofmy court or otlier .goVfammental agency or body. £1. The e?x6cuti'on and delivery of this Agreement by the Town,' (toes no.tfequ&e Oie apprp.vnjef.^ny regulftto.ry body, goveitimerital unit or agency, or any other .p,?rspr(s/eatities •whatsQever. : .E.. To the Town>s knowledge, tbere are no claims, sirits, pending ifibtloiis, of entered Judgm&ttfs wllich'wo'uld have a material adverse effect on the Tp'wtt'S'sbiUtytO petforin.its- obU'gatlo.ns hereurider. ; SECTIEQN 1.03..FULL DISCLOSURE: Thepartifcs each shaU provide to .th^Otliei', if i'^^ all plans;, .ps built d);6wings.> fipaiicial '{nfoi'mafi.on, and all. other uaformatiQn, dQcymeiits, .waterials, and pther, thlngg intli??po,sses;sjion: or c.Qntrcil associate^ vrith.f&e Water and Sewer Systems, and.'fhe performance .of>fh.e .terms and .conditions :set forfcilier&ih. SECTION. 1M COOPERATION .OF THE PARTIES. TheDistnetaD.^meTowuagi'e&to c(30;ger^te,.Mly>.effecfivety,:.an4 efficiently with ea .purposes pf'tM? Agi.'e,e:pi^nt,;,0X.eicy.te .all suppleriieritaly docutnente^ecessary to' epferce ji^s teim's, and to take all addjltjl.onal.acflosns •deeoied,;n%,ess.aiy -and .apptopnatp so.:8S.t6.giv.e fiill force Hn^ effe.ct;t6 the terms, condttious, and ijitejat of this Agreement, .Nei'tlierpSii'ty shall ffnr'ea^oiiably- ..—witogld-QKdela^providmg-sueh.GOOperation-." ARTICLE 2s PURPOSE SECTIQN 2.'.OX. .PUISPQgB .OF AQREEMENT. Th& parties ..are e!ntefmg.Jiftt6 ^as ^greerffent: for -th'6 &isti'ict'to. provide..operafronal, maintenance, and,.GgLaD.Eige'tll;gtii s^n'i^te's- for ibe- fomn's Water ahd.S6Wer Systems; saict services conformixigto .WdNiug 'ID full OOjtfipHaac^ 'Witibi- aS. igsyed .p:eftn'JLte,;tli.e :s^stem?' .Op.eratibrialrequirements, industiy steudarcl.s,. 9nd te .applfoable l^/$,f\iieSy mdxegulations of;iegulatory b.o.dies, .govemmental units, •oi:agencies"tfieEep.l?.. ARTICLE .3: SERVIGJ5S \ SECUm 1,01. SCOPE C^'!§ERVICES,. The getvic@s:.t&l30proYidiejl.1?y"tl3ie::Distriefliereunder; are fbiose duties, •ri.oi'mally :prov,i'ded by complianl; pyblic enterprise Wtef s(ipgl:y:att^ idistribufiQxi $Ucl. Wia'stew&ter colleetton,. ti'wtm.erit, atid. disposal systeiris, ARTICLE 4; TEKM $E'C]TO 4..01, TBRM OE AGREEMENT. .A. TMs temioftbis Agreement shall commene6 Qn1;l]:8 date tlie p.attieiS' .c.batetripotatoecms' Agteetfaenf to Convey 'Water'ERi'4'Se'v/er S.ystieiKS. closes-aad sBall ;e^)?: on. J^ftu^y31,.20i'8mleSS.6arllei'tei^inatedm.accordance;wifhthet.erm9.:^ B> This A.gi'e.efiKS&t m&y fhefeaftej' be, extended for an ^ddiUon^.term.by -tlie pwties ;iu.a •^•itten:adte>dum Kgreto oa'sueh tWns dnd, tiOnditions. as the-.parti'es may.negQtfafe aD:<3, agce'e. upon. -3- Belville_0000876 .H. Re'ad. all riieters of, ;sei)id all Bills to, and 'Gollect all payments' fi;om. to Wafer aad Sewer Systems' cus.tomers, 'in: a.aw&aa.ce, •n'ifli the'proyisioas ofArticl.e 7 hereih. I. y.royfde all }abg;r,: gup^cvision,; sftpplies, eqvipmeni, fepMr "and rfiplacem.ent pai-ts for minor, repairs, and all other maohinery,.tQQls, materials, ando.yier^ms, flaings, OF serVtties alecessaiy JEOr the operation,, maintenance, and'manageme^ Qf the Tcwa,?&' %tbl; ,an,4 •Se^ei* SystcitUs, J, :Pey^oitn3,.tih:e: To wrt'S.y^ligationis-'under, the p.britraets'aridipemilts associate^ wHli and K. Adtiutuster.'tlie provision. oi"'water -snd s'ew.esi; sg]?V.ii$.es,A^>. ;tiew wsfomers ;and. the construction of related -infiastructure by d.eyelQpers mtendmg: to CQtffieci: W, th& ToWtl's Water •arid/or S.ewer Systems; the To'wii being, the .gpveming authority "v/^tefs.ssd.io coffuqUtiiag t6 < prpyide •watet aitd s,6w6l-:se)i!yices to.futyro cust6rciers. L. .Communicate, in a thnely faslilon, Witlt a aeSiguatediiSp^serttatiive-ot'the Town. regardiug-aiiy.ploUems detected within: j&eTOvm'sW^ex:^^^ TfieomriiendatlQns :f6r curmg -or correGtifig,the .sgBcie. . M, Ac.coim.f ffl^d p&y -for' 'all stattdWd "wear aud teai^' ;itetns,rejpl'aced .as; ^ part. of ^acii.jity ^p^r_a4 M, ;E)6xfc>ran.9Ulx:.epau;s Ns capablp'of^eyf6»xiju]^'ysing.I)istdct;E&rsoiuiiel, TltfeDisteict shall notify the •designated' Town;ieRreseatati.v?: j.tt Ifae k]i^+-*lh.+.^^i.l4.U2t/»- -d-./,. •/'•JC^ ^^-^ ^.^•j.^^.A'l^^i. .^^4;?-;^ 'r\i-,.^-j_-A»'_ *'^-.^.-*. 0. Srpyi^. adtoNs.trafiye.tyversight mQ assigta&efi .to l&e Towtt •ia:' .dealing .\viih.:afiy governmental .or regtaatQry.Q^M.als/w^resjp.g^to.'jihe.Tfiyfti'fi^ •P. ?^?/ Uie. Tb-wn in wxiting of.auy eapitol unpJ'ovemeQts 4eem:ed:n,e Q.. Assist iQie-'To'wfl •w]th-Seeldtig;finatt.cirig a^prov'al ffotfi teTL'poal-QoveomaeQi' renewals .of or aetions reqyired. iwfe -fbei p^raatts. aiid .eoBto&ts •ass.o:6;i'ated with .o'rxeqrured' for- tlw Town's. Water and. Sew.?r ISysfein^ 'R, Ensure tfiat fh6 employees ^9 Distri'ct iirovi^e? jto og'^a^ Bifiii'xite'to, ^ .ma&agQ. the'. Pisfaictas.an independent Goritr.gct.Qr and th6-Disti;ic{-ste1I'ther6f6rl6-be r.e?pQnsible^or all-Bsp.^efs; -5'- 'Belvi.He_0060'878 ARHCLE 7: BILUNG AND COLLECTIQNS SECTKM 7..0.1. BilLLlNG. The Di.sttNslia,!!. provide xitility billing sei-vices .for the Town's Water 'and' 'Sewer System -and will l)i;ll the systems' cpstoniets. based oll.the To.wri's fheri cwwnt a3opted.mte schedules, SEC3W 7.0%. COLLECTIONS. The Distne-t sllaU (Soilect the .customers' utility paym^ts' Hnd sllall also collect any required water/sewer "i.mpaGt" ftnd. eapital.jcecoyery fees fi'om Town eust'onicrs in accordance with Town rates. All. fiinds co.ll.wt.ed by the District shall be.foiwarded ti&'tlie: T.p.wn.^t lesqst/olise a inoD.th. No later than ten.(10.) days after the date on. which the CQlleiQNtJE'eps -Wei-^ fQrwlu'dedyfhe .D&'trict.shall-provide {he Town wifh .a written aecQ'untmg of us&ge,. amcnmt b^led, p.&Smlenfe tecei^eri, ati,d the status of all accounts. SiECTIOJN 7..Q3, NEW ACCOUNTS. Tiie DistrM sMl ^e respousible for establishing new a.Gciotutfs for Tpvflti..(3Ust:Qmer.s... ARTICLES: IIWEMWFICATION 8ECTJ83N 'S.Q 1, •JNDEMNIFICATION. A, Trriciylfrfe.e§5 Wtitdli..£irg eause4.by'oi arise from .the DNact's- defaylt ^ fogaeh Of£hj,'§ Agi;e6iaae&t: oi* th.i&.W^Ugeht'Mid/oi', •willful acts an:d/6r omissiQns-o^feeDilstiricC.or i'g:ere}3loyee^, a'gen^sCTy^ts, 'B, Tcithe;^ent'Mlov?ed.by3aw,iKeTowft.:shall.mdemm tbe;JMSitl'N>; i'ts eieo^d .and .apgomtesd Qffi'cial^, .find..its duly. aufliorlzed' employees, .agent.?,, and SeF-ygrris.ftQia, anyvaiui,a,ll costs, :e^p.^tiges^,0i';l{8l?ilj[^§; .(mclttding bosts, expenses, or liabilities to :third.;p£udes and. aftoi'ney'^.fees) YyHiicsh' ^•cms6d,byo'r'.aifse.jErQin.tlieTowu's .dfifeuK and' ttfeaOh ofiSaSs Agreement or lli&.-negiigenf an4/or willful acts andl/tir, omissiotis of-fh^ Tovfti .01 .its eiiaiplby&esy. age'nts, se?an:ts,- c&jitraGtoi's,. 6r; subconfeaotQis provider such cQsfs, expenses,. Or. ligbilitwjss :d,o liot•'aris'e as a result oftlie -Aegligent and/or wiUiul action aad/Qr Qmi?sfons ;of :the PJistt!ic;i;;Qr'lLt9'g.&ipl&ye:es, .£igeiQt$, s.ecv^tifs,.:eontca(StQj;s, .di- subco.nti:actors. 0, .In the even.t .bQ:tiitii0,Dis^'c;t ail^.theYowii are.fourid liy a finder .of fact to. be riLegligent and •s]ucL,negIij;en.ce 'Qf.eaoti,:is. deferffimp:d to .bi;;. a ptosfcimate cause of'the ..Qlaim, damage cost, .Kiabllitj, or exjiei^e ^3titelu4w.g: postg, •.e^en.s.es, 91' llaKiliH.tes to thii^d •pai'ties arid attQrffe^s fees) stich .:ffiat..tlle Disfrictand tlie Townwe jointty'and seve.i&lly lia&Ie, then. afta m sn(?h,ev$rit,.:ea6h ^.arty'jshall b.fe tespoJo.SiMe. for;one-half(,l/2) oftliet.Qtal claim, dajtti.age, cps.f, 'IwUli.t/ptfjx^ense,. , ARTXCLE.;.9: BONDS AND: KNSXMANC3E iSE.CTJ[0M,9..0'L B.QNDS. .N:QtappU.cabfe; -7... Belviile. 0000880 which'{he term of the. Agreoment: expires, Tiie provisions.of SeGtion 12;04heieb shall n'ot limit; delay, toll, or otherwise effect the Town's enttitlpnlent 'to liqtudiaitSd.damages as herein.provided, SECTION 11.03. CIMULATJVE REMEDIES... The duties an^Qbligatiipns impose.dfey tliis Agiteemept a6d the nghts an.d.remedies availablehereunder lo flig;parties .hei.'etQ'ai.e ii'n :additiQn to, and are not to be' co&strued in any way as a.limitdtion.ofy any i-ights and remedies available to any or all of them -vviuch are'oth^wlse jsiposed. Of 'available b^ la^s, regulations, wiiiTanty or guarantees, or:by other provisions oftheAgr^m^nt. ARTICLE 12s GENERAL PplOWSONS .SB.CTION 12,0r. LIABILITY OF.OmCERiS. B&IELOYEES. AMD. A.GENTS. .No elected or appointed member,, official, o£Sp0r>. Wpld^e^'bt agent tifeithscjparty. shall be subjecttq ^ny personal -liability or acccfttntability' by 'i;%s.oy .6fJig.y3.lig,'vQtg'a to. • &p{3iro've df. Kavifag execute this Agreement or any other-documents related to'.tetransAGfaos G%jf^tQp;3&fed:Kerel)y. g.uch. offieials,. ojEflcei's, fcthplQyees, oi-'agents shall'.be deeioed'tfi^YP e^eenfe^. any sy^lx.d.ocumeuts,in t^il:: officiEil CEtpaci'ties. ojndly •m4 no:t' ]'n theit mdhMual' oapabitie.s. ^lu§ §eo{iQn:sh,all not: r6li,6V6 a.oy official .affieer, i?i3'}:pl0y$e,.or agettf&ojtnthe.:per£()£ffi;ance o'jl:auy;offidial dutyjprow4e4'b)> law. SECTION 12.02. NOT1.CS& M notices, a-eportfc .and o&er_eoj-ilmi[nieatioiis_giy^n;puistianfct6L this Agrefemerit shall b6- in 'wrltiii^ ari'ii. niailed 'by certified m^'l^.:Yfittii^.i^cej.5t;re.^ueste^,..or' deliver.ed.in person to the Nettded. acldres.siee, T**>f6tice sent by certified XIMUJI ?^a!l be effeetiye .upon. ttie. date Q^dejl.iyety 9$ {ndi6Mei:oii:1}xe: retytH jreee'ipt; Xotice ^iven in any other •manjQ.er •shall be. effectiyerup.on, g; do'QivnWte.d, actuial T^ce'i^t'by the; a^dfSsseS.. 'Nd.tices reqiiure.d umder ithts Agreement shall be-made to the follq'wing: ! District: .Executive Director 'BRUNSWlGKiIteGIONA^^ATERASEWBRmGO •PQst:Q£fic&Box2a30 ' Inland, NG 2S^[, Towtti Tbwn-Administrator J!OWN;OF BEI,?L:& 6;8'38LiwRO£i-d: B.eIv.ilWe':2844S Copy to: Jam.es'S.Eldrldg^.TonmAttQrffey ' ELDKtoGELX.WiElRH, ]PG P6st:Omce,'BoxT3.8a WUmixtgto.n, NjG 2-840S. gSGriON 12.03.. .9:.. BelvilleJ)000882 SECTION 12.09. ENTIRE AGREfiMENT;..MODMCATION,, ThisA.gte.etoenfcoristiftites the eompfete, entire, afad: final agreement, of thepartie? wNi'resp.ect t.o 1:he subjgict-inattei,- hei-edf; and •stfpersedeS any and all previou's c.omrilunications, sfatemeut,?, w^ •representatjibns, 'oral ov. written, v/jiQiiespect'.to -the. sybj'eot, ffiatter hereof. Tbjs Agreeriient:.may not.be.mo'difie'd, atnetide'd, of revised except by furti|ie:r •\witten ajg?em6nt ^ .and betwe.enihfe pa'rties. SEC'HQN 12.1Q.. COfMTERPART. COJMEg. This .Asreem?ttt'may be exeputed.inmultiple counterparts, each.of'w.hicli shall be 'deemed an .onglpal, and all of •w^&.sh, taken together, shall constitute one and.the saAednstrument wliich-may be siriBEiciep.tly ey,iaei):ce4l3.y o{i& c.pi?lplei& [email protected]::. XN 'WITNESS WBQ&REQIj', the p'fflities. Nv&.caHsed tN^:Agteementto, be exeeuted.by their diilyau£hoi'l2ed,.represent.atives as. o.f the day and y^ar.ilrstiVmttefa above,. ^i^-y^'^..M?^/^..... s^"^'^. .•..' • rff"^- •T"'".:-' '"^•'^•. BRtjg^IGjK REGIjQ^AL TOW Q^BELWLLE MlkeJai^n, M^QC '^^•—^l^^' A3;TEST^ M? WMc- TliigsAgi'eefnent .has been pre-audite(l: agrftqidred.by'la.w;: 5. C(1^ •1:^. Disttict IPiuniauce O.fiRrcer To\imLI7m&ce Officer -ii B.e'lville_0000884 E)(^)O\T y RESOLUTION OF THE BRUNSWICK REGIONAL WATER & SEWER H2GO WHEREAS, Bmnswi&k Regional Water & Sewer H2GO (the "District") operates a public water distribution system and a public sanitary sewer collection system'(collectively, the . "Water and Sewer Systems"); WHEREAS, the Water System services approximately 10,000 customers and the Sewer System services approximately 6,500 customers; WHEREAS, the District cun'ently employs 29 fiill-time employees with an annual payroll of $1,540,000 (excluding benefits and overtime)'; WHEREAS, the District currently purchases its finished water from Brunswick County ("County"), the source of which is the Cape Pear River ("River"), WHEREAS, GenX, and other unregulated contaminants, potentially harmftil to humans, have been detected in water drawn j&'om the River; • • WHEREAS, the County is unable to filter GenX and other chemical contaminants oufof the water before selling it to the District; WHEREAS, a reverse osmosis ("RO") water ti'eatnent system, soiu-ced from deep-well, confined aquifers will provide contaminant-ftee finished water for customers within the District, thereby immediately removing the.served population of 25,000 from.the contaminated and vulnerable River source; . • WHEREAS, in compliance with its statutory mandate to promote and preserve public health and welfare, and as an inherent element of its long-term Water System plans, the District has been proaotively platming and working to construct and operate a new 4.0 million gallon per day RO water treatment plant, and has invested over $6 million and awarded construction contracts exceeding another $8 million in that project to date; WHEREAS, recent events clearly, show a risk that the RO project may be terminated by rescmding the related contracts thereby wasting the $14 Million Dollars the District has already invested towards safe, clean, contaminant-fi'ee water supplies; WHEREAS, recent events show an additional risk that the Distnct'might be dissolved; -1. WHEREAS, such recent events include;' • Commissioner Trombley openly questioning the need for. the District and stating that . construction of the RO water treatment plant will likely be stopped; • Commissioner Jeff Oerken stating that he knows a majority of the board, when newly- elected Commissioner Beer is seated in Dec.ember, "plans to vote to kill the project"; and • Newly elected William Beer, who campaigned on a platform to "stop further construction on the RO plant," stating that he is working closely with Trombley and Oerken and will seek to "abolish all activities and contracts related to the reverse osmosis plant"; WHEREAS, based on these events, it is reasonable to consider the.risk to public j&ealth and local economic development posed by the new board terminating the RO water treatment project and seeking to dissolve the District; WHEREAS, the Board finds that public health, safety, and welfare will be improved by the construction of the RO water treatment plant which will provide the only confammant-free and sustainable source of water for northern Brunswiok County; WHEREAS, the BQard also finds that the projected $34 Million Dollar project cost for • the RO water treatment plant arid the preservation of the District's 29 employment positions with an annual payroll of $1,540,000 will improve and promote economic development within the Town and in northern Brunswick County; WHEREAS, based on these findings, the Board concludes that by entering into an undertaking with the Town ofBelville whereby the District conveys the Water and Sewer . Systems to the Town and by agreement, operates, maintains, and'manages those public enterprises on behalf of the Town, will effectively accomplisK the public health and economic development goals set forth above; and WHEREAS, the North. Carolina General Statutes expressly authorize the District to convey its real and personal property to the Town "upon such terms gnd conditions as it deems wise"; . NOW, THEREFORE, be it resolved by the District, in a meeting duly noticed and assembled, as follows; 1. That the District, shall, convey the Water and Sewer Systems, and all of its real and personal property jnchding, without limitation, all oftiie land, facilities, structures, vehicles, equipment, permits, cont'aots, funds, supplies, and liabilities associated with or required by the Water and Sewer Systems to the Town qfBelville ("Belville"); 2, That the District enter into an operating agreement with Belville to operate, maintain, and manage the Town's Water and Sewer Systems; and 3. Authorizes the Executive Director and H2GO Staff to coordinate efforts with the Town ofBelville to insure a seamless conveyance of the Water and Sewer Systems, 4. That the Board Chairman Is hereby authorized and directed to sign, on behalf of the .District, the following instruments: A. An Agreement to Convey Water and Sewer Systems to Belville; • B. An Assignment and Bill of Sale conveying title to the District's personal property to Belville; C, Warranty deeds conveying title to the District's 38 parcels of real property to Belville; and D, An Agreement for the Operation and Maintenance of Water and Sewer Systems with Belville, This the 28th day of November, 2017. BRUNSWICK REGIONAL WATJG3R &1 SEWER H2GO /Wi^iwn H.'j&WnTng.'Chai'r ATTEST: A/i^- Teresa Long, Clerk to f lie Board -3- EmsiT ^5~ ?16 RESOLUTION BYTHE TOWN OF BEL-VmLE ACCEPTING AGREEMENTS WITH AND CONVEyANCES FROM . • , BRUNSWICK REGIONAL WA'rER& SEWER H2GO ' , WHEREAS, Bnmswiok Regional Water & Sewer H2GQ (the 'District") operates a' • public water distribution'system and a public sanitary sewer coUectiou system (collectiyely, tho "Water and Sewer Systems"), ''.;•., • • ' ' . ' . WBQSREAS, fhe Wafer System services approximately 10,0(i0 customers and the Sewer System services apjEaoximately 6,500 customers; " • . .' ' • WHEREAS, the Dis(rigt currently employs 29 foll-time employees with aa annual . payroll of $1,540,000 (esxcliidiiig benefits and overtime); ' , • • . WHEREAS, fhe. District cuitenfly purchases its fimshed. water &om Bnmswick County ("County1*), the source of.^hioh is fh? Cajie Fear River ("River"); • <* WHEREAS, GenX, and other unregulated coatarqmants, potentially harm&il to humans, have been detected in water drawn. fiom the Kiver;. WHEREAS, tiie County is'uaablo to filter GecC^ and ofher chemical co'afamiDants out of .•fhe water lefore s.eUifig it to-the'Distaot; •••..' .• 'WHEREAS, a reverse osmosiff ("RO") water ttoattnent system; sozirced fiom d^ep-well, coccfined aquifers will provide contanAtant-ftee fimshed water for customers .within' the District, {hereby umnediately removiog fhe served popidation of 25,000 ftom the contaminated arid vulnerable River sourcei WHEREAS, m'compUaace^wlfb. its statutory mandate to promote ;and preserve public ' j • hedth md weffare, and as an Nierent element of its long tenn. Water System plans, the District ' ; . has been proacfively.plaaniDg.aad workmg to construct and operate a npw 4.0 •million gaUoa per j . day RO-water treatment plant, and has i&vested over $6 xmtlion and awarded consfcruction • ,! contracts exceeding another $8 miUiotimtiiat project to date; . ' 'i WHEKEAS,-recent .events clearly show'a CTsk that the RQ project may be tenumated by rescinding the related contracts thereby "(vastlag the $14 Million Dollaxs the Plstiiot 'has already invested towards safe, clean, contammant-j&ee water supplies; WEEREAS, recent events show an additional risk that the Disjnct nught be dissolved; .2- • . ' • WHEREAS, such recent events include: ® CommissionerTtoabley op.enly questioning 1fa.e jaeed for the District and statbg that construction offhe RO water teeatment plant wlU likely be stopped; ' . • ® ComiiussionerJeffGei'ken'statmgfhathe'fcnowsamajorityoftiie board, wliennewly-- elected Conimissioner Beer is seated in December, "plans to vote to IdU'the project"; and o Newly elected William Beer, who campaigned on a platform to "stop furfher constmqtion on the RO plant," stating fhat he ifi worldng closely with Tronible}? and Gerkeh arid .will seek to "abqlish all activities an.d contraots'related to the fevorse osmosis plant"; WHEREAS, based on tihese events, it'ls reasonable to consider the.'risk to public healfb. and local economic development ]posed by the new board termtoatmg the RO Water treatment proje.ct, and seeking to dissolve fh.e District; . . .';. WHEREAS, the'BeIvUle Board of Commissioners .("Board") finds that public health, safety, and welfato will be improved by the cpnsteuction of the RQ wafer.tceatment pl'ant •which will provide the only cojoitammantrftee! and sustaml?lQ source of water for northern Brunswiok . County; " , ' ••, ' . , WHEREAS, the ^oaid also finds that tfae projected .$34 Million DoUar project cost for .• the E.O water'treatment plant and 'the preservation offhe Dlst'ict's 29 •omployuent positions wifh Etu'aunual.payipU of $1,540,000 will improve arid promote economic development wifhinfhe Town and in adrfiiemBrunswick County; ' '• • WHEREAS, based on these findings, the Board' coacludes'fbat by entering into an • yndertalcuag with fhe District wliereby ffae Distdot conveys Hie '\Vpter and 'Sewer Systems to fhe " • Town and by agreement, .operates, tnaiQtatos, and manages those public enterprises on behalf of ' the Town, will effectively accomplish the.pubUo hedfh and econbmic.developmeait goals, set forfih above; and , ... • •. . •I ; • WHE8EAS,'th(?-North Caroliua General Statues expressly authorizes the District to convey its real and personal pfoperty to the Towa < NOW, THEREB'OKE;be it resolved by the Belvme Board of Commissioners, .m a meeting duty noticed and assembled, as foUowss. ' . , • . 1. That the Towu shall accept fhe District's conveyance of the Water and Sewer Systems, and aU.of.the District's real and personal property iacludiag, without luuitatloD, all, of ^&l3Sia>jTaoiUties, structures, vehicles, equipmeQt, percqits, contracts, funds, sujpplies; and •', yiabilitiesj.assooiated wifh' or required by the Water end Sevror Systems, 2. That Sie Town entor.into an operaluig agteement witii the Djtsfalct for the District's operation, maintenance, and management of the Town's Wafer find Sewer Systems. • I .3- . 3. That the Mayor is hereby authorized and duected.to sign, on behalf of the Town, the following; i) An Agreement to Convey Water aod Sewer Systetris ftom the Distelct.to BoNUe ("Cdnveyaace agreement") and ii) As, Agreement for the Operation and Mainteuance of Water add Sewer Systems-witfx the District. . . ' ' • 4. That the Mayor'is authorized to accept, on behalf of the Town, the followng: i) An Assignment and Bill of Sale ("Assigument") conveymg title to th,e Distdct's perBonal property to BelviUo aad ii) Warranty deeds conveymg title to the Distdct's SS.parcels of real pmperty to Belvme. . . / . .' ~ . • ~ • ' ' 5. St^is .instructed to jrnmedia.telyan'auge for fho recording of fhe Conveyance Agreement, Assignment, and Wan-anty Deeds .at the Brunswick Cowrfy Register, of Deeds, Adopted'ffila the 29to day of November, 2017. MIKE ALLBN, MAYOR ATEESTs !52mis, TOWN CLERK Boundary of Sanitary District LELANDOQ00575 E^mr 7 8 tSSSS'SS 81 a H • a Boundary of Leland •• a. • I^B Lelarid Bss in trj-l County Boundaries s •^ • '. " I ' • s ^ I IS sass LELANDOQ00572 E>^^}r 8 m SSSStSSS&SSgSSSSS ^^^£?5^ Boundaries of s Brynswick County m'i^si and Belville |^> Belville £^ county Boundaries 9_ ' ' < • \, Q s •""ww giys3^^^ I ts' 8 IS ffii s II •I. 9 g •9 i • ili LELANDOQ00570 E»i)0\T 7 Boundaries of Brunswick County and Leland Island 1^'p County Boundades -». © LELANDOQ00571 £rM-l)0}T /0 Boundaries of Leland and Belville with Sanitary District Ngvassa ^ Letend 1# BglvUlg djj|9 Sanllary Dtolrtct l^j-I Counly Boundaries LELAND0000576 Ex^iQir It Boundary of • Belvllle without Sanitary District <^ BelvlllB l^p County Boundaries • " I • • < © K -"•taftii.-!— iI• i M is • KS'A'fi 8 i • MB • s • I LELANDOQOOS74 E^]Q\T IZ Boundary of Belvllle with M Sanitary District • •qP Belville SIS •.Sp Sanitaiy District Cy County Boundades I - " ' > • • 0 ^ I t2 • a • I%i B s • g I II s I • LELAND0000573 EXHIBIT “D” EXHIBIT “E” NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE BRUNSWICK COUNTY SUPERIOR COURT DIVISION FILE NO.: 17-CVS-2243 TOWN OF LELAND, NORTH CAROLINA, and H200 BRUNSWICK REGIONAL WATER & SEWER, Plaintiffs, vs. ti TOWN OF BELVILLE, NORTH CAROLINA Defendant. TOWN OF LELAND, NORTH CAROLINA Plaintiff and Cross-Claim Plaintiff AFFIDAVIT OF vs. DEBRA WILLIS TOWN OF BELVILLE, NORTH CAROLINA Defendant and. H2G0 BRUNSWICK REGIONAL WATER & SEWER, Cross-Claim Defendant. INTERLOCAL RISK FINANCING FUND OF NORTH CAROLINA, Intervenor. 1. My name is Debra Willis. I am over the age of 18 years and there is no reason why I cannot testify truthfully. The statements made in this affidavit are based on my personal knowledge 2. I am a citizen of Leland and Brunswick County, North Carolina, and I reside within and am a customer, ratepayer and freeholder of the H2GO Brunswick Regional Water & Sewer Sanitary District (the "Sanitary District"). 3. On May 21, 2019, I attended the regularly scheduled meeting (the Meeting") of the Sanitary District's Board of Commissioners (the "Board"). I recorded that Meeting. 4. During the Meeting, the Board voted to go into a closed executive session. While the Board was out of the room, the leader of an advocacy group known as the Clean Water Team and Belville's Mayor, Mike Allen, stayed in the main meeting room and took turns addressing the people who remained in the main meeting room (collectively the "Belville-Related Speeches"). 5. My recording of the proceedings captured the Belville-Related Speeches. I also made contemporaneous notes of the Belville-Related Speeches in which I tried to write down what the speakers were saying to the best of my ability (my "Notes"). I made handwritten notes and then typed them on May 22, 2019 at about 9:00am. 6. I culled out the otherwise unedited and continuous portion of the recording that captured the Belville-Related Speeches. That portion of my recording of the Board meeting is hereinafter referred to as the "Excerpt." 7. A true and accurate copy of the Excerpt is included as Exhibit A to the May 24, 2019 affidavit of Joseph S. Dowdy. That recording accurately depicts the Belville-Related Speeches as I heard them when I personally was present in the room on May 21, 2019 while the Sanitary District Board was out of the room in closed executive session. 8. A true and accurate copy of my Notes is attached hereto as Exhibit 1, 9. This is the end of my affidavit. 2 &Cht_t-i inivt IL> Debra Willis State of North Carolina County of Brunswick Debra Willis personally appeared before me and swore to and subscribed the foregoing document in my presence on the date indicated below. Witness my hand and notarial seal this 29th day of May, 2019. otary Public My Commission Expires: - to - 2U2Z 3 21 May H2G0 meeting notes - -Deb's notes I attended the H2G0 monthly meeting on 21 May 2019 to hear the Board discuss relevant issues relating to the recent court case. In addition, I also recorded the proceedings on my phone. During the closed executive session, I remained in the chambers waiting for the Board to return and I overheard the following commentary given by Steven Hosmer and Mayor Mike Allen. Hosmer — saying Gerken doesn't like the RO plant but if Leland wants to build it, it's ok. Gerken wants to give the assets all over to Leland. Gerken and Trombley up for reelection. Town of Belville has gone to great expense, legal expense, to ensure that the injunction would remain in effect. What Belville did was protect the assets for their citizens and H2go citizens. Belville took the assets right after the Nov 2017 election and the outgoing commissioners voted at their last meeting to have assets transferred to town of Belville. Mayor Mike Allen back there was the one we owe (handclapping). Belville has worked very hard fighting. Allen — Summary judgment — Belville got ruled against. Belville appealed. Appeal will go way beyond the election. If you don't live in Leland, you will be disenfranchised in the upcoming election. I can promise you this if you put the right people on the board I'm going to turn the assets back over. Step back from it and let H2go go back to business. Process Leland is doing what they have to do to disenfranchise the voters. You will be disenfranchised completely. They can't keep up with infrastructure and growth — only way to do it is take h2go assets. Watch the media, news. I have one goal — protect people in my town. Aquifer is safest source of water. County is doing the right thing — working as hard as they can to get to process of cleaning the river water but the timeframe is going to be a lot longer. Five years vs one year. Based on fact, aquifer water can serve at least 100,000 people. 5 wells down now that your current board is trying to get rid of. Equipment stored in warehouse right now. Only one way to change their mind. Appeal process as a general rule takes over a year, Election coming first. Voters decide. Hosmer - Lawsuit is to have assets returned to h2go.... Not to Leland. If Belville returns assets to h2go, then lawsuit crumbles. Appeal becomes not an issue and H2go can build the ro plant for clean aquifer water. Estimate 12-15 mos from time politicians get out of the way and give Bob Walker the go ahead. Allen — half is already built. RO system is already built and in storage. All they have to do is build building. Could have been pumping water a year ago. Simplified system. Hosmer — not anticipating any approval problems with property — happens to be Belville. Mr. Eades will tell us we lost the summary judgment. Appeal will go forward. If judge issues a permanent injunction, he could force us to give everything back. Small turnout — was here for bridge issue and it was packed. Beers won by 17 votes. Hosmer - Clean Water team — Nov 2017 — when commissioners transferred the assets. We have been responsible for all of these shows or play-acting. We found we could influence commissioners — stopped lying at the public meetings, got them to move the meetings to town hall so more people to attend, got them to stop gaveling (go read Gavel, gavel at Beacon), quoted laws to Gerken. Haven't been able to change minds on RO system. We suspect that Town of Leland has charged some of them to make sure that the assets are moved to the town of Leland one way or another. We KNOW from other EXHIBIT I, commissioners who saw the light and did not buy into — why don't you run for the board and then when you get on the board you can transfer the assets to Leland, dissolve H2go and then you are done — serious effort from way back. We know Leland is trying to get rid of H2go and get the assets. What do the assets represent — over $60M in combined infrastructure and about $14-16M cash. We all know that Leland is not exactly flush with cash right now. It would go right into general fund. Maintain emergency fund if hurricane comes — have to be able to get water back to people and that money would go away. So essentially Leland wants h2go for its assets. For ability to bill h2go customer directly and get the revenue from selling the water. They want h2go so they can sell aquifer water to other people besides h2go. A lot of benefit to Leland if they pull this off. One of biggest claims for getting elected is that they will provide cleaner water. Leland says well then we'll provide the cleaner water and everyone is supposed to fall down and say yes it's good and forget about it. We can't forget about it. They're going to charge us out the..... You've seen what they are doing for their property taxes. They have no expertise. Bob Walker and his team have been living and breathing RO and I have been as a result of the leadership role I have taken on... every time I had a technical question, Bob Walker is an excellent source. .. he is out of control. We have all the expertise we want sitting in the h2go offices. How can Leland put all this money into the plant and not raise the rates. H2go being charged $1.8M/yr to buy water wholesale. BC has announced a price increase almost immediately to $2.1M. And when RO plant is completed, amount will go up to $2.9M. 2.9M to service and debt, you are saving all that money. Instead of paying BC for water, budget structure changes so you are servicing the debt. That's how we can expect to have no rate increases when plant is built because we stop paying BC. BC obviously not happy —going to lose money. H2go is their largest wholesale customer. Allen — there is going to be a catch to that — some things I can't go into right now because we are doing a lot of negotiating behind the scenes. Can be a true partnership that can happen behind the scenes once we resolve this issue. Whole solution will make it better for all of us. I am just interested in keep rates low. We all have to support each other. County doing everything they can do as fast as they can do it. They know they are building what they have to build — nothings cheap. Ways that the aquifer water can offset their costs, we can sit down at the table and work together. Pay attention to the media and what's going on, PR war between now and November. Everything they put out, we're going to respond to and look at the response. All we want to do is get out the proper information, get it to the people, going to boil down to the Nov election. Hosmer — here is what you can do — take what you have learned tonight. Every time we get up there and talk we are also teaching. Giving you info about what is going on so you can be informed citizen. You can spread the info. Go on your Nextdoor and challenge, talk to your friends, clubs, we need to have an informed public. Can we give you some money? Bill Beer got elected by recognizable name, his friend promoted him. We want h2go to build the RO plant. We are going to become an agent, legal thorn in the side of these 3. We are a corporation. Will be holding info mtgs, don't want to start too soon. Like Compass Pointe mtg year ago Jan. Mailings, be at events talking to people, education. Hired an attorney who has submitted public records request to h2go. My and Barry Laub's requests have not been responded to. Had Belville not appealed, we had attorney who would have filed a class action suit, injunction to stop transfer of assets of h2go until lawsuit could be determined. We aren't just a bunch of people mouthing off. In Jan, we said we can't wait. We investigated recall vote to get rid of Gerken, but laws that apply say that county has to do recall and they can decide when. BC doesn't want to lose h2go as customer, so county would say wait until election. Then county gets to replace the recalled. Looked at how much it would cost, but risk was too hard the ways NC laws were structured. Guess who has iron grip on the assets —this good-looking guy over here (pointing to Mayor Allen). Allen — legal term for what they are trying to do — current injunction still in play until judge makes a decision. Could change things — next week we'll find. If injunction stays intact during the appeal, everything stays as is no matter what vote they take. Someone asked where is the Leland mayor. Someone else said we don't live in Leland — we live in the county. Someone else said she wants the assets. Mag Greens resident — Hosmer says your mayor is Brenda Bozeman, but the mayor is actually Pat Batleman. Power behind the throne is Pat Batleman. If you want to know where they are on all of this, they are the ones that came up with the proposal to build the plant... hey we are Leland, we can build an RO plant, we can do anything, just look at our success in the past, uh, don't look at that. Allen — whole thing is just be patient. Wait for judge to make his decision. Appeal will go on no matter what. The judge can make permanent injunction, tell us to turn assets over. But we can also appeal that. Safeguards will be put in to protect our rights until appeal is finalized. But basically it's boiling down to is the vote in November. People can stand up and speak and if you speak loud enough, it will take care of the issue. Hosmer — to insure we get the right people — legal horsepower between now and then — we need $5K in near term and total budget of $10K between now and election. Legal needs, what makes sense, if we need to file a lawsuit. Punitive lawsuit, dereliction of duty, whatever tem you want to use, will be expensive and last for over a year, so probably not financially practical. Is important that we have $ and legal knowledge — our attorney for customers of h2go — his job is to make sure that come Nov there are still assets. Donations — not a 501c3 — we will be done in less than 9 months — mailing list — we will be contacting you to donate. Will set up online, getting PO Box. Have a bank account. Who is going to run? Someone chanted Steve. Great question — but answer is yes. Don't want to declare too early — because there are things you need to start doing. We don't know if Gerken and Trombley are going to run again. There is a lot of speculation behind the scenes that Gerken was promised a seat on the council on the town of Leland once he gets the assets transferred over. This is the rumor — we have no proof of this. If we replace just one of the people, then we have the majority and then Mayor Mike Allen will return all the assets to h2go. Steering committee — half are not in Compass Pointe, half are, that's where we started. I started out driving this. People from Mallory Creek, Lanvale trace, Waterford, MG. We're going to do presentations in all of the communities, we can get a mailing list of all H2go customers. Trying to put in records request so they can show that someone said h2go is not necessary. If you are willing to help out financially sign the sheet. When we make logical statements or even funny statements applause is a statement to them that this is their customer base, people behind the podium not behind the dais. Next time bring three more friends. CERTIFICATE OF SERVICE I, the undersigned attorney, hereby certify that on the date indicated below, I served a true copy of the foregoing Affidavit of Debra Willis with exhibit by depositing the same in a repository in the custody of the United States Postal Service in an envelope bearing proper postage, designating delivery by First Class Mail, and properly addressed as follows: Charles S. Baldwin, IV Cathryn M. Little Jim W. Phillips, Jr, LITTLE & LITTLE, PLLC Andrew L. Rodenbough P .0. Box 20789 Sarah M. Saint Raleigh, NC 27619-0789 BROOKS, PIERCE, McLENDON Counsel for IRFFNC IIUMPI-IREY & LEONARD, LLP 115 North 3rd Street, Suite 301 Wilmington, NC 28401 Counsel for the Town of Belville Brian E. Edes CROSSLEY MCINTOSH COLLIER James E. Eldridge HANLEY & EDES, P.L.L.C. ELDRIDGE LAW FIRM, P.C. 5002 Randall Parkway P.O. Box 1380 Wilmington, North Carolina 28403 Wilmington, NC 27402 Counselfor H2GO Counsel for the Town of Belville 7-6111.‘. Respectfully submitted on May 24" 2019. TOWN OF LELAND, NORTH CAROLINA, By Counsel, Joseph S. Dowdy (NC Bar 31941) Todd S. Roessler (NC Bar #28046) Phillip A. Harris, Jr. (NC Bar #39740) KILPATRICK TOWNSEND & STOCKTON LLP 4208 Six Forks Road, Suite 1400 Raleigh, NC 27609 Phone: (919) 420-1700 Fax: (919) 420-1800 [email protected] [email protected] [email protected] NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE BRUNSWICK COUNTY SUPERIOR COURT DIVISION FILE NO.: 17-CVS-2243 TOWN OF LELAND, NORTH CAROLINA, and H2GO BRUNSWICK REGIONAL WATER & SEWER, 1.1119 KAY 31 P 3 Plaintiffs, .:W;SWICK COUN TY, C. vs. TOWN OF BELVILLE, NORTH CAROLINA Defendant. TOWN OF LELAND, NORTH CAROLINA Plaintiff and Cross-Claim Plaintiff AMENDED vs. CERTIFICATE OF SERVICE (DEBRA WILLIS) TOWN OF BELVILLE, NORTH CAROLINA Defendant and. H2GO BRUNSWICK REGIONAL WATER & SEWER, Cross-Claim Defendant. INTERLOCAL RISK FINANCING FUND OF NORTH CAROLINA, Intervenor. I, the undersigned attorney, hereby certify that on the date indicated below, I served a true copy of the foregoing Affidavit of Debra Willis with exhibit by depositing the same in a repository in the custody of the United States Postal Service in an envelope bearing proper postage, designating delivery by First Class Mail, and properly addressed as follows: Charles S. Baldwin, IV Cathryn M. Little Jim W. Phillips, Jr. LITTLE & LITTLE, PLLC Andrew L. Rodenbough P .0. Box 20789 Sarah M. Saint Raleigh, NC 27619-0789 BROOKS, PIERCE, McLENDON Counsel for IRFFNC HUMPHREY & LEONARD, LLP 115 North 3rd Street, Suite 301 Wilmington, NC 28401 Counsel for the Town of Belville Brian E. Edes CROSSLEY MCINTOSH COLLIER James E. Eldridge HANLEY & EDES, P.L.L.C. ELDRIDGE LAW FIRM, P.C. 5002 Randall Parkway P.O. Box 1380 Wilmington, North Carolina 28403 Wilmington, NC 27402 Counsel for H2GO Counsel for the Town of Belville Respectfully submitted on May 30, 2019. TOWN OF LELAND, NORTH CAROLINA, By Counsel, 'Joseph S. Dowdy (NC Bar # 31941) Todd S. Roessler (NC Bar #28046) Phillip A. Harris, Jr. (NC Bar #39740) KILPATRICK TOWNSEND & STOCKTON LLP 4208 Six Forks Road, Suite 1400 Raleigh, NC 27609 Phone: (919) 420-1700 Fax: (919) 420-1800 [email protected] [email protected] [email protected] EXHIBIT “F” EXHIBIT “G” ·1· STATE OF NORTH CAROLINA· ·IN THE GENERAL COURT OF JUSTICE ·2· BRUNSWICK COUNTY· · · · · SUPERIOR COURT DIVISION ·3 ·4· ------x ·5· TOWN OF LELAND, NORTH CAROLINA, : ·6· and H2GO BRUNSWICK REGIONAL· · · : ·7· WATER & SEWER,· · · · · · · · · ·: ·8· Plaintiffs,· · · · · · · · · · · : ·9· v.· · · · · · · · · · · · · · · ·: 10· TOWN OF BELVILLE, NORTH CAROLINA,: 11· Defendant.· · · · · · · · · · · ·: 12· TOWN OF LELAND, NORTH CAROLINA, : 13· Plaintiff/Cross-Claim Plaintiff, :· · File No.: 17-CVS-2243 14· v.· · · · · · · · · · · · · · · ·: 15· TOWN OF BELVILLE, NORTH CAROLINA,: 16· Defendant,· · · · · · · · · · · ·: 17· and H2GO BRUNSWICK REGIONAL WATER: 18· & SEWER,· · · · · · · · · · · · ·: 19· Cross-Claim Defendant.· · · · · ·: 20· ------x 21· INTERLOCAL RISK FINANCING FUND· ·: 22· OF NORTH CAROLINA,· · · · · · · ·: 23· Intervenor.· · · · · · · · · · · : 24· ------x 25· VIDEOTAPED DEPOSITION OF STEVE HOSMER, February 1, 2019. ·1· APPEARANCES: ·2· · · · · For Plaintiff, Town of Leland: ·3· · · · · JOSEPH S. DOWDY, Esq. (VIA SPEAKERPHONE) ·4· · · · · Kilpatrick Townsend ·5· · · · · 4208 Six Forks Road ·6· · · · · Suite 1400 ·7· · · · · Raleigh, North Carolina· 27609 ·8· · · · · ([email protected]) ·9 10· · · · · For Plaintiff, H2G0: 11· · · · · BRIAN E. EDES, Esq. 12· · · · · CROSSLEY, MCINTOSH, COLLIER, HANLEY & EDES 13· · · · · 5002 Randall Parkway 14· · · · · Wilmington, North Carolina· 28403 15· · · · · ([email protected]) 16· and 17· · · · · STEPHEN E. COBLE, Esq. 18· · · · · Coble Law Firm 19· · · · · 3333-E Wrightsville Avenue 20· · · · · Wilmington, North Carolina· 28403 21 22 23 24 25 ·1· · · · · For Town of Belville: ·2· · · · · JAMES E. ELDRIDGE, Esq. ·3· · · · · Eldridge Law Firm ·4· · · · · 201 N. Front Street ·5· · · · · Suite 906 ·6· · · · · Wilmington, North Carolina· 28402 ·7· · · · · ([email protected]) ·8· and ·9· · · · · CHARLES S. BALDWIN, IV, Esq. 10· · · · · Brooks, Pierce 11· · · · · 115 North 3rd Street 12· · · · · Suite 301 13· · · · · Wilmington, North Carolina· 28401 14· · · · · ([email protected]) 15 16 17· Also present: Glynde M. Jones, Notary Public, Court Reporter 18· · · · · · · · Olivia Bergman, Videographer 19 20 21 22 23 24 25 ·1· sir – Athina Williams, who is the Town Administrator and the ·2· Town Clerk for the Town of Belville? ·3· · · · · A· · · ·I did not meet her at that first meeting where Joe ·4· Breault was the key person from the town that I met. I believe ·5· somebody else was on the switchboard that day or on the - you ·6· know, on the desk, front desk on that day. I did meet her ·7· about a month ago - ·8· · · · · Q· · · ·Tell me under what - ·9· · · · · A· · · ·- when I was there to discuss what we as the – the 10· Clean Water Team is changing its direction, and we are moving 11· on to new strategies, having found the strategies of the past 12· year singularly unproductive for us and for what we are 13· looking for, so we are moving on to new strategies and we are 14· – because, as I stated earlier, the Town of Belville and the 15· citizens of Compass Pointe have similar goals. We attempt to 16· keep Mayor Allen apprised of what we are doing. 17· · · · · Q· · · ·When you first met Ms. Williams, what – like were 18· you there to meet with her, or was - 19· · · · · A· · · ·No, no. 20· · · · · Q· · · ·- it happenstance? 21· · · · · A· · · ·I've never been there to meet with her. 22· · · · · Q· · · ·Okay. 23· · · · · A· · · ·It was a oh, and, by the way, this is Athina 24· Williams, I don't think you've met. Thank you very much. Hi, 25· Athina. Hi, I'm Steve, you know, had pleasantries and that was ·1· Coble said that nobody had any time to review it in the entire ·2· three weeks or four weeks since the previous meeting, and ·3· besides which, attorney/client privilege prevented them from – ·4· you were absent that meeting. Attorney/client privilege ·5· prevented them from discussing it in open session. ·6· · · · · · · · · And so it was – once again, the tabled status of ·7· it was reinstated by Commissioner Gerken. You think I'm ·8· thrilled about that? No, I'm sorry. I can't ask you any ·9· question. I am not thrilled about that, and I feel it was 10· disrespectful, Mr. Coble. I feel it was disrespectful to the 11· citizens of the area and particularly the customers of H2GO to 12· not even take a few minutes to consider it and to have a more 13· complete answer. 14· · · · · · · · · Thank you. That's all I need to say on that. 15· · · · · Q· · · ·Mr. Hosmer, as you sit here today, coming up on 16· the February round of meetings, - 17· · · · · A· · · ·Uh-huh. 18· · · · · Q· · · ·- you still don't know how the terms of this 19· settlement agreement will be received by the Town of Belville, 20· is that correct? 21· · · · · A· · · ·That's correct, I don't. 22· · · · · Q· · · ·And - 23· · · · · A· · · ·I'm relying on a previous conversation with Mayor 24· Allen who said that if he could be assured that the – that 25· H2GO would complete the project and – and start pumping ·1· aquifer sourced water that he would return the assets to the – ·2· to H2GO. I'm relying on that single statement. I have not ·3· discussed it with anybody since then. ·4· · · · · · · · · It's like it's – I don't deal with this. I have ·5· other things to do. - I don't deal with this unless – the next ·6· time I'll deal with this is when we go to the next meeting in ·7· February and we wonder if Mr. Coble is going to give us the ·8· same story about not having time to discuss it or it being ·9· attorney/client privilege or whatever. 10· · · · · Q· · · ·Is it your understanding that if H2GO were to 11· approve the terms in Exhibit 3 or something similar, that 12· those terms would still have to be approved by two other 13· governmental entities? 14· · · · · A· · · ·Absolutely. 15· · · · · Q· · · ·And you don't know how either one of those would 16· receive - 17· · · · · A· · · ·Absolutely. I do not have any idea how Leland 18· would react. The Town of Leland, I'm sorry. I have no idea how 19· the Town of Leland would react whatsoever. I have had no 20· conversation with anybody in the Town of Leland as to how they 21· would react. I have my suspicions, but that's just guesswork, 22· and so – really doesn't matter. 23· · · · · Q· · · ·Have you had any discussions with anyone about the 24· mediation that was conducted in this case? 25· · · · · A· · · ·I already said that I'd had discussions with the ·1· that. ·2· · · · · Q· · · ·Okay. ·3· · · · · A· · · ·Would you like me to do that? ·4· · · · · Q· · · ·Well, let's get through the - ·5· · · · · A· · · ·Okay. ·6· · · · · Q· · · ·- questions. I don't – my goal here today is not ·7· to give you homework. It's to try to wrap it all up today - ·8· · · · · A· · · ·Terrific. I'm all for that. ·9· · · · · Q· · · ·And before you remove the Post-it, if you would 10· please write Letter A on that Post-it, and then we'll do the – 11· follow the Post-its by letters - 12· · · · · A· · · ·Great. 13· · · · · Q· · · ·- numbers. 14· · · · · A· · · ·Okay. 15· · · · · Q· · · ·Okay. What is a public comment history book 2018? 16· · · · · A· · · ·Yes, sir. You – the DVD that I gave you has that 17· book on it. It is a compilation of all of our public comments, 18· starting with November, 2017 as a Clean Water Team and going 19· through December of 2018. It includes a table of contents and 20· an index on the back, and of course there's a pdf - 21· · · · · Q· · · ·Okay. Is – are those public comments provided by 22· you to the clerk of H2GO? 23· · · · · A· · · ·We provide those public comments to the clerk of 24· H2GO in electronic format. However, we have some readers who 25· don't always follow the script - and so while they accept with ·1· appreciation the electronic file, they nevertheless have to ·2· listen to the actual tape and make corrections to match what ·3· people actually say. ·4· · · · · Q· · · ·And when you said not follow the script, are you ·5· referring to what the speakers actually say when taking the ·6· microphone at public meetings? ·7· · · · · A· · · ·I am. And I should tell you that while we have ·8· people who write these presentations, we have other people ·9· that read the presentations. Some people do both. 10· · · · · Q· · · ·Are some of those people listed at the bottom of 11· Tab A? 12· · · · · A· · · ·Yes, they are. 13· · · · · Q· · · ·If you would, from Tab A help me understand what, 14· if anything, is being forwarded by this e-mail. How – how big 15· is this document is another way to rephrase that. 16· · · · · A· · · ·The document itself is about 100 pages. 17· · · · · Q· · · ·Okay. 18· · · · · A· · · ·It contains over 30,000 words of – of public 19· comments. 20· · · · · Q· · · ·Okay. The materials at the bottom of Tab A where 21· it says H2GO presentations, January, 2019, readers, - 22· · · · · A· · · ·Yes. 23· · · · · Q· · · ·- were these materials for the January, 2019 H2GO 24· meeting? 25· · · · · A· · · ·Were they – were those materials what, now? ·1· · · · · · · · · · · · · · ·CERTIFICATE ·2 ·3· · · · · · · · · · · · · · · ·I, Glynde M. Jones, a Notary Public in ·4· and for the State of North Carolina, do hereby certify that ·5· there came before me the person hereinbefore named, who was by ·6· me duly sworn to testify to the truth and nothing but the ·7· truth of the witness's knowledge touching and concerning the ·8· matters in controversy in the cause; that the witness was ·9· thereupon examined under oath, and the examination was reduced 10· to typewriting under my direction; and the deposition is a 11· true record of the testimony given by the witness. 12· · · · · · · · · · · · · · · I further certify that I am neither 13· attorney or counsel for, nor related to or employed by, any 14· attorney or counsel employed by the parties hereto or 15· financially interested in the action. 16· · · · · · · · · IN WITNESS WHEREOF, I have hereto set my hand and 17· seal. 18· · · · · · · · · · · · · · · · · · ·______19· · · · · · · · · · · · · · · · · · ·GLYNDE M. JONES, NOTARY PUBLIC 20· · · · · · · · · · · · · · · · · · ·Notary Public Number: 20022120063 21 22 23 24 25 EXHIBIT “H” EXHIBIT “I” P. 0.Box 2460 Wilmington, NC 28403 FOUNDED 1897 Direct Dial 910-444-2020 Direct Fax 910-444-2001 September 11, 2018 Honorable Charles H. Henry Senior Resident Superior Court Judge Judicial District 4B North Carolina Judicial Branch Office: 910-478-3734 Email: [email protected] Dear Judge Henry: I write in furtherance of our discussion in chambers on August 31 among you and counsel for the parties regarding representation of the Outgoing Majority with respect to the Open Meetings Law claim asserted by Leland. Upon further consideration, it appears not so much a conflict issue but that the Outgoing Majority lacks sufficient representation of their interests. I note that Leland seeks an award of attorneys' fees on its claim for violations of the Open Meetings Law. While Belville does not think an award of attorneys' fees is appropriate in this case, N.C. Gen. Stat. § 143-318.16B provides that the Court has the discretion to tax attorneys' fees either against H2GO or individually against members of the Outgoing Majority if it finds against H2GO on the Open Meetings Law claim. Belville therefore does not think that the members of the Outgoing Majority—two former members of the H2GO Board and one current member of the H2GO Board—can be adequately represented by H2GO's counsel in this litigation. While it is true that H2GO is a defendant on the Open Meetings Law claim, and that HZGO's counsel has represented that H2GO will vigorously defend that claim, the allegations of the First Amended Complaint, which was prepared and/or approved by both HZGO's counsel and H2GO's current board, accuses the Outgoing Majority of unlawful conduct. For example, the current board, by and through H2GO's counsel, accuses the Outgoing Majority of, among other things: (1) passing a resolution "in defiance of the LGC, the voters, and the law" (Compl. D 65); (2) taking action that is "unlawful and manifestly unfair to H2GO's voters and customers" (Compl. D 94); (3) joining in action that is "oppressive, the result of a manifest abuse of discretion, and/or in wanton disregard of the public good" (Compl. H 121); (4) authorizing a "sham transaction" (Compl. H 121(b)); and entering into a transaction "in a hasty manner without due consideration of the important facts and circumstances relevant to a legitimate transfer" (Compl. H 121(g)). 4846-4647-0514.vl Honorable Charles H. Henry September 11, 2018 Page 2 H2GO's counsel has stated that he intends to represent and prepare the Outgoing Majority for depositions in this case, but it is difficult to understand how such an arrangement could sufficiently represent the interests of the Outgoing Majority where that same counsel and H2GO's current board have a taken a position in this litigation that is diametrically opposed to the actions taken by the Outgoing Majority and accuses them of unlawful conduct. That problem is evident given, as I mentioned in chambers, that H2GO's current board has formed a "litigation committee" to discuss this case with H2GO's counsel and make decisions in this case that excludes sitting Commissioner Jenkins, who was one of the members of the Outgoing Majority who voted in favor of the transactions between H2GO and Belville. We respectfully urge the court to require independent counsel for the Outgoing Majority to the extent they will be involved in this action, whether as witnesses or otherwise. Doing so will increase the likelihood of a fair presentation of the evidence and due representation of current and former elected officials of H2GO as to all claims. This case presents unique factual and procedural issues for the Court, the parties, and their counsel. Belville invites counsel for Leland and H2GO to share any additional thoughts they may have regarding this issue. I appreciate your efforts and the efforts of counsel in grappling with these issues. Sincerely yours, ^"~ '^ CZ-.^- LA- ^ \._----"" Charles S. Baldwin, IV 4846-4647-0514.vl EXHIBIT “J” From: Gail G. Warren Dear Judge Henry: I hope this finds you well. In addition to any items the other parties wish to discuss, the Town of Belville would like to discuss: 1. Case scheduling. Belville’s revised proposed Schedule is attached. It would involve completion of discovery by January 18, 2019, mediation deadline of February 15, 2019 and trial May 13, 2019; 2. ESI Order; 3. Deposition of Jim Eldridge; and 4. Mediation. I look forward to seeing everyone on Friday. Best regards, Charles Gail G. Warren t: 910.444.2010 f: 336.232.9061 115 N. 3rd Street, Suite 301 Wilmington, NC 28401 P.O. Box 2460 (28402) Confidentiality Notice: 1 The information contained in this e-mail transmittal is privileged and confidential intended for the addressee only. If you are neither the intended recipient nor the employee or agent responsible for delivering this e-mail to the intended recipient, any disclosure of this information in any way or taking of any action in reliance on this information is strictly prohibited. If you have received this e- mail in error, please notify the person transmitting the information immediately. This email has been scanned for viruses and malware by Mimecast Ltd. 2 Original Proposed Schedule Event Date Proposed Trial Date* Monday, March 11, 2019 Deadline for Parties to Hold Pre-Trial Conference (N.C. Super. Ct. & Dist. Ct. R. 7)* Monday, March 04, 2019 Defendant(s) to serve its/their portion of the pretrial order* Friday, February 22, 2019 Plaintiff(s) to serve its/their portion of the pretrial order* Friday, February 15, 2019 Dispositive Motion Hearing Deadline Friday, February 01, 2019 Summary Judgment Replies** Friday, January 25, 2019 Summary Judgment Responses Filed** Friday, January 18, 2019 Summary Judgment Motions Filed** Friday, December 14, 2018 Deadline for Completion of All Discovery Friday, November 30, 2018 Expert Rebuttal Designations Friday, November 09, 2018 Expert Response Designations Friday, October 12, 2018 Expert Designations by Party with Burden of Proof on Any issue Friday, September 14, 2018 Revised Proposed Schedule Event Date Proposed Trial Date Monday, May 13, 2019 Deadline for Parties to Hold Pre-Trial Conference (N.C. Super. Ct. & Dist. Ct. R. 7) Monday, May 6, 2019 Defendant(s) to serve its/their portion of the pretrial order* Friday, May 3, 2019 Plaintiff(s) to serve its/their portion of the pretrial order Friday, April 26, 2019 Dispositive Motion Hearing Deadline Friday, April 12, 2019 Summary Judgment Replies Friday, April 5, 2019 Summary Judgment Responses Filed Friday, March 29, 2019 Summary Judgment Motions Filed Friday, March 1, 2019 Deadline for Completion of Mediation Friday, February 15, 2019 Deadline for Completion of All Discovery Friday, January 18, 2019 Expert Rebuttal Designations Friday, December 21, 2018 Expert Response Designations Friday, November 30, 2018 Expert Designations by Party with Burden of Proof on Any issue Friday, October 26, 2018 EXHIBIT “K” From: James E. Eldridge 08/16/2018 Judge Henry: Respectfully, I believe the parties’ tentative schedule, as set forth below, needs to be pushed back for a reasonable amount of time to provide for what heretofore has not been addressed; the mandatory mediation of this superior court civil action. James E. Eldridge (Sent from my iPhone) On Aug 16, 2018, at 2:48 PM, Dowdy, Joe Dear Judge Henry and Ms. Emmons: Thank you for your message. We appreciate Your Honor’s careful consideration of the submissions relative to the Rule 12 motion. Counsel for Leland appreciates the Court’s willingness to hold another conference, and we are amenable to (and prefer) an informal conference. We will work to accommodate the Court’s schedule and desired location. I return from “vacation” with my family on August 26. I could attend a conference with the court anytime thereafter except August 29, September 6 -7, and September 11 or 14. If those conflicts present a problem for the Court, Mr. Roessler or Mr. Harris can attend. Leland respectfully submits the following issues to address with the Court: First, we welcome the opportunity to address the Court’s thoughts regarding the ramifications of § 143- 318.16A. Second, we would like to address the schedule with the Court. My notes reflect that, when we last discussed scheduling with our counterparts, Belville proposed modifying Leland and H2GO’s suggested schedule as follows: Event Date Proposed Trial Date* Monday, March 11, 2019 Deadline for Parties to Hold Pre-Trial Conference (N.C. Super. Ct. & Dist. Ct. R. 7)* Monday, March 04, 2019 1 Defendant(s) to serve its/their portion of the pretrial order* Friday, February 22, 2019 Plaintiff(s) to serve its/their portion of the pretrial order* Friday, February 15, 2019 Dispositive Motion Hearing Deadline Friday, February 01, 2019 Summary Judgment Replies** Friday, January 25, 2019 Summary Judgment Responses Filed** Friday, January 18, 2019 Summary Judgment Motions Filed** Friday, December 14, 2018 Deadline for Completion of All Discovery Friday, November 30, 2018 Expert Rebuttal Designations Friday, November 09, 2018 Expert Response Designations Friday, October 12, 2018 Expert Designations by Party with Burden of Proof on Any issue Friday, September 14, 2018 If memory serves, the trial and summary judgment dates reflected the Court’s suggestions of possible good times. Leland accepts Belville’s edits and is ready, willing, and able to proceed with these deadlines. Third, if Belville intends to seek anything more than a de minimis extension to answer to the Amended Complaint, we would want to address that request with the Court. We calculate the deadline as 20 days from the issuance of the ruling, or September 4. Fourth, Leland intends to address with Belville certain items on its privilege log. To the extent issues remain, we may need to request an in camera review and would want the opportunity to address scheduling that with the Court. Fifth, if there are any issues with discovery at the time of the conference, we would like the opportunity to address those with Your Honor. Thank you again. Please do not hesitate to let me know if you have questions. Warm regards, Joe Joe Dowdy Kilpatrick Townsend & Stockton LLP Suite 1400 | 4208 Six Forks Road | Raleigh, NC 27609 office 919 420 1718 | fax 919 510 6120 [email protected] | My Profile | vCard From: Emmons, Caitlin R. 2 Charles S. Baldwin, IV Counselors, Please see the message below from Judge Henry. Counselors: Please find attached the order which I will mail to CSC of Brunswick County for filing. I apologize for the delay in getting this work completed. With trial sessions to hold, I found difficulty finding blocks of time to work on this. I had to resort to evenings and weekends. I’ve allowed the motions to dismiss as to the 7th and 11th claims for relief but I have denied the motion to dismiss as to the remaining claims. I think we need to conference this case again to discuss our schedule and any other matters that need to be considered. I would prefer doing this in Brunswick or New Hanover Counties informally, but if any party wants our discussions to be on the record then I will arrange it. I am open to any suggestions as to topics. I need also to discuss with you the Open Meetings issue and the ramifications of § 143-318.16A. I will ask that Leland respond by email first, followed by H2GO, Belville and Interlocal Risk. Thank you for your cooperation. Charles H. Henry Senior Resident Superior Court Judge Judicial District 4B North Carolina Judicial Branch Office: 910-478-3734 Email: [email protected] Justice for all www.NCcourts.org Caitlin Emmons North Carolina Judicial Branch O 910-478-3734 F 910-478-3617 E-mail correspondence to and from this address may be subject to the North Carolina public records laws and if so, may be disclosed. Confidentiality Notice: This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. Section 2510, and its disclosure is strictly limited to the recipient intended by the sender of this message. This transmission, and any attachments, may contain confidential attorney-client privileged information and attorney work product. If you are not the intended recipient, any disclosure, copying, distribution or use of any of the information contained in or attached to this transmission is STRICTLY PROHIBITED. Please contact us immediately by return e-mail or at 404 815 6500, and destroy the original transmission and its attachments without reading or saving in any manner. 3 ***DISCLAIMER*** Per Treasury Department Circular 230: Any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. 4 EXHIBIT “L” NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE BRUNSWICK COUNTY SUPERIOR COURT DIVISION FILE NO.: 17-CVS-2243 TOWN OF LELAND, NORTH CAROLINA, ) and H2GO BRUNSWICK REGIONAL ) WATER & SEWER, ) ) Plaintiffs, ) ) vs. ) ) TOWN OF BELVILLE, NORTH CAROLINA ) ) Defendant. ) ) ) TOWN OF LELAND’S AND H2GO TOWN OF LELAND, NORTH CAROLINA ) BRUNSWICK REGIONAL ) WATER & SEWER’S Plaintiff and Cross-Claim ) RESPONSE IN OPPOSITION TO Plaintiff ) TOWN OF BELVILLE’S MOTION ) FOR STAY PENDING APPEAL vs. ) AND BRIEF IN SUPPORT OF ) THEIR MOTION FOR ENTRY OF TOWN OF BELVILLE, NORTH CAROLINA ) PERMANENT INJUNCTION OR. ) IN THE ALTERNATIVE. MOTION Defendant ) FOR AN INJUNCTION ) PENDING APPEAL and. ) ) H2GO BRUNSWICK REGIONAL WATER ) & SEWER, ) ) Cross-Claim Defendant. ) ) ) INTERLOCAL RISK FINANCING FUND ) OF NORTH CAROLINA, ) ) Intervenor. ) Plaintiffs Town of Leland, North Carolina (“Leland”) and H2GO Brunswiek Regional Water & Sewer (the “Sanitary District”), by and through the undersigned, hereby respectfully submit this Response in Opposition to Belville’s Motion for Stay Pending Appeal and Brief in Support of Leland’s Motion for Entry of Permanent Injunction or, in the alternative. Motion for an Injunction Pending Appeal. INTRODUCTION This matter is before the Court following a judicial determination that Belville is wrongfully in possession of the Sanitary District’s property, thereby preventing the meaningful exercise of the Sanitary District’s powers. Belville has filed a plainly interlocutory appeal and a motion for stay pending appeal, taking both actions to try to hold onto and maintain its unlawful possession and its interference with the Sanitary District’s governance. But every wrongdoer wants to keep the things it has taken and the control it has obtained, even after justice catches up with it. Is that selfish interest to be overprotected at the expense of the voters’ interests in their officials possessing and presiding over government property? Belville insists that the answer is “yes” because there is a preliminary injunction in place, which conveniently maintains Belville’s hold on the property, and Belville now thinks that the Preliminary Injunction is an exceedingly impressive document. The Preliminary Injunction was a necessary, minimum protection to prevent Belville from completely taking over the Sanitary District while the Court determined the legality of the Belville transaction. But there are problems with the situation that the Preliminary Injunction creates; Belville has exploited those problems, violating the Preliminary Injunction at times; and the Preliminary Injunction is neither a necessary, nor appropriate remedy, to protect against the speculative harms Belville (incorrectly) worries may occur. With benefit of the Court’s ruling that Belville has no right to possess the property, it makes no sense to leave the Preliminary Injunction in place. The proper course of action is for the Court to enter a permanent mandatory injunction, as the Court indicated it would. If the Court is so inclined, it possesses the authority under Rule 62(c) to include language in the permanent injunction that, during the pendency of any direct appeals, the Sanitary District shall not allow waste or destruction of the property and must obtain Court approval of any transfers of the property that do not occur in the ordinary course. The Court may also certify its final injunction order as immediately appealable. Then, any desired appeals can go forward without the threat of certain dismissal; the interests of the parties will be adequately protected; and there will be less waste of time and (public) money. 2 BACKGROUND On April 22, 2019, this Court granted summary judgment in favor of Leland and the Sanitary District and against Belville on the First, Second, and Third causes of action. The Court provisionally left the Preliminary Injunction in place and ruled that it would enter a permanent mandatory injunction requiring and facilitating the return of the District’s assets. Though the order granting summary judgment was interlocutory, Belville filed a Notice of Appeal on April 30, 2019. As Belville has acknowledged, the purpose of this appeal is to prevent the entry of the permanent injunction. Indeed, on May 13, 2019, Belville moved to stay any further proceedings pending its interlocutory appeal, in which motion Belville specifically asks this Court not to enter that injunction. ARGUMENT I. This Court’s April 22, 2019 Summary Judgment Order Does Not Finally Adjudicate The First Three Causes Of Action And Therefore Is Not Appealable As A Final Judgment. Rule 54(b) of the North Carolina Rules of Civil Procedure provides that, as a general rule, only a final judgment - ont that adjudicates all claims as to all parties - is appealable: [A]ny order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties and shall not then be subject to review either by appeal or otherwise except as expressly provided by these rules or other statutes. Similarly, in the absence of entry of such a final judgment, any order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties The Court’s April 22, 2019 Order (the “April 22 Order”) is not a final judgment because it does not adjudicate all claims as to all parties. At a minimum, Leland’s Open Meetings Law claim remains unadjudicated. By Consent Order, it is stayed. That stay arose from discussions following Belville’s spurious contention that the Sanitary District was not entitled to its choice of counsel to defend the claim and related concerns by Leland’s counsel that Belville would use this contention to delay and hamper a decision on the remaining claims. In its April 22 Order, this Court confirmed that the Open 3 Meetings Law claim remains stayed. No order or judgment in the case could be a fully final judgment so long as the Open Meetings Law claim remains unresolved. The April 22 Order also leaves open issues regarding the rights and liabilities of the parties. The Sanitary District’s assets have not yet been ordered returned to it. Under a separate provision of Rule 54(b), Superior Courts possess the authority to certify a partialfinal judgment as immediately appealable: When more than one claim for relief is presented in an action, whether as a claim, counterclaim, crossclaim, or third-party claim, or when multiple parties are involved, the court may enter a final judgment as to one or more but fewer than all of the claims or parties only if there is no just reason for delay and it is so determined in the judgment. Such judgment shall then be subject to review by appeal or as otherwise provided by these rules or other statutes. Notably, the language of this rule provides that certification is available as to a “final judgmenf’ as to fewer than all of the claims or parties. Under Rule 54(c), a final judgment, whether partial final or fully final, must “grant the relief to which the party in whose favor it is rendered is entitled.” This Court’s April 22 Order is not a final judgment or a partial final judgment because it does not yet grant Leland and the Sanitary District the relief to which they are entitled. In the First Amended Complaint for Declaratory and Injunctive Relief, Leland and the Sanitary District specifically requested this Court enter a permanent mandatory injunction requiring Belville to return the property it unlawfully obtained from the Sanitary District. In its April 22 Order, this Court found that the challenged transfer from the Sanitary District to Belville violated the law in that the transfer impaired the Sanitary District as a body politic and corporate, stripped the Sanitary District of essential governmental discretionary functions, and constituted a manifest abuse of discretion. The April 22 Order states at Decree 3: A permanent mandatory injunction shall be entered by the court consistent with and in support of the rulings of the court which will order that the public records state that H2GO is the lawful owner of all assets and debts described in the specialty warranty deed and the assignment and bill of sale. 4 The Court found that Leland and the Sanitary Distriet are entitled to this relief, but it has not yet granted this relief. Thus, the April 22, 2019 Order is not a partial final order and cannot yet be certified.^ Accordingly, Belville’s appeal is premature. To appeal, Belville must await entry of a permanent mandatory injunction and, if the court is inclined to grant it, certification of the permanent mandatory injunction as a partial final judgment. See Branch Banking & Tr. Co. v. Peacock Farm, Inc., 241 N.C. App. 213, 219, 772 S.E.2d 495, 500 (holding that a trial court may not “retroactive[ly] attempt to certify a prior order for immediate appeal” and that the certification must be “contained in the body of the judgment itself from which appeal is being sought”), aff’dper curiam, 368 N.C. 478, 780 S.E.2d 553 (2015). II. The April 22 Order Is A Non-Appealable Interlocutory Order, Such That Belville’s April 30, 2019 Appeal Is Impermissible And Has No Effect. An interlocutory order “is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy.” Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950). An interlocutory order is not appealable unless it affects a substantial right of the appellant’s “and will work an injury to him if not corrected before an appeal from the final judgment,” id, or unless an appeal is expressly authorized by statute, see N.C. Gen. Stat. § 7A- 27. Premature interlocutory appeals must be dismissed. Veazey, 231 N.C. at 362, 57 S.E.2d at 382. In Veazey, our Supreme Court noted the importance of avoiding premature appeals in language that has been repeatedly cited as a basis for dismissing appeals in many decisions since: Although the law’s delay has been a chronic lament among men for centuries, the law itself does not will that justice should be lame. In truth, its consciousness that justice delayed is justice denied arose before this guaranty of Magna Carta was exacted from King John at Runnimede: ‘To no one will we deny justice, to no one will we delay it.‘ The awareness of the law in this respect ^ And even assuming, arguendo, that it could be, the Order was not certified and Belville did not request certification before appealing. 5 finds present day expression in the declaration of our organic law that right and justice shall be ‘administered without sale, denial, or delay. ‘ N.C.Const. Art. I, Sec. 35. There is no more effective way to procrastinate the administration of justice than that of bringing cases to an appellate court piecemeal through the medium of successive appeals from intermediate orders. The rules regulating appeals from the Superior Court to the Supreme Court are designed to forestall the useless delay inseparable from unlimited fragmentary appeals, and to enable courts to perform their real function, i.e., to administer ‘right and justice * * * without sale, denial, or delay.’ N.C. Const. Art. I, Sec. 35 [now, as modified, at N.C. Const. Art. I, Sec. 18]. This being true, a litigant cannot deprive the Superior Court of jurisdiction to try and determine a case on its merits by taking an appeal to the Supreme Court from a nonappealable interlocutory order of the Superior Court. A contrary decision would necessarily require an acceptance of the paradoxical paralogism that a party to an action can paralyze the administration of justice in the Superior Court by the simple expedient of doing what the law does not allow him to do, i. e., taking an appeal from an order which is not appealable. 231 N.C. at 363-64, 57 S.E.2d at 382-83. Belville finds itself in the teeth of the Veazey analysis. It is trying to do precisely what the decision does not allow: prevent the Superior Court from acting by taking a premature appeal. Specifically, Belville seeks to avoid the finality of the relief justice requires, a permanent mandatory injunction, by taking a premature appeal of an interlocutory order. It cannot do so. Belville incorrectly argues that the April 22 Order is immediately appealable under N.C. Gen. Stat. § 7A-27(b) because it supposedly involves a “substantial right” belonging to Belville, or “[i]n effect determines the action and prevents a judgment from which an appeal might be taken,” or perhaps “discontinues the action.” These arguments lack merit for several reasons, including that: a. Belville has no substantial right to avoid entry of an injunction merely because Belville would like to appeal. Quite the contrary, N.C. R. Civ. P. 62(c) specifically provides for an injunction pending appeal. The argument that one has a supposedly “substantial right” to avoid an injunction because of an appeal would be 6 inconsistent with Rule of Civil Proeedure 62(c), which expressly permits the Court to enter injunetions pending appeal to protect the interests of the parties. b. Contrary to Belville’s arguments, the April 22 Order does not divest Belville of any property. It speeifieally leaves the Preliminary Injunetion in plaee pending entry of a final injunetion. The earliest order from whieh Belville eould possibly appeal would be the permanent injunetion order. c. Even a permanent injunetion order will not divest Belville of any property to which it is entitled or property that is essential to Belville’s exercise of local government funetions. The Superior Court has speeifieally found that Belville is wrongfully in possession of the Sanitary District’s property; Belville will not be deprived of any property that was in Belville’s possession prior to the illegal transfer; and Belville will not lose possession of any property that it ereated or eontributed to the ereation of d. Belville speeulates that there will be waste or destruction of assets. Not only is this untrue, but the proper remedy for this eonjeetural “harm” is the entry of a Rule 62(c) injunctive relief pending a proper appeal from an appealable order. The proper remedy is not a premature appeal. e. The April 22 Order does not prevent a judgment from whieh appeal may be taken. Belville would still have the right of appeal from a final order and would be entitled to plead its ease for a stay in this Court and in the Appellate Division (whieh stays should be denied). f The April 22 Order does not diseontinue the aetion. It leaves issues to be deeided, ineluding entry of the permanent mandatory injunetion and adjudieation of the Open Meetings Law elaim. g- At present, the relief granted in the April 22 Order is the eontinuance of a Preliminary Injunetion, from whieh Belville never sought an appeal in the seventeen months in whieh it was in plaee prior to the April 22 Order. Nor could Belville: Orders granting a preliminary injunction are generally not immediately appealable, absent a 7 showing that the order affects a substantial right. Bessemer City Express, Inc. v. City of Kings Mountain, 155 N.C. App. 637, 640, 573 S.E.2d 712, 714 (2002); Little v. Stogner, 140 N.C. App.380, 383, 536 S.E.2d 334, 336 (2000); Dixon v. Dixon, 62 N.C. App. 744, 744, 303 S.E.2d 606, 607 (1983). If this Court declines to enter a final permanent mandatory injunction, and Belville’s present appeal proceeds, it is very likely that Belville’s appeal will be dismissed. Such a result would be wasteful of time and resources, which would be especially unfortunate given that the taxpayers are ultimately incurring the legal fees being spent on this case. Accordingly, both the law and the interests of justice dictate that a final permanent mandatory injunction be entered. III. There Is No Automatic Stay Pending Belville’s Appeal Of The April 22 Order. It is true that the taking of an appeal from an immediately appealable order gives rise to a stay of further proceedings in the trial court, at least as to those issues embraced within the order appealed from.^ N.C. Gen. Stat. § 1-294. But the law is clear that the taking of an appeal from a non-appealable order does not. See supra, § II. Indeed, “it is the duty of the Judge to proceed as if no such appeal had been taken.” Veazey, 231 N.C. at 367, 57 S.E.2d at 385. That is the rule applicable to Belville’s appeal from an interlocutory, non-appealable order: there is no stay in place, and the proceedings in this Court should continue. There can be no legitimate concern that this Court’s entry of a permanent mandatory injunction will be deemed null because of Belville’s appeal. The appellate courts will review this Court’s decision to proceed for harmless error. RPR & Assocs. v. Univ. ofN.C.-Chapel Hill, 153 N.C. App. 342, 570 S.E.2d 510 (2002). If the law is unclear and the Court reasonably determines that no substantial right exists, then the Court’s continued exercise of jurisdiction is valid in the greatly unlikely event that the Court of Appeals later determines that an immediate appeal was available to Belville. Id. Where, as here, the law is clear that no substantial right exists at this juncture, the Court can and should proceed. ^ Such a stay does not become effective until an appeal is perfected, which occurs when the record on appeal is filed and docketed in the Court of Appeals, and once a stay becomes effective, it relates back to the filing of the notice of appeal. Reidv. Town of Madison, 145 N.C. App. 146, 149, 550 S.E.2d 826, 828 (2001). 8 Specifically, to prevent the waste of further resources when the parties are eventually in the Appellate Division, this Court should make a finding that Belville’s appeal is interlocutory and does not affect a substantial right to ensure any needed compliance with the RPR case. And the Court should exercise the duty identified in Veazey and proceed to enter the permanent mandatory injunction. IV. Belville Is Not Entitled To A Discretionary Stay Pending Its Appeal Of The April 22 Order. As Belville notes in its Motion to Stay, the general rule is that there is no stay pending appeal of an order or judgment involving an injunction: Unless otherwise ordered by the court, an interlocutory or final judgment in an action for an injunction or in a receivership action shall not be stayed during the period after its entry and until an appeal is taken or during the pendency of an appeal. The provisions of [Rule 62] section (c) govern the suspending, , modifying, restoring, or granting of an injunction during the pendency of an appeal N. C. R. Civ. P. 62(a). Belville claims that we should buck the tide here for several unpersuasive reasons. First, Belville implies that a stay is somehow necessary because, under the Preliminary Injunction, customers have received water and sewer services without interruption. (Mot. To Stay, If 11.) But the lack of any interruption in service is attributable to the Preliminary Injunction keeping H2GO on life support and in existence so that it could continue to operate the water and sewer systems without any interruptions occasioned by the (at the time only allegedly) unlawful transfer. The threat to the provision of services was the unlawful transfer. It is illogical for Belville to claim that the Preliminary Injunction is the source of the continuing service to customers when, in fact, the Sanitary District is the source of that continuing service. Belville’s logic also fails in that Belville appears to be claiming that having the water and sewer operator dispossessed of the water and sewer assets somehow improves the delivery of services. Particularly when the (wrongful) holder of the assets and the operator are in discord, it is difficult to find the wisdom in Belville’s logic. 9 Second, Belville states that it wants a stay because it fears (speculatively) that the sitting Sanitary Board will waste away the Sanitary District’s assets. Belville’s hand-wringing about theoretical waste is unfounded. There is no evidence that Board would seek to destroy any asset, including the RO Plant, pending appeal. We cannot know what the Board would do because it has never been a fully-empowered Board.^ Particularly given the circumstances, it is inappropriate (and ironic) for Belville to assume that the Sanitary District would do something inappropriate. The crux of Belville’s argument is that a stay is necessary because the hostile takeover of the Sanitary District by Belville, which this Court has ruled was unlawful, was nonetheless justified, and the Sanitary District Board cannot be trusted with its own assets. Having argued for months in the Court that local government actions are generally presumed to be in good faith and that local governments should have broad discretion to act, Belville cannot seriously contend now that there should be a presumption that the current Board will do something bad. In any event, Belville’s speculative concerns do not warrant a stay. Rather, a permanent mandatory injunction should be entered, the property should be transferred back, and a Rule 62(c) injunction pending appeal can be entered which prevents waste. This superior alternative is further addressed below. Alternatively, if the Board sought to waste assets, Belville could seek to stop it with an injunction pending appeal under Rule 62(c). Both of Belville’s arguments miss an important point: staying the case and simply leaving the Preliminary Injunction in place would leave an entity, which was found by this Court to be a wrongdoer, in possession of the property that this Court found it illegally obtained. That is unheard of Belville cannot justify such an arrangement by arguing that it would feel better if it maintained control of the property - everyone who has ever taken something they shouldn’t ^ Indeed, Leland has just made a public proposal for the current Board to allow Leland to own and build the RO Plant now and to supply RO Plant water to the District’s customers, including Belville and its citizens at reasonable wholesale rates. As Belville has repeatedly insisted that clean water from an RO Plant was its real interest in fighting this litigation, it should want that proposal considered. In any event, the Current Board should be allowed to consider that proposal when it meets for its regularly scheduled meeting on May 18, 2019. Whether the Board accepts or rejects that proposal, Belville’s attempted power grab should not hold up the public’s business. 10 would prefer to keep it. But that is not how we do things, and Belville eites no authority for its eontention that such an unusual arrangement is appropriate here. Belville’s arguments also fail to appreciate that, although Belville has no substantial right to appeal at this time, the Sanitary District has a substantial right in the unhindered exercise of its governmental discretionary functions. See Cablevision of Winston-Salem, Inc. v. City of Winston-Salem, 3 N.C. App. 252, 257, 164 S.E.2d 737, 740 (1968) C‘[T]he order appealed from restrained the governing body of the City of Winston-Salem from exercising its legislative function in dealing with a matter of large public interest to the citizens of that City. A substantial right of appellant City has been adversely affected.”). This Court specifically determined that: [T]he cumulative effect of the resolutions, transfer and operating agreements was to enter into an agreement which eliminates the district’s governmental discretionary power and binds the commission’s successors permanently. This is contrary to public policy and an unlawful transfer of governmental functions by the H2GO Board of Commissioners to the Town of Belville. (April 22 Order at 37.) In light of this determination, a stay pending Belville’s premature appeal would be unwarranted, unsupported, unjust, and inconsistent with prevailing law. V. Given the Current Circumstances And Belville’s Misconduct, Belville Is Not Entitled To Have The Less Protective Preliminary Injunction Remain In Place. In December 2017, Belville sent four lawyers to strenuously oppose the entry of the Court’s Preliminary Injunction, and it advocated for entry of a watered-down order after Judge Lock ruled that he would enter an injunction. Now that it faces the loss of ill-gotten property and control, Belville describes the Preliminary Injunction with encomiums. The Preliminary Injunction was sufficient to keep the Sanitary District on life support while this Court determined whether it could be given away, but it no longer balances the equities of this case. A. The Preliminary Injunction No Longer Meets The Circumstances. Belville insists that the Preliminary Injunction is necessary to maintain the status quo. As Belville conceptualizes it, the status quo is not the current state of affairs, and it has no context; rather, for Belville the status quo is a procrustean force which binds us to the circumstances of the past and, apparently, in itself justifies failing to meet the circumstances of today. The 11 argument is that the Court should keep the Preliminary Injunction in place because the Preliminary Injunction is in place. But this circular logic provides no basis for declining to move forward when the circumstances have changed. When the Court entered the Preliminary Injunction, the following circumstances prevailed: a. Leland had alleged claims against Belville and the Sanitary District seeking to prevent or unwind the unlawful transfer from continuing to go forward in a hurried fashion. Between the filing of the motion for preliminary injunction and the preliminary injunction hearing, the new Sanitary District Board assumed power. b. Leland’s claims were, at the time, unproven, and Leland was seeking protection pending the litigation so that Belville did not continue with illegal activity that would effectively insulate the transaction from review while also imperiling the Sanitary District’s customers, like Leland. c. The new Sanitary District Board had just taken office on December 4, 2017, earlier than Belville anticipated (because it apparently was unfamiliar with N.C. Gen. Stat. § 130A-50(e)). Belville alleged, incorrectly, that the swearing in of the new Board was unlawful and that it should be held in contempt of court for passing resolutions seeking the return of the Sanitary District’s assets. d. Given that at least one prominent member of the Sanitary District’s staff had worked with Belville to secretly accomplish the unlawful transaction, there were practical questions about whether an immediate transfer back would be seamless and questions about how well the new Board would be able to work with a potentially hostile staff e. There was confusion and disorder following a bizarre transaction with no parallel in the history of local government transactions in this State. f There were questions about insurance of the assets, and Belville indicated that it had already taken steps to insure the assets. 12 g- There were concerns about whether there might be interruptions to the water and sewer services that the Sanitary District had been providing to its customers with the surprise transfer of assets, a new Board coming to power, and confusion about the status of the Sanitary District’s employees. h. There was no election in the future, and no concern that the wrongful possession of assets could be used by Belville to obtain a tactical advantage. After seventeen months of litigation, discovery regarding the illegal transaction, a full presentation of evidence, and a ruling by the Court, we find ourselves in very different circumstances now: a. Leland and the Sanitary District have been - and are - aligned with respect to the causes of action asserting the illegality of the transfer, which have now been proven. b. We are no longer proceeding on mere allegations. The Rule 2.1 Judge specially appointed by the Chief Justice of the North Carolina Supreme Court to hear this case has determined that the transfer is unlawful, ruling specifically that: • The transaction documents drafted by Belville’s counsel “clearly demonstrate[] the intent of the Town and the former majority of the District Board of Commissions to dismantle the sanitary district as a body politic and corporate and completely remove all significant power from the new District Board of Commissioners ....” (April 22 Order at 32.) • “[T]he cumulative effect of the resolutions, transfer and operating agreements was to enter into an agreement which eliminates the district’s governmental discretionary power and binds the commission’s successors permanently.” (April 22 Order at 37.) • Asa result of the unlawful transactions, “the H2GO board of commissioners will lose all ability to exercise its statutory authority under N.C. Gen. Stat. §130A-55.” (April 22 Order at 41.) • “All real property and personal property owned by H2GO including its infrastructure, facilities, structures, vehicles, equipment, supplies, and funds, used to operate the water and sewer system, with a total value in excess of $57 million would be conveyed by the district to the Town of Belville ... [including] approximately $16.5 million in capital improvement funds, debt service reserve funds, operating reserves, and customer deposits [and] H2GO’s debt associated with the sewer system of approximately $6 million . ...” (April 22 Order at 41.) 13 • A “public water distribution system and a public sanitary sewer collection system that served a population in excess of 25,000, with over 10,000 customer accounts, would be conveyed to the Town of Belville[.]” (April 22 Order at 41.) • “[M]ajor portions of the Town of Leland and those who reside in the unincorporated areas would be dependent on the Board of Commissioners of the Town of Belville for their economic planning and expansion requirements.” (April 22 Order at 41.) • “[0]f the approximately 17,800 registered voters in the district, 16,500 (approximately 11,200 of those voters reside in Leland) would be voting for sanitary district commissioners who no longer had the authority or ability to manage and operate their water distribution and public sanitary collection systems. That authority would fall into the exclusive hands of the town commissioners for the Town of Belville. Those living outside of that town cannot vote for those commissioners.” (April 22 Order at 42.) • There would be “a profound effect of the transfer of the systems and its governance on the ability of those who reside outside of Belville but within the sanitary district. They would be limited to voting for members of the sanitary district commission that does not have the authority or ability to address their concerns or consider requests for service or expansion of services. They would be forced to plead their needs and requests to the Town of Belville officials who are elected solely by Belville residents. It is not difficult to see the conflicts that could arise when competing interests for service and development of services, between those who live in Belville and those who do not, come before the Belville commission. (April 22 Order at 46.) • “[T]he commissioners of both governing boards of H2GO and Belville, acting in concert, failed to act in good faith, and their actions were so clearly unreasonable as to amount to an oppressive and manifest abuse of their discretion.” (April 22 Order at 53-54.) • “[I]t was unreasonable for Belville to acquire and operate these water and sewer public enterprises outside its corporate limits. Such an acquisition would be in violation of Article 16 of Section 160A of the General Statutes, and beyond its statutory authority.” (April 22 Order at 52.) c. The Current Board is firmly established now, and this Court has found that its members are properly in power following their election by the voters. d. Unless Belville intends to maintain its course of rampant lawlessness, there is no question that transferring the assets back should be seamless. e. After months of being under the Court’s supervision, and with the benefit of discovery and the presentation of evidence, we are now past the confusion and disorder caused by the unlawful transaction. 14 f There is no question that, with its cash assets returned, the Sanitary District can obtain insurance for its assets. Indeed, the insurer is an intervening party. Belville can be ordered to cooperate in this endeavor as part of a final injunction. g- The new Board has recovered from the initial discombobulation caused by Belville and the prior Board, with the only lingering effect being that the Sanitary District’s assets are still being held hostage. There is no confusion about the status of the Sanitary District’s employees, and there is no question that the Sanitary District can receive back its assets and provide seamless water and sewer services to its customers, as it has been doing for seventeen months. h. There is an election for Sanitary District Board commissioners in November 2019, and Belville’s appeal strategy appears to be premised, in part, on the belief that it delay while it tries to influence the vote (by incorrectly claiming that Board members are against clean water), flip the Board, and then work with the new Board to essentially render this Court’s work deciding the case a nullity. The very purpose of an injunction is to balance the equities. What is equitable when a claim is still unproven is far different from what is equitable when someone has been found by a court to be wrongfully in possession of property - especially when the wrongful possession is interfering with the property functioning of a government entity, which ultimately belongs to the people. Under the present circumstances, the Preliminary Injunction is no longer the appropriate remedy. A permanent mandatory injunction is. B. Given the Present Circumstances, the Preliminary Injunction Now Imposes Unfair Burdens Upon the Sanitary District. Belville fails to mention that the Preliminary Injunction imposes significant burdens upon the Sanitary District that are no longer necessary. Belville holds the District’s cash, such that every time the Sanitary District wishes to pay a bill, it has to submit the invoice to Belville and ask it to make payment. H2GO employees drive work-related vehicles that are owned and 15 insured by Belville. That is a clunky system that requires public employees to go through additional work to accomplish an objective that should be much easier. As will be shown at the hearing, there have been instances of Belville asserting its technical ownership interest as a basis for demanding answers from the Sanitary District when Belville incorrectly assumed that the Sanitary District was doing something amiss. In one instance, Belville sought to interrogate a third party directly based on misguided suspicion rather than collegially engaging in a full and frank discussion with the Sanitary District’s counsel. If the Preliminary Injunction is left in place, the Sanitary District likely will experience difficulty completing its annual audit. The property has to be accounted for somehow. Belville cannot legitimately claim to own the property now that there is an Order in place stating that it is not the rightful owner. But, in all likelihood, neither can the Sanitary District because it does not possess the assets. There is no need to indulge these burdens just so that Belville can keep something it wrongfully obtained. C. Belville Is Not Entitled to the Continued Benefit of the Preliminary Injunction Order because Belville has Engaged in Misconduct Regarding The Court’s Injunctions. The Court has entered two injunctions in this case thus far. The December 1, 2017 Temporary Restraining Order (“TRO”) provided: THE COURT HEREBY ORDERS that Defendants and their respective officers, agents, servants, employees, attorneys, employees, and those persons in active concert or participation with Defendants who receive actual notice of this Order are RESTRAINED AND ENJOINED during the pendency of this Order from taking any action in furtherance of the challenged Resolution and Agreements or Belville's acceptance of the transfer thereunder, including but not limited to executing any transfer documents, closing the transfer or any related transactions, implementing any course of conduct regarding the transfer, or otherwise acting in any manner that advances the challenged transfers pending the Court's entry of a preliminary injunction. The December 28, 2017 Preliminary Injunction Order provided, among other things, that: 16 Belville will retain title to and ownership of the real and personal property of the water and sewer system and its liabilities (the “Assets” and “Debts”), but shall not transfer, use, pay, pledge, encumber, or dispose of the Assets without the express approval of H2GO, through its current Board of Commissioners .... Belville has failed to adhere to the provisions of the Temporary Restraining Order and the Preliminary Injunction in a number of ways. For example, the record before this Court already demonstrates that on December 11, 2017, while the TRO was in place, Belville, through its Town Attorney, acted in furtherance of the transfer by taking issue with the Sanitary District’s Commissioners meeting at the Sanitary District’s headquarters and providing notice that they were trespassing on Belville property. As will be shown at the hearing, there are other instances of Belville asserting ownership of the property as a basis to threaten the Sanitary District. Belville further violated the Court’s prior injunctions by making improper use of an asset of the Sanitary District’s, namely the services that the Sanitary District contracted to receive from WaterPIO, a public relations company owned by Mike McGill. As Belville Town Attorney James Eldridge testified, “[Mike McGill’s] contract came over from the [Djistrict with the closing on 11/29,” and he confirmed, “after that, [McGill] worked for the [T]own of Belville.” (Eldridge Dep. 147:12-17.) Mr. McGill confirmed that his contract was an asset of the Sanitary District’s and that it was one of the assets that transferred, which he believed was brought to his attention on December 1, 2017. (McGill Dep. 39:5-7 & 77:3-8.) When asked how long Belville has been a client of WaterPIO, Mr. McGill explained: Well, it’s an interesting situation. My H2GO contract transferred over. I didn’t know it at the time, but it transferred over with the other assets when that took place. I operated under that agreement through the end of May [2018]. We [Belville and WaterPIO/Mike McGill] extended that agreement for one more month and then I received a new agreement with the town [of Belville], completely written by the town [of Belville] and agreed to by the town on - starting - July [2018]. (McGill Dep. 11:20 - 13:11.) There could be no mistake about the WaterPIO/McGill contract being a transferred asset because there was a media inquiry about the transfer of this contract, a 17 lengthy meeting involving Belville’s Town Attorney and at least one Belville Commissioner to discuss the subject, and “a vigorous back and forth about how [McGill] would do [his] work, who [he] would answer to, what would be conducted, how it would be conducted,” which lasted “a good set of time.” (McGill Dep. 80:7-14, 82:10-25 & 84:3-7.) Absent the transfer, McGill testified that he anticipated working for the new Board from November 28, 2017 through the end of his one-year contract, which was set to expire on May 23, 2018, and that he understood that the new Board might not be in favor of his particular pro-RO- Plant messaging. (McGill Dep. 78:4-9 & 79:4-18.) Indeed, he confirmed that his job is to be a spokesperson for his client, regardless of what they want him to say and that he was willing to work for the new Board, even if they wanted messaging that contradicted his prior messaging: Q: But you were willing to put out messaging that was against the RO plant? A: Absolutely. I perform on behalf of my clients. If my - whatever my direction is from my clients, that's what I do. I might provide counsel that says hey, look, maybe you shouldn't do this, maybe you should go in a different direction, but ultimately that's who I work for. (McGill Dep. 79:19-25.) Although the WaterPIO/McGill contract was a transferred asset and the Court had enjoined Belville from acting in furtherance of the transfer or using any assets that had been transferred, Belville used a transferred asset, Mr. McGill’s services, to work against the Current Board and to disseminate pro-transfer messaging and other media. McGill testified that he “worked through” Mayor Allen, Attorney James Eldridge and eventually the Brooks Pierce law firm. (McGill Dep. 85:3-8.) He confirmed that, during radio appearances and conversations with the media following the transfer, he has indicated that he formerly worked for the Sanitary District but was appearing on behalf of Belville. (McGill Dep. 150:1-17.) On or about December 5, 2017, while the TRO was in place, Belville used WaterPIO/McGill to act in furtherance of the transfer by having him issue a press release for Belville touting its decision to file a motion for contempt of court against the new Board’s 18 members because they met on December 4, 2017 and voted to declare the unlawful transfer null and void. (McGill Dep. 173:3-25 & Ex. 4 p. 41.) Ironically, Belville used the WaterPIO/McGill contract, in violation of the TRO, to accuse the Sanitary District’s new majority of violating the TRO by “implementing any course of conduct regarding the transfer” of assets from the Sanitary District to Belville. (McGill Dep. Ex. 4 p. 42.) The press release further stated Belville’s position that it was entitled to the Sanitary District’s assets. (McGill Dep. Ex. 4 pp. 41-42.) On or about December 6, 2017, while the TRO was pending, Belville used the WaterPIO/McGill contract by having McGill submit an op-ed piece to the Star News in support of the transfer from the Sanitary District to Belville. (McGill Dep. 175:1-15; Ex. 4 pp. 45 - 47 & Ex. 12.) Belville’s counsel apparently signed off on this opinion piece. (McGill Dep. 178:5-9 & Ex. 4 pp. 45 - 47.) On December 19, 2017, while the TRO was in place and after Judge Lock’s oral ruling concerning the Preliminary Injunction, Belville caused McGill to submit comments to the media in support of the transfer and for the purpose of rebutting comments made by the Sanitary District’s Chairman about potential confusion caused by the transfer. (McGill Dep. 181-82 & Ex. 4 p. 52.) On or about January 23, 2018, while the Preliminary Injunction was in place, Belville had WaterPIO/McGill prepare and present a slide of talking points supportive of the transfer for a presentation to citizens of a community within the Sanitary District. Further, Belville used WaterPIO/McGill to facilitate remarks being made by Belville’s Mayor. (McGill Dep. 90-91 & 192-93.) On or about March 9, 2018, while the Preliminary Injunction was in place, Belville used a Sanitary District asset, the WaterPIO/McGill contract, by having McGill speak in support of the transfer in a statement to the media following Judge Lock allowing the Sanitary District and Leland to be aligned as plaintiffs in this case. (McGill Dep. 226.) McGill repeated Belville’s tagline that the transaction “was a legal transfer properly handled under open meetings law and under North Carolina general statute.” (McGill Dep. Ex. 15 p. 2.) 19 Since the issuance of the Preliminary Injunction, Belville used a Sanitary District asset, the WaterPIO/McGill contract, by having McGill attend the Sanitary District’s Board meetings and convey Belville’s position. (McGill Dep. 191:17-92:2.) In McGill’s words, he “go[es] where [he] think[s] cameras might be.” (McGill Dep. 191:21.) It appears that McGill also served as a liaison between Belville and the two pro-Belville members of the Sanitary District Board. Indeed, Commissioner Rodney McCoy called McGill twice while he was sitting for his deposition in this case. (McGill Dep. 331:13-17.) There are other examples that Leland could highlight, but there is no need. The above- referenced examples demonstrate a disturbing, pervasive pattern of Belville violating this Court’s orders. Belville may try to misdirect the highlighting of its indefensible conduct by attempting to argue that Belville was entitled to express its opinions regarding the transfer. This argument, if attempted, would miss the point. Though Belville was free to speak to the media if it chose, it was prohibited from using the Sanitary District’s assets to achieve its goal, as it knew or should have known. Belville either needed to seek a modification of the Court’s orders or obtain and pay for its own public relations contractor to express its views. It is especially abhorrent that Belville used an asset of the Sanitary District to try to convince the public that the Sanitary District’s destruction should go undisturbed and to publicize Belville’s efforts to have three Sanitary District commissioners potentially jailed for contempt for doing what they felt was their duty (having a meeting and making a declaration with which this Court ultimately agreed - that the transfer was unlawful). Leland would have been - and would be - well within its rights to bring a motion for contempt based on the above-referenced violations of the Preliminary Injunction. It is not, however, the undersigned counsel’s practice to bring such motions unless they are absolutely necessary. Leland and the Sanitary District do ask, however, that the Court not reward Belville’s bad behavior by granting it continuing possession of the Sanitary District’s assets. If Belville was willing to thumb its nose at the Court’s orders when it believed it would win the case, it is simply unsafe to leave it in possession now that it has lost the case. 20 D. Leaving the Preliminary Injunction In Place Is Dangerous Because It Would Leave A Zealot In Wrongful Possession. We must keep in mind that the only reason this case exists is that Belville thought its objectives were worthy enough to do something illegal. It prioritized its objectives over honoring the results of an election, respecting the need for transparency in government, and upholding the law. It attempted to orchestrate the giveaway of a unit of local government to get what it wanted. Given Belville’s history, it would be naive to assume that Belville will not do something rash again, and it would be unsafe and imprudent to leave the property in Belville’s possession now that Belville has lost the case. As it has broken the law once, we must assume that it would be willing to do so again. The Preliminary Injunction provides too much opportunity for Belville to do so. VI. The Court Should Enter A Permanent Injunction And, If It Is Inclined, Modify The Injunction Pending Appeal To Prevent Waste. In its April 22 Order, this Court specifically determined that Belville is wrongfully in possession of the Sanitary District’s property, that the transfer was impairing the Sanitary District’s corporate and political existence and the exercise of its governmental discretionary functions, and that the Court would enter a permanent mandatory injunction requiring that the property be transferred back to the Sanitary District. For the reasons set out above, there is no basis to delay entering the permanent injunction, and justice and equity require its entry as soon as the Court can do so. The provisions governing injunctions pending appeal provide the Court with authority to protect any legitimate interests Belville may have. Rule 62(c) provides: Injunction pending appeal. - When an appeal is taken from an interlocutory or final judgment granting, dissolving, or denying an injunction, the court in its discretion may suspend, modify, restore, or grant an injunction during the pendency of the appeal upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party. This Rule provides a mechanism for the Court to rule that, during the pendency of any appeal, the Sanitary District may not waste any of its assets and should seek court approval of any 21 transfers. This method of protection is preferable to leaving the Preliminary Injunction in place because it eliminates the risks attended by leaving a wrongdoer in possession. VII. Alternatively, The Court Should Transfer The Property Baek To The Sanitary District Via An Injunction Pending Appeal. Rule 62(c) by its terms vests this Court with broad discretion to issue injunctive relief while an appeal is pending. If this Court determines that Belville’s appeal is proper, the Court should nonetheless act under Rule 62(c) to transfer possession back to the Sanitary District. A return of the property is the only appropriate outcome if this Court’s rulings are to have meaning. Otherwise, Belville can maintain its stranglehold on the Sanitary District’s property and its interference with the Board’s ability and authority to act. It bears repeating that Rule 62(c) can be used to prevent waste if that is a concern for the Court. The return of the property via an injunction pending appeal is not ideal, because it would not correct the problem occasioned by Belville taking a premature, interlocutory appeal that is going to be dismissed, and it would not prevent that appeal from wasting time and public money. But it would still avoid the multiple problems with leaving the Preliminary Injunction in place. CONCLUSION You don’t get caught with your hand in the cookie jar and still get to keep the cookie. Belville fails to appreciate this reality. Improper procedural wrangling and a desire to keep what one has taken don’t change this reality. The Court specifically determined that Belville should have to return the Sanitary District’s property, and an injunction should be entered requiring that return. In the Court’s discretion, that injunction may provide for the prevention of waste pending appeal. 22 Respectfully submitted this 16* day of May, 2019. TOWN OF LELAND, NORTH CAROLINA, By Counsel, doseph S. Dowdy (NC Bar #31941) Todd S. Roessler Bar #28046) Phillip A. Harris, Jr. (NC Bar #39740) KILPATRICK TOWNSEND & STOCKTON LLP 4208 Six Forks Road, Suite 1400 Raleigh, NC 27609 Phone: (919) 420-1700 Fax: (919) 420-1800 [email protected] [email protected] [email protected] H2GO BRUNSWICK REGIONAL WATER & SEWER Brian E. Edes State Bar No. 25415 CROSSLEY MCINTOSH COLLIER HANLEY & EDES, PLLC 5002 Randall Parkway Wilmington, NC 28403 P: 910-762-9711 F: 910-256-0310 [email protected] 23 CERTIFICATE OF SERVICE I, the undersigned attorney, hereby certify that on the date indicated below, I served a true copy of the foregoing TOWN OF LELAND’S AND THE SANITARY DISTRICT’S RESPONSE enj opposition to belville’s motion to stay and brief in support of their MOTION FOR A PERMANENT INJUNCTION OR, IN THE ALTERNATIVE, MOTION FOR AN INJUNCTION PENDING APPEAL via electronic mail to the following: BROOKS, PIERCE, McLENDON HUMPHREY & LEONARD, LLP [email protected] Counsel for the Town of Belville James E. Eldridge ELDRIDGE LAW FIRM, P.C. [email protected] Counsel for the Town of Belville Brian E. Edes CROSSLEY MCINTOSH COLLIER HANLEY & EDES, P.L.L.C. [email protected] Counsel for the Sanitary District Cathryn M. Little LITTLE & LITTLE, PLLC [email protected] Counsel for IRFFNC Respectfully submitted on May 16, 2019, bseph S. Dowdy CNC Bar # 24 EXHIBIT “M” Did Belville violate state law by endorsing some H2GO candidates, accusing others of lyi... Page 1 of 5 Did Belville violate state law by endorsing some H2GO candidates, accusing others of lying? portcitydaily.com/local-news/2019/10/31/did-belville-violate-state-law-by-endorsing-some- h2go-candidates-accusing-others-of-lying October 31, 2019 The Town of Belville waded into the H2GO election but apparently broke state law while doing so. (Port City Daily photo/File) BELVILLE — It appears the Town of Belville may have acted contrary to state law Monday when it endorsed and denounced rival political campaigns in the same press release. In the release, attributed to Belville Mayor Mike Allen but approved by Commissioners and distributed through a contracted town employee, Allen makes allegations against current H2GO Chairman Jeff Gerken and his running mate, John Bradley, including their “willingness to lie to their customers to get elected.” Gerken and Bradley’s stance against completing H2GO’s reverse osmosis plant was then juxtaposed against that of their campaign opponents, Barry Laub and Steve Hosmer (though they are not named) stating “the commitment of [Gerken and Bradley’s] opponents to building the plant is unquestioned.” [Note: Gerken has generally been against the construction of the plant without outside government funding.] https://portcitydaily.com/local-news/2019/10/31/did-belville-violate-state-law-by-endorsin... 3/18/2020 Did Belville violate state law by endorsing some H2GO candidates, accusing others of lyi... Page 2 of 5 The release concluded with Belville’s apparent offer to concede its appeal in the ongoing lawsuit over the future of H2GO — if Gerken and Bradley’s opponents are elected. “We believe they will guarantee the plant will be finished so we can return the assets and get the construction restarted ASAP,” the release reads. The legal definition of ‘endorse’ is broad, meaning an individual or entity does not necessarily need to use the word itself to constitute a political endorsement. And, while Belville denies it broke the law, the town’s actions appear to have violated the limits set up by state statute. What’s the law? Elected officials can endorse political candidates in their free time. They can even call a press conference in their front yards to endorse a campaign. They can’t, however, use public resources to advance political endorsements or oppositions, per General Statute § 160A-499.3. Related: Questions about H2GO Chairman’s use of the utility’s fliers to counter political opponent’s claims Monday’s press release was issued by the town spokesperson, who is a contracted employee of the town. Though the body of the release is attributed to Mayor Mike Allen, its spokesperson confirmed it was shared with the approval of the full board. According to §160A-499.3, “A municipality shall not use public funds to endorse or oppose a referendum, election or a particular candidate for elective office.” Asked to explain how the release was legal, Belville’s spokesman, Mike McGill, provided the town’s response: “The purpose of the October 28 press release was to correct factual misstatements by H2GO Chairman Gerken regarding Belville‘s position with respect to the RO plant and a potential resolution of the litigation. Mr. Bradley shares a website with Mr. Gerken, so he was mentioned in the context of the factual corrections. The email we referred to in the release is found on their joint website. Finally, the press release did not ask for a vote for or against any political candidate,” McGill provided in a statement. https://portcitydaily.com/local-news/2019/10/31/did-belville-violate-state-law-by-endorsin... 3/18/2020 Did Belville violate state law by endorsing some H2GO candidates, accusing others of lyi... Page 3 of 5 Given the heightened legal tensions between Belville, H2GO, and the Town of Leland — the three parties in the ongoing litigation over H2GO’s assets — it has become common for official releases from the stakeholders to be reviewed by legal counsel. In this case, however, it is not clear if Mayor Allen’s statement was reviewed by an attorney. Frayda Bluestein, University of North Carolina at Chapel Hill distinguished professor of public law and government, provided §160A-499.3 when given a copy of the town’s press release. “State law prohibits local governments from using public funds for this type of communication,” Bluestein wrote in an email. Timeline Tuesday, Port City Daily published the contents of a public records request that showed H2GO’s Chairman Gerken apparently directed the use of public resources (over 10,000 fliers, costing H2GO $441) in order to combat claims lodged by his political opponent, Hosmer. Later that evening, Gerken issued a campaign press release, proclaiming the proposed interlocal agreement that would settle the ongoing H2GO lawsuit was “dead.” In response, Belville (as a town) fired back the same night, accusing Gerken of attempting to change the narrative away from his apparent use of H2GO staff for a political reason. Commenting as an individual, not on the Town of Belville’s behalf, McGill called for an investigation into Gerken’s actions. In 2017, Gerken accused McGill of having been involved in a similar claim. Gerken told to WECT he was concerned in May 2017 when H2GO hired McGill’s company, WaterPIO, that public resources would be used to influence the November election. This week, Gerken said he didn’t see the parallels, stating his directive to use public resources was to correct false information. Belville’s Monday release was a rebuttal to a rebuttal, part of an escalating back- and-forth between regional players. Belville issued a press release hours before H2GO’s Oct. 15 meeting stating it would not sign the proposed interlocal agreement Commissioners were slated to take a vote on; Commissioners didn’t take a vote; Gerken released a three-page analysis of Belville’s surprise release Oct. 18, stating it was full of falsehoods; Belville responds with its Monday release, containing political endorsements and denouncements. https://portcitydaily.com/local-news/2019/10/31/did-belville-violate-state-law-by-endorsin... 3/18/2020 Did Belville violate state law by endorsing some H2GO candidates, accusing others of lyi... Page 4 of 5 The court decision Belville is currently appealing contains a legal conclusion unfavorable to the town. Judge Charles Henry ruled the November 2017 transfer of all of H2GO’s $60 million assets to the Town of Belville then-Commissioners helped orchestrate, illegal. Plus, Judge Henry concluded Commissioners’ actions were “unreasonable,” “oppressive,” in “bad faith,” and constituted an abuse of discretion. Commissioners violated state ethics law by working around North Carolina Open Meetings Law (but not explicitly violating it), according to Henry’s order. The only sitting official this conclusion applies to is Mayor Mike Allen (the others no longer serve the board). The release Belville’s Monday release aims to correct Gerken’s statements shared on his campaign website and criticize the campaign’s supposed use of scare tactics in campaign material. A recent campaign poster advertising the Gerken-Bradley campaign reads, “LELAND VOTERS!!! OUR H2GO VOICE IS IN DANGER!!!” After the critique, the release goes one step further, claiming these tactics “shows their willingness to lie to their customers to get elected,” according to Belville’s release. While the town insists it did not ask for a vote for or against any particular candidate, it does appear the release bargains with the town’s current legal position in concert with the upcoming election. “With a new H2GO Board, the lawsuit will come to a close, the assets will shift back to H2GO, and H2GO will finish the RO plant,” according to the release. This statement means if the power shifts on H2GO’s board (anti-reverse- osmosis-plant officials hold a 3-2 majority), Belville may drop its appeal, honoring the district court’s order that the town give H2GO its assets back. H2GO cannot simply drop the suit on its own, as the utility is currently a co-plaintiff with the Town of Leland. Referencing — but not naming — Gerken and Bradley’s opponents (Hosmer and Laub) Belville concludes in its release: “We believe they will guarantee the plant will be finished so we can return the assets and get the construction restarted ASAP. With a new board, H2GO – and H2GO alone – will be able to bring clean water to the citizens of Leland and northern Brunswick County in less time and for far less money.” Read the full Oct. 28 Belville press release below: Local Voice Mail – Statement From Belville Mayor Mike Allen Regarding https://portcitydaily.com/local-news/2019/10/31/did-belville-violate-state-law-by-endorsin... 3/18/2020 Did Belville violate state law by endorsing some H2GO candidates, accusing others of lyi... Page 5 of 5 Misinformation From Gerken_Bradley Ca… by Johanna Ferebee on Scribd Send tips and comments to Johanna Ferebee at [email protected] https://portcitydaily.com/local-news/2019/10/31/did-belville-violate-state-law-by-endorsin... 3/18/2020 EXHIBIT “N” OUR VIEW: Why H2GO should not kill the reverse-osmosis plant - Opi... https://www.starnewsonline.com/opinion/20190429/our-view-why-h2go... 1 of 2 https://www.starnewsonline.com/opinion/20190429/our-view-why-h2go... OUR VIEW: Why H2GO should not kill the reverse-osmosis plant - Opi... https://www.starnewsonline.com/opinion/20190429/our-view-why-h2go... 2 of 2 https://www.starnewsonline.com/opinion/20190429/our-view-why-h2go... EXHIBIT “O” STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION COUNTY OF BRUNSWICK 17 CVS 2243 TOWN OF LELAND, NORTH CAROLINA, and H2GO BRUNSWICK REGIONAL WATER & SEWER, Plaintiffs, vs. TOWN OF BELVILLE, NORTH CAROLINA, Defendant. TOWN OF LELAND, NORTH CAROLINA, Plaintiff and Cross-Claim Plaintiff, SECOND NOTICE OF APPEAL vs. TOWN OF BELVILLE, NORTH CAROLINA, Defendant, and H2GO BRUNSWICK REGIONAL WATER & SEWER, Cross-Claim Defendant. INTERLOCAL RISK FINANCING FUND OF NORTH CAROLINA, Intervenor. TO THE HONORABLE COURT OF APPEALS OF NORTH CAROLINA: Defendant and Counter-Claimant Town ofBelville ("Belville") filed a Notice of Appeal in this case on April 30, 2019, with respect to the Order of the Honorable Charles H. Henry, entered April 22, 2019, granting in part and denying in part the Motions for Summary Judgment of Plaintiffs Town of Leland, North Carolina and H2GO Bmnswick Regional Water & Sewer and granting in part and denying in part Belville's Motion for Summary Judgment. Belville, through counsel and pursuant to Rule 3 of the North Carolina Rules of Appellate Procedure, hereby submits this Second Notice of Appeal and gives notice of appeal to the Court of Appeals of North Carolina from the July 12, 2019 Order of the Honorable Charles H. Henry entering a permanent injunction, staying the effectiveness of that injunction pending appeal, and certifying the July 12, 2019 Order as an immediately appealable final judgment with respect to the claims for which summary judgment was entered in the April 22, 2019 Order. A This the 16th day of July, 2019. ^^u-^^^ Charles S. Baldwin, IV N.C. State Bar No. 19799 Andrew L. Rodenbough N.C. State Bar No. 46364 BROOKS, PIERCE, McLENDON, HUMPHREY & LEONARD, LLP 115 North 3rd St, Suite 301 Wilmington, North Carolina 28401 Telephone: (910)444-2000 Email: cbaldwin(%brookspierce.com arodenbou.8;h(%brookspierce. corn James E. Eldridge N.C. State Bar No. 13483 ELDRIDGE LAW FIRM, P,C. PO Box 1380 Wilmington, North Carolina 28402 Telephone: (910) 815-0107 Email: iee(%ec,rr.com Attorneys for Town ofBelville CERTIFICATE OF SERVICE The undersigned hereby certifies that the foregoing document was served via United States Mail, postage prepaid and email, du-ected as follows: Joseph S. Dowdy Todd S. Roessler Phillip A. Harris, Jr. Kilpatrick Townsend & Stockton LLP 4208 Six Forks Road, Suite 1400 Raleigh, North Carolina 27609 Email: JDowd}'(a),KjlpatnckTownsend. corn TRoessler(SiJKiilpatTickTownsend.com PHarris(a)Klpciti'ickTo\vnsend.com Attorneys for Town ofLeland Brian E. Edes Crossley Mclntosh Collier Hanley & Edes, PLLC 5002 Randall Parkway Wilmington, NC 28403 Email: briane(%cmc.lawfirm. corn Attorney for H2GO -and- Cathryn M.. Little, Esquire Little & Little, PLLC P. 0. Box 20789 Raleigh, NC 27619-0789 Email: cathrynmlittle®;aol.com Attorney for Intervenor Interlocal Risk Financing Fund of North Carolina This the 16th day of July, 2019. 'Charles S. Baldwin, IV ^ EXHIBIT “P” EXHIBIT “Q” From: Hilary Snow Note: This is a joint release from the Towns of Leland, Belville and Navassa and the Brunswick Regional Water and Sewer H2GO Sanitary District FOR IMMEDIATE RELEASE: Aug. 13, 2019 Northern Brunswick County Officials Reach Potential Solution to Water and Sewer Disputes Possible regional plan would create singular system, RO plant LELAND, NC – Officials with the Towns of Leland and Belville and the Brunswick Regional Water and Sewer H2GO Sanitary District have discussed a potential agreement that would settle litigation surrounding water and sewer assets in northern Brunswick County. In addition to resolving a long-standing legal matter, this potential regional solution would empower the Sanitary District as a water and sewer entity and give all parties involved the opportunity for comprehensive growth. Following are the concepts to be included: Belville would return all Sanitary District assets. Leland would convey its water and sewer lines to the Sanitary District. The Sanitary District would operate and maintain all water and sewer assets as a singular system. The Sanitary District would construct an aquifer-based reverse osmosis water treatment plant. As Belville, Leland and Sanitary District have discussed the matter, officials with the Town of Navassa and Brunswick County have been part of the conversation. Navassa could also join the potential agreement. In the next several months, the water and sewer concept will be drafted into documents that will be presented to Belville and Leland town councils, as well as the Sanitary District board, for consideration. If 1 approved, the agreement would end all litigation, including any appeals, between Leland, Belville and the Sanitary District. ### Hilary Snow Communications Officer Town of Leland 102 Town Hall Drive Leland, NC 28451 Direct: (910) 550-2477 Mobile: (910) 508-3531 www.townofleland.com All messages sent to or from this email account are subject to North Carolina public records law. 2 EXHIBIT “R” INTERLOCAL AGREEMENT The local governments signing below hereby agree to and enter into this Interlocal Agreement, the same having been duly adopted and approved by their respective governing bodies. Article I. Definitions Section 1.01 Defined Terms. When used in this Agreement, except as otherwise indicated by context, the following terms shall be defined as follows: (a) This Agreement: This Interlocal Agreement. (b) Belville: The Town of Belville, North Carolina, a municipal corporation organized and existing pursuant to G.S. Chapter 160A. (c) Belville-Sanitary District Transfer: See definition in Section 2.01(g). (d) County: Brunswick County, North Carolina, a county organized and existing pursuant to G.S. Chapter 153A. (e) Development Agreement Map: The Map titled “Municipal Limits and Development Areas” and attached hereto as Exhibit 1. (f) Development Area or Development Areas: A Town’s Development Area is the area designated for development by the particular Town shown and described on the Development Agreement Map. Page 1 of 63 (g) Effective Date: The original effective date of this Agreement is October 18, 2019. (h) Existing Systems and Components: Systems, and components thereof, that are designed, under construction, or existing as of the Effective Date. (i) Facilities: Water and sewer lines, pump stations, and any other water or sewer facilities and infrastructure. (j) Leland: The Town of Leland, North Carolina, a municipal corporation organized and existing pursuant to G.S. Chapter 160A. (k) Litigation: See definition in Section 2.01(h). (l) Navassa: The Town of Navassa, North Carolina, a municipal corporation organized and existing pursuant to G.S. Chapter 160A. If Navassa becomes a signatory to this Agreement, then it shall be included in the definitions of Town and Party. (m) New Connection: Any new public or private water or sewer line extended from an existing manhole, sewer line, water line, sewer clean out, water meter, or other water or sewer Facility, to serve a new structure, building, or use that is not connected or receiving water or sewer service at the Effective Date of this Agreement. (n) New Development: Any residential, commercial, or mixed-use real estate development project, whether or not construction has been commenced or completed, in a Development Area. Page 2 of 63 (o) Operational Transfer Date: June 30, 2020. (p) Party or Parties: The signatories to this Agreement shall be referred to herein individually as a “Party” or collectively as the “Parties.” (q) Region: That portion of northeastern Brunswick County which is currently a part of, or in the future may reasonably be annexed into, any Party to this Agreement, including, without limitation, the Development Areas. (r) RO Plant: The aquifer-sourced reverse osmosis water treatment plant of which the Sanitary District commenced preliminary site preparation, equipment purchase, and construction, prior to November 28, 2017, including but not limited to all associated groundwater wells and all transmission lines to and from such wells. (s) Sanitary District: Brunswick Regional Water and Sewer H2GO, a body politic and corporate organized and existing pursuant to G.S. Chapter 130A, Article II, Part 2. (t) Systems: Water and sewer systems, including all treatment plants, storage facilities, pump and transmission stations and equipment, infrastructure, pipes, and other Facilities typically owned and operated by a water and sewer utility in connection with providing water and sewer services to customers. The word “system” shall mean either a water or sewer system. (u) Term (as in “the Term of this Agreement”): The period of time comprising forty (40) years from the Effective Date of this Agreement. Page 3 of 63 (v) Town or Towns: The Towns which are signatories to this Agreement shall be referred to herein individually as a “Town” or collectively as the “Towns.” (w) Transferring Personnel: See definition in Section 3.04. Section 1.02 Undefined Terms. Undefined terms shall have their plain and ordinary meaning or the meaning informed by their immediate context. This Agreement shall be construed in a manner to effectuate the intent of the Parties. In no event, shall any word, term, or phrase be assigned a meaning that is inconsistent with the purpose, context, and scope of this Agreement. Article II. Considerations Section 2.01 Recitals. Whereas the following considerations exist, which support the Parties entering into this Agreement: (a) There is a need in the Region for a comprehensive plan to address the Region’s current and future water and sewer needs and the availability of other municipal services in portions of the Region that are likely to request annexation into a Town within the Region. (b) The Region’s citizens and businesses need a variety of local government services, including water and sewer services, which can be best provided by the local governments in the Region working together collaboratively. (c) The Region is one of the fastest growing areas in North Carolina, and the Region is expected to continue to grow for the foreseeable future, which is likely Page 4 of 63 to result in new and expanded development. This development is likely to lead to additional needs for local government services, including water and sewer services, which can be best provided by the local governments in the Region working together collaboratively. This development also is likely to lead to requests for annexation into a Town. (d) Coordination and cooperation among the local governments in providing services to the Region will create efficiency and lower costs for the citizens of the Region, will drive value for the rates and taxes paid by the Region’s citizens, will promote conservation and protection of the environment, and will make the Region a more desirable place to live, work, and enjoy recreational opportunities. (e) For a number of years, there have been counterproductive disagreements between and among the local governments in the Region, which have led to competition among the local governments regarding decisions about the provision of local government services, such as water and sewer, and which entity should provide them. Competition between and among local governments regarding services, sometimes resulting in duplication and overlap of services, is not in the best interest of the Region’s citizens. (f) For a number of years, there have also been disagreements among citizens and local governments within the Region about whether the Sanitary District should construct, operate, and provide water to the Sanitary District’s customers from the RO Plant. The construction of the RO Plant has been enjoined since December 1, 2017 by court orders entered in the Litigation. Page 5 of 63 (g) On November 28 and 29, 2017, Belville and the Sanitary District arranged for the transfer of all property owned by the Sanitary District to Belville pursuant to the following transaction documents: an Agreement to Convey Water and Sewer Systems, an Assignment and Bill of Sale, a Special Warranty Deed, and an Agreement for the Operation and Maintenance of Water and Sewer Systems (the transactions reflected in these documents are collectively referred to as the “Belville-Sanitary District Transfer”). (h) In a civil action filed in the Brunswick County Superior Court, Case No. 17-CVS-2243 (the “Litigation”), Leland challenged the transfer of assets from the Sanitary District to Belville. After the filing of the action, the Sanitary District requested and received permission from the Court to be realigned as a party plaintiff. The Chief Justice of the North Carolina Supreme Court designated the Litigation as exceptional pursuant to Rule 2.1 of the General Rules of Practice for the Superior and District Courts Supplemental to the Rules of Civil Procedure and assigned the Litigation to the Honorable Charles H. Henry, Superior Court Judge. (i) By separate Orders entered in the Litigation on August 20, 2018, April 22, 2019, and July 12, 2019, Judge Henry granted summary judgment to Leland and the Sanitary District on three causes of action, granted summary judgment or dismissal in favor of Belville on seven causes of action, granted summary judgment in favor of the Sanitary District on two counterclaims filed by Belville, and stayed an open meetings law claim filed by Leland. Page 6 of 63 (j) In his Order entered April 22, 2019, Judge Henry declared the transfer of assets from the Sanitary District to Belville to be unlawful, void, and of no effect. (k) By Order entered July 12, 2019, Judge Henry entered partial final judgment in the Litigation. Belville, Leland, and the Sanitary District have appealed to the North Carolina Court of Appeals. (l) The Sanitary District, Leland, and Belville explored resolution of the Litigation following entry of Judge Henry’s April 22 and July 12, 2019 Orders. They have decided that it is in their respective and collective best interests to settle the Litigation, to work together pursuant to the terms of this Agreement, and to avoid the risks, uncertainty, and expense of pursuing the appeals and continuing with the Litigation. (m) At meetings held between June 19 and August 13, 2019, representatives of the Sanitary District, Leland, Belville, Navassa, and the County discussed a possible multi-party resolution of growth and water and sewer issues within the Region. No more than two elected representatives from any local government attended any meeting. (n) Representatives of the Sanitary District, Leland, and Belville reached a potential settlement of the Litigation and agreement based on the terms of this Agreement, subject to approval by the respective governing bodies of the Parties. Page 7 of 63 (o) In the opinion of the Parties, it would be in the best interest of the Region if Navassa has the opportunity to join this Agreement after it is executed, if Navassa decides to do so. (p) If this Agreement is in effect, it is in the best interests of the Towns, the Sanitary District, and the current and future citizens and customers of the Region that: (1) the Towns generally not own or operate water or sewer systems independent of the Sanitary District; (2) the Sanitary District owns an appropriate interest in the Systems, operates the Systems, and provides water and sewer services to all customers residing within the borders of the Sanitary District, the Towns, and the Development Areas as they are annexed into a Town; (3) the Towns and the Sanitary District grow together to meet the needs of the Region; (4) New Developments, or parcels and properties seeking New Connections in the Development Areas, be annexed into a Town as well as the Sanitary District; (5) a New Development, in a Town’s Development Area receiving water and sewer services from the Sanitary District, be annexed into both the respective Town and the Sanitary District; and (6) each Town possess an appropriate ownership interest in the Systems located within its borders, Development Area, or any area that it annexes to facilitate cooperation between each Town and the Sanitary District in further expanding together for the benefit of the Region. (q) Consistent with existing annexation agreements involving Belville, Leland, and Navassa, the Parties have identified the Development Areas, which are areas into which Belville, Leland, or Navassa, respectively, should be permitted to Page 8 of 63 expand by offering voluntary annexation to New Developments, or parcels or properties seeking New Connections in those areas, without interference from the other Parties. The respective Development Area for each Town is shown and described on the Development Agreement Map. These Development Areas reflect the projected reasonable and likely growth of each Town. The Parties have determined it is in their best interests for the Towns to enter into the proposed annexation agreements referenced in this Agreement, which are consistent with the Development Agreement Map. (r) If this Agreement is in effect, it is in the best interest of the Towns, the Sanitary District, the Region, and the current and future customers of the Sanitary District, for the Sanitary District to construct the RO Plant and to provide water from the RO Plant to the Sanitary District’s customers. Providing water from the RO Plant will be affordable, particularly when its costs are spread across the additional customer base being added to the Sanitary District from the respective local governments. Constructing the RO Plant will assuage concerns by some regarding compounds found in the Cape Fear River. All Parties have agreed to support the RO Plant based on the terms of this Agreement. (s) The interests of the Parties and the Region would be well served by: (1) the consolidation of water and sewer services into a single provider, and (2) the respective Towns providing their ordinary local government services, other than water and sewer services, to customers located within the respective Towns and, if Page 9 of 63 such areas are annexed, to customers located within the Towns’ respective Development Areas. (t) This Agreement will support economic development in the Region and will provide economic benefits to each of the Parties and to the respective current and future citizens, residents, and freeholders of the Parties. (u) This agreement will promote the health, safety, and welfare of the current and future citizens, residents, and freeholders of the Parties and a more environmentally conscious utility system. (v) This Agreement will promote consolidation of services, efficiency, and reduced costs. (w) The Parties intend, by this Agreement, to further a collaborative approach to the provision of water and sewer services, the provision of other local government services, growth, and annexation. (x) The Parties have conducted certain due diligence, as applicable, and have carefully considered the terms of this Agreement and are satisfied with the results of that due diligence and careful consideration. (y) It is necessary for this Agreement to remain in effect for a period of forty (40) years, which will permit the Sanitary District to pay the indebtedness incurred to fund the construction of the RO Plant. (z) The Parties desire to enter into this Agreement pursuant to the statutes authorizing interlocal agreements, G.S. §§ 160A-460 to 464, in order to Page 10 of 63 pursue the goals stated herein, and also a desire to cooperate to accomplish objectives set out more generally in the General Statutes, including, without limitation, G.S. Chapters 130A and 160A. Section 2.02 Agreement to Be Bound. Based on the foregoing recitals, which are incorporated into this Agreement and acknowledged as accurate by all Parties, and for and in consideration of the mutual promises and covenants contained in this Agreement, the receipt and sufficiency of which is hereby acknowledged, and intending to be bound thereby, the Parties agree to the provisions of this Agreement. Article III. Purpose, Scope and Term. Section 3.01 Purposes of Agreement. The purposes of this Agreement are: (a) To resolve longstanding regional disputes in the Region and the Litigation; (b) To promote planned, collaborative, and coordinated growth in the Region; (c) To allow the Parties and their current and future citizens, freeholders, and ratepayers to enjoy the benefits of consolidation in the provision of water and sewer services, including the cost saving benefits; Page 11 of 63 (d) To provide an independent source of potable water to the Parties’ citizens, freeholders, and customers; and (e) To otherwise accomplish the objectives set out in the Recitals. Section 3.02 Duration. The duration of this Agreement shall be for its Term, commencing on the Effective Date, and may be extended by a written agreement signed by all Parties. Section 3.03 Joint Undertaking. This Agreement creates a joint undertaking pursuant to N.C. General Statute 160A-460 for the purposes of providing water and sewer services to existing customers and to New Developments, or parcel(s) or property served by a New Connection, consistent with the terms of this Agreement and coordinated expansion by the Towns and the Sanitary District within the Region and related economic development. Except as expressly provided herein, no joint undertaking is created by this Agreement. Section 3.04 Appointment of Personnel. The Sanitary District shall appoint such personnel from time to time, in accordance with its customary procedures, as is necessary to perform its obligations under this Agreement and shall be responsible for compensating that personnel. At a time mutually agreed upon by Leland and the Sanitary District, within 30 (thirty) days after the Effective Date, the Sanitary District shall offer employment to the Leland personnel (the “Transferring Personnel”) identified in Exhibit 2, attached hereto and titled “Schedule of Transferring Personnel.” The Sanitary District shall offer the Page 12 of 63 Transferring Personnel employment terms which are not less favorable than the material terms identified for each employee on Exhibit 2 and which preclude termination of the Transferring Personnel, except for cause, during at least the first 2 (two) years of their employment with the Sanitary District. Section 3.05 Financing. (a) Financing Systems Ownership and Operation. The Sanitary District shall be solely responsible for financing the construction and operation of the RO Plant and for any financing relative to the rights and obligations of the Sanitary District to own maintain, repair, and operate Systems and to provide water and sewer services that the Sanitary District undertakes pursuant to this Agreement, including for any new or additional Facilities. (b) Town Cooperation with Financing. Upon request of an entity from which the Sanitary District seeks financing in the ordinary course to own, operate, or expand the Systems, whether or not such financing relates to existing or contemplated portions of the Systems located in the respective Town or such Town’s Development Area, a Town shall execute any consent, security instrument, or subordination agreement as may be necessary to allow the lender to perfect a security interest to secure such financing. Section 3.06 Formula for Property Ownership. The formula for property ownership is as follows: Page 13 of 63 (a) Ownership in Development Area. Within a Town’s Development Area, such Town and the Sanitary District shall own all Facilities, including all connection points for any New Development, parcel or property seeking a New Connection, as tenants in common, with each entity owning an undivided one-half interest in the same. A Party’s interest shall terminate if it seeks to sell or to partition any portion of its interest without the consent of the other Party in ownership. If a Town’s boundaries are extended to cover an area located and described within such Town’s Development Area on the Development Agreement Map, then such area shall no longer be a Development Area and shall instead be an area within a Town’s Borders. Capital improvement projects funded and constructed by the Sanitary District, and which are not interconnection points for any New Development, parcel or property seeking a New Connection, shall be excluded from being joint property described in this Section 3.06(a). The Sanitary District represents and warrants that it will not use, and the Sanitary District shall be in breach of this Agreement if it does use, any sewer pump station(s) to connect a New Development, parcel, or property seeking a New Connection. (b) Ownership Along Town Borders. Within a Town’s borders, such Town and the Sanitary District shall own both the Facilities in the border zone, regardless of type and the connection points for new Facilities, as tenants in common, with each entity owning an undivided one-half interest in the same. A Party’s interest shall terminate if it seeks to sell or to partition any portion of its interest without the consent of the other Party in ownership. As used in this Page 14 of 63 subsection “Facilities in the border zone” shall mean, for each Facility, the ten feet closest to and within the borders of the Town (c) Facilities Transferred by a Town under Article V. With the exception of the Facilities referenced in 3.06(a) and (b), Facilities transferred by a Town pursuant to Article V of this Agreement shall be owned solely by the Sanitary District. (d) Other System Assets. With the exception of the Facilities referenced in 3.06(a) and (b), the Parties shall cause the Sanitary District to be the owner of all System assets. In accordance with the schedule set out in Article V, without limitation, the System Assets owned by the Sanitary District shall include customer accounts. (e) Dedications in Development Areas. The owner of a New Development, parcel or property seeking a New Connection in a Town’s Development Area shall be required to file a deed and dedication of any new Facilities it constructs naming the Sanitary District and such Town as joint owners of such Facilities. Within the one hundred eighty (180) day period set out in 3.06(f) of this Agreement, such Town much convey to the Sanitary District any part of the dedicated property that does not fall with Sections 3.06(a) or (b) of this Agreement. (f) Changes as Borders Extended. If a Town’s borders are extended, that Town must convey to the Sanitary District any property that no longer falls within the description of subsections 3.06(a) and (b) within one hundred eighty Page 15 of 63 (180) days of such change in circumstances. Section 3.06(a) and (b) shall apply with respect to the new Town borders. (g) Security Interests Given by the Towns. Each Town shall create and execute security interests in favor of the Sanitary District, including deeds of trust, covering all System assets in which such Town owns an interest within such Town’s borders and Development Area. The Sanitary District shall be permitted to realize on such security interests, including via foreclosure, if the respective Town breaches Section 3.05, 3.06(l) or Article V, VII, or VIII of this Agreement. (h) Security Interests Given by Sanitary District. The Sanitary District shall create and execute security interests in favor of each respective Town, including deeds of trust covering all System assets described in Sections 3.06(a) and (b). Such Town shall be permitted to realize on such security interests, including via foreclosure, if the Sanitary District breaches Article V, VII, VIII, X, or XII of this Agreement. (i) RO Plant Exempted. Notwithstanding any other provision of this Agreement, the RO Plant shall not at any time be owned by any third party or any Party to this Agreement other than the Sanitary District. (j) Appropriate Conveyance and Security Instruments Required. The Parties shall each cause the ownership and security interests required by this Agreement to be created by appropriate instruments, which shall be recorded as required by law, and shall be consistent with this Agreement. Such instruments Page 16 of 63 shall be prepared by counsel for the respective Town involved in a conveyance and shall be in a form acceptable to the Sanitary District, with the Sanitary District to pay the reasonable expenses of such preparation. (k) Ownership Not to Impede Financing. If, due to the ownership structure described herein, and after exhausting all reasonable options to obtain financing from multiple sources, the Sanitary District is unable to obtain financing it seeks in the ordinary course to own, operate, or expand the Systems, then the Towns shall convey their property interests in the Systems to the Sanitary District. Prior to a Town being required to convey its property interests in the Systems to the Sanitary District, the Parties shall work together reasonably and in good faith to address any issues raised by the North Carolina Local Government Commission. (l) Upon Termination of this Agreement. Except as otherwise indicated, the ownership interests created by this Agreement and which exist at its termination shall survive the Termination of this Agreement. Section 3.07 Methods for Amending. This Agreement may only be amended by the method set out in Section 15.07. Section 3.08 Methods for Terminating. This Agreement may only be terminated pursuant to the provisions of Article XIV hereof. Page 17 of 63 Article IV. Return of Sanitary District Assets by Belville On the Effective Date or at such time as Belville executes this Agreement, Belville shall return all property, of whatever kind, that it received from the Sanitary District as part of the Belville-Sanitary District Transfer or which would have been property of the Sanitary District but-for the Belville-Sanitary District Transfer. Such property will include, without limitation, all real and personal property, Systems, Facilities, assets, debts, cash, interest earned on cash, and other tangible and intangible property. Belville will be deemed to have returned any cash that it disbursed at the request of the Sanitary District pursuant to the Preliminary Injunction Order entered in the Litigation. Belville shall execute and cause to be recorded the following documents: (1) a cancellation and/or withdrawal of the Agreement to Convey Water and Sewer Systems; (2) an Assignment and Bill of Sale conveying to the Sanitary District the assets included in the Belville-Sanitary District Transfer Assignment and Bill of Sale; (3) a Special Warranty Deed, conveying to the Sanitary District all property included in the Belville-Sanitary District Transfer Special Warranty Deed; and (4) a notice that the Agreement for the Operation and Maintenance of Water and Sewer Systems is cancelled. The Sanitary District must accept the return of the assets provided for in this Article. Page 18 of 63 Article V. Systems Ownership and Operations Section 5.01 Systems Operation. (a) Operation by Sanitary District. The Sanitary District shall operate all Systems governed by this Agreement, both those that currently exist and those that are subsequently constructed. For any Existing Systems currently operated or planned to be operated by a Town, the Sanitary District shall assume operation on the Operational Transfer Date or such earlier time as a Town and the Sanitary District may agree in writing. (b) Operation Explained. As used in this Agreement, the operation of Systems means having the duties, rights, and responsibilities stated or implied in N.C. General Statutes Chapter 160A, 162A, and Chapter 130A, Article 2, Part 2 governing operation of water and sewer facilities. Section 5.02 The Towns’ Conveyance of Water and Sewer Assets to the Sanitary District. The Towns shall convey all of their water and sewer assets, including utility enterprise funds, customer accounts, existing water and sewer lines, pump stations, water tower(s), any other water or sewer Facilities, design plans for upgrades, and contracts regarding water and sewer Facilities to the Sanitary District consistent with Section 3.06 and Article V of this Agreement. The Towns, through their respective governing bodies, have determined the interest in the assets they are conveying to the Sanitary District are surplus property because of the Sanitary District's operation of the same as provided herein. Page 19 of 63 Section 5.03 The Sanitary District’s Assumption of Town Debts Related to Town Systems. Upon the appropriate Party(ies) obtaining any approvals that are necessary for assumption of such debt, including any necessary approvals from the North Carolina Local Government Commission or the holder of any indebtedness, the Sanitary District shall assume all identified debt and liabilities related to each Towns’ Systems, infrastructure, operations, agreements, and allocation within the County’s treatment plants. The Towns have provided a Schedule of Assets and Debts that provides specific detail with regard to all known debts and liabilities to be transferred to the Sanitary District. The Sanitary District may, upon its own discretion, assume additional debts that were not identified by the Towns prior to the time of transfer. The Sanitary District shall only be responsible for those debts and liabilities that were identified prior to the time of transfer or that the Sanitary District has agreed to accept. To the extent a debt or liability is secured by a Town’s assets, the Town shall retain ownership of such assets until the Town receives the creditor’s approval to transfer those assets. No Town shall be denied the use of any sewer allocation from the County for which it has already contracted as a result of the transactions addressed in this Agreement. Section 5.04 Schedule of Assets and Debts. Each Town, as applicable, represents and warrants that the attached Exhibit 3, titled “Schedule of Transferred Assets and Debts” correctly lists the System assets and debts each Town is transferring to the Sanitary District pursuant to this Article and correctly lists the Town that is transferring each asset. No Town is responsible for, or makes Page 20 of 63 any representations or warranties, regarding any other Town’s water or sewer assets. Each Town, as applicable, represents the assets and debts listed pursuant to this Section include all of the Town’s water and sewer assets and debts to the best of the Town’s present knowledge and information. Each Town represents and warrants that, except as otherwise disclosed in writing, the Facilities listed are in good working order to the best of its knowledge, information, and belief. Section 5.05 Projects Committed to or Commenced by a Town. The attached Exhibit 4 to this Agreement, titled “Schedule of Projects,” is an exclusive list of water and sewer projects that a transferring Town has committed to build or has begun to build relative to the Systems it is transferring to the Sanitary District. The Sanitary District hereby assumes the obligation to complete and pay for those projects within the determined timeframes of the agreements or contracts. Section 5.06 Civil-Action-Related Cash Transfer Reserve. Leland is currently a defendant in a civil action concerning water and sewer development charges it collected between July 1, 2015 and June 30, 2018. Leland shall continue to vigorously defend the civil action. Leland has retained from the water and sewer assets being transferred the sum of six million dollars ($6,000,000), which represents a reasonable reserve to pay any related judgment, pre-judgment settlement, and reasonable attorneys’ fees and expenses incurred by Leland or required to be paid to another party in such litigation. Following resolution of the litigation or by the Operational Transfer date, whichever is later, Leland shall promptly disburse any remaining amounts in the reserve to the Sanitary District. Page 21 of 63 Leland shall, at the reasonable request of the Sanitary District, provide the Sanitary District with information about this litigation and the reserve, and Leland shall remain solely responsible for resolving the litigation. Section 5.07 Transfers of Ownership. For existing assets and debts, each respective Party shall cause the ownership interests required by this Article to be transferred or created, as the case may be, as set out in the Operational Transfer schedule contained in Section 5.08, and to be closed, within that thirty-day period at times that are mutually agreed upon by the Sanitary District and each respective Town. Each Party shall accept the conveyance of assets and debts governed by this Article consistent with the provisions of this Agreement. Section 5.08 Operational Transfer. The transfer of operations regarding the assets transferred pursuant to this Article shall occur on the Operational Transfer Date. Until the Operational Transfer Date, a transferring Town shall continue to operate the Systems being transferred and shall exercise reasonable efforts to prepare the assets for operation by the Sanitary District, and the Sanitary District shall exercise reasonable efforts to be prepared to operate the assets. The Sanitary District and a transferring Town can shorten or extend any deadline regarding operational transfer if they agree to do so in writing, without the consent of any other Party. The operational transfer schedule shall be as follows: (a) Within thirty (30) days after the Effective Date: Page 22 of 63 (i) The Sanitary District shall seek approval to transfer a transferring Town’s debts and liabilities from the North Carolina Local Government Commission and the holder of any indebtedness; (ii) The Parties shall close the real property transactions necessary to create the ownership interests required by Section 3.06 of this Agreement, if the North Carolina Local Government Commission has approved the related transfers of indebtedness as of that time; and (iii) The Sanitary District shall offer employment to Transferring Personnel. (b) Within sixty (60) days after the Effective Date: (i) A transferring Town shall provide notice to its water and sewer customers that operations will be transferred to the Sanitary District and shall provide a schedule regarding the transfer; (ii) The Sanitary District shall complete all due diligence regarding any Systems conveyed to it by a Town; and (iii) The deadline for Transferring Personnel to accept or decline the Sanitary District’s offer of employment shall occur. (c) Within one hundred twenty (120) days after the Effective Date: (i) A transferring Town shall transfer one-half of all unreserved cash assets to the Sanitary District; and Page 23 of 63 (ii) A transferring Town’s water and sewer customer accounts shall be transferred to the Sanitary District to begin billing them directly. (d) Within one hundred eighty (180) days after the Effective Date: (i) The Sanitary District shall begin operation of a transferring Town’s System; (ii) Transferred Personnel, if an offer of employment was accepted by the employee, must begin employment with the Sanitary District; and (iii) A transferring Town shall transfer the remainder of any unreserved funds to the Sanitary District. (e) On or before the Operational Transfer Date: (i) All other items necessary to complete operational transfer shall be accomplished; and (ii) All remaining case assets that a transferring Town is required to transfer pursuant to this Agreement shall be transferred, except as provided in Section 5.06. Section 5.09 Diligence by the Sanitary District. As of the Effective Date, the Sanitary District has conducted an inspection of the Towns’ respective water and sewer Facilities and has concluded they are in reasonable working order, can be operated by the District, and are suitable for being owned by the District. Prior to assuming operation of a System currently owned by a Town, the Sanitary Page 24 of 63 District shall have the right to conduct additional, reasonable diligence through and until the deadline established in the Operational Transfer schedule set out in Section 5.08 of this Agreement. The purpose of this diligence shall be to facilitate the transfer of all operations to the Sanitary District. In the event such diligence reveals a problem(s) with any asset transferred by a Town, other than the need for routine maintenance and repair or condition commensurate with their age and use, which problem(s) are verified by a third party mutually selected by the Town and the Sanitary District, and which exceed one million dollars ($1,000,000), the Sanitary District may elect either to repair the problem at its own expenses or to return all water and sewer assets that such Town has conveyed to it and to forego any future conveyances by such Town. Section 5.10 Interests by the Towns to Facilitate Cooperation and Collaborative Growth. The contractual and ownership interests referenced and created by this Agreement are designed and intended, and shall be construed so as, to facilitate cooperation and collaborative economic development and to avoid counterproductive competition among local governments regarding the provision of water and sewer services in New Development Areas. To that end, the ownership interests by a Town set out in Section 3.06 shall be created either by the Town reserving this interest in making a conveyance of its assets to the Sanitary District or by the Sanitary District conveying the ownership interest specified by this Agreement to such Town. Prior to transferring any interest, a Party shall obtain any necessary governmental or creditor approvals. Page 25 of 63 (a) Contractual Obligation of Sanitary District to Support Growth by Towns in Respective Development Areas. The Sanitary District, upon the request of a Town, shall provide New Connections and provide water and sewer service to any New Development, parcel or property within such Town or such Town's Development Area, regardless of whether the Sanitary District chooses to annex such area. The Sanitary District shall also comply with Article VIII of this Agreement. (b) Towns Respective Ownership Rights to Support Growth by Towns in Respective Development Areas. The Sanitary District hereby consents to a Town using the property jointly owned by the Sanitary District and such Town under Section 3.06 for the purposes of offering interconnection and agreeing to provide water and sewer services to any New Development, parcel, or property seeking a New Connection in such Town’s Development Area. Without the express request or consent of a Town having a joint interest in property pursuant to Section 3.06, given in writing, the Sanitary District shall not use such property for the purposes of offering interconnection to or agreeing to provide water and sewer services to any New Development, parcel, or property seeking a New Connection in such Town’s Development Area. (c) Consistent Ownership Rights Exercised by Sanitary District. To the extent not otherwise inconsistent with this Agreement or with applicable law, the Sanitary District shall be entitled to make all decisions regarding the use Page 26 of 63 or non-use, operation, maintenance, repair, replacement, destruction, insurance, and financing of assets transferred to it pursuant to this Agreement. Section 5.11 No Separate Town Systems or Providers. Except as otherwise provided in this Agreement, the Towns will not acquire, own, operate, or construct any Systems, or water and sewer infrastructure, or contract with or obtain treatment or water and sewer services from any entity or company, other than the Sanitary District so long as the Sanitary District does not refuse to provide such services or the Sanitary District is not declared by a court of competent jurisdiction to be in breach of this Agreement. Article VI. RO Plant Construction and Use Section 6.01 Construction of the RO Plant. The Sanitary District shall finance and construct the RO Plant as soon as is objectively practicable, using its best efforts and consistent diligence. Notwithstanding any provision herein to the contrary, and unless a delay is caused by circumstances beyond the Sanitary District’s control, the Sanitary District, within ninety (90) days of the Effective Date, shall submit to the Local Government Commission an application for debt financing of the RO Plant. Section 6.02 Delivery of Water from the RO Plant. The Sanitary District shall provide water from the RO Plant to the Sanitary District’s customers as soon as is objectively practicable, using its best efforts and consistent diligence. Notwithstanding any provision herein to the contrary, and unless a delay is caused Page 27 of 63 by circumstances beyond the Sanitary District’s control, the RO Plant shall be constructed and operational not more than eighteen (18) months following the Effective Date. Article VII. Expansion of the Sanitary District Section 7.01 Annexation. Subject to the provisions of Section 7.03, the Sanitary District and each respective Town shall work together to achieve annexation into the Sanitary District of the following areas at the earliest reasonable time(s): (a) any areas in which such Town operates Existing Systems, and (b) any New Development, or parcel or property seeking a New Connection, that has been annexed into a Town. Section 7.02 Proceeding Without Annexation by the Sanitary District. If the Sanitary District decides not to annex an area described in Section 7.01, the Sanitary District shall still be contractually bound to provide such area with water and sewer services pursuant to Section 5.01 of this Agreement and to support the requesting Town’s need to offer water or sewer services as part of such Town’s annexation of any New Development, or parcel or property seeking a New Connection in such Town’s Development Area. Section 7.03 Joint or Concurrent Annexation Permitted. To the extent consistent with this agreement and a Town and the Sanitary District so desire, they may pursue joint or concurrent annexation in a Town’s Development Area by the respective Town and the Sanitary District. The Sanitary District shall Page 28 of 63 not interfere with a Town’s annexation of any New Development, parcel or property in a Town’s Development Area. Section 7.04 Governmental Discretion Regarding Annexation Preserved. This Article shall not be construed to bind the governing body of any state or local government body or agency to request, allow, or approve a request made to it by a Party or a third party for annexation. Article VIII. Planned Growth and Development Section 8.01 Towns Possess Exclusive Rights to Offer Water and Sewer Services in Designated Development Areas. Each Town shall have the exclusive right to offer water and sewer services to New Developments, and parcels or properties served by New Connections, in its respective Town boundary and designated Development Areas, which are shown and described in Exhibit 1. Upon request of a Town that has agreed to make available water and sewer services to a New Development, or parcel or property served by a New Connection, consistent with this Agreement, the Sanitary District shall allow interconnection of each New Development, or parcel or property served by a New Connection, into the Sanitary District’s Systems. Section 8.02 Compliance with Development Areas. Except as otherwise agreed in writing, during the Term of this Agreement, the Sanitary District may not provide water or sewer services to any New Development, or parcel or property served by a New Connection, in a Town’s boundary or such Town’s Page 29 of 63 Development Area unless that Town requests that the Sanitary District provide water and sewer services to the New Development, or parcel or property served by a New Connection. A Town may condition the provision of water or sewer services upon the New Development, or parcel or property served by a New Connection, petitioning for annexation into the Town or petitioning for annexation into the Town or the Sanitary District. Nothing in this Agreement shall be deemed to require a Town or the Sanitary District to annex any New Development, or parcel or property served by a New Connection. Section 8.03 Adoption of Consistent Annexation Agreements. Within thirty (30) days of the Effective Date of this Agreement, the Towns shall adopt the proposed Annexation Agreement attached to this Agreement as Exhibit 5. Upon adoption by the governing board of the Towns, the Annexation Agreement shall be deemed referred to and incorporated into this Agreement by reference. It is a condition precedent to any party seeking to enforce any provision of this Agreement that it has first adopted and executed, and has not withdrawn from, the Annexation Agreement. Prior to entering into this Agreement, Navassa must first execute an Annexation Agreement with the Parties that is consistent with the Development Areas set out in Exhibit 1. Section 8.04 Interconnection. As a condition of providing water and sewer services to a New Development, or parcel or property served by a New Connection, a Town offering such services shall require any New Developments, or parcels or properties served by a New Connection, to construct the water and sewer Page 30 of 63 infrastructure to interconnect to the Systems jointly owned by the Sanitary District and the respective Town and to deed and dedicate the portions of the infrastructure that are to be public to the Sanitary District and the respective Town. A Town also shall require of a New Development, or parcel or property served by a New Connection, that all water and sewer infrastructure be built to conform to applicable federal and state standards and the Sanitary District’s standards and be inspected by the Sanitary District before it is deeded and dedicated to the Sanitary District. It is the intent of the Parties that all New Developments, or parcels or properties served by a New Connection, must interconnect to the Sanitary District’s Systems. If a Town annexes a New Development, or parcel or property served by a New Connection, the Town shall, in connection with such annexation, accept an ownership interest in any new water and sewer assets and shall agree to allow the Sanitary District to accept an ownership interest in such assets, with the proportion and extent of the Town’s and the Sanitary District’s respective ownership interests and operating rights and obligations being established in Section 3.06 and Article V of this Agreement. Section 8.05 Annexation Incentives. Nothing in this Agreement shall prevent a Town from offering incentives to a New Development, or parcel or property seeking a New Connection, for annexation into such Town. Towns shall not offer any incentive that requires a refund to a developer of any water and sewer system development fees that are associated with a New Development, or parcel or Page 31 of 63 property served by a New Connection. The Sanitary District shall receive all system development fees associated with water and sewer. Section 8.06 Obligation for Sanitary District to Provide Water and Sewer Treatment Capacity. The Sanitary District shall obtain such water and sewer treatment capacity and allocations as needed for each Town to offer water and sewer services in their respective Town boundaries and designated Development Areas and to support the existing needs and growth of each Town, and the Sanitary District may not promote one Town or Development Area over another in providing capacity or allocation. If the Sanitary District breaches the obligations of this Section, then in addition to other remedies it may have at law, a Town which has been injured thereby shall retain, for the remainder of the Term, the exclusive right to offer water and sewer services in its respective Town boundary and Development Area and shall be entitled to obtain additional capacity or allocation from another source, and the Sanitary District shall not be entitled to an ownership interest in water and sewer assets thereafter obtained by the Town providing water and sewer services in the Town’s boundary or Development Area. Section 8.07 Sanitary District May Expand in Areas Other Than Town Development Areas. The Sanitary District may offer water and sewer services to new customers or New Developments, or parcels or properties seeking New Connections, in any area that is outside of a Town’s Municipal Limits and Development Areas as set out in Exhibit 1. If a Town identified on Exhibit 1 has not Page 32 of 63 joined this Agreement, then the Sanitary District may expand in that Town’s Development Area without breaching this Agreement. Article IX. Possible Further Consolidation Section 9.01 Joinder of Navassa. With the written consent of all Parties, this Agreement may be amended in writing after the Effective Date to add Navassa as a Party. Nothing in this Agreement shall be construed as preventing the Sanitary District from conditioning its consent, if any, to add Navassa to this Agreement, upon pre-acquisition diligence relative to Navassa’s Systems or as preventing any Town from conditioning its consent, if any, to add Navassa to this Agreement upon Navassa executing a twenty (20) year Annexation Agreement that is consistent with the terms of this Agreement. If Navassa joins this Agreement after the Effective Date, then the Parties may agree to an alternative Effective Date and Operational Transfer Date for Navassa, and Navassa and the Sanitary District must agree, with respect to Navassa, to the inclusion of information required to be provided by a Town in Exhibits 2, 3, and 4 of this Agreement. If Navassa does not join this Agreement, then the Sanitary District may, without breaching this Agreement, construct Facilities and offer water and sewer services to customers in the Navassa Development Area shown and identified on Exhibit 1. Section 9.02 Potential Consolidation with the County. Future consolidation between the County and the Sanitary District is permissible if the governing bodies of the County and the Sanitary District deem such efforts Page 33 of 63 advisable and so long as such efforts do not impair, and are not inconsistent with, this Agreement and if the County agrees to undertake all of the Sanitary District obligations under this Agreement. Article X. Defense of this Agreement The Parties agree to participate in and oppose any legal proceeding challenging the validity or applicability of any terms of this Agreement and will seek to intervene in any action, if necessary, to make such opposition. The Sanitary District shall be responsible for retaining and paying the reasonable legal fees and expenses of counsel to oppose any such legal proceeding, and the counsel employed by the Sanitary District shall, unless otherwise agreed, be the lead counsel. Before retaining counsel, the Sanitary District shall seek consent from the remaining Parties for its choice of counsel, which consent shall not be unreasonably withheld. If the Sanitary District selects counsel to which a Town does not consent or if any Party reasonably contends the Sanitary District has selected counsel that lacks sufficient experience, resources, or freedom from conflicts to handle the matter, or that the counsel selected by the Sanitary District is not aggressively pursuing the matter, and the Sanitary District declines to appoint different or additional counsel, then such Party shall have the right to retain alternative counsel, whose reasonable fees and expenses will be paid by the Sanitary District, unless and until the Court determines that such Party’s position is unreasonable. If any Party is required to oppose any such legal proceedings and any other Party is (or Parties are) unwilling or unable to join in the opposition, then the missing entity or entities shall be Page 34 of 63 responsible for paying, as they are incurred, their portion of any attorneys’ fees and expenses that are incurred in such action. Article XI. Effect of Settlement; Any Settlement Agreement Incorporated Section 11.01 If Settlement Reached. If the Sanitary District, Belville, and Leland all agree to this Agreement and a Settlement Agreement, then the Litigation, including any appeals thereof, shall be resolved pursuant to both the terms of this Agreement and such Settlement Agreement entered into by the Sanitary District, Belville, and Leland, and such Settlement Agreement shall be deemed to be referred to herein and fully incorporated by reference as to those Parties. Section 11.02 Navassa Not Bound by Purely Settlement Terms. Navassa was not a party to the Litigation, and to the extent it joins this Agreement, Navassa shall not be deemed to be a Party to, and will not be bound by, the separate Settlement Agreement entered into by the Sanitary District, Belville, and Leland, but shall be bound fully by the terms of this Agreement. Article XII. Insurance, Defense, and Indemnification Section 12.01 Insurance. The Sanitary District shall maintain, at its sole expense, insurance coverage(s) to protect against losses arising from or related to the ownership and operation of all Systems subject to this Agreement, at commercially reasonable amounts consistent with typical industry practice. Page 35 of 63 Section 12.02 Defense; Indemnification. The Sanitary District shall defend and indemnify the remaining Parties from and against any and all claims, demands, or causes of action arising from or related to the ownership or operation of the physical assets that are subject to this Agreement. Article XIII. Breach Section 13.01 Breach. Any Party to this Agreement that fails to comply with any obligation imposed upon it by this Agreement shall be in breach of this Agreement. Without limiting the generality of the foregoing, it shall constitute a breach by the Sanitary District for the Sanitary District to: (a) refuse to provide water and sewer services in accordance with this Agreement; or (b) provide water and sewer services in a Town's Development Area without that Town requesting or consenting in writing that the Sanitary District do so. Section 13.02 Remedies for Breach. In the event of a Party’s breach, and that Party’s failure to cure that breach within five (5) days after being provided with written notice of such breach, any Party harmed by that breach shall be entitled to pursue any legal or equitable remedy against the breaching Party in any court of competent jurisdiction. Notwithstanding the foregoing or anything else herein, this Agreement shall not obligate any Party to exercise its power to levy Page 36 of 63 taxes either to make payments falling due under, or to pay any judgment entered against the Party as a result of the Party’s breach of, this Agreement. Section 13.03 Damages for Failure to Convey or Execute Annexation Agreement. The Parties agree that the measure of damages by an aggrieved Party for another Party’s failure to convey an interest in assets as required by this Agreement shall be $1,000 for each day the Party fails to make such conveyance after receiving notice of its failure to convey so long as the aggrieved party’s conduct is not a cause of the failure to convey. Section 13.04 Injunction for Breach. The Parties agree that any breach of this Agreement will cause irreparable harm to the non-breaching Parties for which there may not be an adequate remedy at law. Accordingly, in the event of an actual or threatened breach hereof, the non-breaching Party or Parties shall be entitled to a temporary restraining order, a preliminary injunction, and a permanent injunction to address such breach, including a decree requiring specific performance of the obligations hereunder. Such injunctive relief may include a preliminary or permanent mandatory injunction. The injunctive relief addressed in this Section shall be in addition to any other remedies afforded a Party or Parties in equity or at law. Such injunctive relief or decree will be available without the posting of any bond or other security. Section 13.05 Mediation. The Parties agree to mediate any disputes that arise under this Agreement at the earliest reasonable time, which shall not be later than sixty (60) days after the filing of any civil action. Page 37 of 63 Article XIV. Termination Section 14.01 Termination. This Agreement may be terminated only if one or more of the following circumstances occurs: (a) the expiration of the Term of this Agreement; (b) all Parties to this Agreement agree to its termination in writing; (c) any Party obtains a final ruling from a court of competent jurisdiction, as to which all non-extraordinary appeal rights have been exhausted, expired, or waived, that a change in law, another Party’s material breach, or a court order would result in frustration of an essential purpose of this Agreement; or (d) this Agreement, or a material term hereof, is declared invalid or void by a court of competent jurisdiction in a final ruling as to which all non- extraordinary appeal rights have been exhausted, expired, or waived. Section 14.02 Compensation to Town for Property Transferred Under Article V upon Early Termination. In the event this Agreement is terminated before the expiration of its original Term, a Town shall be entitled to recover from the Sanitary District compensation for the assets it has transferred to the Sanitary District pursuant to Section 3.06 and Article V. Such compensation shall be calculated by multiplying the value of all assets the Town transferred to the Sanitary District pursuant to Section 3.06 and Article V on the date of their transfer by the number of years remaining on the original Term of this Agreement and then dividing the product by the total number of years of the original Term. A Page 38 of 63 Town which withdraws pursuant to Section 3.06(k) shall also be entitled to recover the compensation addressed in this Section. Article XV. General Provisions Section 15.01 Governing Board. Any Party’s joining in this Agreement is subject to prior approval by that Party’s respective governing body. Section 15.02 Governing Law. This Agreement shall be governed by North Carolina law. Section 15.03 Notices. Any communication required or permitted by this Agreement must be in writing except as expressly provided otherwise in this Agreement. All notices must be sent both to a Party’s Clerk and to its Town or Sanitary District Attorney as the case may be. Section 15.04 Execution of Additional Documents; Required Approvals. Each Party shall execute, and if necessary file or record, any additional agreements or papers as may be necessary or desirable to effectuate and further evidence the terms and conditions of this Agreement. The Parties shall cooperate to obtain any approvals required or appropriate to effectuate this Agreement. Section 15.05 Cooperation. The Parties covenant and agree that they will each cooperate in good faith to carry this Agreement into effect and to achieve the purposes set out herein. Page 39 of 63 Section 15.06 Severability. If any provision of this Agreement shall be determined to be invalid or unenforceable, that shall not affect any other provision of this Agreement. The Parties, however, must meet and attempt to agree upon a substitute provision that they reasonably believe would be enforceable, and in the event they are unable to do so, any Party aggrieved by the loss of the provision determined to be unenforceable may proceed in accordance with section 14.01(d). Section 15.07 Entire Agreement; Amendments. This Agreement, and the related Settlement Agreement, Annexation Agreement(s), and Consent Order constitutes the entire, fully integrated contract among the Parties concerning this subject matter. No Party has relied upon any other representations, oral or written, as a basis for entering into this Agreement. This Agreement shall not be changed, amended, or modified except in a writing signed by all the Parties. Section 15.08 Binding Effect. Subject to the specific provisions of this Agreement, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns. No provision herein is intended to or shall be construed as a pledge of the full faith and credit of a Party hereto or an assignment of a governmental discretionary function. Section 15.09 Non-Liability of Officers and Agents. No officer, agent, or employee of any Party shall be subject to any liability or accountability by reason of the execution of this Agreement or any other documents related to the transactions contemplated hereby. Such officers, agents, or employees shall be Page 40 of 63 deemed to execute such documents in their official capacities only, and not in their individual capacities. This Section shall not relieve any such officer, agent, or employee from the performance of any official duty provided by law. The officials and employees of each Party shall not be deemed agents or employees of any other Party in performance of this Agreement. Section 15.10 Non-Enforcement is Not a Wavier. A Party’s failure to enforce any provision of this Agreement at any time shall not constitute a waiver of that provision or any other provision of this Agreement. Section 15.11 No Third-Party Rights; Prohibited Agreements. This Agreement is not intended to provide, and shall not be deemed to afford, any non-party to this Agreement any interest or rights (including third party beneficiary rights) in connection with any provision contained herein or contemplated hereby. Except as expressly provided herein, no Party may assign its rights or obligations under this Agreement without the agreement of the other Parties. Section 15.12 Disclaimer of Representations and Warranties. Each Party understands and agrees that, except as expressly set forth herein, no Party to this Agreement or any agreement or document contemplated by this Agreement, makes any representation or warranty, express or implied, regarding this Agreement or any assets transferred pursuant to this Agreement. Section 15.13 Counterparts. This Agreement may be executed in several counterparts, including separate counterparts and via facsimile or PDF Page 41 of 63 transmittal. Each shall be an original, but all of them together constitute the same instrument. [END OF AGREEMENT. SIGNATURES FOLLOW ON NEXT PAGE] Page 42 of 63 EXECUTION IN WITNESS WHEREOF, the Sanitary District has caused this Agreement to be executed in its corporate names by its duly authorized officers. Brunswick Regional Water And Sewer This instrument has been preaudited in H2GO, a body politic and corporate the manner required by the Local organized and existing pursuant to G.S. Government Budget and Fiscal Control Chapter 130A, Article II, Part 2 Act. By:______By:______Jeff Gerken Scott Hook Chairman, Board of Commissioners Finance Officer Brunswick Regional Water And Date:______Sewer H2GO Date:______ Approved as to Form: Jeff Gerken, Scott Hook, and Stephen Coble personally appeared before me and subscribed the foregoing document in my presence. Witness my hand and my notarial seal, By:______Stephen Coble By:______Sanitary District Attorney Teresa Long Sanitary District Clerk Date:______Date:______ Page 43 of 63 IN WITNESS WHEREOF, Belville caused this Agreement to be executed in its corporate name by its duly authorized officers. The Town of Belville, North Carolina, a This instrument has been preaudited in municipal corporation organized and the manner required by the Local existing pursuant to G.S. Chapter 160A Government Budget and Fiscal Control Act. By:______Mike Allen Mayor By:______[Name] Finance Officer Town of Belville, North Carolina Approved as to Form: Mike Allen, ___, and James E. Eldridge personally appeared before me and subscribed the foregoing document in my presence. Witness my hand and my By:______notarial seal, James E. Eldridge Town Attorney By:______Athina Williams Town Clerk Notary Public Date:______ Page 44 of 63 IN WITNESS WHEREOF, Leland caused this Agreement to be executed in its corporate name by its duly authorized officers. The Town of Leland, North Carolina, a This instrument has been preaudited in municipal corporation organized and the manner required by the Local existing pursuant to G.S. Chapter 160A Government Budget and Fiscal Control Act. By:______Brenda Bozeman Mayor By:______Carly Hagg Finance Director Town of Leland, North Carolina Approved as to Form: Brenda Bozeman, Carly Hagg, and John Wessell personally appeared before me and subscribed the foregoing document in my presence. Witness my By:______hand and my notarial seal, John Wessell Special Town Attorney By:______Sabrena Reinhardt Town Clerk Notary Public Date:______ Page 45 of 63 Schedule of Exhibits Exhibit 1 - “Municipal Limits and Development Areas” Exhibit 2 - “Schedule of Transferring Personnel” Exhibit 3 - “Schedule of Transferred Assets and Debts” Exhibit 4 - “Schedule of Projects” Exhibit 5 - “Annexation Agreement” Page 46 of 63 Exhibit 1 - Municipal Limits and Development Areas [begins on following page] Page 47 of 63 Exhibit 2 - “Schedule of Transferring Personnel” Vacation Accrual Rate Employee Last Name Employee First Name Position Hourly Rate Vacation Balance Sick Balance (Per Hour Worked) Faircloth Brandon Public Utilities Supervisor $ 27.64 121.32 63.80 0.038 Hudson Shawn Utilities Maintenance Worker $ 18.13 162.43 195.23 0.038 Flynn Michael Utilities Maintenance Worker $ 17.91 15.82 164.20 0.038 Watson Aaron Utilities Maintenance Worker $ 17.49 5.55 178.83 0.038 Blankenship Yulia Billing & Collections Admin $ 19.58 19.97 251.43 0.050 Page 48 of 63 Exhibit 3 - “Schedule of Transferred Assets and Debts” ASSETS BEING TRANSFERRED BY LELAND 1. All utility easements recorded in the Brunswick County Register of Deeds listing the Town of Leland as GRANTEE 2. All water and sewer utility infrastructure and associated easements, right-of-ways, and utility encroachments conveyed from individuals, business entities, developers, HOAs, builders, contractors, or other entities to the Town of Leland 3. All water, water transmission lines, water distribution pipes, fire hydrants, valves, service taps, meters, registers, remote meter reading equipment, and appurtenances to the overall water distribution system shown on the Water System Map in Exhibit A. 4. The 750,000 gallon the elevated water tank, site improvements, and appurtenances located on parcel 0580000728, containing an easement of 2.21 acres of land, recorded in Book 3758, Page 0445 of the Brunswick County Register of Deeds. 5. The booster pump, vault, and appurtenances located on parcel 05800007, located at 22 Kay Todd Road. 6. All wastewater, wastewater collection sewers, manhole, lift stations, pump stations, force mains, valves, air release valves, service taps, service laterals, Page 49 of 63 clean-outs, and other appurtenances to the overall wastewater collection system shown on the Sewer System Map in Exhibit B. 7. Lift Station #1 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located on parcel 04700046606 behind 1240 Magnolia Village Way easements recorded in Map Book 0077, Page 0097, Map Book 36 Page 56, and Map Book 20 Page 393 of the Brunswick County Register of Deeds. 8. Lift Station #2 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1005 Cornerstone Drive, behind 1304 Grandiflora Drive on Parcel 0370005539 and easements recorded in Map Book 0019 Page 172, Map Book 20 Page 394, and Map Book 27 Page 131 of the Brunswick County Register of Deeds. 9. Lift Station #3 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 8900 Timber Lane and deed/easement recorded in Map Book 0031, Page 0352 of the Brunswick County Register of Deeds. 10. Lift Station #4 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1165 Willow Pond Lane and deed/easement recorded in Book 1360, Page 1265 of the Brunswick County Register of Deeds. 11. Lift Station #5 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at Page 50 of 63 8691 Orchard Loop Road and deed/easement recorded in Book 1560, Page 207 of the Brunswick County Register of Deeds. 12. Lift Station #6 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1231 Greensview Circle and deed/easement recorded in Book 2979, Page 0935 of the Brunswick County Register of Deeds. 13. Lift Station #7 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 117-K Village Road and deed/easement recorded in Book 1214, Page 0082 of the Brunswick County Register of Deeds. 14. Lift Station #8 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 2000 Royal Palm Way and deed/easement recorded in Map Book 0029, Page 0410 of the Brunswick County Register of Deeds. 15. Lift Station #9 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 125 Rampart Drive and deed/easement recorded in Book 1609, Page 685 of the Brunswick County Register of Deeds. 16. Lift Station #10 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 164 Old Fayetteville Road and deed/easement recorded in Book 1687, Page 685 of the Brunswick County Register of Deeds. Page 51 of 63 17. Lift Station #11 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1501 Olde Waterford Way and deed/easement recorded in Map Book 0033, Page 0087 of the Brunswick County Register of Deeds. 18. Lift Station #12 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 114 Fairview Drive and deed/easement recorded in Book 1214, Page 0082 of the Brunswick County Register of Deeds. 19. Lift Station #13 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 100 Live Oak Drive and deed/easement recorded in Book 0026, Page 0381 of the Brunswick County Register of Deeds. 20. Lift Station #14 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 159 South Navassa Road and deed/easement recorded in Book 0026, Page 0430 of the Brunswick County Register of Deeds. 21. Lift Station #15 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 121 Lake Drive and deed/easement recorded in Book 0026, Page 0381 of the Brunswick County Register of Deeds. 22. Lift Station #16 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 151 Page 52 of 63 Forest Hills Drive and deed/easement recorded in Book 1662, Page 0400 of the Brunswick County Register of Deeds. 23. Lift Station #17 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 2035 Pine Harvest Drive and deed/easement recorded in Book 1955, Page 0598 of the Brunswick County Register of Deeds. 24. Lift Station #18 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1700 Low Country Boulevard and deed/easement recorded in Book 3587, Page 0868 of the Brunswick County Register of Deeds. 25. Lift Station #19 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 2015 Annsdale Drive and deed/easement recorded in Book 3587, Page 0686 of the Brunswick County Register of Deeds. 26. Lift Station #20 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 5000 Rice Gate Way and deed/easement recorded in Book 3587, Page 0686 of the Brunswick County Register of Deeds. 27. Lift Station #21 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1010 Stony Woods Lane and deed/easement recorded in Map Book 39, Page 29 of the Brunswick County Register of Deeds. Page 53 of 63 28. Lift Station #22 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 2092 Wind Lake Way and deed/easement recorded in Book 2969, Page 0974 of the Brunswick County Register of Deeds. 29. Lift Station #23 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1238 Sleepy Oak Lane and deed/easement recorded in Book 3587, Page 0868 of the Brunswick County Register of Deeds. 30. Lift Station #24 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 1211 Cape Fear National Drive and deed/easement recorded in Book 3587, Page 0868 of the Brunswick County Register of Deeds. 31. Lift Station #25 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 2401 Shelmore Way and deed/easement recorded in Book 3862, Page 0576 of the Brunswick County Register of Deeds. 32. Lift Station #26 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 3101 Smeades Drive and deed/easement recorded in Book 3893, Page 0568 of the Brunswick County Register of Deeds. Page 54 of 63 33. Lift Station #27 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 3060 Broadhaven Drive and pending dedication to the town. 34. Lift Station #28 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 2059 Southern Pines Drive pending dedication to the town. 35. Lift Station #29 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 7120 Pungo Lake Court pending dedication to the town. 36. Lift Station #30 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 996 Kay Todd Road pending dedication to the town. 37. Lift Station #31 including facilities, pumps, piping, valves, controls, alarm systems, generators, fencing, and other appurtenances thereon located at 2797 Southern Magnolia Drive pending dedication to the town. 38. Allocation in sewer treatment plant for which Leland has paid to date DEBTS AND LIABILITIES BEING TRANSFERRED BY LELAND 1. BB&T financing for sewer improvements, Contract 00007, dated January 26, 2018, in the original principal amount of $4,000,000 2. Remaining payments on debt to Brunswick County for Sewer Treatment Plant allocation Page 55 of 63 Exhibit 4 - “Schedule of Projects” LELAND SCHEDULE OF PROJECTS 1. Lift Station #10/ Hwy 17 Forcemain Upgrade 2. Lift Station #1 Relocation 3. Hewett-Burton Road Lift Station 4. Old Town Creek Road Lift Station 5. Hazel Branch Road Forcemain 6. Left Station #14 Relocation 7. Water Booster Pump Page 56 of 63 Exhibit 5 – “Annexation Agreement” [begins on following page] Page 57 of 63 ANNEXATION AGREEMENT WHEREAS, the Town of Belville and the Town of Leland (the “Participating Municipalities”), duly incorporated municipalities under the laws of the State of North Carolina, desire to eliminate uncertainty among residents and property owners in unincorporated areas adjacent to the Participating Municipalities and also to improve planning by public and private interests in such areas; and WHEREAS, Chapter 160A, Article 4A, Part 6 of the North Carolina General Statutes authorize municipalities to enter into binding agreements concerning future annexation in order to enhance orderly planning by such municipalities as well as residents and property owners in areas adjacent to such municipalities; NOW, THEREFORE, THE PARTICIPATING MUNICIPALITIES AGREE AS FOLLOWS: 1. This Agreement is executed pursuant to the authority of G.S. Chapter 160A, Article 4A, Part 6. 2. This Agreement shall terminate twenty (20) years after its effective date. 3. The Town of Belville may not annex the following area(s): those areas labeled Leland Development Area on the attached map titled “Municipal Limits and Development Areas,” and attached to this Agreement as Exhibit A and incorporated herein by reference. 4. The Town of Leland may not annex the following area(s): those areas labeled Belville Development Area on the attached map titled “Municipal Limits Page 58 of 63 and Development Areas,” and attached to this Agreement as Exhibit A. and incorporated herein by reference. 5. The effective date of this Agreement is October 18, 2019, or the date of adoption of the approving ordinance by the last participating municipality to do so, whichever is later. 6. At least sixty (60) days before the adoption of any annexation ordinance, the Participating Municipality which is proposing any annexation in the area(s) subject to this Agreement shall give written notice to the other participating municipality(ies) of the proposed annexation. Such notice shall describe the area to be annexed by a legible map, clearly and accurately showing the boundaries of the area to be annexed in relation to this Agreement; roads, streams and any other prominent geographical features. Such notice shall not be effective for more than 180 days. The notified municipality may waive this time period. 7. This Agreement will not be effective unless each Participating Municipality has held a public hearing on this Agreement, or the Participating Municipalities have held a joint public hearing, prior to adopting the ordinance approving this Agreement. Until such time as the required public hearings are held and the respective approving ordinances are adopted, this document shall be considered a proposed agreement. 8. This Agreement may be modified or terminated by a subsequent agreement entered into by the Participating Municipalities. Any subsequent Page 59 of 63 agreement shall be approved by ordinance after public hearings as provided in G.S. 160A-3l(c). 9. This Agreement shall not be binding beyond three miles of the primary corporate limits of a Participating Municipalities, unless approved by the board of county commissioners with jurisdiction over the area. Provided, however, that an area where this Agreement is not binding because of failure of the board of county commissioners to approve it, shall become subject to this Agreement if subsequent annexation brings it within three miles. The approval of a board of county commissioners shall be evidenced by a resolution adopted after a public hearing as provided in G.S. 160A-58.24(c) and (e) and 160A-31(c). 10. This Agreement may be terminated unilaterally by a participating municipality or a participating municipality may withdraw from this Agreement by repealing the ordinance which approved this Agreement and providing five years' written notice to the other participating municipality(ies). Upon the expiration of the five-year period, this Agreement shall terminate. 11. From and after the effective date of this Agreement, no participating municipality may adopt an annexation ordinance as to all or any portion of an area in violation of the Act or this Agreement. 12. Nothing in this Agreement shall be construed to authorize the annexation of any area which is not otherwise subject to annexation under applicable law. Page 60 of 63 13. Any Participating Municipality which shall believe that a violation of this Agreement has occurred shall have available to it all remedies and relief authorized by G.S. Chapter 160A, Article 4A, Part 6 in addition to such remedies or relief as are authorized by other applicable law. 14. The Participating Municipalities refer to and incorporate by reference the Settlement Agreement and Interlocal Agreement executed by and between Belville, Leland, and H2GO Brunswick Regional Water And Sewer with the effective date of October 18, 2019. 15. Except as otherwise indicated herein, this writing contains the entire agreement between the Participating Municipalities as to the subject matter hereof. IN WITNESS WHEREOF, the Parties execute this Agreement to become effective as provided herein. [END OF AGREEMENT. SIGNATURES FOLLOW ON NEXT PAGE] Page 61 of 63 EXECUTION IN WITNESS WHEREOF, Belville caused this Agreement to be executed in its corporate name by its duly authorized officers. The Town of Belville, North Carolina, a This instrument has been preaudited in municipal corporation organized and the manner required by the Local existing pursuant to G.S. Chapter 160A Government Budget and Fiscal Control Act. By:______Mike Allen Mayor By:______[Name] Finance Officer Town of Belville, North Carolina Approved as to Form: Mike Allen, ___, and James E. Eldridge personally appeared before me and subscribed the foregoing document in my presence. Witness my hand and my By:______notarial seal, James E. Eldridge Town Attorney By:______Athina Williams Town Clerk Notary Public Date:______ Page 62 of 63 IN WITNESS WHEREOF, Leland caused this Agreement to be executed in its corporate name by its duly authorized officers. The Town of Leland, North Carolina, a This instrument has been preaudited in municipal corporation organized and the manner required by the Local existing pursuant to G.S. Chapter 160A Government Budget and Fiscal Control Act. By:______Brenda Bozeman Mayor By:______Carly Hagg Finance Director Town of Leland, North Carolina Approved as to Form: Brenda Bozeman, Carly Hagg, and John Wessell personally appeared before me and subscribed the foregoing document in my presence. Witness my By:______hand and my notarial seal, John Wessell Special Town Attorney By:______Sabrena Reinhardt Town Clerk Notary Public Date:______ Page 63 of 63 EXHIBIT “S” Still no H2GO vote on proposed settlement, Belville says it won’t sign latest version | Por... Page 1 of 4 Still no H2GO vote on proposed settlement, Belville says it won’t sign latest version portcitydaily.com/local-news/2019/10/16/still-no-h2go-vote-on-proposed-settlement-belville- says-it-wont-latest-version October 16, 2019 Candidate for H2GO Commissioner Steve Hosmer holds up an annexation map purportedly created by Leland, shared by Belville in a press release, at H2GO’s Tuesday meeting. (Port City Daily photo/Johanna Ferebee) Update: This article has been updated to include a comment from Leland. BRUNSWICK COUNTY — With no regular meetings scheduled until after election results are expected in November, Brunswick Regional Water and Sewer H2GO has yet to vote on a proposed settlement agreement that would settle the region’s dispute over providing water and sewer utilities. Neither has Leland, the plaintiff in the multimillion-dollar utility lawsuit surrounding the rightful ownership of H2GO’s assets. And Belville, the defendant, just announced its vehement opposition to the agreement as it stands. This comes two months after the northern Brunswick County governments jointly announced a kumbaya after years of tension and increasing legal costs. Related: Leland ushers residents through sanitary district petition process, Belville unaware and mayor not happy https://portcitydaily.com/local-news/2019/10/16/still-no-h2go-vote-on-proposed-settlemen... 3/18/2020 Still no H2GO vote on proposed settlement, Belville says it won’t sign latest version | Por... Page 2 of 4 H2GO held back-to-back meetings this week; a special called meeting Monday and its regular board meeting Tuesday. Though the proposed agreement was discussed at both, the board did not announce a vote taken in closed session nor did it take action in open session after. A ‘work product’ Just over an hour ahead of H2GO’s Tuesday meeting, Belville announced in a press release its opposition to the legal document in its current version (read the full press release at the bottom of this article). However, when asked about the document, Chairman Jeff Gerken said there is no agreement and described it as still being a “work product.” Before entering closed session Tuesday, Gerken said he was unaware of Belville’s press release and would need time to review it before offering any comment on its contents. Both Gerken and Commissioner Trudy Trombley voiced concerns over how current H2GO challengers, Steve Hosmer and Barry Laub, obtained information related to the proposed agreement; the two challenger candidates criticized the proposal during the public comment period Tuesday. Trombley said she assumed the candidate’s “friends at Belville” provided the information; Gerken said he had serious concerns regarding a purported breach of legal confidentiality. Both Hosmer and Laub maintain they sourced information from Belville’s press release, which the town shared an hour and 20 minutes before the meeting began. During the Commissioners’ discussion, Hosmer got up and physically handed Gerken a copy of the release. “We are continuing to focus on a regional solution and settlement,” Hilary Snow, Leland’s spokesperson, said Wednesday in response to Belville’s release. Both H2GO and Belville denied public records requests for a copy of the agreement (Belville’s Town Administrator cited a confidentiality statute and H2GO’s clerk said she did not have a copy). Belville not signing In its press release, Belville claims Leland has inserted unrelated annexation agreements within the proposed settlement agreement. A map provided in the release, which appears to have been created by Leland, shows large swaths of land outside of current Leland municipal limits depicted as “development areas” (view the full map below). https://portcitydaily.com/local-news/2019/10/16/still-no-h2go-vote-on-proposed-settlemen... 3/18/2020 Still no H2GO vote on proposed settlement, Belville says it won’t sign latest version | Por... Page 3 of 4 “Leland even made it easier to see their power grab in living color by providing the attached map that vibrantly highlights their desired takeover of northeastern Brunswick County. It provides irrefutable evidence that Leland’s goal in the H2GO [reverse osmosis] fight never had anything to do with protecting their citizens from Belville. Leland just wanted to grab money and power by taking control of H2GO assets and imposing new annexation agreements,” the town’s press release states. The release states the 63-page agreement contains no commitment to construct H2GO’s long-planned aquifer-based reverse osmosis plant, and would transfer millions in debt to H2GO. By “dumping millions” into the sanitary district’s debt balance, Leland would hamstring H2GO’s ability to issue debt it needs to construct the RO plant, Belville claims. Leland would also “gain an ownership interest” in H2GO’s assets that it currently does not have, according to Belville (the town’s release does not specifically describe what exactly this means, a definition Leland’s Town Manager declined to offer a substantive description of last month). “This latest version is nothing more than a bludgeon to reduce H2GO to a subservient status, a subservient position, to Leland,” Hosmer said at Tuesday’s meeting. The Town of Leland meets Thursday for its regularly scheduled meeting, its last before election results are learned in November. At the town’s agenda review meeting Monday, Manager David Hollis said if there is an update on the proposed settlement to provide Council, it would be provided in closed session Thursday. View the map shared in Belville’s press release. Click to enlarge. https://portcitydaily.com/local-news/2019/10/16/still-no-h2go-vote-on-proposed-settlemen... 3/18/2020 Still no H2GO vote on proposed settlement, Belville says it won’t sign latest version | Por... Page 4 of 4 View Belville’s full press release below: Local Voice Mail – Proposed Agreement L…NE Brunswick County Through Annexation-1-3 (1) by Johanna Ferebee on Scribd https://portcitydaily.com/local-news/2019/10/16/still-no-h2go-vote-on-proposed-settlemen... 3/18/2020 EXHIBIT “T” Belville declines proposal aimed to settle H2GO dispute https://www.wect.com/2019/10/15/belville-declines-proposal-aimed-settl... Belville declines proposal aimed to settle H2GO dispute October 15, 2019 at 5:44 PM EDT - Updated October 15 at 6:33 PM WILMINGTON, N.C. (WECT) - Belville will not sign the proposal submitted last week that aimed to settle an ongoing dispute about H2GO water and sewer assets. According to Water PIO Mike McGill, the latest proposal was sent to the parties involved last Friday. Tuesday evening, Belville announced it will not sign the proposal “without substantive amendments,” according to a press release. “After reviewing the proposal, it is clear it is just Leland’s latest blatant attempt to grab land and power in northeastern Brunswick County by killing the H2GO RO plant, taking ownership of H2GO assets, and forcing new, unrelated annexation agreements,” Belville’s press release said. “In the entire 63-page agreement, there are only two sentences concerning the construction of the H2GO RO plant and those sentences do NOT guarantee the completion of the plant. Instead, it uses legalese to make sure no commitment to construct can be legally enforced.” H2GO’s board will meet Tuesday at 6 p.m. According to the meeting agenda, the group plans to discuss the lawsuit in executive session. WECT has reached out to the Town of Leland for comment. Copyright 2019 WECT. All rights reserved. 1 of 1 https://www.wect.com/2019/10/15/belville-declines-proposal-aimed-settl... EXHIBIT “U” EXHIBIT “V”