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July 2023 Town Board Meeting
Should the Town Join the Distressed?
July 19, 2023

uly’s Town Board meeting fell on July 4 in 2023. It was moved to Tuesday, July 11 to accommodate the holiday.

In that Tuesday meeting, there was a full quorum present, along with both officers and 14 members of the public.

In attendance: town hall sign Mayor Sally Belangia, Commissioners David White, Charlie Overcash, Allen Price, Sandy Winfrey, Frank Roe, Town Manager Diane Miller, Deputy Finance Director Tammy Cox, Officers Nic Blayney and Bill Wichrowski.

Short Term Rental at 407 High Street
Commissioners held a public hearing for a Special Use Permit (SUP) for the residence at 407 High Street to be used as a short term rental. The application said it had been used as a long term rental prior.

Commissioners went through the vetting process – a series of seven questions that put the burden of proof not to grant the SUP on the surrounding residents. No one gave evidence at the Public Hearing or the Planning Board as to why the short term rental permit should not be allowed.

As a result the SUP was granted.

Commissioner Frank Roe asked Town Manager Diane Miller if the board were considering changing the SUP process. She answered that they were.

The current Special Use Permit Process is constructed in a way that the applicant bears no responsibility for giving proof that their permit request is in harmony & compliance with the surrounding area, an anomaly in local legislation according to the town attorney.

Oriental’s Board of Commissioners.

Current legislation in the General Assembly is also moving to keep municipalities from restricting any short term rental in any zone, including R1 zones, which are the most restrictive zones. An R1 zone usually does not have multiple buildings on one lot, has a single family residence, and does not have industry or retail allowed within the area.

To Join the Distressed Unit List or Not?
Oriental has been invited to join the Distressed Unit List by the Viable Utilities Unit of the NC Department of Water Quality. The offer is a result of the town scoring an 8 on the state’s Unit Assessment Criteria Scorecard.

How We Got Here
Oriental’s water plant is considered underfunded by the state for several reasons: the water fees are lower than in surrounding areas, some monies are pulled from the General Fund to support the Water Plant (all administration costs and some salaries), and with depreciation added into the fund calculations, it appears as though the plant is not solvent.

Town Manager Miller has said in previous meetings that the plant is solvent. Funds from the American Rescue Plan Act (ARPA) received during COVID were mostly put into upgrading old systems and refurbishing existing structures within the plant. The result is a depreciation factor that was not present before.

That was not enough to get the town invited to join the Distressed Unit List, but a series of no-show auditors and a late audit as the result of software issues contributed to the problem.

A Late Audit Causes Problems
In June 2022, the town’s auditor Gregory Redman presented the audit to the Board of Commissioners. He explained why the audit was late (software issues) and that the town would have to send a letter to the state explaining the situation and that it was out of their hands. Commissioners agreed and sent the letter.

As a result of the tardiness of the audit, Oriental was placed on the Unit Assistance List in 2023. The town’s utilities (the water plant) will be monitored for the next three years – there is no way to get off that list early.

Susan Kubacki explains the Unit Assessment List Scorecard as Town Manager Diane Miller and Tammy Cox listen.

Explaining Distressed Unit List Membership
Susan Kubacki of the NCDEQ Viable Utilities Unit spoke to Commissioners to explain how the list works.

Legislation passed in 2020, SL 2020-79, created another list – the Distressed Unit List – with the stated purpose to help smaller utilities struggling to provide water and sewer utilities.

One of the ways to get on the list is to score an 8 or above on the Unit Assessment Criteria Scorecard (Oriental is at an 8 for 2023). One of the defining characteristics as laid out by SL 2020-79 is that towns who have not submitted audits, or submitted them late, for two consecutive years will be automatically added to the list.

At this time, she said, Oriental is being “offered the opportunity to be designated as a distressed water unit.”

Explaining the Unit Assessment Criteria Scorecard, Kubacki said it used the town’s financial data from their audit, information on water resources and public water supplies, and affordability information based on the makeup of the community. “Most of those parameters have one point. There are some that have higher points just based on being higher predictors of risk as the program has developed.”

Kubacki said Oriental’s score of 8 put them in the potentially distressed designation. “If you score above the threshold two years in a row, then we would automatically recommend you for designation.” Meaning the town would not have a choice, and would have to join the list.

The Pros
• Grant funds that are earmarked for designated distressed units.
• Mandatory rate study
• Utilities Education for elected officials (not plant operators)

The Cons
• Grants are not guaranteed
• Towns may be required to regionalize their systems, meaning Oriental could lose their water system to Pamlico County
• Once on the list, you can’t come off it until several criteria are met, even if you drop below the threshold on the scorecard
• No town on the list has come off yet
• Some grants come with the requirement that the utility be dissolved or merged into another one

Commissioner Comments
“I don’t see any compelling reason to join at this time,” said Commissioner Charlie Overcash. “We’re waiting on an audit [for 2022-2023], we’ve raised our [water] rates… our manager is actively looking for grants. There’s $600 million out there, I’m sure she’s looking for a piece of it. And the fact that we can’t get out of this coalition easily makes me not want to do it.”

Commissioner Roe had a different take. “We’re not funding it as I think it should be funded.” Roe wants to combine with other agencies to maximize purchasing power and get better pricing for items like salt. Roe also wants water rates to be as high as those in the rest of Pamlico County, and have those funds be available for things like water pipe replacements.

Commissioner Charlie Overcash asks about how to get of the Distressed Unit List.

“Little water plants like ours are going to go away,” said Roe, “In my opinion, they’re going to go away in the next five years, so I see a lot of advantages to joining.”

Commissioner David White agreed with Overcash’s caution in joining something they could not easily get out of – even if Oriental dipped below the threshold for getting on the list. “I worry about programs like these becoming administrative nightmares for small towns who don’t have the manpower.”

The education requirements and studies mandated by participating in the list were moot in the case of Oriental, White concluded. “The training sounds more like it’s towards elected officials than for the people that work with the plant. We’ve done tremendous studies about our water plant and what we need to do.”

White opted to wait a year, see what the new audit and the new water rates brought.

All Commissioners except Commissioner Roe voted to wait a year. The town will be reassessed in the spring. If they score below an 8, they will not be forced to join the list, nor will they be allowed to opt in to it.

The American Flood Coalition
The Eastern Carolina Council of Government has offered Oriental a chance to become a member of the American Flood Coalition.

There are no dues, no fees, and no requirements from the town to join. “At the very least, we get information on resilience and sustainability,” said Town Manager Miller. “At the best, we will have an opportunity to apply for additional funding.”

Commissioners White and Roe said they had looked into the organization and could not find out much about the coalition, including what they stood for or what they could provide. Neither felt they had enough information to vote at this time. Commissioners requested Jim Blackerby and the Harbor Waterfronts Committee take a look at the organization and report back.

Board Appointments
Several auxiliary boards are having members come and go. All were approved by the Board of Commissioners.

The Planning Board
Julie Rahm and Tom Stone have resigned from the Board. Butch Rasmussen is the a newest member. Tom Quigley was reappointed.

Parks and Recreation
Bonnie Crosser has resigned and Marsha Ostendorff is the newest member. Janice Coakley and Don Mau have asked for reappointments, and Vicki Rasmussen is the new Chair.

Harbor Waterfronts Committee
Jim Blackerby remains as Chair. Don McGuire and Pat Stockwell are reappointed.

Board of Adjustment
Doug Carmichael was reappointed to the board.

Bay River Metropolitan Sewer Department
Debra Khouri was reappointed to the board.

Ordinances and Occupancy Taxes
Commissioners approved two budget related items:

• The Town Manager is allowed to move larger sums of money between budget accounts in the same fund without first seeking approval from the Board of Commissioners, up to $2,500.
• Occupancy Taxes will now be split between three auxiliary boards: 20% to Parks and Recreation, 30% to Tourism, 50% to Harbor Waterfronts.

Manger’s Report
Chicken ordinance There has been a request to loosen up the chicken ordinance in town due to the rising costs of food
Drainage – Town Manager Miller reviewed the drainage work that had been done in and around the village over the last several years to help mitigate the flooding problems seen after heavy rains and storms. The next drainage work to be done is at Midyette St. at Triton. It was noted that the residents were complaining about the flooding in the area.
New Street Assessment, potentially – Miller has been looking at costs for doing a new street assessment, given that the most recent one does not reflect the damage on Hodges Street or Water Street from water incursion, as well as other roads that have deteriorated since the last assessment
ADA Issues Lupton Park is not ADA accessible. An ADA study was funded by the ECCOG and is almost complete. Town may need to appropriate funds to put the study recommendations into place.

Comments for next board meeting
• Mayor Sally Belangia wants to put together a committee to help celebrate Oriental’s 125th anniversary happening next year
• The blue police charger will be going up for sale

Dates to Know
The next Town Board Meeting will be Tuesday, August 1 at 8a.

Related Links
July meeting agenda
• June Meeting Minutes
Special Use Permit for 407 High Street
• Resolution
Budget Ordinance
• Occupancy Tax distribution
Police Report
Manager’s Report

Posted Wednesday July 19, 2023 by Allison DeWeese

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