March 5_ 2003 by zhouwenjuan

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									                                     TOWN OF NAGS HEAD
                                   BOARD OF COMMISSIONERS
                                      REGULAR SESSION
                                        March 5, 2003

The Town of Nags Head Board of Commissioners met in the Board Room at the Nags Head Municipal
Complex at 9:00 a.m. on Wednesday, March 5, 2003.

COMRS PRESENT:       Mayor Robert Muller; Mayor Pro Tem George Farah III;
                     Comr. Doug Remaley; Comr. Anna Sadler; and Comr. Brant Murray

COMRS ABSENT:        None

OTHERS PRESENT:      Town Manager Webb Fuller; Deputy Town Manager Rhonda Sommer; Town
                     Attorney Ike McRee; Roberta Thuman; Tim Wilson; Bruce Bortz; Andy Garman;
                     Courtney Gallop; Charlie Cameron; Wayne Byrum; Kevin Zorc; Butch Osborne;
                     Dave Clark; Jim Northrup; Rayfield Bowe; Ryan Colbert; Solomon Mills; Jeanne
                     Acree; Bob Edwards; Don Bailey; Alan Long; Sean Timmons; Pogie Worsley;
                     Chuck Blazek; Clifford Perry; Branch Vincent; Doug Langford; Duke Geraghty;
                     Kevin Schwartz; Mark Sinesi; Bill Owen; Harry Thompson; Bob Oakes; Marian
                     Clough; William Clough; Sean Boyle; Sheila Foster; Matt Artz; and Deputy Town
                     Clerk Michelle Gray

Mayor Muller called the meeting to order. A moment of silent meditation was followed by the Pledge of
Allegiance to the United States Flag.


AUDIENCE RESPONSE

No one spoke during Audience Response.


RECOGNITION OF EMPLOYEES WITH YEARS OF SERVICE

On behalf of the Board, Mayor Muller presented five-year appreciation certificates to Rayfield Bowe who
began work with the Public Works Division as a Sanitation Equipment Operator II on February 18, 1998,
and to Ryan Colbert who began work with the Fire Division as a firefighter on March 2, 1998.

A cross pen with the town emblem was presented to Police Officer Solomon Mills for three years of
service who began work on February 10, 2000.


CONSENT AGENDA

The Consent Agenda consisted of the following agenda items:

-      Consideration of Budget Adjustment #9 to FY 02/03 Budget
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-      Consideration of Tax Adjustment Report
-      Consideration of proposed amendment to Town Code Chapter 5 Beaches and Waterways
       pertaining to definition of “swimming”
-      Request to establish lifeguard stand at Jennette’s Pier beach access site
-      Request for public hearing to consider proposed amendments to Town Code Section 22-254
       pertaining to real estate signs
-      Request for public hearing to consider proposed amendments to various sections of the Town
       Code pertaining to clarification of medical offices
-      Request for public hearing to consider proposed amendments to various sections of the Town
       Code pertaining to lot coverage exemption for oceanfront pedestrian accessways
-      Request for public hearing to consider proposed amendments to the Town Code pertaining to
       vegetation protection for commercial development

MOTION: Comr. Remaley made a motion to approve the Consent Agenda as presented. The motion
was seconded by Mayor Pro Tem Farah which passed unanimously.

A copy of the Budget Adjustment, as adopted, is attached to and made a part of these minutes as
shown in Addendum "A".

A copy of the Tax Adjustment Report, as approved, is attached to and made a part of these minutes as
shown in Addendum "B".


The memo from the Director of Public Safety concerning revised Town Code definition of
"swimming", dated February 26, 2003, read in part as follows:

"The Fire and Rescue Division presented to the Board of Commissioners, at your meeting of February
5th, 2003, the “2002” Annual Report of the Ocean Rescue Unit. (Attachment #1)

'In that report the Department of Public Safety recommended that the Town Code of Ordinances be
amended to permit “surfers”, using surf boards (as defined in the proposed ordinance) and with a leash,
to enter the ocean waters when “Red Flags” are authorized and posted on the oceanfront beaches in the
Town.

'I am recommending to the Board of Commissioners for your consideration that Section 5-2 (b) of the
Town Code of Ordinances be amended as follows:

       (b) “Swimming”, as used in this section, is defined to mean and include any entry into the waters
       of the Atlantic Ocean whether assisted by a raft, float or other aid or device commonly used, but
       shall not include any entry assisted by a “surfboard” as defined in this section. “Surfboard”, as
       used in this section, shall be defined as a fiberglass and foam combination at least (five (5) feet
       in length, having a minimum of one (1) fin and used in conjunction with a leash."

A copy of the ordinance amending the Town Code definition of "swimming", as adopted, is attached to
and made a part of these minutes as shown in Addendum "C".




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The memo from the Director of Public Safety concerning an additional lifeguard stand at
Jennette's Pier, dated February 26, 2003, as approved, read in part as follows:

"As the Board of Commissioners is aware, the Town, Dare County and the State of North Carolina
Aquarium System have entered into a partnership to ensure the preservation of the historical Jennette’s
Fishing Pier site.

'The preservation of Jennette’s Fishing Pier will also provide for increased educational as well as
recreational opportunities for both our residents and visitors to Nags Head and the Outer Banks of North
Carolina. The Jennette’s Fishing Pier will quickly become an educational and recreational family-oriented
destination.

'To better protect the increasing number of water recreation users at this location, I am recommending
and requesting that the Board of Commissioners authorize and fund an additional fixed lifeguard stand
to be located on the oceanfront beach between Jennette’s Fishing Pier and the already heavily used
Gulfstream Street Beach Access.

'The annual salary costs, plus FICA for this fixed lifeguard stand position is approximately $13,450.00,
plus the housing supplement of $440.00 The uniforms and equipment for this new lifeguard position is
approximately $400.00. The construction costs of the fixed lifeguard stand is approximately $300.00.

Total Estimated Costs:
Salary + FICA                  $13,450.00
Housing Supplement             $440.00
Uniforms and Equipment         $400.00
Cost of Lifeguard Stand        $300.00

Total Costs:                   $14,590.00"



PUBLIC HEARINGS/PUBLIC COMMENT

Large Structure Ordinance/Nags Head Architectural Standards; Staff presentation and
Public Comment

The following public comments were heard on the Large Structure Ordinance and the proposed
architectural standards:

-       Jeanne Acree; Nags Head resident; feels the large structure ordinance would not allow for
affordable housing due to the required Nags Head style features; she said everyone should have the
right to build a house of their choice; she asked the Board to not take away the right to choose.

-      Kevin Schwartz; Nags Head resident and Government Affairs Director for Outer Banks Association
of Realtors and the Outer Banks Homebuilders Association; he commended the town for the time and
energy spent on the ordinance but felt the Town discarded the building industries’ input from the Large
Structure Committee; he feels the main issue is that the town and its permanent residents do not wish



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to support any more visitor population within its borders during the peak season – he questioned why
the town would support beach nourishment if it wants to cap visitors; as a resident, he is concerned that
town government would be trying to force him to rebuild his average beach box to a style/standard that
he neither desires nor could afford if his home is even half destroyed; he would like the Board to bring
the Committee back in session with the Planning Board and the Board of Commissioners in a working
session so that some of the discarded suggestions, such as an overlay district that would give year-
round residents a break from some of the standards, could be reviewed.

-       Duke Geraghty; property owner; stated that he did not want to build a Nags Head style house
and feels many others will not as well; the property owner should be able to build whatever style they
feel; affordable housing and rentals will be lost because the average young family will not be able to
afford the required features; a builder will not have the time to inventory the required vegetation; he
does not want to be dictated to on the style of houses to be built and feels the Large Structure
Committee did not do their job.

-       Bob Oakes; Nags Head resident and business owner; has a strong interest in this issue; his real
estate business manages 350 homes in Nags Head which contributes tax revenue through occupancy,
property, and sales taxes; he also served on the Large Structure Committee; he likes the appearance
provisions and feels the house appearance contributes to the community’s appearance; he appreciates
the Board’s work on solving the parking problems; he feels that the Board may need to check for non-
conformities created; he shares the concerns of the quick term developer who builds, sells, and is then
gone.

A progress report was provided by Planning Director Tim Wilson on the Large Structure Ordinance/Nags
Head Architectural standards. He reviewed the proposed ordinance amendments and he presented an
overview of the architectural standards design manual.

Mayor Pro Tem Farah thanked staff for their diligence on this project.

Mayor Muller stated that a joint meeting with the Board of Commissioners, Planning Board and the Large
Structure Committee would be scheduled soon.


APPROVAL OF MINUTES

MOTION:       Comr. Sadler made a motion to approve the following Board of Commissioners minutes as
presented:

-      January 22, 2003, Adjourned Regular Session (Board Retreat)
-      February 5, 2003, Regular Session
-      February 10, 2003, Adjourned Regular Session
-      February 13, 2003, Adjourned Regular Session
-      February 25, 2003, Adjourned Regular Session

The motion was seconded by Comr. Remaley which passed unanimously.




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OLD BUSINESS/ITEMS TABLED FROM PREVIOUS MEETINGS

Update on beach nourishment project - Town Manager Fuller

Town Manager Fuller provided an update on beach nourishment. He explained that Dare County is
advertising for qualifications of companies that are interested in easement acquisitions. The next Beach
Nourishment Committee meeting has been scheduled for Tuesday, March 11, 2003, at 1:30 p.m. at the
Kill Devil Hills Town Hall. The Committee will review the access map that was provided to Board
members by Town Manager Fuller.

Mayor Muller announced that $500,000 has been allocated by the Federal Government for local beach
nourishment construction. He stated further that he, Comr. Murray and Town Manager Fuller would be
going to Washington D.C. next week to lobby for beach nourishment.


Update on customer service initiatives – Deputy Town Manager Sommer

Deputy Town Manager Rhonda Sommer provided an update on customer service initiatives for the Public
Works Department. She provided a brief PowerPoint presentation and reported that 78 cards have been
distributed and 39% have been returned. The overall rating for the department is very good.

It was Board consensus to have updates on customer service initiatives presented to the Board on a
quarterly basis.


Consideration of modification to Volunteer Fire Department Incentive Program
- from January 8, 2002, Board meeting

The memo from Mayor Muller dated March 21, 2003, was presented to the Board and read in part as
follows:

"Attached please find a proposal from the Nags Head Volunteer Fire Dept. to modify the incentive pay
plan for active members of the NHVFD. This program was originally crafted several years ago in an
effort to increase membership in the NHVFD and response to fire calls by volunteers. It has been
marginally successful in this regard. Retention has been good and some new members have been
recruited. I believe the current program has helped our relationship with the volunteers. I am not sure
what impact the incentive plan has had on meeting our goals of having more volunteers who respond to
more fire calls.

'The system works as follows: A member qualifies for inclusion in the incentive system by receiving
credit for participating in NHVFD activities. The qualifying activities are listed under the “Points System”
in the attached proposal. Under the proposal a member needs 100 points to qualify and 36 hours of
training time. Of the training time 18 hours must be with the NHVFD. Previously the plan required 50
points to qualify and had no requirement for training with the dept.

'Once a member has qualified they earn incentive pay in 3 ways. First they are rewarded for their
qualifications. A member receives the amount listed next to each certification they have. These are



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cumulative: A Red Tag fire fighter earns $250. If the member is also qualified as a Driver Operator
then the incentive rises to $450. Additionally each member receives $10 for each year of active
membership in the dept.

'Finally, each member is paid a set amount for every call they respond to. The amount per call varies
based on the training and certification of the member.


Increase In Incentive For Qualifications
Description                          Current    Proposed          'There are a variety of changes to the
Red Tag (Interior Firefighter)        $   100    $   250          plan. These changes are designed to
Driver Operator                       $   150    $   200          increase participation in NHVFD
Medical First Responder               $    50    $   100          training and fire fighting responses.
NC State Certified Firefighter        $   100    $   100          The first change is that the number
NC State Certified EMT                $   100    $   100          of points required to qualify for the
Certified Fire Investigator           $    25    $    25          incentive program rises from 50 to
NC State Certified EMT -D, I Or P $        25    $    25          100. The local training requirement
NC State Certified Fire Instructor    $    25    $    25          described above would also be
CPR Instructor                        $    25    $    25          added.      There are no changes in
Fire Inspector                        $    25    $    25          longevity incentive. The changes in
Certified Haz Mat First Responder $        25    $    25          the incentive for qualifications are
                                                                  detailed in the table to the left.
Orange Tag Status (Probationary $          25    $    25
Firefighter)
                                                                 'The largest change in the plan is in
the increase in incentives for call response. The logic behind these changes is that this is the most
important role for the members therefore it should be emphasized in the incentive plan. The changes
are detailed in the table below.

Increase In Incentive For Call Response
Level Of Training                  Amount Per Call                 'I estimate the increase in incentive
                                   Current      Proposed           pay could increase the cost to the
Orange Tag                          $      1.00 $      4.00        Town by about $5,000 based on last
Red Tag Or Driver Operator          $      1.50 $      6.00        year’s membership and responses.
NC Certified Firefighter Or EMT     $      2.00 $      8.00        This increase is split as $2,000 in
NC Certified Firefighter And EMT    $      2.25 $     10.00        qualification pay and $3,000 in call
                                                                   response incentives (520 total paid
call responses in 2002. Average increase approximately $6. total increase $3,120). If the increases in
incentive pay result in an increase in response then we could see a greater increase in total cost. The
table below details the amounts paid in incentive pay per year for the last 4 years. We budgeted just
under $17,000 this year for incentive pay.

Incentive   Pay per FY
FY           Amount            'The Board has several options. We can reject or accept the proposal
99-00        $    5,720        completely or we can request changes to address specific issues. I have
00-01        $    2,420        recently been questioned as to why we pay for qualifications that may
01-02        $    3,162        not benefit the Town like Fire Inspector or CPR Instructor. This issue
02-03        $    7,359        needs to be addressed. Another issue that we might want to discuss is a



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minimum number of call responses in order to qualify for the incentive program. Currently there are a
couple of members who received incentive pay but did not respond to a single call. Setting a minimum
threshold of call responses to qualify (similar to minimum points level) might increase responses."


It was Board consensus that Mayor Muller go back to the Volunteers to ask them to consider adding
a call response threshold to, and to request further clarification of, their proposed Recruitment and
Retention Plan.


Consideration of proposed amendments to the Town Code Section 22-153 Definitions and
Specific Words to allow cargo lifts in required yards – public hearing held at February 5,
2003, Board meeting

The memo from Town Clerk Carolyn Morris dated February 26, 2003, was presented to the Board and
read in part as follows:

“A public hearing was held at the February 5, 2003, Board of Commissioners meeting to consider
proposed amendments to the Town Code Section 22-153 Definitions and Specific Words to allow cargo
lifts in required yards.

‘Attached please find the backup material provided at that meeting.

‘The Board passed a motion to table the ordinance until the first Board meeting in March 2003.”


MOTION: Comr. Remaley made a motion to adopt the applicant ordinance as presented. The motion
was seconded by Mayor Pro Tem Farah which passed 3 – 2 with Mayor Muller and Comr. Murray casting
the NO votes.

Because no ordinance may be adopted on the date it is introduced except by at least a 2/3 affirmative
vote, a second vote was scheduled for the April 2003, Board meeting.


REPORTS AND RECOMMENDATIONS FROM THE PLANNING BOARD AND THE PLANNING
AND DEVELOPMENT DIRECTOR

Review of site plan amendment for Eastern North Carolina Cardiovascular (4923 S. Croatan
Highway) pertaining to water supply

Planning Director Tim Wilson summarized the Planning Board and Planning and Development staff
memo dated February 21, 2003, which read in part as follows:

“Seaboard Surveying, representing Offshore Properties, LLC has submitted the attached site plan
amendment application. The requested amendment to the plan is to supply the above site with water
service by tapping a water main located on NC 12 as opposed to the extension of and connection to a
water main located on the east side of US Highway 158. The subject property fronts on US Highway



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158 and does not have lot frontage occurring on NC12. The applicant proposes to make the water
connection by way of a private access and utility easement extending east from the property to NC 12.

‘On October 2, 2002 the Board of Commissioners approved the applicant’s site plan that showed an
existing eight inch water main located across the entire frontage of the property occurring along the east
side of US Highway 158 (Attachment #1). The water supply to the proposed development was approved
pursuant to this information as presented by the applicant. Shortly after the site plan approval it was
discovered by the Public Works Department that the above described eight inch water main did not exist
across the front of the property as depicted on the submitted site plan. The nearest water main to the
subject property occurring on the east side of US Highway 158 is an eight inch water main located to the
south at the intersection of Mall Drive.

‘Town Code Section 21-57 (Attachment #2) requires all new development to be connected to the Town’s
water system “in accordance with the standards and specifications then in effect.” A number of these
standards and specifications are identified in the Town’s Policy for Water Line Extensions adopted April
4, 1990 (Attachment #3) which in part requires that “All water mains must be extended across the
entire frontage of the lot or parcel to be developed.” Section #1 of this policy additionally requires that
water main extensions must be extended from the nearest existing water main which is of suitable size,
and clearly gives the Public Works Department the discretionary authority to determine the size and
installation requirements of new water mains. The Public Works Department has determined in this
case that the nearest water main of suitable size is the eight inch water main located immediately to the
south at Mall Drive.

‘In staff’s reading of the Code Section 21, Utilities, no provision for appeal from, or variance to, the
water supply connection requirements are found. Code Section 21 does provide limited opportunities to
an applicant concerning the potential sharing of costs, and then only under certain conditions and
circumstance, none of which the applicant has requested consideration of under this pending site plan
amendment. Therefore, staff maintains that while the Code was deliberately crafted to afford certain
financial relief or cost sharing opportunities in meeting the water supply connection requirements of the
Town, the Code was also constructed to be just as deliberately silent on the granting of variances to the
physical design and operational aspects of the water system. The relaxation of these system design
requirements was not to be contemplated, but rather were to be strictly adhered to, thus ensuring the
safe and efficient construction and operation of this water delivery system.

‘Planning Board Recommendation: At their meeting on February 18, 2003 the Planning Board by a 6-1
vote, with Mr. Jones voting against, recommended the approval of the site plan amendment to allow
connection to the water main located on NC 12 as requested by the applicant. Mr. Oakes in making the
motion to approve stated that this parcel had previously been platted as four (4) parcels which were
intended to be developed together with frontages occurring along both NC 12 and US Highway 158.

‘Planning Staff Recommendation:
Staff maintains that the requirements of the Code and the adopted administrative policies related
thereto are plainly clear, without conflict, and work together hand-in-glove in setting forth water supply
connection requirements and responsibilities. Moreover, there is no variance provision from these Code
requirements.




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‘Staff also maintains that the applicant’s request is in direct conflict with, and contrary to, both the
requirements of the Town Code governing connections to the Town’s water system and the related
administrative policies that have been adopted to implement these provisions. It is also the finding of
staff that the action being sought by the applicant under a site plan amendment request is in fact
tantamount to a variance request, a relief that Section 21 of the Code does not afford.

‘Staff furthermore maintains that the mere existence of an access and utility easement appearing on an
approved subdivision plat does not in and of itself convey any development rights as has been
previously asserted by the applicant. Simply put, a subdivision plat approves the division of property in
an orderly manner, it does not convey any future guarantees or rights as to how the newly subdivided
property may be used or developed in the future.

‘And last, while staff acknowledges and regrets that the erroneous water main shown by the applicant in
the original application was not discovered earlier, staff maintains that (1) the location of where the
water main and connection were originally shown incorrectly as “existing”, is in fact how and where this
water connection needs to be installed and pursuant to Town Code and policy and (2), the occurrence of
an administrative oversight or error, regardless of degree or impact, does not negate or diminish the full
force and effect of the requirements of the Code.

‘For all the reasons set forth above the Planning and Development Staff recommends the denial of the
requested site plan amendment."


The memo from Town Manager Fuller dated February 26, 2003, concerning this issue was
presented to the Board and read in part as follows:

"Attached please find Planning Board and Planning and Development staff correspondence in response
to a site plan amendment application from Seaboard Surveying, representing Offshore Properties, LLC,
to supply the Cardiovascular Center site with water service by tapping a water main located on NC 12 as
opposed to the water main located on the east side of US 158.

'I support the position of staff that no variance provision exists for this request and strongly encourage
the Board to deny the requested site plan amendment."

Bill Owen, surveyor representing the applicant; he stated that the 1987 Village Master Plan does not
show a waterline agreement made between the developer and the town; the Seven Sisters Subdivision
plat from 1996 shows that an original condition was for the waterline to be extended but that condition
was removed by the Public Works Director; the property was divided again in 1999 and a waterline
extension was not required; he emphasized that it is not on the Village Master Plan.

Mayor Muller explained that the Board is bound and must abide by the Town Code of Ordinances.

Comr. Sadler expressed her concern that a lot of changes have been made to the Village Master Plan.

MOTION: Mayor Pro Tem Farah made a motion to deny the request to amend the site plan. The
motion was seconded by Comr. Murray which passed with a 4 – 1 vote with Comr. Sadler casting the NO
vote.



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Review of site plan for Oncology Associates (4125 S. Croatan Highway - across from Nags
Head Post Office)

Zoning Coordinator Courtney Gallop summarized the Planning Board and Planning and Development
staff memo dated February 19, 2003, which read in part as follows:

"Coastal Engineering, representing Oncology Associates of Virginia has submitted the attached site plan
application for the construction of a 4,000 square foot medical office building. The 19,445 square foot
site is located on the east side of the US 158 bypass opposite the Nags Head Post Office just north of
Deering Street. The subject property is comprised of two (2) lots that must be recombined prior to the
issuance of a building permit.

'The subject property is zoned C-2 General Commercial where medical office is a permitted use. The
building will contain various facilities and equipment for cancer treatment as well one (1) doctor’s office.
The Town engineer has approved internal site circulation, ingress and egress and stormwater
management plans. Parking, lighting, buffers, setbacks, and lot coverage comply with the applicable
sections of the zoning ordinance as shown on the site plan. Fire and Public Safety issues have been
addressed. Public Works is coordinating with the applicant on their plans to extend a water line to the
property to provide the building with water service.

'Planning Board Recommendation:
At their meeting of February 18, 2003 the Planning Board members voted unanimously to recommend
approval of the attached site plan application as submitted. The Planning Board members encouraged
the applicant to redesign the site to eliminate the proposed curb cut on US 158 by connecting the
proposed parking lot internally to the BP station parking lot next door.

'Staff Recommendation:
The Planning and Development Staff recommend approval of the Oncology Associates medical office
building site plan application as presented."


MOTION: Mayor Pro Tem Farah made a motion to approve the site plan for Oncology Associates as
presented. The motion was seconded by Comr. Remaley which passed unanimously.


Review of site plan for a restaurant at The Village at Nags Head (5304 S. Virginia Dare Trail
– east of Village Realty)

Zoning Coordinator Courtney Gallop summarized the Planning Board and Planning and Development
staff memo dated February 18, 2003, which read in part as follows:

"Quible Engineering, representing Forrest Bartlett and Linda Rodgers, has submitted the attached site
plan application for the construction of an 8,938 square foot restaurant. The 55,416 square foot site is
comprised of lots 33 and 34 of the Village Commercial subdivision. Prior to issuance of a building permit
the site will need to be recombined into one (1) lot of record.



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'The subject property is located at the south east corner of the intersection of NC 12 and Epstein Street.
To the south, the property abuts the Town of Nags Head municipal complex site. To the west, the
subject property abuts the Village Realty office building.

'In the Village Commercial 2 district where the building would be located, restaurants are a permitted
use. As the floor plans show, space in the building will be allocated for dining, a catering operation, and
management offices. The site plan shows no excess parking spaces to accommodate the storage of
catering vehicles.

'The Town engineer has approved internal site circulation, ingress and egress and stormwater
management plans. Parking, lighting, buffers, setbacks, and lot coverage comply with the applicable
sections of the zoning ordinance as shown on the site plan. Fire, Public Safety, and Public Works issues
have been addressed.

'The building elevations indicate that the building would comply with the 35-foot building height limit
established by the zoning ordinance.

'Planning Board Recommendation:
At their meeting of February 18, 2003 the Planning Board members voted unanimously to recommend
approval of the attached site plan which has been revised to bring the height of the proposed building
into compliance with the Town’s 35 foot height limit. The Planning Board members discussed the height
of the proposed building and the pitch of its roof. They recommended that the Board of Commissioners
at a future time, explore allowing the height of certain commercial buildings to be measured to the top
plate of the roof rather than the top ridge of the roof to encourage the construction of more “Nags
Head-style” roof lines and roof pitches.

'Staff Recommendation:
The Planning and Development Staff recommend approval of the attached restaurant site plan
application as presented."


MOTION: Comr. Remaley made a motion to approve the site plan for the restaurant in The Village at
Nags Head as presented. The motion was seconded by Mayor Pro Tem Farah which passed
unanimously.


NEW BUSINESS

Report from Citizens Advisory Committee

The report from the Citizens Advisory Committee meeting of February 10, 2003, was presented to the
Board and read in part as follows:

"LINKING WEST SIDE NEIGHBORHOODS




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Deputy Town Manager Rhonda Sommer reported that the issue of linking west side neighborhoods
together is currently going through the town’s Capital Improvement Program (CIP) process; it is
included in tonight’s CIP Workshop.

'TOWN RECREATION SITE
Planning Director Tim Wilson reported that the town recreation site plan, prepared by Dare County Parks
and Recreation, is currently undergoing some changes. It is expected that the site plan will be on the
March 2003, Planning Board agenda.

'MULTI-USE PATH SAFETY
Deputy Town Manager Rhonda Sommer explained that issues involving the multi-use path include ice on
the path from sprinkler systems; companies have cooperated with staff when asked to turn the sprinkler
systems off.

'COMMERCIAL SITE VEGETATION PRESERVATION
Planner Andy Garman presented and summarized a report concerning vegetation preservation on
commercial sites which is included as Attachment #1.

'The Committee passed a motion to support Option #2 as presented and to recommend that the town
endeavor to set up some form of input from the builder/developer community. The motion passed 7 – 1
with Susan Boncek casting the NO vote.

'BYPASS BEAUTIFICATION
Planner Andy Garman presented and summarized a report on the NC DOT bypass landscaping project
which is included as Attachment #2.

'STATUS OF SOUTH NAGS HEAD CANAL/DITCH
Town Manager Fuller stated that NC DOT has had the prisoners from the State Corrections Department
clean out the South Nags Head ditches.

'LARGE STRUCTURE/NAGS HEAD ARCHITECTURE ORDINANCE
Planning Director Tim Wilson provided a summary of his presentation to the Board of Commissioners last
week which was an update of the proposed Large Structure ordinance.

'NEW BUSINESS
Camille Lawrence
Ms. Lawrence emphasized that the town needs to consider why more hotels are not being built in the
area.

'Susan Boncek
Ms. Boncek questioned the status of the Animal Control Officer position; Ms. Sommer stated that the
position has been advertised and should be filled very soon.

'Committee members
Committee members thanked Town Manager Fuller and staff for the good job done during and after the
recent snow storm."




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Report from Artwork Selection Committee

The report from the Artwork Selection Committee meeting of February 12, 2003, was presented to the
Board and read in part as follows:

'REVIEW OF DRAFT LETTER TO ARTISTS
A draft letter to each artist, prepared by Kim Allen, was reviewed and modified by Committee members.
A copy of the letter, as modified, is provided as Attachment #1.

'SUGGESTION BY EMPLOYEE JIM NORTHRUP
Committee members discussed town employee Jim Northrup’s suggestion that a “framed invitation” be
provided at Town Hall, as well as on the town’s web site, to invite the public to view the town’s artwork
collection. Majid Elbers is to prepare a draft “framed invitation” for review by Mayor Muller and Town
Manager Fuller prior to bringing back to the Committee for review and formal acceptance.

'DRAFT LETTER TO SCHOOLS AND AGENCIES
Mary-Ellen Riddle will provide a draft letter to agencies/schools for Committee review and formal
acceptance at next month’s Committee meeting.

'ARTIST FOR NEXT COMMITTEE MEETING
Carolyn Morris is to contact artist Sandra Nelson-McNeal to see if she has a body of work for review by
the Committee at next month’s meeting.

'ADDITIONS TO ARTIST LIST
It was Committee consensus to add the following artists to the List of Artists for consideration by the
Committee: John Orlick; David Wise; Susan Wells Vaughan; Pat Hayward; and Mike Bennett.

'REVIEW OF FRANK STICK ART SHOW
The Committee passed motions for the following:
-     to purchase the fiber “Afternoon Shadows” by artist Judy Ann Drought for the price of $700.
-     to purchase the wood piece “To Life” by artist Robert Mason for the price of $275.
-     to purchase the oil on canvas “Wet Lands” by artist Pat Williams for the price of $700.
-     to reframe “Wet Lands” in a shadow box.
-     to purchase the watercolor “Great Day” by artist Susan Righter for the price of $395.
-     to reframe “Great Day” with a different mat/frame and with UV-reflective, non-glare glass."


Request for authorization for new Police Officer position in Dept. of Public Safety

Public Safety Director Charlie Cameron summarized his memo dated February 26, 2003, which read in
part as follows:

"As the Board of Commissioners is aware, the Police Division is recommending and requesting funding,
in the Town’s 2003/2004 Capital Improvement Program, for the addition of two (2) sworn police officer
positions.




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                                                                           Nags Head Board Meeting Minutes
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'In the Police Division C.I.P. Project Description Form – “Capital Improvements – Vehicles and Personnel”
the justification for these requested police officer positions was detailed. (Attachment #1)

'Additional justification for these sworn police officer positions was presented to the Board of
Commissioners at your C.I.P. Workshop held on February 13, 2003.

'For the Town, our citizens and visitors to receive meaningful benefit for the coming summer and for this
Centennial of Flight year from any new police officer positions, these positions need to be filled
immediately. I am, therefore, recommending and requesting that the Board of Commissioners increase
the authorized staffing level for police officers in the Police Division by one (1) police officer with an
effective date of March 17th, 2003.

'There are presently sufficient funds available in the Police Division’s FY 2002/2003 operating budget to
cover the salary and benefit package for this police officer position for the remainder of this fiscal year.
If approved, the Police Division is proposing to keep in service a police vehicle, that is scheduled to be
replaced this month, for the remainder of this fiscal year. A new police vehicle and associated
equipment for this position, is included in the Police Division’s FY 2003/2004 Operating Budget
submission.

'Police Division staff is available to answer questions that the Board of Commissioners might have
regarding this request."


MOTION: Comr. Remaley made a motion to authorize the Public Safety Director to hire an additional
police officer. The motion was seconded by Mayor Pro Tem Farah and Comr. Sadler which passed
unanimously.

Chief Cameron thanked the Board for their continued support.


Request to change Town of Nags Head banking services

Finance Officer Rhonda Sommer introduced Deputy Finance Officer Kim Kenny who summarized the
Administrative Services memo dated February 24, 2003, which read in part as follows:

"A strong and seamless banking relationship is essential to the efficient performance of the operations of
the Town, particularly the department of Administrative Services. With the acquisition of Centura Bank
by Royal Bank of Canada (RBC) we have experienced an ongoing steady deterioration of our relationship
with Centura, as well as, a significant reduction in the level of customer service we receive. This decline
in service has been experienced in all aspects of the relationship including investment activities, credit
card transactions, and our depository accounts.

'As a result of the changes in service, the Town no longer has funds invested by Centura. We have
maintained the custodial account for investments as required by statute, however, we have experienced
problems with this service as well. These include inaccurate information on monthly statements,
charges for the service which are not authorized by our contract, inability to follow investment directions




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with the potential to overdraw the Town’s operating account, and failure to provide sufficient details of
transactions so that we can properly record investment transactions.

'With the acquisition by RBC, Centura’s credit card operations went from being handled in house to
outsourced with a corresponding reduction in oversight and accountability for operations. We received
insufficient notice that our existing cards would expire without having first received any replacement
cards. They were unable to tell us when or how many cards had been mailed, to whose attention they
had been addressed, or when we would receive them. They did offer to overnight additional cards to us
at our expense which we declined. For some departments it took several weeks to get a sufficient
number of cards and for other departments we received more cards than we had employees. Once new
cards had been received we began to experience problems with the billing. They weren’t able to
process our payments in a timely manner resulting in the incurrence of interest and finance charges.
After several attempts at having these resolved and multiple promises that they would be, Centura
ultimately reimbursed us for the charges and we switched our payment method from check to bank
draft. While this payment method appears more efficient on its face, it no longer allows us the
opportunity to dispute erroneous charges prior to their payment with any credits due left entirely up to
the discretion of the vendors.

'Problems with our level of service also extend to our depository accounts. One of the more significant
examples of poor customer service involved a situation with the exchange of contaminated money
where Centura received a full weeks advance notice of the situation and our needs and gave us every
indication that they would be able to provide us with that service. It was not until Police personnel
arrived at the bank to exchange the funds that we were informed by Centura staff that they would be
unable to handle the transaction only to take the same funds to another bank, with which we had no
established banking relationship, that easily made the exchange of funds that we needed.

'There have been several instances of adjustments to our account related to deposits. We receive no
notice of these adjustments until receipt of the monthly bank statement. At that time we must then
request that the item be researched to obtain any detailed information regarding the adjustment which
typically takes seven to ten days to receive. In most cases these have ended up being bank encoding
errors and not Town errors which are then subsequently readjusted. On at least one occasion, Town
staff had to explain to bank staff how to correct their error. It is not unusual for us to have to call more
than once to have an adjustment explained and corrected. We have experienced checks cleared for
incorrect amounts; the most recent instance a check for $50 was encoded and cleared as $709.41. One
of the original justifications for selecting Centura as the Town’s depository three years ago was their
promised service level for adjustments that included telephone notice of any adjustment to our account
and courier delivery to the branch of our choice for returned items. Instead, we continue to experience
lengthy delays in the receipt of returned checks, rejected EFT transactions, and documentation for
adjustments to our account.

'In response to these problems, staff has spoken on multiple occasions to various representatives from
Centura at all levels of the organization. While there has been some improvement in some areas, the
overall level of service does not approach what it used to be or what it needs to be.

'Staff contacted representatives from other local banks including BB&T, ECB, First South, and Gateway
for informal proposals for banking service based on the compensating balance approach to fees that is
comparable to what we have currently. We received written proposals from BB &T, Gateway, and First



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                                                                           Nags Head Board Meeting Minutes
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South. The non-interest bearing balances required by each are as follows: BB & T $945,000, Gateway
$605,000, and First South $100,000. Based on the responses received, it is Staff’s recommendation that
First South Bank be named as the depository for the Town of Nags Head.

'First South will provide three main accounts for the Town – operating, payroll, and facility fee accounts.
First South will provide reconciliation software, direct deposit capabilities, daily deposit courier service,
Town credit cards, and investment safekeeping. The fee for services will be based on a compensating
balance of $100,000 of Town funds which will not be “swept” for daily investment as the remainder of
funds will be. In addition, there will be a one-time fee of $250 and monthly fees of $100 for the Total
Treasury Manager software needed for payroll direct deposit, utility billing EFT activity, and ACH
transactions. First South anticipates the availability of on-line banking in the near future which will
alleviate these ongoing costs. Additional costs to the Town include the printing of new checks and
deposit tickets.

'Copies of all checks deposited by the Town will be image archived and available within one to two
business days. Copies can be obtained by fax immediately. Response for research items is generally
one business day. Cancelled checks will be returned to the Town each month with the bank statement
in numerical order. Free checking and savings accounts will be provided for employees.

'First South Bank officials have been made thoroughly aware of the Town’s banking needs and desired
level of service and have indicated their willingness and ability to assume this role for the Town of Nags
Head. Additionally, First South is listed as an approved depository by the Local Government
Commission.

'In summary, RBC Centura has not been able to maintain the level of service that we expect and that we
were promised. First South Bank has indicated their desire and ability to provide the banking services
that the Town requires, as well as the customer service needed by Town staff to enable them to perform
at the level required by the Board and the citizens of Nags Head. Therefore, you are asked to name
First South Bank as depository evidenced by the resolution attached."


MOTION: Comr. Murray made a motion to approve staff’s request and adopt the corresponding
resolution authorizing the change of the town's banking services to First South Bank. The motion was
seconded by Comr. Sadler which passed unanimously.

The resolution authorizing the change to First South Bank, as adopted, read in part as follows:

“RESOLUTION AND AGREEMENT FOR DEPOSIT ACCOUNT AND BANK SERVICE WITH FIRST SOUTH BANK

‘BE IT RESOLVED by the Town of Nags Head Board of Commissioners that First South Bank be, and hereby
is, designated as a depository institution for the Town of Nags Head and that funds so deposited may be
withdrawn upon a check, draft, note or order of the Town of Nags Head, AND

‘BE IT FURTHER RESOLVED that all checks, drafts, notes or orders drawn against said account be signed
by any one of the following: RHONDA SOMMER, FINANCE OFFICER; KIMBERLY N. KENNY, DEPUTY
FINANCE OFFICER; and countersigned by any one of the following: J. WEBB FULLER, TOWN MANAGER;




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ROBERT W. MULLER, MAYOR; whose signatures shall be duly certified to said Bank, and that no checks,
drafts, notes or orders drawn against said Bank shall be valid unless so signed, AND

‘BE IT FURTHER RESOLVED that said Bank is hereby authorized and directed to honor and pay any checks,
drafts, notes or orders so drawn whether such checks, drafts, notes or orders be payable to the order of
any such person signing and/or countersigning said checks, drafts, notes or orders, or any of such persons
in their individual capacities or not, and whether such checks, drafts, notes or orders, or to the individual
credit of any of the other officers or not. This resolution shall continue in force and said Bank may consider
the facts concerning the holders of said offices, respectively, and their signatures to be and continue as set
forth in the certificate of the Finance Officer or Town Clerk, accompanying a copy of this resolution when
delivered to said Bank or in any similar subsequent certificate, until written notice to the contrary is duly
served on said Bank.”


Consideration of Lease with Carolina Telephone (Sprint) for Gull Street switching station

Deputy Town Manager Rhonda Sommer summarized the request from Carolina Telephone that the
Board consider adoption of a resolution authorizing the lease of the real property located at the Gull
Street switching station, described as an 18 foot by 20 foot parcel, for the location of a telephone
equipment switching hut. It is requested that the annual lease payment for this property be $5,400.

Public notice of the Board's consideration of the lease was published in the Coastland Times on Sunday,
February 23, 2003, as required by law.

Town Manager Fuller pointed out to the Board the manner in which the telephone books would be
delivered was added in the agreement; however Sprint has sold that part of the business and is not
responsible for delivery of the phone books.

MOTION: Comr. Remaley made a motion to authorize entering into a lease agreement with Carolina
Telephone and Telegraph (Sprint) for the lease of the real property, Gull Street switching station, and
adopting the corresponding resolution as presented. The motion was seconded by Mayor Pro Tem
Farah which passed unanimously.


The resolution, as adopted, read in part as follows:

"RESOLUTION AUTHORIZING THE LEASE OF CERTAIN REAL PROPERTY

'WHEREAS, public notice of the intent of the Town of Nags Head Board of Commissioners to consider at
its regular meeting to be held on the 5th day of March, 2003, the lease of certain real property of the
Town was published, as required by law; AND

'WHEREAS, said public notice also included time and place of the meeting along with a description of the
real property and a statement of the annual lease payments, as required by law; AND




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                                                                         Nags Head Board Meeting Minutes
                                                                                           March 5, 2003


'WHEREAS, at its regular meeting on the 5th day of March, 2003, the Town of Nags Head Board of
Commissioners considered the lease of the property and desires to lease the real property of the Town
described below:

'An 18 foot by 20 foot parcel at the Gull Street Pumping Station site for location of telephone equipment
switching hut.

'NOW, THEREFORE, BE IT RESOLVED by the Town of Nags Head Board of Commissioners that:

'1.    The following described property is hereby declared to be surplus to the needs of the Town:

'An 18 foot by 20 foot parcel at the Gull Street Pumping Station site for location of telephone equipment
switching hut.

'2.     The Mayor and the Town Clerk are hereby authorized to execute a lease agreement for the real
property of the Town described above, said lease agreement to be for no longer than 10 years
(including options to extend or renew).

'3.    The annual lease payment for the real property of the Town of Nags Head described above will
be $5,400.

'Adopted this 5th day of March, 2003."


TOWN MANAGER FULLER – MEMORANDUM OF UNDERSTANDING BETWEEN TOWN AND
DARE COUNTY FOR RECREATION SITE

Town Manager Fuller summarized his memo dated February 26, 2003, which read in part as follows:

"Attached please find the proposed Memorandum of Understanding between the Town and Dare County
for the use of the town’s recreation site. The MOU makes the following points:

-      County is authorized to construct improvements pursuant to the site plan (provided as Exhibit
       “A”); any other improvements requested are subject to approval of the town
-      Town is responsible for clearing property and for obtaining all required
       permits/fees
-      Improvements, to include any necessary waterlines, are done at County expense
-      County has exclusive use and control of the facilities constructed
-      Events/uses are scheduled through Dare County Recreation Department
-      The MOU is entered into as part of PARTF grant which requires agreement to remain in effect for
       25 years

'I am in full support of the attached agreement and request Board authorization of its execution. Staff
will be available at the March 5, 2003, Board of Commissioners meeting to answer any questions you
may have."




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                                                                                            March 5, 2003


MOTION: Comr. Sadler made a motion to approve entering into a Memorandum of Understanding
with Dare County for the town's recreation site as presented. The motion was seconded by Comr.
Remaley which passed unanimously.


TOWN MANAGER FULLER – CONTRIBUTION TO NC AQUARIUM

Town Manager Fuller's memo dated February 26, 2003, concerning the request by the NC Aquarium
Society for grant funds was presented to the Board and read in part as follows:

"Attached please find a request from the North Carolina Aquarium Society for $14,000 in grant funds to
be used for public educational programs at Jennette’s Pier. Their enclosure details the proposed budget
for the amount requested and includes equipment and supplies for coastal educational programs.

'I am in full support of the Aquarium Society’s request as my response letter, attached, indicates.

'Funds are available from the Nags Head Woods Contribution line item to fulfill this request."

MOTION: Comr. Murray made a motion to authorize a contribution of $14,000 to the NC Aquarium
Society for the purpose of establishing environmental education programs for Jennette’s Pier. The
motion was seconded by Comr. Remaley which passed unanimously.


RECESS FOR LUNCH

The Board recessed for lunch at 12:00 noon.


RECONVENE FROM LUNCH

The Board reconvened from lunch at 1:30 p.m.


MAYOR MULLER – AMERICAN RED CROSS MONTH PROCLAMATION

A proclamation declaring March 2003, as American Red Cross Month was presented to the Board by
Mayor Muller.

MOTION: Comr. Murray made a motion to adopt the proclamation for American Red Cross Month as
presented. The motion was seconded by Mayor Pro Tem Farah which passed unanimously.

The proclamation, as adopted, read in part as follows:

“PROCLAMATION HONORING AMERICAN RED CROSS MONTH MARCH 2003




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                                                                          Nags Head Board Meeting Minutes
                                                                                            March 5, 2003


‘WHEREAS, the American Red Cross is a humanitarian organization, led by volunteers, that aims to
improve the quality of human life, enhance individual self-reliance and concern for others, provide relief
to victims of disasters and help people prevent, prepare for, and respond to emergencies; AND

‘WHEREAS, the American Red Cross provides the courageous men and women who serve our country’s
Armed Forces with the ability to keep in touch with their families; AND

‘WHEREAS, the American Red Cross operates the most extensive blood collection, testing, processing,
and distribution network making it our nation’s largest blood product supplier; AND

‘WHEREAS, the volunteers of the American Red Cross, by their unselfish and untiring efforts, contribute
significantly to the welfare of this community.

‘NOW, THEREFORE, BE IT RESOLVED, by the Mayor and Board of Commissioners of the Town of Nags
Head that the month of March shall be designated as AMERICAN RED CROSS MONTH, and we urge all
citizens to support wholeheartedly and generously this great volunteer effort that touches all our lives in
some way.”


MAYOR MULLER – RESOLUTION IN SUPPORT OF THE TOWN OF KITTY HAWK

The resolution supporting the Town of Kitty Hawk condemnations to protect Virginia Dare Trail (NC 12)
was presented to the Board by Mayor Muller.

MOTION: Mayor Pro Tem Farah made a motion to adopt the resolution in support of the Town of Kitty
Hawk condemnations as presented. The motion was seconded by Comr. Remaley and Comr. Murray
which passed unanimously.

The resolution, as adopted, read in part as follows:

“A RESOLUTION IN SUPPORT OF EFFORTS BY THE TOWN OF KITTY HAWK TO PROTECT VIRGINIA
DARE TRAIL

‘WHEREAS, Virginia Dare Trail is an important part of the Outer Banks transportation system and its
viability is important to the welfare of our entire community; AND

‘WHEREAS, for many years Virginia Dare Trail has been threatened by ocean overwash and erosion in
the vicinity of its intersection with Kitty Hawk Road which, left unchecked, could have broken the
continuity of the road; AND

‘WHEREAS, the Town of Kitty Hawk has forged a partnership with the North Carolina Dept. of
Transportation to protect the integrity of this important thoroughfare; AND

‘WHEREAS, the Town of Kitty Hawk has taken decisive action including the condemnation of property to
protect the highway.




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                                                                          Nags Head Board Meeting Minutes
                                                                                            March 5, 2003


‘NOW, THEREFORE, BE IT RESOLVED that the Town of Nags Head Board of Commissioners commends
the Town of Kitty Hawk for its action to protect Virginia Dare Trail and offers their support and heartfelt
gratitude to the Town of Kitty Hawk for their actions to ensure the viability of this important community
resource.”


FESTIVAL OF THANKSGIVING UPDATE – CHAIR DWIGHT GREGORY

Festival of Thanksgiving Chair Dwight Gregory presented an update on the 2003 Festival. He stated that
the Festival would total three (3) days and would be held at the Outer Banks Family YMCA.

It was Board consensus that Mayor Muller be the Board liaison to this year’s Festival Committee.


DISCUSSION OF WATER CONSUMPTION UNIT TABLE

The request from Mr. Fred E. Bear, III, dated January 29, 2003, to modify the Town Code requirements
for the calculation of water consumption units (WCU) was presented to the Board. Mr. Bear’s request is
attached to and made a part of these minutes as shown in Addendum “D”.

Doug Langford spoke as a Nags Head resident and as representative for the applicant, Mr. Fred E. Bear,
III; he questioned the fairness of the issue; the town recognizes parking standards for furniture and
appliance stores; he questioned how many more furniture stores will be built in Nags Head such as the
Outer Banks Furniture Store in the Outer Banks Mall Shopping Center.

MOTION: Mayor Muller made a motion to direct staff to construct a Water Consumption Unit (WCU)
table for furniture and appliance stores as a separate category for further consideration by the Board.
The motion was seconded by Mayor Pro Tem Farah which passed unanimously.


RETIREMENT CONCERNS

Deputy Town Manager Rhonda Sommer provided an overview of her memo dated February 25, 2003,
which read in part as follows:

"A question has been raised concerning retirement benefits for the Town of Nags Head’s employees.
More specifically, the Town of Nags Head did not enroll new, probationary employees into the retirement
system from June 18, 1975 until December 16, 1986. Legally, could the Town do this? Does the Town
have any current obligation to the employees that were hired during this time?

'First, the decision to offer retirement benefits is a discretionary decision by the Board. Per North
Carolina General Statute (NCGS) 160A-163, the enrollment of city employees in a retirement plan is
discretionary. Next, if it chooses to offer retirement benefits, the Town of Nags Head also has the
choice of retirement systems. The Town of Nags Head has been a member of the Local Government
Employees Retirement System (LGERS) since July 1, 1965.




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                                                                         Nags Head Board Meeting Minutes
                                                                                           March 5, 2003


'Further, the Town of Nags Head Board of Commissioners has the choice of whether to enroll employees
into the LGERS when they are hired or when they successfully complete their probation. NCGS states
that all regular employees (of participating units) must be enrolled into the retirement system.
Probationary employees are not considered regular employees, so their enrollment is therefore
discretionary. The Town changed their previous practice of waiting until employees completed probation
to enroll them and began to enroll all fulltime employees when they were hired in December 1986.

'In summary, the practice of waiting to enroll employees not only was legal at that time but continues to
be a choice of each member unit in the LGERS today. While the LGERS does not track how each of its
participants time their enrollments, we have attached a listing to this memo of agencies who responded
to our inquiry and their choices in this matter (Attachment A).

'Information provided to the Board at the last discussion of this matter indicated that conversations with
Doris Gard disclosed the rationale used for not enrolling employees into LGERS on their hire date. The
decision to delay at that time was due to high turnover, the extensive paperwork requirements and the
desire to save money. It makes sense when you consider that the Town would have had to make Town
contributions, in addition to withholding the employee’s portion, and would not be able to recover any
portion of those funds if the employee either chose not to stay or was not retained after their
probationary period. These decisions were made taking into consideration the issues at hand at that
time. To clarify – there was no error nor any omission - it was a conscience choice.

'NCGS 128-26 specifically addresses the purchase of this probationary time. You will see in this section
that the purchase of probationary time is only an option for those employees whose units of government
have changed their practice related to enrollment. Taking that a step further, this buyback discussion
would not even be a possibility if our practice had not been changed. As detailed in NCGS and shown in
the LGERS handbook “it is optional with the employer whether to share the cost with its employees”
(Attachment B).

'As the files have been reviewed extensively, documents were located in ten of the fifteen employee
personnel files indicating that the employees were advised in writing when they were hired of the
specific time at which they would be enrolled into the retirement system.

'In previous discussions we thought that Legislation in process might address the calculation of this
buyback cost more favorably. As was reported to you at the October 2002 Board meeting, the action
only applied to time that was previously cashed in and not for time that was never covered during
probation. This legislation has had a considerable impact on this item in spite of no direct benefit, as
State staff are so far backlogged with requests to purchase cashed in time at the favorable rates that we
are still missing 73% of our employees applications for calculation of the cost involved even though we
made application on October 25, 2002. With that said, the numbers that are attached to this memo are
approximations based on the figures we were provided when this item was first brought up projected to
current amounts based on the percentage change in the few applications that we did actually receive. In
other words, we extrapolated the change to approximate the figures we did not receive revised from the
State.

'Again as we discussed at a previous Board meeting, we are of the opinion that the Town can only make
payments that it would have made if these employees were enrolled in the retirement system.
Contributing beyond that amount could possibly be considered a discriminatory act with respect to the



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                                                                           Nags Head Board Meeting Minutes
                                                                                             March 5, 2003


buy back and thus prohibited by NCGS. For example, the Town does not currently nor at any other time
pay the employee’s contribution during their probationary period. This is construed to mean that the
most the Town could contribute to this purchase if they so choose, would be the Town’s portion or
approximately 45% (Attachment C). Employees would remain responsible for their portion.

'An additional consequence of the purchase of this credit for law enforcement officers, regardless of who
pays, is that the law enforcement separation allowance will utilize the same retirement credit dates.
Longer credited service for LGERS will result in additional unfunded liabilities to the separation allowance
trust fund. These numbers will not be felt immediately as the actuarial reports and funding are prepared
eight and considered eighteen months in-arrears, respectively.

'Recent listserve inquiries yielded only one unit of government participating with their employees in
purchasing their time. The City of Shelby indicates that they maintain a fund from which they contribute
the municipality’s portion should an employee bring in a request to purchase this time. (They also
changed their practice of not enrolling probationary employees in 1986 – the same year as Nags Head).

'Communications with the Retirement System indicate that retirement credit purchases can be made
only in increments of twelve months or the total time to be purchased (if it was less than twelve
months). This would preclude most of the affected employees from purchasing the probationary time
incrementally or from purchasing credits using only the Town’s portion of funding.

'In summary, the non-enrollment for probationary service periods prior to December 1986 was a
conscience decision and not an error/omission. The NCGS clearly states the terms for purchase of
probationary time and the complete discretion of the governmental unit to contribute to the funding.

'Staff is available for any questions you may have."


Don Bailey, Nags Head resident, spoke concerning the retirement benefit program; he said that he is
familiar with some of the rules and regulations as he used to work for the IRS; he is unable to locate
"discretionary" in the State Statutes as mentioned in staff's introduction; he feels this is a critical issue
from the standpoint of timeline; his understanding is that in 1986 the IRS was established as the
oversight authority for these retirement plans and in essence from that day forward an employee was
enrolled immediately upon being hired – the probation period only refers to if an employee works out,
then the benefits would continue.

Mayor Muller said that his understanding is that this discussion only concerns current employees.

Don Bailey continued to discuss in detail employee retirement benefits; he feels town employees
are/were not treated fairly and that there have been some discriminations.

MOTION: Mayor Pro Tem Farah made a motion to excuse Comr. Remaley from the retirement
discussions as he was an employee during the time in question. The motion was seconded by Mayor
Muller which passed unanimously.

MOTION: Mayor Pro Tem Farah made a motion to earmark up to $50,000 from the Undesignated
Fund Balance to purchase buy-back retirement for the list of employees presented and any other



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                                                                                        March 5, 2003


inadvertently omitted, to fund the town's 45% share to be matched by the appropriate employee, with a
deadline date of December 31, 2003. The motion was seconded by Comr. Murray which passed 4 – 0
(Comr. Remaley was excused.).


MAYOR MULLER – YMCA CONCERNS

Mayor Muller stated that he received an email from Greg Honeycutt of the YMCA regarding the
vegetation/fencing buffer around the property. Sheila Foster of the YMCA stated that Mr. Honeycutt has
met with one neighbor regarding the concerns of the neighborhood; she said that the YMCA’s intention
is to be a great neighbor.


MAYOR MULLER – COASTAL MUNICIPALITIES CONFERENCE

Mayor Muller reported that he and Town Manager Fuller attended the Coastal Municipalities conference
on February 20-21, 2003 in Kure Beach. The municipalities agreed to establish a coalition of coastal
cites and Mayor Muller volunteered that next year’s meeting in February 2004 be held on the Outer
Banks.


MAYOR MULLER – SUBSTANCE ABUSE FORUM

Mayor Muller announced that the Nags Head Community Watch would hold a Substance Abuse Forum
on March 11, 2003, at 7:00 p.m. in the Board Room.


MAYOR MULLER – TOWN-WIDE STAFF MEETING

Mayor Muller announced the next Town-wide staff meeting would be held on Wednesday, March 19,
2003, at 11:00 a.m. in the Board Room.


MAYOR MULLER – HAPPY BIRTHDAY TO TOWN OF KILL DEVIL HILLS

Mayor Muller expressed a happy birthday wish to the Town of Kill Devil Hills on its 50th birthday on
March 6, 2003.


MAYOR MULLER – JOINT MEETING TO DISCUSS LARGE STRUCTURE ORDINANCE

Mayor Muller reported that the Board of Commissioners, the Planning Board, and the Large Structure
Committee are scheduled to meet on Thursday, April 10, 2003, at 7:30 p.m. in the Board Room to
discuss large structure regulations.


MAYOR MULLER – TOWN BOARD/COMMITTEE APPLICANT GROUP MEETING



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                                                                          Nags Head Board Meeting Minutes
                                                                                            March 5, 2003




Mayor Muller reported that group interview sessions for town board/committee applicants have been
scheduled for Monday, April 7, 2003 at 7:00 p.m. and at 8:30 p.m. in the Board Room.


MAYOR MULLER – REQUEST FOR CLOSED SESSION

Mayor Muller requested a brief Closed Session to discuss a possible litigation issue.


COMR. SADLER – THANKED SPEAKERS DURING LARGE STRUCTURE PUBLIC COMMENT

Comr. Sadler thanked everyone that spoke during the Large Structure public comment period.


COMR. MURRAY – ANNUAL NAGS HEAD WOODS RUN

Comr. Murray invited everyone to either participate in or volunteer at the Nags Head Woods/Barrier
Island 5K-Run to be held on Saturday, May 10, 2003, at 9:00 a.m. in Nags Head Woods. Mayor Muller
asked the Board and received concurrence to offer a challenge to the Mayor of the Town of Kill Devil
Hills for the two towns to compete for the Stinky Sneaker Award.


MAYOR PRO TEM FARAH – GOVERNMENT ACCESS CHANNEL COMMITTEE MEETING

Mayor Pro Tem Farah announced the Government Access Channel Committee would meet on Thursday,
March 6, 2003 at 5:30 p.m. in the Nags Head Board Room.


MAYOR PRO TEM FARAH – SHORT TERM HOUSE RENTAL TAX

Mayor Pro Tem Farah asked staff for an update on the idea of implementation of privilege licenses for
short term rental structures.

Deputy Town Manager Sommer reported that the legal opinion of Town Attorney Ike McRee is that the
Town could impose a gross receipts tax for rental houses. She noted that staff will be working on this in
conjunction with the upcoming budget.


COMR. REMALEY – SHORT TERM HOUSE RENTAL TAX

Comr. Remaley feels the Town should move forward imposing a short term house rental tax.




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                                                                       Nags Head Board Meeting Minutes
                                                                                         March 5, 2003




COMR. REMALEY – JOCKEY'S RIDGE SAND REMOVAL PROJECT

Public Works Director Dave Clark provided a brief update on the sand removal project at Jockey’s Ridge.
Mr. Clark reported that Monday, March 3, 2003, was the last day for hauling sand from the area.
Repairs to Soundside Road would be provided by the contractor and/or the State.


MAYOR MULLER – NC DOT REPAVING OF BYPASS PROJECT

Mayor Muller reported that he and the four beach town mayors met recently with NC DOT
representatives, NC DOT Board member Stan White, and staff from all beach towns to discuss the
repaving of HWY 158. NC DOT feels the project will be complete by Memorial Day weekend and will
keep the towns apprised of the progress. The Mayor thanked Town Manager Fuller and the Town Clerk
for setting up the meeting.


ADJOURNMENT

MOTION: Mayor Pro Tem Farah made a motion to adjourn to a town-wide staff meeting on
Wednesday, March 19, 2003, at 11:00 a.m. in the Board Room after adjourning to a Closed Session to
discuss a possible litigation issue. The motion was seconded by Comr. Remaley which passed
unanimously. The time was 4:11 p.m.

                                           _______________________________
                                           Carolyn F. Morris, Town Clerk

Approved:     April 2, 2003_______________

Mayor:        ___________________________
              Robert W. Muller




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