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HomeMy Public PortalAbout01-27-20 Agenda Work SessionHuman Resources Director/Town Clerk Katherine Cathey 101 E. Orange St., PO Box 429, Hillsborough, NC 27278 919-296-9441 | katherine.cathey@hillsboroughnc.gov www.hillsboroughnc.gov | @HillsboroughGov Board of Commissioners Agenda | 1 of 1 Agenda Board of Commissioners Work Session 7 p.m. Jan. 27, 2020 Town Hall Annex Board Meeting Room, 105 E. Corbin St. Compliance with the American with Disabilities Act interpreter services and/or special sound equipment is available on request. If you are disabled and need assistance with reasonable accommodations, call the Town Clerk’s Office at 919-296-9441. Please use the bookmark feature to navigate and view the item attachments. 1.Opening of the workshop 2.Agenda changes and approval 3.Items for decision — consent agenda A.Miscellaneous budget amendments and transfers B.Bond Order and Series Resolution – Carr Store and Mill Creek Road Project 4.In-depth discussions and topics A.Comprehensive and Sustainability Planning 5.Other business 6.Committee updates and reports 7.Adjournment Board of Commissioners Agenda Abstract Form Meeting Date: Jan. 27, 2020 Department: Administration - Budget Public Hearing: Yes No Date of Public Hearing: __________________________ For Clerk’s Use Only AGENDA ITEM # 3.A Consent Agenda Regular Agenda Closed Session PRESENTER/INFORMATION CONTACT: Emily Bradford, Budget Director ITEM TO BE CONSIDERED Subject: Miscellaneous budget amendments and transfers Attachment(s): 1. Description and explanation for budget amendments and transfers Brief Summary: To adjust budgeted revenues and expenditures, where needed, due to changes that have occurred since budget adoption. Action Requested: Consider approving budget amendments and transfers. ISSUE OVERVIEW Background Information & Issue Summary: N/A Financial Impacts: As indicated by each budget amendment. Staff Recommendations/Comments: To approve the attached list of budget amendments. BUDGET CHANGES REPORT TOWN OF HILLSBOROUGH FY 2019-2020 DATES: 01/27/2020 TO 01/27/2020 REFERENCE NUMBER DATE BUDGET CHANGE BUDGET ORIGINAL BUDGET AMENDEDCHANGE USER 10-10-6610-5300-080 TRAINING/CONF/CONV 01/27/2020 3,800.00 1,483.00To cover account overages 16459 5,283.00EBRADFORD 10-10-6610-5300-458 DATA PROCESSING SERVICES 01/27/2020 230,988.00 117.00To cover account overages 16457 241,558.00EBRADFORD 10-10-6610-5300-600 PERSONNEL EXPANSION - OP COSTS 01/27/2020 1,600.00 -1,600.00To cover account overages 16458 0.00EBRADFORD 10-20-5100-5300-460 C.S./DRIVER SAFTEY TRAINING 01/27/2020 3,500.00 -3,500.00To cover patrol jackets 16454 0.00EBRADFORD 10-20-5110-5100-010 OVERTIME COMPENSATION 01/27/2020 30,000.00 -3,500.00To cover CID overtime 16450 26,500.00EBRADFORD 10-20-5110-5300-350 UNIFORMS 01/27/2020 18,150.00 3,500.00To cover patrol jackets 16455 22,236.66EBRADFORD 10-20-5120-5100-010 OVERTIME COMPENSATION 01/27/2020 5,000.00 3,500.00To cover CID overtime 16451 8,500.00EBRADFORD 10-20-5120-5300-113 LICENSE FEES 01/27/2020 1,500.00 1,500.00To cover software overlap 16453 3,000.00EBRADFORD 10-20-5120-5300-730 DRUG ENFORCEMENT OPERATIONS 01/27/2020 5,000.00 -1,500.00To cover software overlap 16452 1,917.00EBRADFORD 30-80-8140-5300-160 MAINTENANCE - EQUIPMENT 01/27/2020 2,000.00 3,000.00New service agreement for generators 16463 6,500.00JDELLAVAL 30-80-8140-5300-330 SUPPLIES - DEPARTMENTAL 01/27/2020 115,000.00 -3,000.00New service agreement for generators 16462 117,143.28JDELLAVAL 30-80-8200-5300-160 MAINTENANCE - EQUIPMENT 01/27/2020 16,000.00 14,500.00New service agreement for generators 16465 30,500.00JDELLAVAL 30-80-8200-5300-165 MAINTENANCE - INFRASTRUCTURE 01/27/2020 85,000.00 -14,500.00New service agreement for generators 16464 170,500.00JDELLAVAL 30-80-8220-5700-735 CAPITAL - BUILDINGS & IMPROVEMENTS 01/27/2020 0.00 29,000.00Fencing & screening recmd by assessmen 16461 30,100.00JDELLAVAL 30-80-9990-5300-000 CONTINGENCY 01/27/2020 400,000.00 -29,000.00Fencing & screening recmd by assessmen 16460 328,709.00JDELLAVAL 0.00 JDELLAVALLE 10:49:00AM01/22/2020 fl142r03 Page 1 of 1 Info. Services Info. Services Info. Services Police-Admin Police-Patrol Police-Patrol Police-Invest. & CS Police-Invest. & CS Police-Invest. & CS Water Dist. Water Dist. WW Coll. WW Coll. WWTP W/S Contingency Board of Commissioners Agenda Abstract Form Meeting Date: _Jan. 27, 2020_______________ Department: __Finance_____________________ Public Hearing: Yes No Date of Public Hearing: ___ _________ For Clerk’s Use Only AGENDA ITEM # 3.B Consent Agenda Regular Agenda Closed Session PRESENTER/INFORMATION CONTACT: Finance Director Daphna Schwartz ITEM TO BE CONSIDERED Subject: Bond Order and Series Resolution – Carr Store and Mill Creek Road Project Attachment(s): 1.Bond Order and Series Resolution authorizing the issuance of up to $4,150,000 revenue bonds 2.Second Supplemental Hillsborough revenue bonds for 2020 Brief Summary: Approval of the attached resolution allows the town to move forward with issuing the bond to Truist, approves the draft Trust Agreement as a substantially final form document, and authorizes staff to complete the bond closing. The bond issue is still subject to LGC approval. Action Requested: Approve Resolution. ISSUE OVERVIEW Background Information & Issue Summary: Construction started in April 2018 on the reservoir expansion. The first series of revenue bonds provided $10.2 million in funding for the project. The remaining funds are now required to finish the two road projects which were not included in the first bond issue. Financial Impacts: The town will take on an additional $4,150,000 of debt and related interest secured by Water and Sewer Fund revenue. Staff Recommendations/Comments: Approve as proposed. Bond Order and Series Resolution Authorizing the Issuance of up to $4,150,000 Revenue Bonds WHEREAS -- The Board of Commissioners (the “Board”) of the Town of Hillsborough (the “Town), by resolution adopted on December 9, 2019, has stated its proposal to issue revenue bonds to provide funds to carry out a plan (the “Project”) to construct road improvements near the Town’s water reservoir, as part of a comprehensive plan to improve and expand the reservoir. The Town has solicited competitive proposals from banks and other financial institutions to purchase the proposed bonds, and Truist Bank (the “Lender”) has submitted the best proposal. This Bond Order and Series Resolution provides the Town Board’s formal authorization for the issuance of the new revenue bonds and the Board’s final approval of the financing terms and documents. BE IT ORDERED by the Board of Commissioners of the Town of Hillsborough, North Carolina, as follows: 1. There are hereby ordered to be issued water and sewer revenue bonds of the Town (the “Bonds”) to pay capital costs of improvements to the Town’s water and sewer enterprises, including the construction of road improvements near the reservoir, all as previously approved by the Town Board. 2. The maximum aggregate principal amount of the Bonds issued for these purposes will be $4,150,000. 3. The Bonds will be special obligations of the Town, secured by a pledge of the net operating revenues of the Town’s water and sewer system. The principal of, and interest and any premium on, the Bonds will be payable solely from the sources pledged to the payment. Neither the faith and credit nor the taxing power of the Town or any other governmental entity is pledged for the payment of the principal of, or interest or any premium on, the Bonds, and no owner of the Bonds shall have the right to compel the exercise of the taxing power of any governmental entity in connection with any default on the Bonds. BE IT FURTHER RESOLVED by the Board as follows: 1. Acceptance of Lender’s Proposal -- The Town will issue and sell the Bonds to the Lender. The Town asks the North Carolina Local Government Commission to sell the Bonds to the Lender at a private sale, substantially in accordance with this resolution and the financing proposal dated December 17, 2019. 2. Approval of Agreement; Direction To Execute Agreement – The Town’s Finance Officer has made available to this Board a draft dated January 20, 2020, of a Second Supplemental Trust Agreement (the “Agreement”) to be dated on or about February 1, 2020, between the Town and a Trustee, providing for the issuance of the Bonds. The Board approves the draft Agreement submitted to this meeting. The Board authorizes the Mayor and the Town Manager, or either of them, to execute and deliver the Agreement in its final form. The Agreement in its final form must be in substantially the form presented, with such changes as the Mayor or the Town Manager may approve. The execution and delivery by an authorized Town officer will be conclusive evidence of that officer’s approval of any changes. The Agreement in its final form, however, must be consistent with the financing plan described in this resolution and must provide (a) for the amount financed by the Town not to exceed $4,150,000, (b) for an annual interest rate not to exceed 1.98% (in the absence of default, or a change in tax status), and (c) for a financing term not to extend beyond December 31, 2030. 3. Officers To Complete Closing – The Board authorizes the Town Manager, the Finance Officer and all other Town officers and employees to take all proper steps to complete the financing in cooperation with the Lender and in accordance with this resolution. The Board authorizes the Finance Officer to hold executed copies of all financing documents authorized or permitted by this resolution in escrow on the Town's behalf until the conditions for their delivery have been completed to that officer's satisfaction, and then to release the executed copies of the documents for delivery to the appropriate persons or organizations. Without limiting the generality of the foregoing, the Board specifically authorizes the Finance Officer to approve changes to any documents previously signed by Town officers or employees, provided that the changes do not conflict with this resolution or substantially alter the intent from that expressed in the form originally signed. The Finance Officer’s authorization of the release of any document for delivery will constitute conclusive evidence of that officer’s approval of any changes. In addition, the Board authorizes the Finance Officer to take all appropriate steps for the efficient and convenient carrying out of the Town’s on-going responsibilities with respect to the financing of the Project. This authorization includes, without limitation, contracting with third parties for reports and calculations that may be required under this resolution or otherwise with respect to the Agreement. 4. Resolutions as to Tax Matters -- The Town will not take or omit to take any action the taking or omission of which will cause the Bonds to be "arbitrage bonds," within the meaning of Section 148 of the “Code” (as defined below), or “private activity bonds” within the meaning of Code Section 141, or otherwise cause interest on the Bonds to be includable in gross income for federal income tax purposes. Without limiting the generality of the foregoing, the Town will comply with any Code provision that may require the Town at any time to pay to the United States any part of the earnings derived from the investment of the financing proceeds. In this resolution, “Code” means the United States Internal Revenue Code of 1986, as amended, and includes applicable Treasury regulations. 5. Bonds are “Bank-Qualified” - The Town designates the Bonds as "qualified tax-exempt obligations" for the purpose of Code Section 265(b)(3), which provides certain tax advantages for financial institutions purchasing obligations like the Bonds. 6. Miscellaneous Provisions -- The Board authorizes all Town officers and employees to take all further action as they may consider necessary or desirable in furtherance of the purposes of this resolution. The Board ratifies all prior actions of Town officers and employees to this end. Upon the absence, unavailability or refusal to act of the Town Manager, the Mayor or the Finance Officer, any other of those officers may assume any responsibility or carry out any function assigned in this resolution. The Board authorizes the Clerk to apply the Town’s seal, and to attest to the seal, on any document related to the purposes of this resolution. In addition, the Mayor Pro Tem or any Deputy or Assistant Clerk to the Board may in any event assume any responsibility or carry out any function assigned in this resolution to the Mayor or the Clerk, respectively. All other Board proceedings, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect immediately. sh draft of January 20 Second Supplemental Trust Agreement dated as of February 1, 2020 by and between the Town of Hillsborough, North Carolina and U.S. Bank National Association, as Trustee Relating to the issuance of [$4,150,000] Combined Utility Systems Revenue Bonds Series 2020 1 THIS SECOND SUPPLEMENTAL TRUST AGREEMENT is dated as of February 1, 2020 (this “Supplemental Agreement”), is between the TOWN OF HILLSBOROUGH, NORTH CAROLINA, a North Carolina municipal corporation (the "Town"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association having an office in Raleigh, North Carolina, as trustee (the “Trustee”), and relates to the Town’s issuance of its [$4,150,000] Combined Utility Systems Revenue Bonds, Series 2020 (the "2020 Bonds"). RECITALS The Town and the Trustee have executed and delivered a Master Trust Agreement dated as of May 1, 2018 (the “Master Agreement”). The Master Agreement provides for the issuance of the Town’s revenue bonds from time to time to finance improvements to the Town’s public water and sewer utility enterprise system, and provides that the parties will enter into a supplemental agreement for each issue of revenue bonds. The Town has now determined to issue [$4,150,000] in its revenue bonds to finance additional improvements to the Town’s reservoir, including in particular related road improvements, and to pay related costs (the “2020 Project”). This Supplemental Agreement provides for the issuance of those revenue bonds. Unless the context clearly requires otherwise, capitalized terms used in this Supplemental Agreement and not otherwise defined have the meanings set forth in Exhibit A. In consideration of the mutual promises in this Supplemental Agreement, the parties agree as follows: ARTICLE I THE 2020 BONDS Section 1.01. Authorization and Issuance of 2020 Bonds. In accordance with the Act, the Trust Agreement and the authorizing Supplemental Bond Order and Series Resolution adopted by the Town Board on January 27, 2020, the Town will issue the 2020 Bonds as provided in this Supplemental Agreement to pay Project Costs of the 2020 Project. 2 Section 1.02. Agreement Supplements Master Agreement. This Supplemental Agreement is a “supplemental agreement” for the issuance of Additional Bonds as provided in Section 1.03 of the Master Agreement. The 2020 Project is an “Additional Project” within the meaning of the Trust Agreement, and the Town is issuing the 2020 Bonds to pay Project Costs of this Additional Project. Section 1.03. Form and Details; Payments. The 2020 Bonds will be issued as a single fully registered bond designated "Combined Utility Systems Revenue Bond, Series 2020,” and in substantially the form of Exhibit B, with any changes as the Trust Agreement permits or requires. The 2020 Bonds will be (a) dated the date of their initial delivery to the Lender, (b) payable as to interest semiannually until payment on each Payment Date at the annual rate of 1.98% (calculated based on a 360-day year consisting of twelve 30-day months and subject to adjustment as provided below), and are payable as to principal on April 1 in installments in the following years and amounts: Payment Date (April1) Principal Amount ($) Payment Date (April1) Principal Amount ($) 2021 2026 2022 2027 2023 2028 2024 2029 2025 2030 Promptly upon final payment of this Bond, the Bondholder at its option will either (1) return the original Bond, marked “Paid in Full,” to the Town, or (2) send the Town written notice in a form reasonably acceptable to the Town that the Bond has been paid in full as to principal and interest. 3 Section 1.04. Interest Rate and Payment Adjustment. Upon any “Rate Adjustment Event,” as defined below, (a) the unpaid principal of the 2020 Bonds will continue to be payable as shown in Section 1.03, but (b) the interest on the 2020 Bonds shall be recalculated, at an interest rate equal to an annualized interest rate equal to the “Prime Rate,” as defined below, plus 2% (200 basis points), to the date (retroactively, if need be) determined pursuant to the Rate Adjustment Event to be the date interest became includable in any Bondholder’s gross income for federal income tax purposes (in the case of a “265 Event,” as defined below, retroactively to the date of the original delivery of the Bond). The Bondholder shall promptly prepare a substitute debt service schedule reflecting the new interest rate and resulting payment schedule, and deliver a copy of the new schedule to the Town and to the LGC. The Town shall pay interest at each adjusted rate as in effect from time to time (subject to credit for interest previously paid) to each affected Bondholder, notwithstanding the fact that any particular Bondholder may not be a Bondholder on the date of a Rate Adjustment Event. The Town shall additionally pay to all affected Bondholders any interest, penalties or other charges assessed against or payable by such Bondholder and attributable to a Rate Adjustment Event, notwithstanding the prior repayment of the 2020 Bonds in full or any transfer to another Bondholder. "Rate Adjustment Event" means (1) any action by the Internal Revenue Service (including the delivery of a deficiency notice) or any other federal court or administrative body determining or (2) receipt by the Bondholder of an opinion of nationally-recognized bond counsel, in either case to the effect (A) that interest on the 2020 Bonds is includable in gross income for federal income tax purposes, or (B) that the 2020 Bonds are not "qualified tax-exempt obligations" within the meaning of Code Section 265 (a “265 Event”), in either case as a result of (i) any action the Town takes, or fails to take, or (ii) any representation made by the Town being a misrepresentation. “Prime Rate” means the rate by that name published by Truist Bank, as in effect from time to time, whether or not Truist Bank at any time is not the registered Bondholder. 4 Section 1.05. Redemption Dates and Prices. The 2020 Bonds are subject to redemption as described in Section 2.01. Section 1.06. Delivery of 2020 Bonds. The Trustee will authenticate and deliver the 2020 Bonds when it has received the following items: (a) Original executed counterparts of the Master Agreement and this Supplemental Agreement (b) A certified copy of the Town Board’s authorizing bond order for the 2020 Bonds (c) A certified copy of one or more Town Board resolutions approving the substantially final form of this Supplemental Agreement, authorizing its execution and delivery, and approving the issuance of the 2020 Bonds (d) A Town Certificate approving the award of the Bonds and directing the authentication and delivery of the Bonds to or upon the order of the purchasers named in the certificate upon payment of the purchase price stated in the certificate (e) Evidence of compliance with the provisions of Section 3.02 of the Master Agreement with respect to Parity Indebtedness (f) Executed 2020 Bonds in the aggregate principal amounts, bearing interest at the rates, and payable as to principal and interest at the times and in the amounts, as are provided in this Supplemental Agreement (g) A Town Certificate directing the Trustee as to the application of proceeds from the sale of 2020 Bonds (h) Evidence that the LGC has approved the issuance of the 2020 Bonds (i) An Opinion of Bond Counsel to the effect that the Town has duly authorized the execution and delivery of the 2020 Bonds 5 ARTICLE II REDEMPTION Section 2.01. Redemption Dates; Prices. The Town may prepay the 2020 Bond in whole, but not in part, at any time. To prepay the 2020 Bond, the Town must pay all interest accrued and unpaid to the prepayment date and all the unpaid principal, along with a prepayment premium of 1% of the unpaid principal balance if the prepayment occurs prior to April 1, 2025. No premium is payable for a prepayment made on or after April 1, 2025. Section 2.03. Redemption Notices. (a) The Trustee, at the Town’s direction, upon being satisfactorily indemnified by the Town with respect to expenses and with at least two Business Days’ notice, will send notice of redemption no less than 30 nor more than 60 days prior to the redemption date, to the registered owner of the 2020 Bond at its address as it appears on the Trustee’s registration books, by registered or certified mail. The Trustee shall also send a copy of the notice to the LGC. (b) Any redemption notice may state that the redemption to be effected is conditioned upon -- (i) the Trustee’s receipt on or prior to the redemption date of moneys sufficient to pay the principal of and interest on the 2020 Bonds to be prepaid; or (ii) any other condition not unacceptable to the Trustee. If a notice contains a condition and the Trustee either (i) does not receive moneys sufficient to pay the principal of and premium, if any, and interest on the 2020 Bonds on or prior to the redemption date, or (ii) the stated condition is not fulfilled, in either case on or prior to the redemption date, then redemption will not be made, and the Trustee must, within a reasonable time, give notice the same way the redemption notice was given that the moneys 6 were not so received (or condition was not fulfilled) and the redemption was not made. (c) Each redemption notice must specify (i) the complete designation of the 2020 Bonds, (ii) the date fixed for redemption, (iii) any conditions to the redemption, as contemplated by subsection (b) above, (iv) the principal amount of 2020 Bonds or portions thereof to be redeemed, (v) the applicable redemption price, (viii) the address of the place or places of payment, (vi) the Trustee's name and telephone number, and the name of a contact person, (vii) that interest accrued to the date fixed for redemption will be paid as specified in the notice, and (viii) that on and after the established redemption date interest on 2020 Bonds which have been redeemed will cease to accrue. The Trustee must also include in any redemption notice any additional information provided by the Town for use in the notice. Section 2.03. 2020 Bonds Payable on Redemption Date; Interest Ceases To Accrue. If on or before the date fixed for redemption funds are deposited with the Trustee to pay the principal of and interest accrued to the redemption date on 2020 Bonds called for redemption, the 2020 Bonds cease to accrue interest from and after the redemption date. Thereafter, the 2020 Bonds (a) are no longer entitled to the benefits provided by the Trust Agreement and (b) are not deemed to be Outstanding under the Trust Agreement. ARTICLE III 2020 FUNDS AND ACCOUNTS Section 3.01. Creation and Use of 2020 Project Fund. The Trustee will establish a special fund designated as the “Hillsborough 2020 Project Fund.” The Trustee will keep this Fund separate and apart from all other funds and moneys held by it, and will hold and administer this Fund as provided in this Supplemental Agreement. Moneys in the 2020 Project Fund will be expended only as described in Sections 3.02 and 3.03. The Trustee is not required to disburse any moneys from the 2020 Project Fund during the continuation of any Event of Default. Section 3.02. Deposits to 2020 Project Fund; Payment of Project Costs. 7 (a) The Trustee will deposit into the 2020 Project Fund the amount specified in the certificate referenced in Section 1.06(g) and all other amounts paid to it for deposit in the 2020 Project Fund. (b) The Trustee will disburse moneys in the 2020 Project Fund from time to time, either to pay Project Costs of the 2020 Project directly or to reimburse the Town for previous expenditures on any of those costs, upon the Trustee’s receipt of a requisition substantially in the form of Exhibit C. The Trustee may rely conclusively on requisitions as authorization for payments, and the Trustee has no duty or responsibility to verify any matters in the requisitions. (c) Notwithstanding the provisions of Section 6.01(a), the Trustee will accept requisitions that the Town submits by electronic mail or by facsimile transmission. Unless otherwise directed by the Town, the Trustee will disburse moneys from the 2020 Project Fund that are due to the Town by wire transfer to any bank account in the United States as a Town Certificate may designate from time to time. Any electronic notice to the Trustee is subject to the provisions of Section 10.02 of the Master Agreement. Section 3.03. Transfer of Unexpended Proceeds. Upon receipt of a Town Certificate stating that there are no more Project Costs to be paid from the 2020 Project Fund, the Trustee will withdraw all remaining moneys in the 2020 Project Fund and deposit those moneys into Subaccounts of the Payment Fund as the Town Certificate may specify. In the absence of any direction from the Town, the Trustee will deposit those moneys in the 2020 Subaccount of the Interest Account and use them to pay interest on the 2020 Bonds as the same becomes due. Section 3.04. Establishment of Subaccounts. The Trustee will establish the following subaccounts the accounts established under the Master Agreement: (a) 2020 Subaccount of the Interest Account (b) 2020 Subaccount of the Principal Account (c) 2020 Subaccount of the Redemption Account 8 The Trustee will hold and administer the subaccounts referenced above pursuant to the Master Agreement and this Supplemental Agreement. Section 3.05. Application of Revenues to 2020 Subaccounts. Subject to the provisions of Section 2.03 of the Master Agreement, the Town shall deposit (or cause to be deposited) with the Trustee, the following amounts from Net Receipts held in the Revenue Fund. The Trustee shall apply these amounts to the specified accounts and subaccounts in the following order: (a) into the 2020 Subaccount of the Interest Account, on or before the 25th day of the month immediately preceding each Payment Date, an amount equal to the interest payable on the 2020 Bonds on that Payment Date; and (b) into the 2020 Subaccount of the Principal Account, on or before the 25th day of the month immediately preceding a Payment Date on which principal of 2020 Bonds comes due, an amount equal to the principal of all 2020 Bonds coming due on that Payment Date. In addition, the Trustee shall deposit in the 2020 Subaccount of the Redemption Account all other amounts paid to it from time to time with instructions to deposit the amounts in that subaccount. At the Town’s request, the Trustee shall notify the Town of any amounts in the 2020 Subaccounts available to reduce the amount of any upcoming required deposits, and the Town may then reduce the amount of a required deposit by any available amounts. Section 3.06. Payment of Principal and Interest; Pledge of Net Receipts. The Town covenants that it will promptly pay the principal of and the interest on every 2020 Bond on the dates and in the manner provided in the Trust Agreement and in the 2020 Bonds, according to the true intent and meaning thereof. The Town further covenants that it will always faithfully perform all its covenants, undertakings and agreements contained in the Trust Agreement, in the 2020 Bonds, or in any proceedings of the Town pertaining to those matters. The Town represents and covenants that it is duly authorized under the Constitution and laws of the State, particularly the Act, to issue the 2020 Bonds and to pledge the Net Receipts in the manner and to the extent provided in the Trust Agreement; that all action on its part for the issuance of the 2020 Bonds has been 9 duly and effectively taken; and that 2020 Bonds in the hands of their Owners are and will be valid and binding special obligations of the Town, payable according to their terms. Section 3.07. No Reserve Account. The 2020 Bonds are not secured by the Parity Reserve Account or any Special Reserve Account. ARTICLE IV TOWN’S WARRANTIES, REPRESENTATIONS AND COVENANTS Section 4.01. In General. The Town makes the following statements of fact, with the understanding and intent that the Trustee and the Owners will rely on these statements in making the decision to enter into this Supplemental Agreement and to purchase and own 2020 Bonds: (a) The Town is a duly organized and validly existing municipal corporation of the State. The Town has all powers necessary to enter into the transactions contemplated by the Trust Agreement and the 2020 Bonds, and to carry out its obligations under the Trust Agreement and the 2020 Bonds. (b) The Town has duly and validly authorized, executed and delivered the Trust Agreement and the 2020 Bonds. The Town requires no further approval or consent from any governmental authority with respect to the Town’s entering into, issuing or performing under the Trust Agreement or the 2020 Bonds. Assuming the Trustee’s due authorization, execution and delivery of the Master Agreement and this Supplemental Agreement and the Trustee’s due authentication of the 2020 Bonds, the Trust Agreement and the 2020 Bonds constitute valid, legal and binding obligations of the Town, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and applicable principles of equity. (c) There is no action, suit or proceeding at law or in equity before or by any court, public board or body pending or, to the best of the Town’s knowledge, threatened, against or affecting the Town (or any official thereof in an official capacity) (i) challenging the validity or enforceability of the Trust Agreement or the 10 2020 Bonds, or seeking to restrain or enjoin the issuance or delivery of the Bonds or (ii) seeking to restrain or enjoin the assessment or collection of water and sewer revenues to pay the principal of and interest on the Bonds, or (iii) challenging (A) the Town's organization or existence, (B) the Town's issuance of the Bonds, (C) the Board’s adoption of the Bond Order, or (D) the title to office of any Town Board member or other Town officer, or (iv) that otherwise would be likely (if decided adversely to the Town) to have a material adverse effect on the Town’s ability to provide for timely payment of the Bonds. (d) The Town’s performance of its obligations under the Trust Agreement or the 2020 Bonds, and its compliance with their respective provisions, under the contemplated circumstances, does not and will not in any material respect constitute on the Town’s part a breach of or default under, or result in the creation of a lien or other encumbrance on any Town property (except as contemplated in such instruments), pursuant to any agreement or other instrument to which the Town is a party, or any existing law, regulation, court order or consent decree to which the Town is subject. (e) No Town representation, covenant or warranty in the Trust Agreement or the 2020 Bonds is false or misleading in any material respect. (f) The Town Board proceedings relating to the Town’s entering into, issuing, and performing under the Trust Agreement and the 2020 Bonds have been duly adopted, are in full force and effect, and have not been in any respect modified, revoked or rescinded. (g) The Town will not take or permit, or omit to take or cause to be taken, any action that would cause the 2020 Bonds to be "arbitrage bonds" or “private activity bonds” within the meaning of the Code, or otherwise adversely affect the exclusion from gross income for federal income tax purposes of the interest on the 2020 Bonds to which that interest would otherwise be entitled. If the Town does take or permit, or take or cause to be taken, any such action, the Town will take (or cause to be taken) all lawful actions within its power reasonably necessary to rescind or correct such actions or omissions promptly upon having knowledge of the effect of such actions. 11 (h) The Town will send to Truist Bank (“Truist”), so long as Truist is the registered owner of the 2020 Bond, a copy of the Town’s audited financial statements for each Fiscal Year within 30 days of the Town’s acceptance of the statements, but in any event within 270 days of the completion of each Fiscal Year. The Town shall also furnish Truist, at such reasonable times as Truist may request, all other financial information (including, without limitation, the Town’s annual budget as submitted or approved) as Truist may reasonably request. The Town shall permit Truist or its agents and representatives to inspect the Town’s books and records and make extracts therefrom. ARTICLE V AMENDMENTS OF AND SUPPLEMENTS TO SUPPLEMENTAL AGREEMENT OR THE 2020 BONDS Section 5.01. Without Owners' Consent. The Town and the Trustee may amend or supplement this Supplemental Agreement or the 2020 Bonds without notice to or consent of any Owner for any of the following purposes, or for any combination of the following purposes: (a) to cure any ambiguity, inconsistency or formal defect or omission (b) to grant to the Trustee for the benefit of the Owners additional rights, remedies, powers or authority (c) to subject to this Supplemental Agreement additional collateral or to add other agreements of the Town (d) to permit the qualification of this Supplemental Agreement under any federal or state statute, whenever enacted, and, in that connection, to add to this Supplemental Agreement or any other supplemental trust agreement any other terms, conditions and provisions as may be permitted or required by the federal or state statute (e) to provide for the issuance of Additional Bonds as otherwise permitted by the Trust Agreement 12 (f) to provide for 2020 Bonds to be issued or exchanged for 2020 Bonds in any other form or format at that time permitted by law (g) to evidence the succession of a new Trustee, or to provide for the appointment and operation of a Bond Registrar separate from the Trustee (h) to make any other change that does not materially adversely affect the rights of any Owner The Trustee may rely on a Town Certificate to the effect that a proffered amendment or supplement is within the scope of this Section 5.01. At least 10 days prior to the execution and delivery of any supplemental trust agreement for any of the purposes described in this Section, the Trustee shall provide for a notice of the proposed agreement to be mailed first-class, postage prepaid, to the LGC and to all Owners of the 2020 Bonds. The notice must briefly set forth the nature of the proposed agreement and state that copies of the proposed agreement are available to all Owners of the 2020 Bonds upon request to the Town or the Trustee at addresses set forth in the notice. The Town must pay the expenses of any mailing and copies required under this Section. A failure on the Trustee’s part to mail the notice required by this Section will not affect the validity of any supplemental agreement. Section 5.02. With Owners' Consent. (a) If Section 5.01 does not permit an amendment of or supplement to this Supplemental Agreement or the 2020 Bonds without any consent of Owners, the Town and the Trustee may enter into that amendment or supplement only with the consent of the Majority Owners (determined only with respect to the 2020 Bonds). (b) Without the consent of each Owner affected, however, no amendment or supplement to this Supplemental Agreement or the 2020 Bonds may (i) extend the maturity of the principal or interest with respect to any 2020 Bond, (ii) reduce the principal amount of, or rate of interest on, any 2020 Bond, (iii) effect a privilege or priority of any 2020 Bond or 2020 Bonds over any other 2020 Bond or 2020 Bonds, (iv) reduce the percentage of the principal amount of the 2020 Bonds required for consent to any amendment or supplement, (v) intentionally impair any 13 exclusion of interest on the 2020 Bonds from the federal gross income of the Owner of any 2020 Bond to which that interest was intended to be entitled, (vi) change any redemption terms of any 2020 Bonds, (vii) create a lien ranking prior to or on a parity with the lien of this Supplemental Agreement on the property pledged under the Trust Agreement (except with respect to a parity pledge for the benefit of the Owners of Additional Bonds), or (viii) deprive any Owner of the lien created by this Supplemental Agreement on any property. In addition, if moneys or Federal Securities have been deposited or set aside with the Trustee pursuant to Article IX of the Master Agreement for the payment of 2020 Bonds and those 2020 Bonds have not in fact been paid in full, the parties may make no amendment to the provisions of that Article without the consent of each Owner affected. Section 5.03. Procedure for Amendment with Owners' Consent. (a) If a proposed amendment requires the consent of Owners, the Trustee must establish a record date, and Owners as of that record date will be the Owners with the right to consent to the proposed amendment or supplement. This record date must be a date not later than five Business Days after the date the Trustee receives notice or direction from the Town to solicit consents. (b) The Trustee must send, by first-class mail, a copy of the proposed supplement or amendment, together with a request to the Owners for their consent, to each Owner at its address as set forth in the registration books maintained pursuant to Section 6.05 of the Master Agreement, but failure to receive copies of the documents so mailed does not affect the validity of the supplement or amendment when assented to as provided in this Section. The request mailed by the Trustee must also designate a date not more than 180 nor less than 30 days following the mailing date, as designated by the Town, by which consent must be returned to be effective. The Town must pay all the expenses of the copying and mailing provided for in this Section. (c) The proposed supplement or amendment will not become effective unless there are filed with the Trustee the written consent of the Owners (as of the record date) of not less than a majority in aggregate principal amount of the 2020 Bonds then Outstanding (exclusive of 2020 Bonds disregarded from the calculation 14 as provided in Section 5.04) and the Trustee has mailed the notices required by Section 5.09. Each consent will be effective only if accompanied by proof of ownership of the 2020 Bonds for which the consent is given as provided in Section 5.05 and given within the time designated as provided in subsection (b) above. Section 5.04. Bonds Held by Town Excluded from Calculation. 2020 Bonds owned or held by or for the account of the Town or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Town, be excluded from any calculation of Outstanding 2020 Bonds for any action provided for in this Supplemental Agreement. Similarly, Owners of those 2020 Bonds are not entitled to take any action provided for in this Supplemental Agreement. The Town and the Trustee intend, however, that the Town’s ownership or holding of 2020 Bonds will not, by itself, give rise to an extinguishment of the 2020 Bonds or of any obligation arising under this Agreement. The Trustee may (but is not required to) provide for each Owner, before an Owner’s consent is deemed effective, to certify or otherwise provide evidence to establish whether the 2020 Bonds as to which the consent is given are excluded as provided in this Section. Section 5.05. Owners' Consents. Any consent or other instrument required by this Supplemental Agreement to be signed by Owners may be in any number of concurrent documents and may be signed by an Owner or by the Owner's agent appointed in writing. The Trustee may require that proof of the execution of any instrument, or of the instrument appointing an agent, and of the ownership of 2020 Bonds, be made as described below, and then may conclusively rely on that submitted proof. (a) The fact and date of a person's signing an instrument may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within that jurisdiction that the person signing the writing acknowledged before the officer the execution of the writing, or by an affidavit of any witness to the signing. (b) The fact of ownership of 2020 Bonds, the amount or amounts, numbers and other identification of such 2020 Bonds and the date of holding will be proved by the registration books kept pursuant to the Trust Agreement. 15 Section 5.06. Effect of Consents. After an amendment or supplement becomes effective, it binds every Owner. Any consent is binding upon and irrevocable by the Owner of the 2020 Bond giving consent and on any subsequent Owner (whether or not any subsequent Owner has notice of the consent), unless the consent is revoked in writing by the Owner giving the consent, or by a subsequent Owner of the same 2020 Bonds, by filing a revocation with the Trustee prior to the time when the Trustee has mailed the notice provided for in Section 5.09. Section 5.07. Trustee's Execution of Amendments and Supplements. The Trustee must execute and deliver any amendment or supplement to the Trust Agreement or the 2020 Bonds authorized by this Article if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee, as the Trustee may determine in its reasonable discretion. If the amendment or supplement has such an adverse effect, the Trustee may, but need not, execute and deliver it. In determining to execute and deliver an amendment or supplement, the Trustee is entitled to receive and rely on an Opinion of Counsel to the effect (a) that the amendment or supplement is authorized by this Supplemental Agreement and (b) that upon execution it will be valid and binding upon the party or parties executing it in accordance with its terms. Section 5.08. LGC’s Consent Required. No amendment or supplement to this Supplemental Agreement or the 2020 Bonds will become effective unless the LGC delivers to the Town and the Trustee its prior written consent to the amendment or supplement. Section 5.09. Notice of Amendments and Supplements. The Trustee must cause notice of the execution of any supplement or amendment to this Supplemental Agreement or the 2020 Bonds to be mailed to the Owners. The notice will, at the Trustee's option, either (a) briefly state the nature of the amendment or supplement and that copies of it are on file with the Trustee for inspection by Owners, or (b) enclose a copy of the amendment or supplement. The Town must pay the expenses of any mailing and copies required under this Section. A failure on the Trustee’s part to mail the notice required by this Section will not affect the validity of any supplemental agreement. 16 Section 5.10. Notation on or Exchange of 2020 Bonds. If an amendment or supplement changes the terms of a 2020 Bond, the Trustee may require the Owner of that 2020 Bond to deliver it to the Trustee. The Trustee may place an appropriate notation on the 2020 Bond about the changed terms and return it to the Owner. Alternatively, if the Trustee and the Town so determine, the Town, in exchange for the 2020 Bond, will execute, and the Trustee will authenticate and deliver, a new 2020 Bond that reflects the changed terms. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Notices. (a) Any communication provided for in this Supplemental Agreement or the 2020 Bonds must be in writing (not to include facsimile transmission or electronic mail). (b) Any communication under this Supplemental Agreement will be deemed given on the delivery date shown on a United States Postal Service certified mail receipt, or a delivery receipt (or similar evidence) from a national commercial package delivery service, if addressed as follows: (i) if to the Town, to Town of Hillsborough, Attn: Town Manager, Re: Notice for Revenue Bonds, Post Office Box 429, Hillsborough, NC 27278 (ii) if to the Trustee, to U.S. Bank National Association, Re: Notice for Hillsborough Revenue Bonds, 5540 Centerview Drive, Suite 200, Raleigh, NC 27606 (iii) If to the LGC, to the North Carolina Local Government Commission, Attn: Secretary of the Commission, Re: Notice for Hillsborough Revenue Bonds, Longleaf Building, 3200 Atlantic Ave., Raleigh, NC 27604 (iv) If to Truist, to Truist Bank -- Government Finance, Attention: Account Administration/Municipal, Re: Notice for 2020 Hillsborough Revenue Bonds, 5130 Parkway Plaza Blvd., Building 9, Charlotte, NC 28217 17 (c) Any party sending a communication under this Supplemental Agreement must also send a copy to the LGC and Truist, so long as Truist is the registered owner of the 2020 Bond. Any addressee (including the LGC and Truist) may designate additional or different addresses for communications by notice given under this Section to each of the others. (d) Whenever this Supplemental Agreement requires the giving of a notice, the person entitled to receive the notice may waive the notice, in writing. The giving or receipt of the notice will then not be a condition to the validity of any action taken in reliance upon the waiver. Section 6.02. Binding Effect; Limitation of Rights. This Supplemental Agreement is binding upon, inures to the benefit of and is enforceable by the parties and their respective successors and assigns. Nothing expressed or implied in this Supplemental Agreement or the 2020 Bonds gives any person other than the Trustee, the Town, the LGC and the Owners any right, remedy or claim under or with respect to this Supplemental Agreement or the 2020 Bonds. Section 6.03. Severability. If any provision of this Supplemental Agreement is determined to be unenforceable, that does not affect any other provision of this Supplemental Agreement. Section 6.04. Non-Business Days. If a Payment Date is not a Business Day, then payment may be made on the next Business Day, and no interest will accrue for the intervening period. When any other action is provided in this Supplemental Agreement to be done on a day or within a time period named, and the day or the last day of the period is not a Business Day, the action may also be done on the next ensuing Business Day. Section 6.05. Governing Law; Forum. The parties intend that North Carolina law will govern this Supplemental Agreement, the 2020 Bonds, and all matters of their interpretation. To the extent permitted by law, the parties agree that any action brought with respect to this Supplemental Agreement or the 2020 Bonds must be brought in the North Carolina General Court of Justice in Orange County, North Carolina. 18 Section 6.06. Liability of Officers and Agents Limited. No officer, agent or employee of the Town, the Trustee or the LGC is subject to any personal liability or accountability by reason of that person’s execution of this Supplemental Agreement, the 2020 Bonds, or any other documents related to the transactions contemplated by this Supplemental Agreement. These officers or agents are deemed to execute documents in their official capacities only, and not in their individual capacities. This Section does not relieve any person from the performance of any official duty provided by law, this Supplemental Agreement or the 2020 Bonds. Section 6.07. Counterparts. This Supplemental Agreement may be signed in several counterparts, including separate counterparts. Each will be an original, but all of them together constitute the same instrument. Section 6.08. Definitions; Rules of Interpretation. Unless the context clearly requires otherwise, capitalized terms used in this Supplemental Agreement and not otherwise defined have the meanings set forth in Exhibit A. This Supplemental Agreement will be interpreted in accordance with the rules of interpretation set forth in Exhibit A to the Master Agreement. [The remainder of this page has been left blank intentionally.] 19 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered in their corporate names by their duly authorized representatives, all as of February 1, 2020. ATTEST: (SEAL) Town of Hillsborough, North Carolina __________________________________ Katherine Cathey Town Clerk By: ____________________________ Eric Peterson Town Manager U.S. Bank National Association, as Trustee By: ______________________________ Shawna L. Hale, Vice President [Second Supplemental Trust Agreement dated as of February 1, 2020] 20 EXHIBIT A – Definitions All capitalized terms used in this Second Supplemental Trust Agreement and not otherwise defined have the meanings ascribed thereto in the Master Agreement. In addition, for all purposes of this Supplemental Agreement, unless the context requires otherwise, the following terms have the following meanings. “2020 Bonds” means the [$4,150,000] Combined Utility Systems Revenue Bonds, Series 2020, issued pursuant to the Master Agreement and this Supplemental Agreement. “2020 Project” has the meaning assigned in the preambles to this Supplemental Agreement. “2020 Project Fund” means the Hillsborough 2020 Project Fund established pursuant to Section 3.01. “2020 Subaccount of the Interest Account” means the subaccount created and so designated by Section 3.04. “2020 Subaccount of the Principal Account” means the subaccount created and so designated by Section 3.04. “2020 Subaccount of the Redemption Account” means the subaccount created and so designated by Section 3.04. “Master Agreement” means the Master Trust Agreement dated as of May 1, 2019, between the Town and U.S. Bank National Association, as Trustee, as it may be properly amended or supplemented from time to time. “Payment Date” means each April 1 and October 1 beginning October 1, 2020. “Supplemental Agreement” means this Second Supplemental Trust Agreement, as it may be properly amended or supplemented from time to time. “Trust Agreement” means the Master Agreement, as supplemented (a) by a First Supplemental Trust Agreement dated as of May 1, 2018, and (b) by this Supplemental Agreement, as each may be properly amended or supplemented from time to time. 21 EXHIBIT B – Form of 2020 Bond Registered Bond Number R-1 February _____, 2020 UNITED STATES OF AMERICA STATE OF NORTH CAROLINA TOWN OF HILLSBOROUGH, NORTH CAROLINA Combined Utility Systems Revenue Bond, Series 2020 THE TOWN OF HILLSBOROUGH, NORTH CAROLINA (the "Town"), a municipal corporation of the State of North Carolina, for value received, promises to pay, solely from the Net Revenues and other funds described below and pledged to the payment hereof, to TRUIST BANK or registered assigns (the "Bondholder"), the principal sum of FOUR MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS *****$4,150,000***** in principal installments payable on each April 1 as shown on Schedule I, together with interest on the unpaid principal from the date hereof until payment of the entire principal sum at the annual rate of 1.98%, payable on each April 1 and October 1, beginning October 1, 2020, subject in all cases to prepayment and adjustment as described below. 22 Principal, interest, and any prepayment premium are payable in lawful money of the United States of America. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In all events, (1) all payments on this Bond will be applied first to interest accrued and unpaid to the payment date and then to principal, and (2) if not sooner paid, the entire principal of and interest on this Bond will be due and payable on April 1, 2030. Promptly upon final payment of this Bond, the Bondholder at its option will either (1) return the original Bond, marked “Paid in Full,” to the Town, or (2) send the Town written notice in a form reasonably acceptable to the Town that the Bond has been paid in full as to principal and interest. Upon any “Rate Adjustment Event,” as defined below, (1) the unpaid principal of this Bond will continue to be payable as shown on Schedule I, but (2) the interest on the Bond shall be recalculated, at an interest rate equal to an annualized interest rate equal to the “Prime Rate,” as defined below, plus 2% (200 basis points), to the date (retroactively, if need be) determined pursuant to the Rate Adjustment Event to be the date interest became includable in any Bondholder’s gross income for federal income tax purposes (in the case of a “265 Event,” as defined below, retroactively to the date of the original delivery of the Bond). The Bondholder shall promptly prepare a substitute Schedule I, reflecting the new interest rate and resulting payment schedule, and deliver a copy of the new Schedule to the Town and to the North Carolina Local Government Commission. The Town shall pay interest at such adjusted rate (subject to credit for interest previously paid) to each affected Bondholder, notwithstanding the fact that any particular Bondholder may not be a Bondholder on the date of a Rate Adjustment Event. The Town shall additionally pay to all affected Bondholders any interest, penalties or other charges assessed against or payable by such Bondholder and attributable to a Rate Adjustment Event, notwithstanding the prior repayment of the Bond in full or any transfer to another Bondholder. "Rate Adjustment Event" means (1) any action by the Internal Revenue Service (including the delivery of a deficiency notice) or any other federal court or 23 administrative body determining or (2) receipt by the Bondholder of an opinion of nationally-recognized bond counsel, in either case to the effect (a) that interest on this Bond is includable in gross income for federal income tax purposes, or (b) that this Bond is not a "qualified tax-exempt obligation" within the meaning of Code Section 265 (a “265 Event”), in either case as a result of (i) any action the Town takes, or fails to take, or (ii) any representation made by the Town being a misrepresentation. “Prime Rate” means the rate by that name published by Truist Bank, as in effect from time to time, whether or not Truist Bank at any time is not the registered Bondholder. This Bond constitutes the entire issue of [$4,150,000] Combined Utility Systems Revenue Bonds, Series 2020 (the "Bonds"), authorized by a Supplemental Bond Order and Series Resolution adopted by the Town’s governing Board of Commissioners on January 27, 2020. The Bonds are issued under, and are equally and ratably secured by, a Master Trust Agreement dated as of May 1, 2018, as previously supplemented, and a Second Supplemental Trust Agreement dated as of February 1, 2020 (collectively, the “Trust Agreement”), each between the Town and U.S. Bank National Association, as trustee (the “Trustee”). The Bonds are special obligations of the Town, payable solely from the “Net Receipts” of the Town’s combined public utility enterprise system, and the other funds pledged to that payment, all as defined in and as provided in the Trust Agreement. Neither the faith and credit nor the taxing power of the Town are pledged for the payment of the principal of or interest on the Bonds, and no owner of Bonds has any right to compel the exercise of the Town's taxing power in connection with any default on the Bonds. Reference is made to the Trust Agreement and all amendments and supplements thereto for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Town and the Trustee, the rights of the Bondholder and the terms upon which the Bonds are issued, to all of which provisions the Bondholder, by the acceptance of this Bond, agrees. Additional Bonds secured by a parity lien on the Net Receipts and other property securing the Bonds have been, and may be in the future, issued under the terms and conditions set forth in the Trust Agreement. 24 The Town may prepay the 2020 Bond in whole, but not in part, at any time. To prepay the 2020 Bond, the Town must pay all interest accrued and unpaid to the prepayment date and all the unpaid principal, along with a prepayment premium of 1% of the unpaid principal balance if the prepayment occurs prior to April 1, 2025. No premium is payable for a prepayment made on or after April 1, 2025. The Trustee will send prepayment notice to the Bondholder, at its address as it appears on the Trustee’s Bond Register (as defined in the Trust Agreement), not more than 60 nor less than 30 days prior to the redemption date. If on or before the date fixed for redemption funds have been deposited with the Trustee to pay the principal and interest accrued to the redemption date, the Bond will cease to accrue interest from and after the redemption date, will no longer be entitled to the benefits provided by the Trust Agreement, and will not be deemed to be Outstanding under the Trust Agreement. The Owner of this Bond has no right to enforce the provisions of the Trust Agreement or to institute action to enforce the covenants therein, or to take any action with respect to any event of default thereunder, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Trust Agreement. Changes to or supplements of the Trust Agreement may be made to the extent and in the circumstances permitted by the Trust Agreement. Ownership of this Bond will be registered on the Trustee’s Bond Register. This Bond may be exchanged, and its transfer may be effected, only by the Owner hereof in person or by attorney duly authorized in writing at the designated office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement, and upon surrender and cancellation of this Bond. The Trustee will not register the transfer of the Bond to any person other than a bank, an insurance company or a similar financial institution unless the North Carolina Local Government Commission has previously approved the such transfer. Upon exchange or registration of such transfer a new registered Bond of the same aggregate principal amount and interest rate will be issued in exchange therefor. The Town and the Trustee shall deem and treat the person in whose name this Bond is registered on the Bond Register as the absolute owner of this Bond for the purpose of receiving payment of or on account of principal of and interest due 25 on this Bond and for all other purposes, and neither the Town nor the Trustee will be affected by any notice to the contrary, except that interest payments will be made to the persons shown as Owners on the Trustee’s registration books at the end of the calendar day on the 15th day (whether or not a business day) (the “Record Date”) preceding each Payment Date. The Town has designated this Bond as a "qualified tax-exempt obligation" within the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended. All acts, conditions and things required by the Constitution and laws of the State of North Carolina to happen, exist or be performed precedent to and in the execution and delivery of this Bond have happened, exist and have been performed. The Town intends that North Carolina law will govern this Bond and all matters of its interpretation. This Bond will not be entitled to any benefit under the Trust Agreement or be valid or obligatory for any purpose until the Trustee has executed the Certificate of Authentication appearing on this Bond. [The remainder of this page has been left blank intentionally.] 26 IN WITNESS WHEREOF, the Town has caused this bond to be signed, sealed and delivered by duly authorized officers, as of the day and year first above written. ATTEST: (SEAL) Town of Hillsborough, North Carolina __________________________________ Katherine Cathey, Town Clerk By: ____________________________ Eric Peterson, Town Manager This Bond has been approved by the North Carolina Local Government Commission in accordance with the State and Local Government Revenue Bond Act. Greg C. Gaskins Secretary, North Carolina Local Government Commission By _____________________________ [Greg C. Gaskins or Designated Assistant] CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds referred to in the Second Supplemental Trust Agreement dated as of February 1, 2020 (the "Trust Agreement"), between the Town of Hillsborough, North Carolina, and U.S. Bank National Association, as trustee. Date of Authentication: __________________ U.S. Bank National Association, as Trustee By: __________________________ Authorized Officer [[$4,150,000] Combined Utility Systems Revenue Bonds, Series 2020] 27 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________________________________________ (Please print or type transferee’s name and address, including zip code) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE: the within bond and all rights thereunder, hereby irrevocably constituting and appointing ___________________________, Attorney, to transfer said certificate on the books kept for the registration thereof, with full power of substitution in the premises. Dated: _____________________ Signature Guaranteed: _____________________________ NOTICE: Signature(s) must be guaranteed by a participant in the Securities Transfer Agent Medallion Program (“STAMP”) or similar program _____________________________ (Signature of Owner) NOTICE: The signature above must correspond with the name the Owner as it appears on the front of this certificate in every particular without alteration or enlargement or any change whatsoever. [[$4,150,000] Combined Utility Systems Revenue Bonds, Series 2020] 28 Schedule I – Principal and Interest Payment Schedule Principal of this Bond is payable on dates and amounts as shown below. Interest is payable on the dates shown below, at the annual rate of 1.98% (subject to prepayment and adjustment as described above). The table below shows the estimated interest payments. Date Principal Payable ($) Interest Payable ($) Total ($) 10/1/2020 0 4/1/2021 … 4/1/2030 [To come] 29 EXHIBIT C – Form of Requisition [Date] ___________________ U.S. Bank National Association, as trustee Regarding: Requisition under 2020 Trust Agreement for Town of Hillsborough 5540 Centerview Drive, Suite 200 Raleigh, NC 27606 RE: Request by the Town of Hillsborough, North Carolina (the "Town"), for disbursement of funds from a Project Fund created under a Second Supplemental Trust Agreement dated as of February 1, 2020 To the Trustee: Pursuant to the terms and conditions of the above-referenced Supplemental Agreement, the Town authorizes and requests the disbursement of funds from the “Hillsborough 2020 Project Fund” established under that Supplemental Agreement for the costs described below. Capitalized terms used in this requisition and not otherwise defined have the meanings ascribed in the Supplemental Agreement. This is requisition number _______ from the Project Fund. Total Amount for Disbursement Payee Payee’s address or wiring instructions 30 The Town makes this requisition pursuant to the following representations: 1. The purpose of this disbursement is for payment of Project Costs of the 2020 Project as provided for in the Trust Agreement. 2. The requested disbursement has not been subject to any previous requisition. Town of Hillsborough, North Carolina By: [Exhibit Form Only – Do Not Sign] Title: _____________________________ Town Representative Board of Commissioners Agenda Abstract Form Meeting Date: Jan. 27, 2020 Department: Public Space Public Hearing: Yes No Date of Public Hearing: For Clerk’s Use Only AGENDA ITEM # 4.A Consent Agenda Regular Agenda Closed Session PRESENTER/INFORMATION CONTACT: Public Space Manager Stephanie Trueblood ITEM TO BE CONSIDERED Subject: Comprehensive and Sustainability Planning Attachment(s): 1. Presentation Brief Summary: The Vision 2030 Plan is scheduled for an update this year. The town board has also expressed interest in strategic planning for climate change and developing initiatives to meet the town’s Renewables Pledge. The presentation provides several paths available to accomplish these tasks and identifies overlapping and additional topic areas. The purpose of this item is to evaluate the various options, define a scope of work for the plan(s) and determine the plan- making process best suited for Hillsborough. Action Requested: Discussion and direction ISSUE OVERVIEW Background Information & Issue Summary: The Vision 2030 Plan needs updating. Many of the topic areas that may fall within the scope of the Vision Plan impact emissions and environmental quality. The scope of the Vision Plan and any climate or sustainability planning efforts needs to be defined clearly so that appropriate processes for plan development can be determined especially regarding public and stakeholder input, technical expertise and staff/departmental participation. Discussion will include evaluating whether multiple plans or one comprehensive plan is warranted. Financial Impacts: N/A Staff Recommendations/Comments: N/A Comprehensive and Sustainability Planning Town of Hillsborough January 2020 Vision 2030 Plan I.Overview Town Government II.Strategy Map III.Historical/Current Snapshot IV.Demographics V.Natural features VI.Recreation VII.Transportation VIII.Land Use IX.Tax Base/Revenue X.Public Utilities (Water/Wastewater) XI.Tourism/Economic Development XII.Regional Coordination XIII.Goals/Strategies XIV.Implementation Schedule Hillsborough’s Comprehensive Plan Strategic Growth Plan Vision 2030 Plan Future and Use Plan/Map Parks and Recreation Master Plan Community Connectivity Plan Churton Street Corridor Strategic Plan U.S. 70/Cornelius Street Corridor Plan Climate Change Impacts •Sea level is rising 1” every decade. •Carbon Dioxide in the air has increased 40% since 1970s. •North Carolina has warmed ½ degree Fahrenheit in last century. •Storms and droughts are becoming more frequent and more intense. •Rising temperatures reduce crop yields, harm livestock, and hurt vulnerable populations. •Aging infrastructure is vulnerable to storm damage and overload. Climate Impacts Source: NASA Source: EPA 1984 2016 Transition from fossil fuel-powered operations to 100%clean/renewable energy by December 31,2050 or sooner and 80%clean,renewable energy by 2030 Climate Action Plans •Built Environment, Energy, Transportation, Solid Waste, Water/Wastewater, Land Conservation •Conduct Baseline Assessment (GHG inventory) •Assess Past Efforts •Identify Goals •Set Emissions Targets •Identify Initiatives •Quantify Impacts of Initiatives •Develop Implementation Plan •Establish Metrics •Track and Report Progress Resiliency Plans •Risk Assessment •Hazard Mitigation Planning •Vulnerability/Threat Management •Emergency Operations Procedures •Implementation Plan Mitigation Strategies Adaptation Strategies •Energy Conservation •Energy Efficiency •Alternative Transportation •Renewables •Fuel Efficiency •Waste Reduction •Infrastructure Upgrades •Residential Programs •Health Programs •Continuity Planning •Emergency Preparedness •Emergency Operations Residential/Commercial 33% Municipal 2% Industrial 29% Transportation 26% Agriculture 10% Total U.S. Greenhouse Gas Emissions by Sector (2017) Vision Plan Climate Action Plan Resiliency Plan Vision for the future with long-range goals and objectives •Zoning •Housing •Environment •Transportation •Economic conditions •Public services •Utilities Reduce GHGs and mitigate climate change impacts •Built Environment •Energy •Transportation •Solid Waste •Water/Wastewater •Land Conservation •Municipal Operations Strategies to resist, absorb, accommodate and recover from stresses and shocks •Preparedness •Robustness/Resourcefulness •Hazard Mitigation •Emergency Operations Climate Action Vision Resiliency Sustainability Action Plan Sustainability Plans I.Purpose/Scope/Process II.Overview and Vision III.Built Environment IV.Climate and Energy V.Natural Systems VI.Economy and Jobs VII.Social and Cultural Resources VIII.Infrastructure IX.Preparedness X.Implementation Plan Economic EnvironmentalSocial Equitable Viable Livable Sustainable Leadership Team Outreach Strategy Develop Scope Engage Stakeholders Baseline Assessment Goals and Strategies Identify Indicators Set Priorities Funding Strategy Performance Measures Report Progress Plan-Making Process Comprehensive Land Use Plan Climate Action Plan Sustainability Plan Carrboro Chapel Hill Durham Raleigh Hillsborough = in process = complete Topic Areas Vision Plan Emergency Operations Plan Climate Action Plan Resiliency Plan Sustainability Plan Recreation Land Use Housing Preservation Economic Development/Tourism Regional Coordination/Partnerships Reducing GHGs Energy Facility Mgmt/Development Built Environment Transportation Land Conservation Water Conservation/Quality Waste Reduction Risk Assessment Hazard Mitigation Threat Mgmt EOC Procedures Transit Bike/Ped. Connectivity Transit Oriented Development/Infill Environmental Inititaives (Air/Soil/Water) Habitat/Wildlife Green Technologies Business Climate Jobs/Opportunity Diversity Equity/Inclusivity Accessibility Environmental Justice Public Safety/Policing Public Information/Communications 3 Plan Approach 1 Plan Approach Advantages •Familiar •Simple •Distinct •Concurrent •Quick •Manageable Advantages •Broad •Comprehensive •Integrated •Thorough •Extensive •Educational Vision Climate Action Resiliency Sustainability