NC0006033_Modification_20180508

is NC 28053-1748
;•:,, ,y,tea
;IC
Twp V E l� �nfeat�+voriversutilities.com
QTILITIES www.twonversutilities.com
We are TRU to our customers!
May 8, 2018
RECEIVED/DEN R/DWR
Mr. Mike Templeton MAY 14 2018
Wastewater Permitting Section Water Resources
Department of Environmental Quality/DWR Permitting Section
1617 Mail Service Center
Raleigh, NC 27699-1617
RE: Request for Revision to NPDES Permit NC0006033 to Add Supplemental Nutrient Allocation
Dear Mr.Templeton:
As has previously been discussed, the City of Gastonia requests that NPDES Permit NC0006033 (Eagle Road
Wastewater Treatment Plant) be modified to include supplemental nutrient allocation that the City of Gastonia
is purchasing from Lowell Investments I, LLC(NPDES Permit NC0005274).
The City of Gastonia and Lowell Investments I, LLC have entered into an agreement on December 27, 2017 for
the purchase of Lowell Investment I, LLC's total allocation of 144 lbs/day of total nitrogen and 7.6 lbs/day of
total phosphorus. An executed copy of this agreement is attached.
Per earlier discussions, our understanding is that this allocation can be added to permit NC0006033 by listing it
in as supplemental allocation. We understand this allocation would not become part of the active allocation
until there is an expansion of the flow limit for the facility.
Also from our earlier discussions, we understand that this revision will be considered a "Major Permit
Modification" and therefore have included a check to NCDEQ for the amount of$1,030.00 to cover this fee.
We appreciate DEQ's assistance with this permit request. Please let us know if there is anything additional
needed from us to complete this request.
Sincerely,
Stephanie Scheringer
Division Manager Wastewater Treatment
cc: Mr. David Shellenbarger,Assistant WWTD Manager Compliance
Enclosures: Purchase Contract between City of Gastonia and Lowell Investments I, LLC
Check# 134793 to NCDEQ
Certified Mail: 7014 0150 0002 0276 0913

�V f U tJ v N.f( l
STATE OF NORTH CAROLINA
COUNTY OF GASTON
PURCHASE CONTRACT
THIS PURCHASE CONTRACT(hereinafter referred to a"Contract"), entered into this
27 day of De <. , 2017, by and between LOWELL INVESTMENTS I,
LLC, hereinafter referred to as the "Seller"; and CITY OF GASTONIA, a North Carolina
Municipal Corporation, hereinafter referred to as"Buyer";
WITNESSETH:
WHEREAS, Seller is the owner of a nutrient discharge allocation under the Lake Wylie
TMDL 1995 Catawba River Basin Wide Water Quality Management Plan consisting of 144
lbs/day of Total Nitrogen and 7.6 lbs/day of Total Phosphorus (the "Total Allocation") as
evidenced by NPDES Permit#NC0005274; and,
WHEREAS, Seller's NPDES Permit is scheduled to be terminated in early 2018; and,
WHEREAS, the Total Allocation will be eliminated upon the termination of Seller's
NPDES Permit unless the Total Allocation is transferred to another active NPDES Permit; and,
WHEREAS, the North Carolina Division of Water Resources of the Department of
Environmental Quality has acknowledged that the Total Allocation can be transferred from
Seller's NPDES Permit #NC0005274 to be held in reserve for Buyer's NPDES Permit
#NC0020184 until such time as the Total Allocation would need to be activated by Buyer in order
to accommodate an increase in the nutrient limits currently approved for Buyer's NPDES Permit,
as evidenced by a letter from Michael E. Templeton, P.E. dated f OJQy 114 , 2017,
attached hereto and incorporated herein by reference; and,
WHEREAS, Buyer has no immediate need to increase Buyer's nutrient limits; however,
Buyer has determined that it would be in the best interest of its utility service rate payers to acquire
the Total Allocation to be held in reserve until such time as Buyer realizes a need to increase
Buyer's nutrient limits; and,
WHEREAS,Buyer and Seller have agreed that it would be in their mutual best interests to
enter into an agreement whereby the elimination of the Total Allocation will be avoided by
transferring the Total Allocation to be held in reserve under Buyer's NPDES Permit, with Buyer
having the option to activate the Total Allocation for Buyer's use at such time as Buyer requires
an increase in Buyer's nutrient limits under Buyer's NPDES Permit;
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises and
covenants contained herein, and the payments from Buyer to Seller referred to below, the receipt
and sufficiency of which are hereby acknowledged,the Buyer and Seller agree as follows:
Agree1560

1. Purchase. Subject to the terms hereof and in consideration of the sum of two thousand dollars
($2,000.00) paid by Buyer to Seller(the"Option Money"), Seller hereby sells to Buyer the Total
Allocation for the sole purpose of having the Total Allocation held in reserve under Buyer's
NPDES Permit.
2. Option to Activate the Total Allocation. In further consideration of the payment of the Option
Money, Buyer hereby grants to Seller the exclusive option to obtain from the State of North
Carolina an activation of the Total Allocation as part of the nutrient limits Buyer is permitted to
discharge under Buyer's NPDES Permit (hereinafter the "Option"). The period during which
Buyer may exercise the Option shall commence upon the date of execution of this Purchase
Contract and shall continue and exist for a period of fifteen(15)years (the"Option Period"). The
Option Period may be extended by Buyer for two additional five (5) year Option Periods by
providing Seller with written notice of Buyer's intent to extend the Option Period at least 30 days
prior to the expiration of the then current Option Period.
3. Transfer of Total Allocation During Option Period. Upon execution of this Purchase
Contract, Buyer and Seller shall jointly file a request with the North Carolina Wastewater
Permitting Section of the Division of Water Resources of the Department of Environmental
Quality to modify their respective NPDES Permits in order to transfer the Total Allocation under
Seller's permit to Buyer's permit to be held as reserved allocation for Buyer's permit bubble limit
during the Option Period. In the event that the transfer of the Total Allocation is not approved or
cannot be accomplished for any reason, then this agreement shall terminate and Buyer shall be
entitled to a full refund of the Option Money. In the event that the transfer of the Total Allocation
is approved and accomplished but Buyer fails to exercise its option to activate the Total Allocation
during the Option Period; or any extension thereof, Buyer's right to activate the Total Allocation
shall terminate.
4. Exercise of Option. At any time during the Option Period, or any extension thereof, Buyer
may exercise its option to activate the Total Allocation by written notice personally delivered to
the Seller or deposited in the United States Mail, postage prepaid, registered or certified mail,
return receipt requested, addressed to Seller at the notice address contained herein, or such other
notice address as Seller may provide Buyer in writing after the initial execution of this agreement.
5. Additional Consideration Due Seller Upon Exercise of Option. Upon exercise of the Option
by Buyer during the Option Period, or any extension thereof, the terms and conditions of such
activation shall be as follows:
(A) Additional Cash Payment. The Additional Cash Payment due Seller for the activation of
the Total Allocation by Buyer shall be two hundred thousand dollars ($200,000.00), payable to
Seller at closing. In the event that Buyer does not exercise the Option within five (5) years from
the date of execution of this Purchase Agreement, the amount of the Additional Cash Payment
shall increase by a percentage equal to the percentage increase in the Consumer Price Index, if
any, during that time period between five years from the date of execution of this Purchase
Agreement and the date that the Option is exercised by Buyer. Provided,however,that in no event
shall the Additional Cash Payment exceed$ 2SO p On.C 0 .
Agree1560

(B) Closing. Upon exercise of the Option Buyer shall immediately request from the appropriate
North Carolina regulatory authority written confirmation that the Total Allocation can and has
been transferred to Buyer's NPDES permit and activated such that Buyer may increase Buyer's
nutrient limits by an amount equal to the Total Allocation. The closing and payment of the
Additional Cash Payment shall occur at the offices of the Buyer or at such other place in Gaston
County, North Carolina as may be determined mutually by Buyer and Seller within ninety (90)
days of receipt of written confirmation from the appropriate North Carolina regulatory authority
that the Total Allocation has been permanently transferred to Buyer's NPDES permit and
activated. The parties shall also execute and deliver at closing any other documents reasonably
identified by Buyer and Seller as necessary or appropriate to complete and evidence the transaction
contemplated hereby.
(C)Conditions Precedent. The obligations and liabilities of the Buyer and Seller hereunder shall
be in all respects conditioned upon satisfaction of each of the following conditions precedent. The
failure of any condition precedent,unless waived, shall entitle either party, in addition to its other
rights and remedies provided in this Purchase Contract,if any,to terminate this Purchase Contract
on or before the Closing Date and upon such termination due to the failure of Seller to be able to
complete the transaction,Buyer shall be entitled to a return of the Option Money. Termination by
Seller due to Buyer's failure to be able to complete the transaction shall entitle Seller to retain the
Option Money as liquidated damages.
(i)Authorizations and Approvals. The Buyer shall have obtained the regulatory approval
and Buyer shall have obtained assurances to its reasonable satisfaction that Seller has the requisite
legal authority to complete the transaction contemplated herein. The Seller shall be satisfied as to
the i content and scope of Buyer's regulatory approval and that Buyer has the requisite legal
authority to complete the transaction contemplated herein.
(ii) No Change in Seller's Total Allocation. Seller shall hold and be able to transfer
and/or Buyer shall be able to activate the entire Total Allocation offered. If,at the time of exercise
of the Option, Seller does not hold or is not able to transfer, or Buyer is not able to activate, the
entire Total Allocation offered, Buyer shall have the option, in Buyer's sole discretion, to either
terminate this Contract and receive a full refund of the Option Money; or, to proceed to closing
and purchase any smaller portion of the Total Allocation offered that Seller then holds and is able
to transfer and/or Buyer is able to activate with the Additional Cash Payment being reduced by a
percentage equal to the percentage by which the Total Allocation has been reduced.
(iii) Change in Laws. There shall have been no change in statutes or regulations and no
administrative or legal decision or opinion by any court or any administrative agency materially
affecting Buyer's ability to acquire, hold, activate and use the Total Allocation offered by Seller
for the purposes described herein, or affecting Seller's ability to transfer the Total Allocation
offered.
(iv) Accuracy of Representations and Warranties. All representations and warranties
made by Buyer and Seller in this Contract shall be true and accurate in all material respects.
Agree1560

(v) Change in or Elimination of the Lake Wylie TMDL. There shall be no change in
the Lake Wylie TMDL, which would eliminate all or a portion of the Total Allocation, or prevent
Buyer from activating all or a portion of the Total Allocation. Any such change in the Lake Wylie
TMDL shall entitle Buyer to terminate this Purchase Contract with no further obligations or duties
to Seller.
(D) Representations and Warranties of Seller. To induce Buyer to enter into this Purchase
Contract and to purchase the offered Total Allocation, Seller hereby makes the representations,
warranties and covenants set forth in this paragraph,upon each of which Seller acknowledges and
agrees that Buyer is entitled to rely and has relied. Seller has corporate power and authority to
execute, deliver and perform its obligations under this Purchase Contract and this Purchase
Contract has been duly authorized, executed and delivered by Seller, constitutes the valid and
binding agreement of Seller and is enforceable in accordance with its terms. Seller is duly
organized and validly existing under the laws of North Carolina and in good standing. The
execution and delivery of and the performance by Seller of its obligations hereunder do not and
will not contravene, or constitute a default under, any provisions of applicable law or regulation,
or any agreement,judgment, injunction, order, decree or other instrument binding upon Seller or
result in the creation of any lien or other encumbrance on any asset of Seller. To Seller's
knowledge, there is no action, suit or proceeding pending or known to be threatened against or
affecting Seller in any court or before any arbitrator or before any governmental body which: (a)
in any manner raises any questions affecting the validity or enforceability of this Purchase Contract
or any other agreement or instrument to which Seller is a party or by which it is bound and that is
to be used in connection with, or is contemplated by, this Purchase Contract; (b) could adversely
affect the ability of Seller to perform its obligations hereunder, or under any document to be
delivered pursuant hereto; or(c) could adversely affect the offered Total Allocation or the use or
purposes thereof. Seller has not filed a petition or an answer seeking reorganization or an
arrangement with creditors or to take advantage of any insolvency or bankruptcy law.
(E) Representations and Warranties of Buyer. To induce Seller to enter into this Purchase
Contract and to sell the offered Total Allocation, Buyer hereby makes the representations and
warranties set forth in this paragraph, upon each of which Buyer acknowledges and agrees that
Seller is entitled to rely and has relied. This Purchase Contract has been duly executed and
delivered by Buyer, constitutes the valid and binding agreement of Buyer and is enforceable in
accordance with its terms. The execution and delivery of and the performance by Buyer of its
obligations hereunder do not and will not contravene,or constitute a default under,any provisions
of applicable law or regulation, or any agreement,judgment, injunction, order, decree or other
instrument binding upon Buyer or result in the creation of any lien or other encumbrance on any
asset of Buyer.
(F) Seller's Covenants. Seller shall cooperate with and assist,and shall take no action that might
impede, Buyer in obtaining the legal authorizations and regulatory approvals. Seller shall use
commercially reasonable efforts to maintain and avoid loss of any of Seller's offered Total
Allocation,and shall take no action that might reduce its value. In the event Seller becomes aware
of any action or event that potentially may cause loss, totally or partially, of the offered Total
Allocation, Seller shall promptly notify Buyer of such action or event.
Agree1550

•
t Allocation Buyer's Covenants. Buyer shall submit its request for the transfer of the Total to
Buyer's NPDES permit immediately upon execution of this Purchase Contract; and Buyer shall
submit its request for the activation of the Total Allocation for Buyer's NPDES permit
immediately upon exercise of the Option and shall use its best efforts to obtain all legal and
regulatory authorizations as soon thereafter as practically possible. The failure of the proper
regulatory authority to issue the necessary approvals described herein shall not constitute an event
of default for either party,but shall afford either party the ability to elect to terminate this Purchase
Contract under sub-paragraph C hereof as an unsatisfied condition precedent.
(Ii)Remedies on Default. In the event of a default or other failure to perform hereunder by Buyer
of any of the terms, conditions and provisions of this Purchase Contract prior to closing, Seller,
upon written notice to Buyer,may terminate this Purchase Contract,retain the Option Money and
obtain from Buyer any reasonable costs incurred by Seller in connection with this transaction as
liquidated damages and in full and complete satisfaction of any and all claims of damages or causes
of action that Seller may have against Buyer. The parties hereby acknowledge that the actual
damages of Seller would be difficult to ascertain. In the event of a default or other failure to
perform hereunder by Seller of any of the terms, conditions and provisions of this Contract prior
to closing, Buyer, upon written notice to Seller, may terminate this Contract and receive from
Seller a refund of the Option Money plus any additional costs incurred by Buyer in connection
with this transaction as liquidated damages. The parties hereby acknowledge that the actual
damages of Buyer would be difficult to ascertain; except that,in the event Seller sells or otherwise
transfers to a person or entity other than Buyer all or any part of the offered Total Allocation during
the Option Period or after receiving from Buyer notice that Buyer is exercising the Option Seller
refuses to transfer the offered Total Allocation, Buyer may seek through a proceeding in equity
specific performance of Seller's obligations under this Contract.
6. Notice. For purposes of the Option and Contract,every notice or other communication required
herein shall not be effective unless the same shall be in writing and delivered personally to either
party or mailed by United States mail, Registered or Certified, postage prepaid, return receipt
requested, and if intended for Buyer, shall be addressed or personally delivered to:
City Manager
City of Gastonia _
P.O. Box 1748
Gastonia,NC 28053-1748
and if intended by Seller, shall be addressed and personally delivered to:
i Ae:64
53/0 ad Q‘1,2 Uoid
C\O-10 -W1 QC, 222..r1
Notice to either Buyer or Seller shall be deemed effective from the time the same is deposited in
the United States Post Office, in an envelope, postage prepaid, addressed to either of the parties
herein.
Agree1560

7. Entire Agreement. The parties acknowledge this writing to constitute the entire agreement
between the parties and no amendment to the terms hereof shall be effective unless in writing and
signed by the parties.
8. Assignment. This Option and Contract may not be assigned by either party without the written
consent of the other party.
9. Severability. The invalidity or unenforceability of any terms or provisions hereto in any
jurisdiction shall in no way affect the validity or enforceability of any of the other terms or
provisions in that jurisdiction, or of the entire Agreement in any other jurisdiction.
10. Governing Law. This Agreement shall be deemed to have been made in the State of North
Carolina,and its validity, construction and effect shall be governed by the laws of the State of
North Carolina. The parties hereto agree that any action brought by either party to enforce the
terms of this Agreement shall be filed in the Superior Court of Gaston County, State of North
Carolina.
Agree1560

IN WITNESS WHEREOF,the parties hereto have, by authority duly given, caused the Option
and Contract to be executed as their official act the day and year first above written.
s •°1•se•.•• BBB
®6• % s
• ii• Ci Gastonia
o s
•
end- •e•• ..,°', 4:.'� $Ji
II C By: '.
°` .'sQee luso$t o- D. Bri•geman, Mayor
Attest:
By:jilt/tit JA :DtimakocIA-
(Deputy)
C ty Clerk
Low hive- men : ,LLC
l ,,.
i
STATE OF NORTH CAROLINA
COUNTY OF GASTON
I, Q(nd:'L C 6 Ow,ein b q , a Notary Public of the aforesaid County and State, do
here y certify that '5/-7,e✓Y /4_ Dun Pt i personally appeared before me this day
and acknowledged that she is safe(Deputy')City Clerk e City of Gastonia and that by authority
duly given and as the act of the municipal corporation, the foregoing instrument was signed in its
name by its Mayor, sealed with its corporate seal and attested by her as its (Deputy) City Clerk.
' /dv‘
WITNESS my hand and Notarial Seal, this the `7 day of C.e, ,.' Y , 20l`i.
ototimsoirio
MED .4,114 4101.44111
``�� ;•\ G. p �otary Pu, is ,
My Commission Expires: ).1 I21 Q� NOTA, 2
COMMISSION EXPIRES s
c
S. r
Agree1560 ¶ '%BLIG 4V.r`
'444,4nC'OrUN ``��'

STATE OF NORTH CAROLINA
COUNTY OF GASTON �p
I, 5hhfltW1 ( T"� ,�a Not Public of aforesaid County and State, do
hereby certify that Qm13 j �(''f YiG personally appeared before me
this day and acknowledged that he is the ei of Lowell Investments I, LLC, a
North Carolina Limited Liability Company and b authority duly given and as the act of the
company, the foregoing instrument was signed in its name by him as its Naj/)p Q/
WITNESS my hand and Notarial Seal,this thet'4day of NoVerk,b,e/ 20
jL
podtary Public
193 My Commission Expires: )-
\\\\\ oNHiio,��///
�a os
. Notary Public c�
co Mecklenburg
County
My Comm. Exp.
09-23-2422
09 .�
',i/,til CA1R1��\`\\\\\
Agree1560

AS I tONIA_
r,. : 7slnar.•.".,..a Pt.o A.t:r;•.: Prt' th.e.
Contract Approvals/Certificates
CONTRACT: 20180061 -PURCHASE OF WASTEWATER NUTRIENT ALLOCATION
Approved as to form: � � �� 12/12/2017 3:41:43PM
This instrument has been preaudited in the manner required by the Local Government Budget and Fiscal
Control Act, Article 3, Chapter 159 of the General Statutes of North Carolina.
/ J4444.. -. ���=�"�- J 12/27/2017 2:59:33PM

•
ROY COOPER
�. Governor
MICHAEL S. REGAN
Secretary
LINDA CULPEPPER
Water Resources Interim Director
ENVIRONMENTAL QUALITY
November 14,2017
Mr. David Shellenbarger
Assistant Division Manager,Compliance
Two Rivers Utilities
P.O. Box 1748
Gastonia,North Carolina 28053-1748
Subject: Proposed Transfer of Lowell
Investments'Nutrient Allocations
Long Creek WWTP
NPDES Permit NC0020184
Gaston County
Dear Mr.Shellenbarger:
I have reviewed your September 12,2017,outline of a potential agreement between Two Rivers
Utilities(TRU)and Lowell Investments for the transfer of nutrient allocations from the Lowell
Investments facility, NC0005274,to your Long Creek WWTP. In accordance with the 1995 Lake
Wylie Nutrient TMDL,Lowell Investments holds allocations of 144 lb/day of total nitrogen
(TN) and 7.6 lb/day of total phosphorus (TP).
I believe that,in most respects,the outline provides a satisfactory framework for the transfer of
these allocations.The Division of Water Resources could transfer the allocations to your Long
Creek facility in accordance with an acceptable sales agreement between the parties.The
transfer would be implemented by adding the allocations to the Nutrient Allocations special
condition of the Long Creek permit.The allocations would initially be designated as'reserve'
but could be activated in the future to increase the facility's nutrient limits,consistent with the
Lake Wylie Nutrient TMDL.
Please note that the contract must transfer ownership of the allocations to TRU immediately
rather than merely provide an option for their future purchase. Each facility's nutrient
allocations are associated with its NPDES permit;thus,upon termination of Lowell
Investments'permit(expected in early 2018),any allocations it still holds will be eliminated and
no longer available to the company or to Two Rivers. As we discussed,the parties may be able
to craft a contract that executes the sale up front but defers payment until TRU needs to apply
the allocations.
In addition,the proposed 25-year duration of the agreement is excessive,given that significant
changes in the Lake Wylie nutrient strategy could occur in that time.A 10-to 15-year term,with
the option to extend in 5-year increments,seems a more reasonable approach.
State of North Carolina I Environmental Quality I Water Resources
1617 Mail Service Center I Raleigh,North Carolina 27699-1617
919 807 6300

Proposed Transfer of Lowell
Investments'Nutrient Allocations
November 14,2017
In response to your question,TRU does not in any way assume responsibility or liability for the
Lowell Investments site as the result of its purchase of the nutrient allocations.
Feel free to contact me at(919)804-6402 or [e-mail] if you have any
questions.
Sincerely,
Michael E.Templeton,P.E.
Water Quality Engineer
Enclosure: Proposed Option for Purchase Structure(TRU)
Copies: NPDES Files
Central Files
eCopies: Torn McKittrick,Lowell Investments I,LLC
Wes Bell,Mooresville Regional Office
2

•
Outline of possible Lowell Investments-Two Rivers Utilities agreement(David Shellenbarger,
TRU,9/12/2017 email to Templeton):
Proposed Option for Purchase Structure:
1. The City of Gastonia will agree to pay Lowell Investments $XXXXX for an option to
purchase the phosphorus and nitrogen Threshold Management Plan allocation from the
site at 1602 N Main Street, Lowell. At any time prior to the expiration of this agreement,
the City may purchase this allocation in its entirety for the sum of$XXXXX.
2. Lowell Investments and the City of Gastonia will request to modify their respective
NPDES Permits such that 100% of the phosphorus and nitrogen allocation currently in
the Lowell permit will be transferred to NPDES Permit NC0020184 for the City of
Gastonia's Long Creek WWTP.
3. Until this purchase is completed, Lowell Investments will retain ownership of the
nitrogen and phosphorus allocation, but it will be temporarily transferred to the City of
Gastonia with an option to purchase and will be listed as Reserved Allocation for the
Eagle Road and Long Creek Bubble Limit within NPDES Permit NC0020184.
4. The transaction shall be structured as a purchase option with a term of 25 years. If the
option has not been exercised the end of this term, the parties shall agree to negotiate
in good faith on a renewal. In the event no renewal agreement can be reached,the City
agrees to request removal of the subject reserve allocation from its NPDES permit(s).
5. If the 1995 Lake Wylie Threshold Management Plan is reopened in a manner that does
not preserve this reserve allocation, the City of Gastonia is not obligated for any further
compensation to Lowell Investments.
6. In the event the City of Gastonia does not utilize the Lowell Investments Allocation, no
cost shall be incurred by the City of Gastonia.
Obligations of Lowell Investments
• Submit to NCDEQ a permit rescission letter requesting the structure outlined above.
Obligations of the City of Gastonia
• Submit to NCDEQ a permit modification requesting the structure outlined above.
• Provide Lowell Investments notification and a report of any activation of the allocation
in the permit and any usage of the allocation in any monthly monitoring period
• Provide Lowell access to the City of Gastonia discharge data (DMRs) as needed.
NOTE: "Threshold Management Plan"refers to the Lake Wylie TMDL.