NC0025453_Modification_Request_20200616

TOWN OF CLAYTON
"SERVICE" OPERATIONS CENTER "ENVIRONMENT'
ELECTRIC SERVICE •CARO! PUBLIC WORKS
[phone] " 2\ [phone]
VEHICLE MAINTENANCE ,z. ,,T N WATER RECLAMATION
[phone] [phone]
Date: June 16, 2020
RE wriVED
Mike Templeton JUN 2 2 2020
Division of Water Resources
Water Quality Permitting Section-NPDES NCDEQIDWRJNPDES
1617 Mail Service Center
Raleigh, NC 27699-1617
Re: NPDES Permit Modification,Town of Clayton NC, Permit#NC 0025453
Mr.Templeton:
The Town of Clayton is requesting a NPDES permit modification to reflect a recent nitrogen allocation/credit
purchase from Restoration Systems.The Town has entered into a contract to purchase
715,858.18 lbs. N equivalent to 23,861.94 lbs./yr.TN. The credits were developed in the Middle Neuse Basin HUC
03020202 and will be used in the Upper Neuse Basin HUC 02020201.The following calculations represent the use
of a 1.5 to 1 uncertainty ratio and the usage of a 50%transport factor.
Number of pounds/yr. purchased: 23,862#
Uncertainty factor 1.5 to 1: 23,862/1.5=15,908#(Estuary Pounds)
Transport factor 50%: 15,908/0.5=31,816#(End of pipe)
Current Allocation: 16,013#(Estuary mixed status) 32,026#(End of Pipe mixed status)
New Allocation: 16,013+15,908=31,921#(Estuary mixed status)
32,026+31,816=63,842#(End of pipe mixed status)
The Town would like to thank you in advance for your assistance in this endeavor as we move forward providing
adequate wastewater resources for our residents and industrial customers.
If you have any questions please contact me at 919-553-1536,or Rich Cappola at 919-553-1530.
Sincerely,I)
es Warren
Town of Clayton NC,WWTP Operations Supt.
653 Highway 42 West•P.O.Box 879•Clayton,North Carolina 27520•[phone]•Fax[phone]

Attachments:
Proposed NPDES Nitrogen Allocation Table, LGC Bond Approval,Statement of Nutrient Offset Credit Availability,
Nutrient Offset Credit Sales Agreement
RECEIV
JUN 2 2 1010 ED
NCD
EQ/DWR/NPDES

Proposed Nitrogen Allocation Table

•
Proposed Table:NPDES#NC0025453
Changes in bold type.
Allocation Source Date Allocation Amount Status
Type Estuary Discharge
(lb/yr) (Ib/yr)
Base Assigned by Rule 12/7/97; 10,700 21,400 Active
(T15A NCAC 028 .0234) 4/1/03
Supplemental Purchased from 7/5/06 3,668 7,336 Reserve
South Granville WSA
(NC0026824)
Supplemental Purchased from 8/30/2007 1,645 3,290 Mixed
UNIFI-Kinston 716 1,432 Active
(NC0003760) 929 1,858 Reserve
Supplemental Purchase from RS Purchase 15,908 31,816 Reserve
Flat Swamp, LLC & Pending
Flat Swamp Mitigation
Bank
TOTAL 32,921 63,842 Mixed
11,416 22,832 Active
21,505 41,010 Reserve

LGC Bond Approval

STATE OF NORTH CAROLINA
LOCAL GOVERNMENT COMMISSION
RALEIGH
CERTIFICATE CONCERNING BOND
I, Greg C. Gaskins, Secretary of the Local Government Commission of North Carolina (the
"Commission"),DO HEREBY CERTIFY as follows:
1. The application requesting approval of the issuance by the Town of Clayton, North
Carolina (the "Town") of its Water and Sewer System Revenue Bond, Series 2020 (the "Bond"), in the
aggregate principal amount not to exceed $15,000,000, authorized by a bond order adopted on June 16,
2008, as amended by the First Supplemental Bond Order adopted June 1, 2015 (as amended, the "Bond
Order"), entitled "BOND ORDER OF THE TOWN OF CLAYTON, NORTH CAROLINA
AUTHORIZING THE ISSUANCE OF WATER AND SEWER SYSTEM REVENUE BONDS TO
PROVIDE FUNDS TO CONSTRUCT IMPROVEMENTS TO ITS WATER AND SEWER
SYSTEM, INCLUDING CONSTRUCTION OF AN ELEVATED WATER STORAGE TANK;
PROVIDING FOR THE ISSUANCE OF ADDITIONAL REVENUE BONDS FOR VARIOUS
PURPOSES;PROVIDING FOR THE ISSUANCE OF REVENUE BOND ANTICIPATION NOTES
IN ANTICIPATION OF THE ISSUANCE OF REVENUE BONDS; PROVIDING FOR THE
CREATION OF CERTAIN SPECIAL FUNDS; PLEDGING TO THE PAYMENT OF THE
PRINCIPAL OF AND THE INTEREST ON THE REVENUE BONDS AND NOTES CERTAIN
REVENUES OF THE WATER AND SEWER SYSTEM; SETTING FORTH THE RIGHTS AND
REMEDIES OF HOLDERS; AND SETTING FORTH THE DETAILS OF CERTAIN RELATED
MATTERS" as amended by a First Supplemental Bond Order adopted on April 20, 2020 and a series
resolution adopted on April 20, 2020 (the "Series Resolution") entitled "SERIES RESOLUTION
AUTHORIZING THE ISSUANCE AND SALE OF WATER AND SEWER SYSTEM REVENUE
BONDS, SERIES 2020 OF THE TOWN OF CLAYTON,NORTH CAROLINA IN THE AGGREGATE
PRINCIPAL AMOUNT OF$15,000,000"is hereby approved.
2. My signature appears on the Bond stating that the issuance of the Bond has been approved
under provisions of The State and Local Government Revenue Bond Act of North Carolina,the Bond being
more fully described as follows:
$15,000,000 Water and Sewer System Revenue Bond, Series 2020, of the Town of
Clayton,North Carolina,No.R-1,dated April 23,2020,bearing interest at a rate of 2.88%
per annum, payable on December 1, 2020 and semiannually thereafter on June 1 and
December 1,and maturing annually on June 1 in the amounts set forth on Exhibit A to the
Bond; registered as to both principal and interest to Capital One Public Funding, LLC,
payable in legal tender to the registered owner.
3. The approval of the Bond was given by resolution passed by the Local Government
Commission on April 7,2020,a true and correct copy of which is attached hereto as Exhibit A.
4. The Local Government Commission has duly approved the issuance of the Bond in the
form as is more fully described in the Series Resolution.
5. The Local Government Commission has approved the appointment of the Town Finance
Officer in its capacity as Paying Agent and Bond Registrar under the Bond Order.

6. The date of maturity of the Bond meets the maturity requirements of Section 159-90(a)(1)
of the General Statutes of North Carolina,as amended.
7. The sale of the Bond,in the principal amount of$15,000,000,is to be at private sale without
advertisement to Capital One Public Funding,LLC on April 23,2020.
8. No request or application for the review of any orders or resolutions adopted or other
proceedings taken by the Local Government Commission or the Executive Committee thereof with respect
to the Bond has been filed with the Local Government Commission or the Executive Committee.
9. No litigation concerning the action of the Commission in approving the issuance and sale
of the Bond is pending or threatened so far as we are aware.
10. The facts stated in this Certificate are set forth in the official records of the Commission.
WITNESS my hand at Raleigh,this 23`d day of April,2020.
Aye,
Greg C.Gaskins,Secretary
Local Government Commission
2

NORTH CAROLINA DEPARTMENT OF STATE TREASURER
LOCAL GOVERNMENT COMMISSION
MINUTES
APRIL 7,2020
The meeting was called to order at 2:32 p.m. by LGC Secretary Greg Gaskins, acting as
Chairman for the meeting on the above date. The meeting was held by teleconference due to the
COVID 19 pandemic. Members present by phone were: Treasurer Dale R.Folwell,Secretary of State
Elaine Marshall, State Auditor Beth Wood, Secretary of Revenue Ronald Penny, Edward Munn,
Joshua Bass,Scott Padgett,Viola Harris and Mike Philbeck.
Members Absent: None
A quorum was present for the entire meeting.
Other participants by phone: Sharon Edmundson, Tim Romocki, Jennifer Wimmer, Alisia
Smith,Cindy Aiken,Debbie Tomasko,Dora Fazzini,Sam Watts,Chad McLamb,Martha Lasater,John
Day,Christi Wood,Greg Meshaw,Tammy Kellis,Mike Stephens,Kay Worley,Bobbie Faircloth,Mary
Duncan, Glynn Rollins, Shannon Moore,Allen Castelloe,Jim Hoggard,Joe Scherer, Leigh Etheridge,
Tom Lee and Ted Cole.
Chair Gaskins asked those present if they had any actual, potential, or the appearance of a
conflict of interest regarding the matters on the agenda. There were no conflicts to report.
Ms. Harris made a motion that the minutes of the March 3, 2020 meeting be approved. Mr.
Padgett seconded the motion and the minutes were approved by unanimous vote.
Mr. Padgett made a motion that the following resolution be adopted:
RESOLUTION APPROVING THE FINANCING TEAM FOR THE
TOWN OF CLAYTON, NORTH CAROLINA WATER AND
SEWER SYSTEM REVENUE BOND,SERIES 2020
WHEREAS, the Town of Clayton, North Carolina (the"Town")has requested that the North
Carolina Local Government Commission (the "Commission") approve their selection of the following
financing team members for the upcoming issuance of its Water and Sewer System Revenue Bond
issue:
Purchaser: Capital One Public Funding, LLC
Purchaser's Counsel: Pope Flynn,LLC
Bond Counsel: McGuire Woods LLP
Bond Registrar/Paying Agent: Town Finance Director
Financial Advisor: Davenport&Company,LLC
WHEREAS, based upon information and evidence received by the Commission, it has
determined to approve the Town's request;
NOW, THEREFORE, BE IT RESOLVED by the Commission that the above financing team
for the Town's upcoming Water and Sewer System Revenue Bond, Series 2020 is hereby authorized
and approved.
Mr.Munn seconded the motion and the foregoing resolution was adopted by unanimous vote.

Mr. Padgett made a motion to approve the following resolution:
RESOLUTION APPROVING THE APPLICATION OF THE TOWN
OF CLAYTON, NORTH CAROLINA FOR THE ISSUANCE OF NOT
TO EXCEED $15,000, 000 WATER AND SEWER SYSTEM
REVENUE BOND, SERIES 2020
WHEREAS, the Town of Clayton, North Carolina (the "Town") has applied to the North
Carolina Local Government Commission (the "Commission"), pursuant to the State and Local
Government Revenue Bond Act,as amended,for approval of the issuance of not to exceed$15,000,000
Water and Sewer System Revenue Bond, Series 2020 of the Town of Clayton, North Carolina (the
"Bond") for the purpose of providing funds for the acquisition of certain nutrient credits and
preliminary costs relating to the construction of a new wastewater reclamation facility(the"Project");
and
WHEREAS, the Town has furnished to the Commission:
(a) Bond Order to be adopted by the Town Council of the Town(the"Council")on February
20, 2012, as amended by a First Supplemental Bond Order to be adopted by the Council on April 20,
2020(as so amended,the"Bond Order");and
(b) Series Resolution to be adopted by the Council on April 20, 2020, authorizing the
issuance of the Bond in an amount to exceed $15,000,000 to finance costs of the Project and setting
forth the terms of the Bond.
WHEREAS, based upon the information and evidence received in connection with such
application,it is hereby determined and found by the Commission:
(a) that the proposed revenue bond issue is necessary and expedient;
(b) that the proposed amount of the revenue bond issue is adequate and not excessive,
when added to other monies available to the Town,for the proposed purpose thereof;
(c) that the proposed Project is feasible;
(d) that the Town's debt management procedures and policies are good;
(e) that the net revenues of the System(as defined in the Bond Order)will be sufficient to
service the proposed revenue bond;and
(f) that the proposed revenue bond can be sold at a reasonable interest cost to the Town.
NOW, THEREFORE, BE IT RESOLVED by the North Carolina Local Government
Commission that the application of the Town for approval of the proposed Bond in an amount not to
exceed $15,000,000 for the purposes set forth therein is hereby approved pursuant to the State and
Local Government Revenue Bond Act, as amended.
Mr.Munn seconded the motion and the foregoing resolution was adopted by unanimous vote.
Mr.Padgett made a motion to approve the following resolution(the"Resolution"):
2

RESOLUTION CONCERNING THE PRIVATE SALE OF THE TOWN
OF CLAYTON, NORTH CAROLINA WATER AND SEWER SYSTEM
REVENUE BOND, SERIES 2020
WHEREAS,Article 7, as amended, of Chapter 159 of the General Statutes of North Carolina
authorizes the North Carolina Local Government Commission (the "Commission") to sell revenue
bonds at private sale without advertisement to any purchasers thereof at such prices as the
Commission determines to be in the best interest of the issuing unit, subject to the approval of the
governing board of the issuing unit;and
WHEREAS, Capital One Public Funding, LLC ("Capital One") has offered to purchase the
$15,000,000 Water and Sewer System Revenue Bond,Series 2020(the"Bond")of the Town of Clayton,
North Carolina(the"Town"),from the Commission upon the terms and conditions set forth below and
in the form of the Series Resolution to be adopted by the Town on April 20, 21020, and the form of the
Bond attached thereto;and
WHEREAS, the Commission desires to approve the request of the Town that it sell the Bond
at private sale without advertisement;and
WHEREAS, the Commission desires to accept the offer of Capital One to purchase the Bond
upon the terms and conditions set forth below;
NOW, THEREFORE, BE IT RESOLVED by the North Carolina Local Government
Commission:
Section 1. The sale of the Bond to Capital One at private sale without advertisement pursuant
to the Bond Order and the Series Resolution is hereby approved,such sale being subject to the approval
of the Secretary of the Commission or a designated assistant of the Commission (the "Designated
Assistant").
Section 2. The aggregate principal amount of the Bond shall not exceed $15,000,000 and the
purchase price for the Bond shall be approved by the Designated Assistant on the date of the sale.
Section 3. The Bonds shall bear interest at an interest rate not to exceed 5.25%, and will
mature no later than December 31, 2045.
Section 4. The Commission hereby determines that the sale of the Bond in the manner and
for the price as provided in this Resolution is in the best interest of the Town, provided that such sale
shall be approved by the Town.
Section 5. The Secretary of the Commission,or any Deputy Secretary,is hereby appointed the
Designated Assistant of the Commission for the purpose of this Resolution, and the Designated
Assistant is hereby authorized and directed, within the terms and conditions of this Resolution, to
approve such changes,including details of the Bond, as shall be satisfactory to him or her,to approve
the forms of other documents on behalf of the Commission and to provide for the execution and delivery
of the Bond in accordance with the Bond Order.
Section 6. This Resolution shall be effective immediately upon its passage.
Mr.Munn seconded the motion and the foregoing Resolution was adopted by unanimous vote.
**** *******
3

I, Greg C. Gaskins, Secretary of the North Carolina Local Government Commission, DO
HEREBY CERTIFY that the foregoing is a true and correct extract from minutes of the North Carolina
Local Government Commission meeting duly called and held on April 7, 2020, and sets forth so much
of such minutes as in any way relates to the introduction,consideration and passage of the resolutions
herein set forth.
WITNESS my hand at Raleigh,this 7th day of pril, 2020.
44. 4,44,,.....
Secreta of the North Carolina
Local Government Commission
4

Statement of Offset Credit Availability

Restoration Systems, LLC
1101 Haynes St.Suite 211
Raleigh, North Carolina '•
Ph: [phone]
Fx:[phone] RISTI+R 1l to\
SYS[k':'M1S UC:
Statement of Nutrient Offset Credit Availability
Neuse River Basin&8-digit HUC 03020202
RS Flat Swamp Nutrient Offset Mitigation Bank
March 17, 2020
NC Division of Water Resources-Water Quality Permitting Section
Re: Availability of Nutrient Offset Credits
This document confirms that 715,858.18 lbs (or 23,861.94 lbs/yr for 30 years) of nitrogen nutrient
offsets (Credits) from the Flat Swamp nutrient offset Bank are currently available and on hold
specifically for The Town of Clayton (Applicant) for NPDES Permit # NC002543 and/or their new
wastewater treatment facility. These credits will remain on hold for the Applicant until July 31,2020.
However, the Applicant and RS Flat Swamp, LLC (Bank Sponsor) may enter into an agreement to
further extend the length of time Credits can remain on hold. The Bank Sponsor is authorized to sell
these Credits under their approved Mitigation Banking Instrument, which became effective
December 20, 2019.
The Applicant may purchase all or some of the Credits on hold depending on the total amount of
Nitrogen and/or Phosphorus required for NPDES permit compliance. The Applicant may purchase
these Credits at any time prior to July 31, 2020. The Applicant may purchase these Credits by July
31, 2020 only upon written confirmation that the draft NPDES permit has been placed on public
notice by the Division of Water Resources (DWR). Should the Applicant purchase the Credits, we
will complete and execute the Nutrient Offset Credit Transfer Certificate (Certificate) within five (5)
days of receipt of the full purchase price.
Additionally, we will provide copies of the completed and executed Certificate to the Applicant, the
DWR NPDES Permitting Staff and, if needed, other regulatory agencies. In addition,we will provide
DWR with an updated copy of the Bank's Nutrient Offset Ledger, reflecting the transaction.
Transaction information in the updated Bank Ledger will include relevant Permit and Applicant
information as well as the number and resource type of the debited Credits.
Should your office have any questions,please contact me at 919.334.9123.
Sincerely,
Tiffani Bylow
Restoration Systems, LLC ,--Docu8ignedby:
The Credits in this letter have been verified by the Division of Water Resources by`—n43c72700Bo543E... on
3/17/2020.

Nutrient Offset Credit Sales Agreement

RESTORATION
SYSTEMS LLC
NUTRIENT OFFSET CREDIT SALES AGREEMENT
This CREDIT SALES AGREEMENT (hereinafter referred to as "Agreement") is made
and entered into this 11►day of MottIN ,2020 by and between RS Flat Swamp,LLC,a North
Carolina limited liability company (hereinafter referred to as "Seller"), and the Town of
Clayton (hereinafter referred to as"Buyer").
1. PRICING.
Number of credits Estuary Credit type Credit price Total
purchased delivery (per unit purchase
zone estuary) price
715,858.18.1bs N 100% Nitrogen Offset $10/lb $7,158,581.78
equivalent to Credits equivalent to
23,861.94 lbs/year TN $300/lb/year
2. PAYMENT.
2.1 Buyer agrees to pay and Seller agrees to accept the amount of seven million
one hundred and fifty-eight thousand five hundred eighty-one and 78/100 dollars
($7,158,743.96) (the"Total Purchase Price")for the Nitrogen Offset Credits described
above in Section 2 (the"Credits").
2.2 Buyer shall tender a refundable deposit of fifty thousand dollars ($50,000) to
Seller within seven (7) business days of the execution of this Agreement. The
refundable deposit shall be returned to Buyer within 10 business days of Seller's
receipt of written notice from Buyer terminating this Agreement. The refundable
deposit shall be applied to the Total Purchase Price such that the balance of seven
million one hundred eight thousand five hundred and eighty-one and 78/100 dollars
($7,108,581.78) is due at closing on the sale of the Credits.
2.3 Upon receipt of the$50,000 deposit,Seller shall hold Credits for the exclusive
sale to and use by Buyer unless and until Buyer submits written notice of termination
of this Agreement to Seller.
2.4 Seller's receipt of the Total Purchase Price shall result in Credits available for
immediate transfer to Buyer by Seller, in accordance with the North Carolina
Department of Environmental Quality - Division of Water Resources (NCDEQ-DWR)
1 101 Haynes St..Suite 211 •Raleigh.NC 27604• ww restorationsystems.eom•Ph 919 755 9490•Fx 919.755.9492
PPAB 5412490v1

Nutrient Offset Mitigation Program. Credits shall be held for the benefit of Buyer as
described in Section 2.3, but no credits shall be transferred, sold, or otherwise
conveyed by Seller to Buyer pursuant to this Agreement until Seller receives the Total
Purchase Price.
3. CLOSING ON SALE OF CREDITS.After execution of this Agreement and upon
written request of Buyer,Seller shall issue an invoice for the Credits.The Total
Purchase Price shall be paid by Buyer to Seller by check or wire transfer on,or
before July 31, 2020. Upon receipt of the Total Purchase Price,Seller shall issue a
Mitigation Credit Transfer Certificate,substantially in the form of Attachment A,and
reasonably in a form acceptable to Buyer and NCDEQ-DWR.
4. LIABILITY FOR NITROGEN OFFSET CREDITS. In consideration for receiving the
Total Purchase Price from Buyer, Seller shall assume liability for providing nitrogen
offset credits under the terms of this Agreement and in accordance with NCDEQ-DWR
rules,regulations,and requirements.
5. TERMINATION. Buyer may terminate this Agreement at any time prior to payment
of Total Purchase Price, in its sole discretion,with written notice to Seller.
6. COMPLETE AGREEMENT. This Agreement constitutes the full and complete
agreement by and between Seller and Buyer for the sale of the Credits.
7. GOVERNING LAW. This Agreement shall be construed, interpreted, and enforced
solely under the laws of the State of North Carolina.
8. NONASSIGNABILITY. This Agreement may not be assigned without the consent, in
writing,of the other Party.
9. AMENDMENTS.This Agreement shall not be changed except in writing signed by all
the parties.
10. COUNTERPARTS. This Agreement may be executed in several counterparts,
including separate counterparts. Each shall be an original, but all of them together
constitute the same instrument.
11. AGREEMENT BINDING ON SUCCESSORS:This Agreement shall be binding upon the
Parties,their legal representatives, heirs,successors,and assigns to the full extent of
prevailing law.
[Signatures on next page]
1101 Haynes St..Suite 211 •Raleigh,NC 27604•www.restorationsysterns.com•Ph 919.755.9490•Fx 919.755.9492
PPAB 5412490v1

„th
J. d Preyer
1' •sident
RS Flat Swamp,LLC(Seller)
Date: �--� Q
[Seller Signature Page- NUTRIENT OFFSET CREDIT SALES AGREEMENT]
1 101 Haynes St.,Suite 211•Raleigh,NC 27604•www.restorationsystems.com•Ph 919.755.9490•Fx 919.755.9492
PPAB 5412490v1

Adam J. ndsay
Title: To n Manager
Town of Clayton (Buyer)
Date: 3161120
[Buyer Signature Page-NUTRIENT OFFSET CREDIT SALES AGREEMENT]
1101 Haynes St..Suite 211 •Raleigh,NC 27604•www.restorationsystems.com•Ph 919.755.9490•Fx 919.755.9492
PPAB 5412490v1