WQ0000165_Final Permit_20160513

Water Resources
ENWRONMENTAL QUALITY
PAT MCCRORY
Governor
DONALD R. VAN DER VAART
Secretary
S. JAY ZIMMERMAN
Director
May 13, 2016
ROBERT J. TOUHEY — GENERAL MANAGER
SANDS VILLA UTILITIES, INC.
POST OFFICE BOX 772
ATLANTIC BEACH, NORTH CAROLINA 28512
Dear Mr. Touhey:
Subject: Permit No. WQ0000165
Sands Villa WWTF
High -Rate Infiltration System
Carteret County
In accordance with your permit renewal request received September 25, 2015, and subsequent
additional information received December 15, 2015, we are forwarding herewith Permit No. WQ0000165
dated May 13, 2016, to Sands Villa Utilities, Inc. for the continued operation of the subject wastewater
treatment and high -rate infiltration facilities.
This permit shall be effective from the date of issuance until April 30, 2021, shall void Permit No.
WQ0000165 issued January 16, 2007, and shall be subject to the conditions and limitations as specified
therein. Please pay particular attention to the monitoring requirements listed in Attachments A, B and C
for they may differ from the previous permit issuance. Failure to establish an adequate system for collecting
and maintaining the required operational information shall result in future compliance problems.
Please note the following permit conditions have been removed since the last permit issuance
dated January 16,2007:
➢ Old Condition 1.1. — This condition has been removed because the engineering certification
was received October 13, 2008.
➢ Old Condition I.2. — This condition has been removed because start-up inspections were
conducted July 23, 2008 and September 30, 2008.
➢ Old Condition II.6., II.7.,11.8.,11.9., II.11., and IV A. —These conditions have been removed.
Please note the following permit conditions are new since the last permit issuance dated
January 16,2007:
➢ Condition 11.3 — Any new groundwater monitoring wells must be constructed to standards.
➢ Condition IIA — Proper operation and maintenance of the wastewater collection system.
➢ Condition 11.7 — Operational Agreement required between Permittee and Environmental
Management Commission.
State of North Carolina I Environmental Quality j 'Water Resources I Water Quality Permitting I Non -Discharge Permitting
1617 Mail Service Center f Raleigh, North Carolina 27699-; 617
919 807 6464

Mr. Robert J. Touhey
May 13, 2016
Page 2 of 2
➢ Condition 11.11 — Any change in compliance boundary must be preceded by permit
modification.
➢ Condition 11.12 — No wells other than monitoring wells to be dug inside the compliance
boundary.
➢ Condition 11.13 — An easement is required of any landowner who is not the Permittee within
the compliance boundary.
➢ Condition H. 14.b. — The previous permit issuance mistakenly omitted the setback requirements
listed under subparagraphs i. through iv. for the treatment facilities permitted under 15A NCAC
02T .0706(d).
➢ Condition III.6. — Public access to infiltration zone prohibited.
A Condition IV.2 — Division -certified laboratory to be used for all lab results reported. This is
broader than Old Condition W.I.d.
➢ Condition IV.5 — Reporting required. These items are all contained in the NDAR-2 and NDMR
forms to be filed and no other forms need be kept.
➢ Condition VI.7. — This condition requires the Permittee to maintain this permit until all
permitted facilities are properly closed or permitted under another permit.
➢ Condition VI.8. -- This condition notifies the Permittee that this permit is subject to revocation
or unilateral modification upon 60 days notice from the Division Director, in whole or part for
the requirements listed in 15A NCAC 02T .0110.
➢ Condition VI.9. — This condition notifies the Permittee that unless the Division Director grants
a variance, expansion of the permitted facilities contained herein shall not be granted if the
Permittee: has been convicted of an environmental crime; has previously abandoned a
wastewater treatment facility; has not paid a civil penalty; is non-compliant with a permit
schedule; or has not paid an annual fee.
If any parts, requirements or limitations contained in this permit are unacceptable, the Permittee
has the right to request an adjudicatory hearing upon written request within 30 days following receipt of
this permit. This request shall be in the form of a written petition, conforming to Chapter 150B of the North
Carolina General Statutes, and filed with the Office of Administrative Hearings at 6714 Mail Service
Center, Raleigh, NC 27699-6714. Unless such demands are made, this permit shall be final and binding.
If you need additional information concerning this permit, please contact Troy Doby at (919) 807-
6336 or troy [e-mail].
Sincerely,
J7—S. Jay Zimmerman, P.G., Director
Division of Water Resources
cc: Carteret County Health Department (Electronic Copy)
Wilmington Regional Office, Water Quality Regional Operations Section (Electronic Copy)
Digital Permit Archive (Electronic Copy)
Central Piles

NORTH CAROLINA
ENVIRONMENTAL MANAGEMENT COMMISSION
DEPARTMENT OF ENVIRONMENTAL QUALITY
RALEIGH
HIGH -RATE INFILTRATION SYSTEM PERMIT
In accordance with the provisions of Article 21 of Chapter 143, General Statutes of North Carolina as
amended, and other applicable Laws, Rules and Regulations
PERMISSION IS HEREBY GRANTED TO
Sands Villa Utilities, Inc.
Carteret County
FOR THE
continued operation of a 43,000 gallon per day (GPD) wastewater collection system, treatment and high -
rate infiltration facility consisting of:
approximately 1,448 linear feet (LF) of 8 -inch gravity sewer; a 195 gallon per minute (GPM) pump station
with dual pumps, high water alarm, and standby power; approximately 500 LF of 4 -inch force main; a
10,750 gallon flow equalization tank with a 1'/4 -inch manually cleaned bar screen, %-inch bubble diffusers,
dedicated 30 cubic feet per minute (CFM) blower and dual %z horsepower (hp) 65 GPM pumps, and flow
splitting device; dual train 27,000 gallon sequencing batch reactors (SBRs) each with 3/4 -inch coarse bubble
diffusion, two (15 hp 383 CFM blowers, a 100 GPM waste activated sludge (WAS) pump, two submersible
mixers and floating decanters; a 6,450 gallon post equalization tank, with dual 65 GPM pumps and high
water alarm; dual 48 square foot (ft) Pyradeck upflow filters with 0.4 hp submersible dewatering pumps;
dual Trojan Model 3000 PTP ultraviolet (UV) disinfection units; an effluent pumping station with tank used
for high -rate filter dosing and filter clearwell; a %2 hp wash water pump; two 80 gallon fiberglass pressure
tanks; a non -potable yard hydrant; an effluent flow meter; an 11,000 gallon sludge holding tank with coarse
bubble diffusers and a dedicated 40 CFM blower including a gravity decanting pipe; a 100 kilowatt (kW)
auxiliary generator with automatic transfer switch; two high rate irrigation fields (each with a diameter of
100 feet), each consisting of 12 '/x -inch sprinkler head irrigation system with 3 -inch supply lines; and all
associated piping, valves, controls and appurtenances
to serve the Sands Villa WWTF, with no discharge of wastes to surface waters, pursuant to the application
received September 25, 2015, and subsequent additional information received by the Division of Water
Resources, and in conformity with the project plans, specifications, and other supporting data subsequently
filed and approved by the Department of Environmental Quality and considered a part of this permit.
This permit shall be effective from the date of issuance until April 30, 2021, shall void Permit No.
WQ0000165 issued January 16, 2007, and shall be subject to the following specified conditions and
limitations:
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I. SCHEDULES
1. No later than six months prior to the expiration of this permit, the Permittee shall request renewal of
this permit on official Division forms. Upon receipt of the request, the Division will review the
adequacy of the facilities described therein, and if warranted, will renew the permit for such period of
time and under such conditions and limitations as it may deem appropriate. Please note Rule 15A
NCAC 02T .0105(d) requires an updated site map to be submitted with the permit renewal application.
In accordance with Rule 1.5A NCAC 02T .0 115, the Permittee shall submit a copy of the declarations
and bylaws documenting compliance with the attached Operational Agreement. [15A NCAC 02T
.0105(d), 02T.0106, 02T.0109, 02T .0115(c)]
2. If the subject wastewater treatment or infiltration facilities are in noncompliance with the terms and
conditions of this permit, governing statutes or regulations, the subject facilities shall.be connected to
an operational publicly owned wastewater collection system within 180 days of its availability. Prior
to the initiation of these connection activities, appropriate Division approval shall be received. [I 5A
NCAC 02H .0404(e)]
II. PERFORMANCE STANDARDS
The subject non -discharge facilities shall be effectively maintained and operated at all times so there is
no discharge to surface waters, nor any contravention of groundwater or surface water standards. In
the event the facilities fail to perform satisfactorily, including the creation of nuisance conditions due
to improper operation and maintenance, or failure of the infiltration areas to adequately assimilate the
effluent, the Permittee shall take immediate corrective actions including Division required actions, such
as the construction of additional or replacement wastewater treatment or infiltration facilities. [G.S.
143-215.1, 143-213.3(x)]
2. This permit shall not relieve the Permittee of their responsibility for damages to groundwater or surface
water resulting from the operation of this facility. [15A NCAC 02B .0200, 02L .0100]
3. All wells constructed for purposes of groundwater monitoring shall be constructed in accordance with
15A NCAC 02C .0108 (Standards of Construction for Wells Other than Water Supply), and any other
jurisdictional laws and regulations pertaining to well construction. [15A NCAC 02C .0108]
4. The wastewater collection facilities shall be properly maintained and operated at all times. The
Permittee shall maintain compliance with an individual system -wide collection system permit for the
operation and maintenance of these facilities in accordance with 15A NCAC 02T .0400. If an
individual permit is not required, the following perfot-mance criteria shall be met:
a. The sewer system shall be effectively maintained and operated at all times to prevent discharge to
land or surface waters, and any contravention of groundwater or surface water standards.
b. A map of the sewer system shall be developed and actively maintained.
c. An operation and maintenance plan shall be developed, implemented and maintained.
d. Pump stations not connected to a telemetry system shall be inspected every day (i.e., 365 days per
year). Pump stations connected to a telemetry system shall be inspected at least once per week.
e. High-priority sewers shall be inspected at least once every six months.
f. A general observation of the entire sewer system shall be conducted at least once per year.
g. Overflows and bypasses shall be reported to the Wilmington Regional Office in accordance with
15A NCAC 02B .0506(a), and public notice shall be provided as required per North Carolina
General Statute § 143-215.1C.
h. A grease control program shall be developed, implemented and maintained.
i. Right-of-ways and easements shall be maintained.
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j. Inspection and maintenance records for Conditions 11.4.a. through II.4.i. shall be maintained for a
period of at least three years, except for Conditions IIA.b. and II.4.c., which shall be maintained
for the life of the system.
[15A NCAC 02T .0403]
5. Effluent quality shall not exceed the limitations specified in Attachment A. [ 15A NCAC 02T
.0108(b)(1), 02T .0705(b)]
6. Application rates, whether hydraulic, nutrient or other pollutant, shall not exceed those specified in
Attachment & [ 15A NCAC 02T .0705(m)]
7. The Operational Agreement (attached) between the Permittee and the Environmental Management
Commission is incorporated herein by,reference and shall be a condition of this permit. Noncompliance
with the terms of the Operational Agreement shall subject the Permittee to all sanctions provided by
North Carolina General Statutes §143-215.6A to §143-215.6C for violation of or failure to act in
accordance with the terms and conditions of this permit. [15A NCAC 02T .0115]
8. A usable green area shall be maintained for effluent disposal. The green area shall contain at least
1,000 square feet of open green area for each residential unit served, or 2,500 square feet per thousand
gallons per day of waste flow, whichever is less. A green area is defined as an area suitable for waste
disposal, either in its natural state or which has been modified by planting a vegetative cover of grasses
or low growing shrubbery. [15A NCAC 02H .0404(g)(7)]
9. This disposal system was individually permitted on or after December 30, 1983; therefore, the
compliance boundary is established at either 250 feet from the effluent disposal area, or 50 feet within
the property boundary, whichever is closest to the effluent disposal area. An exceedance of
groundwater standards at or beyond the compliance boundary is subject to remediation action according
to 15A NCAC 02L .0106(4)(2) as well as enforcement actions in accordance with North Carolina
General Statute 143-215.6A through 143-215.6C. [15A NCAC 02L .0106(d)(2), 02L .0107(b)]
10. In accordance with 15A NCAC 02L .0108, the review boundary is established midway between the
compliance boundary and the effluent disposal area. Any exceedance of groundwater standards at the
review boundary shall require action in accordance with 15A NCAC 02L .0106. [15A NCAC 02L
.0 106, 02L .0108]
11, The Permittee shall apply for a permit modification to establish a new compliance boundary prior to
any sale or transfer of property affecting a compliance boundary. [ 15A NCAC 02L ,0107(c)]
12. In accordance with 15A NCAC 02L.0 107(d), no wells, excluding Division approved monitoring wells,
shall be constructed within the compliance boundary except as provided for in 15A NCAC 02L
.0107(g). [ISA NCAC 02L .0107]
13. Except as provided for in 15A NCAC 02L .0107(g), the Permittee shall ensure any landowner who is
not the Permittee and owns land within the compliance boundary shall execute and file with the Carteret
County Register of Deeds an casement running with the land containing the following items:
a. A notice of the permit and number or other description as allowed in 15A NCAC 02L A 107(£)(1);
b. Prohibits construction and operation of water supply wells within the compliance boundary; and
c. Reserves the right of the Permittee or the State to enter the property within the compliance boundary
for purposes related to the permit.
The Director may terminate the easement when its purpose has been fulfilled or is no longer needed.
[15A NCAC 02L .0107(f)]
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14. The facilities permitted herein shall be constructed according to the following setbacks.
a. The setbacks for high -rate infiltration sites permitted under 15A NCAC 02H.0200 and 02H.0400
shall be as follows (all distances in feet):
i. Any on -property residential units that are to be sold (e.g., condominiums,
subdivisions):
10
ii. Any private or public water supply source:
100
iii. Surface waters:
200
iv. Groundwater lowering ditches:
200
v. Any well with exception of monitoring wells:
100
vi. Any property line:
S0
vii. Subsurface groundwater lowering drainage systems:
200
viii. Public right of way:
50
ix. Impounded public water supplies:
500
x. Public shallow groundwater supply:
500
[15A NCAC 02H .02190), 02H .0404(g)]
b. The setbacks for storage and treatment units permitted under ISA NCAC 02T .0700 shall be as
follows (all distances in feet):
i. Any habitable residence or place of public assembly under separate ownership: 100
ii. Any private or public water supply source: 100
iii. Surface waters: 50
iv. Any well with exception of monitoring wells: 100
v. Any property line: 50
[15A NCAC 02T .0706(4)]
III. OPERATION AND MAINTENANCE REQUIREMENTS
1. The facilities shall be properly maintained and operated at all times. The facilities shall be effectively
maintained and operated as a non -discharge system to prevent the discharge of any wastewater resulting
from the operation of this facility. The Permittee shall maintain an Operation and Maintenance Plan,
which at a minimum shall include operational functions, maintenance schedules, safety measures and
a spill response plan. [15A NCAC 02T .0707]
2. Upon the Water Pollution Control System Operators Certification Commission's (WPCSOCC)
classification of the subject non -discharge facilities, in accordance with 15A NCAC 08G .0200 the
Permittee shall designate and employ a certified operator in responsible charge (ORC) and one or more
certified operator(s) as back-up ORC(s). The ORC or their back-up shall visit the facilities in
accordance with 15A NCAC 08G .0200, and shall comply with all other conditions specified in the
previously cited rules. [ 15A NCAC 02T .0117]
3. Only effluent from Sands Villa WWTF shall be infiltrated on the sites listed in Attachment B. [G.S.
143-215.1]
4. An automatically activated standby power source capable of powering all essential treatment units shall
be on site and operational at all times. If a generator is employed as an alternate power supply, it shall
be tested weekly by interrupting the primary power source. [I5A NCAC 02H .0404(8)(3)]
5. No automobiles or machinery shall be allowed on the infiltration sites except during equipment
installation or while maintenance is being performed. [ 15A NCAC 02T .0108(b)(1)]
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6. Public access to the infiltration sites and wastewater treatment facilities shall be prohibited. [ 15A
NCAC 02T .0705(p)]
The residuals generated from the wastewater treatment facilities shall be disposed or utilized in
accordance with 15A NCAC 02T .1100. The Permittee shall maintain a residual management plan
pursuant to 15A NCAC 02T.0708. [ 15A NCAC 02T .0708, 15A NCAC 02T .1100]
8. Diversion or bypassing of untreated or partially treated wastewater from the treatment facilities is
prohibited. [15A NCAC 02T .0705(i)]
9. Adequate measures shall betaken to divert stormwater from the high -rate infiltration area and to prevent
wastewater runoff. [15A NCAC 02T .0108(b)(1)]
IV. MONITORING AND REPORTING REQUIREMENTS
Any Division -required monitoring (including groundwater, plant tissue, soil and surface water
analyses) necessary to ensure groundwater and surface water protection shall be established, and an
acceptable sampling reporting schedule shall be followed. [15A NCAC 02T .0108(c)]
A Division -certified laboratory shall conduct all laboratory analyses for the required effluent,
groundwater or surface water parameters. [15A.NCAC 02H .0800]
3. Flow through the treatment facility shall be continuously monitored, and daily flow values shall be
reported on Form NDMR.
The Permittee shall install and maintain an appropriate flow measurement device to ensure the accuracy
and reliability of flow measurement consistent with accepted engineering and scientific practices.
Selected flow measurement devices shall be capable of measuring flows with a maximum deviation of
less than ten percent from true flow; accurately calibrated at a minimum of once per year; and
maintained to ensure the accuracy of measurements is consistent with the selected device's accepted
capability. The Permittee shall maintain records of flow measurement device calibration on file for a
period of at least five years. At a minimum, documentation shall include:
a. Date of flow measurement device calibration,
b. Name of person perfonning calibration, and
c. Percent from true flow.
[15A NCAC 02T .0105(k)]
4. The Permittee shall monitor the effluent from the subject facilities at the frequencies and locations for
the parameters specified in Attachment A. [ 15A NCAC 02T .0108(c)]
The Permittee shall maintain adequate records tracking the amount of effluent infiltrated. At a
minimum, these records shall include the following information for each infiltration site listed in
Attachment B:
a. Date of infiltration;
b. Volume of effluent infiltrated;
c. Site infiltrated;
d. Length of time site is infiltrated;
e. Loading rates to each infiltration site listed in Attachment B; and
f. Weather conditions.
[ 15A NCAC 02T .0108(c)]
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6. Three copies of all monitoring data (as specified in Conditions N.3. and IV.4.) on Form NDMR for
each PPI and three copies of all operation and disposal records (as specified in Conditions IV.5.) on
Form NDAR-2 for every site in Attachment B shall be submitted on or before the last day of the
following month. If no activities occurred during the monitoring month, monitoring reports are still
required documenting the absence of the activity. All information shall be submitted to the following
address:
Division of Water Resources
Information Processing Unit
1617 Mail Service Center
Raleigh, North Carolina 27699-1617
[I5A NCAC 02T .0105(1)]
7. A record shall be maintained of all residuals removed from this facility. This record shall be maintained
at the facility for a period of no less than five years, and shall be made available to the Division upon
request. At a minimum, this record shall include:
a. Name of the residuals hauler;
b. Non -Discharge permit number authorizing the residuals disposal, or a letter from a municipality
agreeing to accept the residuals;
c. Date the residuals were hauled; and
d. Volume of residuals removed.
[ 15A NCAC 02T .0108(b)(1)]
A maintenance log shall be maintained at this facility. This log shall be maintained at the facility for a
period of no less than five years, and shall be made available to the Division upon request. At a
minimum, this log shall include:
a. Date and results of power interruption testing on alternate power supply;
b. Date of calibration of flow measurement device;
c. Visual observations of the plant and plant site; and
d. Record of preventative maintenance (e.g., changing of equipment, adjustments, testing, inspections
and cleanings, etc.).
[I5A NCAC 02T .0108(b)(1)]
9. Monitoring wells shall be sampled at the frequencies and for the parameters specified in Attachment
C. All muping, well construction forms well abandonment forms and monitoring data shall refer to
the permit number and the well nomenclature as provided in Attachment C and Figure 1. [15A NCAC
02T .0105(m)]
10. Two copies of the monitoring well sampling and analysis results shall be submitted on a Compliance
Monitoring Form (GW -59), along with attached copies of laboratory analyses, on or before the last
working day of the month following the sampling month. The Compliance Monitoring Form (GW -59)
shall include this permit number, the appropriate well identification number, and one GW -59a
certification form shall be submitted with each set of sampling results. All information shall be
submitted to the following address:
Division of Water Resources
Information Processing Unit
1617 Mail Service Center
Raleigh, North Carolina 27699-1617
[15A NCAC 02T .0105(m)]
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11. Noncompliance Notification:
The Permittee shall report by telephone to the Wilmington Regional Office, telephone number (9 10)
796-7215, as soon asosp sible, but in no case more than 24 hours, or on the next working day following
the occurrence or first knowledge of the occurrence of any of the following:
a. Treatment of wastes abnormal in quantity or characteristic, including the known passage of a
hazardous substance.
b. Any process unit failure (e.g., mechanical, electrical, etc.), due to known or unknown reasons,
rendering the facility incapable of adequate wastewater treatment.
c. Any facility failure resulting in a by-pass directly to receiving surface waters.
d.' Any time self-monitoring indicates the facility has gone out of compliance with its permit
limitations.
e. Ponding in or runoff from the infiltration sites.
Any emergency requiring immediate reporting (e.g., discharges to surface waters, imminent failure of
a storage structure, etc.) outside normal business hours shall be reported to the Division's Emergency
Response personnel at telephone number [phone],[phone], or [phone]. Persons
reporting such occurrences by telephone shall also file a written report in letter form within five days
following first knowledge of the occurrence. This report shall outline the actions taken or proposed to
betaken to ensure the problem does not recur. [15A NCAC 02T .0105(1), 02T .0108(b)(1)]
V. INSPECTIONS
1. The Permittee shall provide adequate inspection and maintenance to ensure proper operation of the
wastewater treatment and infiltration facilities. [15A NCAC 02T .0108(b)]
2. The Permittee or their designee shall inspect the wastewater treatment and infiltration facilities to
prevent malfunctions, facility deterioration and operator errors resulting in discharges, which may cause
the release of wastes to the environment, a threat to human health or a public nuisance. The Permittee
shall maintain an inspection log that includes, at a minimum, the date and time of inspection,
observations made, and any maintenance, repairs, or corrective actions taken. The Permittee shall
maintain this inspection log for a period of five years from the date of the inspection, and this log shall
be made available to the Division upon request. [15A NCAC 02T .0108(b)]
3. Any duly authorized Division representative may, upon presentation of credentials, enter and inspect
any property, premises or place on or related to the wastewater treatment and infiltration facilities
permitted herein at any reasonable time for the purpose of determining compliance with this permit;
may inspect or copy any records required to be maintained under the terms and conditions of this permit,
and may collect groundwater, surface water or leachate samples. [G.S. 143-21.5.3(a)(2)]
VI. GENERAL CONDITIONS
1. Failure to comply with the conditions and limitations contained herein may subject the Permittee to an
enforcement action by the Division in accordance with North Carolina General Statutes 143-215.6A to
143-215.6C. [G.S. 143-215.6A to 143-215.6C]
2. This permit shall become voidable if the permitted facilities are not constructed in accordance with the
conditions of this permit, the Division approved plans and specifications, and other supporting
documentation. [ 15A NCAC 02T .0110]
3. This permit is effective only with respect to the nature and volume of wastes described in the permit
application, Division approved plans and specifications, and other supporting documentation. No
variances to applicable rules governing the construction or operation of the permitted facilities are
granted, unless specifically requested and approved in this permit pursuant to 15A NCAC 02T .0105(n).
[G.S. 143-21.5.1]
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4. The issuance of this permit does not exempt the Permittee from complying with any and all statutes,
rules, regulations, or ordinances, which may be imposed by other jurisdictional government agencies
(e.g., local, state, and federal). Of particular concern to the Division are applicable river buffer rules in
15A NCAC 02B .0200; erosion and sedimentation control requirements in 15A NCAC Chapter 4 and
under General Permit NCG010000; any requirements pertaining to wetlands under 15A NCAC 02B
.0200 and 02H .0500; and documentation of compliance with Article 21 Part 6 of Chapter 143 of the
General Statutes. [15A NCAC 02T .0105(c)(6)]
In the event the permitted facilities change ownership or the Permittee changes their name, a formal
permit modification request shall be submitted to the Division. This request shall be made on official
Division formas, and shall include appropriate property ownership documentation and other supporting
documentation as necessary. The Permittee of record shall remain fully responsible for maintaining
and operating the facilities permitted herein until a permit is issued to the new owner. [15ANCAC
02T.0104]
The Permittee shall retain a set of Division approved plans and specifications for the life of the facilities
permitted herein. [15A NCAC 02T .0108(b)(1)]
The Permittee shall maintain this permit until all permitted facilities herein are properly closed or
permitted under another permit issued by the appropriate permitting authority. [I 5A NCAC 02T
,01050)]
8. This permit is subject to revocation or unilateral modification upon 60 -day notice from the Division
Director, in whole or part for the requirements listed in 15A NCAC 02T.01 10. [15A NCAC 02T .0110]
9. Unless the Division Director grants a variance, expansion of the permitted facilities contained herein
shall not be granted if the Permittee exemplifies any of the criteria in 15A NCAC 02T .0120(b). [15A
NCAC 02T.0120]
10. The Permittee shall pay the annual fee within 30 days after being billed by the Division. failure to pay
the annual fee accordingly shall be cause for the Division to revoke this permit. [15A NCAC 02T
.0105(e)(3)]
Permit issued this the 13'x' day of May 2016
NORTH CAROLINA ENVIRONMENTAL MANAGEMENT COMMISSION
; � �A.
, ea -'. , �
S. Jay Zimmerman, P.G., Director
Division of Water Resources
By Authority of the Environmental Management Commission
Permit Number WQ0000165
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ATTACHMENT A — LIMITATIONS AND MONITORING REQUIREMENTS
PPI 001— WWTP Effluent
Permit Number; WQ0000165 Version: 3.0
EFFLUENT CHARACTERISTICS
EFFLUENT LIMITS
MONITORING REQUIREMENTS
PCS
Code
Parameter Descri tion
p
Units of
Measure
MonthlyMonthly
Average
Geometric
Mean
Daily Minimum
Daily Maximum
Measurement
Frequency
Sample
Type
00310
BOD, 5 -Day (20 °C)
mg/L
10
Weekly' / 2 x Month 2
Composite
00940
Chloride (as Cl)
mg/L
3 x Year 3
Composite
31616
Coliform, Fecal MF, M -FC Broth, 44.5 °C
#/100 mL
14
43
Weekly'/2 x Month 2
Grab
50050
Flow, in Conduit or thru Treatment Plant'
GPD
43,000
Continuous
Recorder
00610
Nitrogen, Ammonia Total (as N)
mg/L
4
Weekly' / 2 x Month 2
Composite
00625
Nitrogen, Kjeldahl, Total (as N)
mg/L
Weekly' 12 x Month 2
Composite
00620
Nitrogen, Nitrate Total (as N)
mg/L
Weekly' / 2 x Month 2
Composite
00600
Nitrogen, Total (as N)
mg/L
10
Weekly' / 2 x Month 2
Composite
00400
pH
so
6.0
9.0
5 x Week
Composite
00665
Phosphorus, Total (as P)
mg/L
Weekly' 12 x Month 2
Composite
70300
Solids., Total Dissolved —180 °C
mg/L
3 x Year a
Composite
60530
Solids, Total Suspended
mg/L
20
Weekly' / 2 x Month z
Composite
1. Weekly sampling shall be conducted from May 1I through August 315'
2. 2 x Month sampling shall be conducted September 1" through April 301h.
3. 3 x Year sampling shall be conducted in March, July and November.
WQ0000165 Version 3.0 Attachment A Page I of 1

THIS PAGE BLANK

ATTACHMENT B - APPROVED LAND APPLICATION SITES AND LIMITATIONS
Sands Villa Utilities, Inc. -- Sands Villa WWTF
Permit Number: WQ0000165 Version: 3.0
INFILTRATION AREA INFORMATION
APPLICATION LIMITATIONS
Field
Owner
County
Latitude
Longitude
Net
Dominant
Parameter
Rate
Units
Acreage
Soil Series
1
Sands Villa Resort Homeowners'
Association, Inc.
Carteret
34.6992070
-76.7125010
0.18
01284 - Non -Discharge Application Rate
10
GPD/ft2
Sands Villa Resort Homeowners'
2
Association, Inc.
Carteret
34.6992010
-76.713176°
0.18
01284 - Non -Discharge Application Rate
10
GPD/ftz
Totals
0.36
WQ0000165 Version 3.0 Attachment B Page 1 of 1

THIS PAGE BLANK

ATTACHMENT C — GROUNDWATER MONITORING AND LIMITATIONS Permit Number: WQ0000165 Version: 3.0
Monitoring wells: MW -3, MW -4, MW -5, and MW -6
GROUNDWATER CHARACTERISTICS
GROUNDWATER STANDARDS
MONITORING REQUIREMENTS
PCS Code
Parameter Description
Daily Maximum
Frequency Measurement
Sample Type
Footnotes
00680
Carbon, Tot Organic (TOC)
mg/L
3 x Year
Grab
1,6
00940
Chloride (as Cl)
250
mg/L
3 x Year
Grab
1
31616
Coliform, Fecal MF, M -FC Broth, 44.5 °C
#/100 mL
3 x Year
Grab
1
00610
Nitrogen, Ammonia Total (as N)
1.5
mg/L
3 x Year
Grab
1
00620
Nitrogen, Nitrate Total (as N)
10
mg/L
3 x Year
Grab
1
00400
pH
6.5-8.5
su
3 x Year
Grab
1, 2
00665
Phosphorus, Total (as P)
mg/L
3 x Year
Grab
1
70300
Solids, Total Dissolved - 180 °C
500
mg/L
3 x Year
Grab
1
GWVOC
Volatile Compounds (GC/MS)
Present: Yes/No
Annually
Grab
1, 4, 5
82546
Water Level, Distance from measuring point
feet
3 x Year
Calculated
I , 2, 3
1. 3 x Year monitoring shall be conducted in March, July & November; Annual monitoring shall be conducted every November.
2. The measurement of water levels shall be made prior to purging the wells. The depth to water in each well shall be measured from the surveyed point on the top of the casing. The measurement of
pl-I shall be made after purging and prior to sampling for the remaining parameters.
3. The measuring points (top of well casing) of all monitoring wells shall be surveyed to provide the relative elevation of the measuring point for each monitoring well. The measuring points (top of
casing) of all monitoring wells shall be surveyed relative to a common datum.
4. Volatile Organic Compounds (VOC) - In November only, analyze by one of the following methods:
a. Standard Method 6230D, PQL at 0.5 gg/L or less
b. Standard Method 6210D, PQL at 0.5 µg/L or less
C. EPA Method 8021, Low Concentration, PQL at 0.5 µg/L or less
d. EPA Method 8260, Low Concentration, PQL at 0.5 pg/L or less
e. Another method with prior approval by the Water Quality Permitting Section Chief
Any method used must meet the following qualifications:
a. A laboratory must be DWR certified to run any method used.
b. The method used must, at a minimum, include all the constituents listed in Table VIII of Standard Method 6230D.
c. The method used must provide a PQL of 0.5 µg/L or less that must be supported by laboratory proficiency studies as required by DWR. Any constituents detected above the MDL but below
the PQL of 0.5 ILg/L must be qualified (estimated) and reported.
5. If any volatile organic compounds (VOC) are detected as a result of monitoring as provided in Attachment C, then the Wilmington Regional Office supervisor, telephone number [phone],
must be contacted immediately for further instructions regarding any additional follow-up analyses required.
6. If TOC concentrations greater than 10 mg/L are detected in any downgradient monitoring well, additional sampling and analysis must be conducted to identify the individual constituents comprising
this TOC concentration. If the TOC concentration as measured in the background monitor well exceeds 10 mg/L, this concentration will be taken to represent the naturally occurring TOC
concentration. Any exceedances of this naturally occurring TOC concentration in the downgradient wells shall be subject to the additional sampling and analysis as described above.
7. Monitoring wells shall be reported consistent with the nomenclature and location information provided in Figure 1 and this attachment.
WQ0000165 Version 3.0 Attachment C Page 1 of 1

STATE OF NORTH CAROLINA
COUNTY OF CARTEREf
Pen -nit No. WQ0000165
OPERATIONAL AGREEMENT
This AGREEMENT made pursuant to G.S. 143-215.1 (dl) and entered into this
day of
-_ , by and between the North Carolina Environmental Management
Commission, ars. agency of the State of North Carolina, hereinafter known as the COMMISSION; and
SANDS VILLA UTILITIES, INC. , a non-profit corporation organized
and existing under and by virtue of the laws of the State of North Carolina, hereinafter known as the
ASSOCIATION.
WITNESSETH;
1. The ASSOCIATION was formed for the purpose, among others, of handling the property, affairs and
business of the development known as SANDS VILLA UTILITIES, INC. ^
(hereinafter the Development); of operating, maintaining, re -constructing and repairing the common
elements of the lands and improvements subject to unit ownership, including the wastewater collection
system with pumps, wastewater treatment works, and/or disposal facilities (hereinafter Disposal System);
and of collecting dues and assessment to provide funds for such operation, maintenance, re -construction
and repair.
2. The ASSOCIATION desires, to construct and/or operate a Disposal System to provide sanitary sewage
disposal to serve the Development on said lands.
3. The ASSOCIATION has applied to the COMMISSION for the issuance of a permit pursuant to G.S. 143-
215.1 to construct, maintain., and/or operate the Disposal System.
4. The Development was created subject to unit ownership in the dwellings units, other improvements and
lands through filing of a Declaration of Unit Ownership (hereinafter Declaration), pursuant to Chapter
47C of the North Carolina General Statutes.
5. The COMMISSION desires to assure that the Disposal System of the Development is properly
constructed, maintained and operated in accordance with law and permit provisions in order to protect the
quality of the waters of the State and the public interest therein.
NOW, THEREFORE, in consideration of the promises and the benefits to be derived by each of the parties
hereto, the COMMISSION and ASSOCIATION do hereby mutually agree as follows:
1. The ASSOCIATION shall construct the Disposal System and/or make any additions or modifications to
the Disposal System in accordance with the permit and plans and specifications hereafter issued and
approved by the COMMISSION, and shall thereafter properly operate and maintain such systems and
facilities in accordance with applicable permit provisions and law_
2. The ASSOCIATION shall provide in the Declaration and Association Bylaws that the Disposal System
and appurtenances thereto are part of the common elements and shall thereafter be properly maintained
and operated in conformity with law and the provisions of the permit for construction, operation, repair,
and maintenance of the system and facilities. The Declaration and Bylaws shall identify the entire
wastewater treatment, collection and disposal system as a common element, which will receive the highest
priority for expenditures by the Association except for Federal, State, and local taxes and insurance.
FORM: HOA 01-15 Page I oft

3. The ASSOCIATION shall provide in the Declaration and Association Bylaws that the Disposal System
will be maintained out of the common expenses. In order to assure that there shall be funds readily
available to repair, maintain, or construct the Disposal System beyond the routine operation and
maintenance expenses, the Declaration and Association Bylaws shall provide that a fund be created out of
the common expenses. Such fund shall be separate from the routine maintenance fund allocated for the
facility and shall be part of the yearly budget.
4. In the event the common expense allocation and separate funds) are not adequate for the construction,
repair, and maintenance of the Disposal System, the Declaration and Association Bylaws shall provide for
special assessments to cover such necessary costs. There shall be no limit on the amount of such
assessments, and the Declaration and Bylaws shall be provided such that special assessments can be made
as necessary at any time.
5. If a wastewater collection system and wastewater treatment and/or disposal facility provided by any city,
town, village, county, water and sewer authorities, or other unit of government shall hereinafter become
available to serve the Development, the ASSOCIATION shall take such action as is necessary to cause the
existing and future wastewater of the .Development to be accepted and discharged into said governmental
system, and shall convey or transfer as much of the Disposal System and such necessary easements as the
governmental unit may require as condition of accepting the Development's wastewater.
6. Recognizing that it would be contrary to the public interest and to the public health, safety and welfare for
the ASSOCIATION to enter into voluntary dissolution without having made adequate provision for the
continued proper maintenance, repair and operation of its Disposal System, the ASSOCIATION shall
provide in the ASSOCIATION Bylaws that the ASSOCIATION shall not enter into voluntary dissolution
without first having transferred its said system and facilities to some person, corporation or other entity
acceptable to and approved by the COMMISSION by the issuance of a permit.
7. The ASSOCIATION shall not transfer, convey, assign or otherwise relinquish or release its responsibility
for the operation and maintenance of its Disposal System until a permit has been reissued to the
ASSOCIATION's successor.
8. The agreements set forth in numbered paragraphs 1, 2, 3, 4, 5, 6, and 7 above shall be conditions of any
permit issued by the COMMISSION to the ASSOCIATION for the construction, maintenance, repair and
operation of the Disposal System.
9. A copy of this agreement shall be filed at the Register of Deeds in the County(ies) where the Declaration
is filedand in the offices of the Secretary of State of North Carolina with the Articles of Incorporation of
the Association.
IN WITNESS WHEREOF, this agreement was executed in duplicate originals by the duly authorized
representative of the parties hereto on the day and year written as indicated by each of the parties named below:
FOR THE ENVIRONMENTAL
MANAGEMENT COMMISSION
S. Jay Zimmerman, Directo
Division of Water Resources
r/i 3//4
(Date)
SANDS VILLA UTILITIES, INC.
Name of ASSOCIATION
B .fid d u/Ia r!,?h O'
(Si CIAP
Print Name and it1
1 �J
(Date)
FORM: HOA O1-15 Page 2 of 2

1 CONNECI* uS
t
L'
Carteret2
Printed September 22, 2015
See Below for Disclaimer
Parcels - Updated 09-17-20' 3
Certerlir}es
NC railroad Riaht OF Way
0
Courar Bourdary
0
Other Courty
-: all Othe,i-nlLesk
Cart
i,
:22.4 Feet
The information displayed by this website is prepared for the inventory of real property found within this jurisdiction and is compiled from recorded deeds, plats
and other public records and data. lasers of this information are hereby notified that the aforementioned public primary information sources should be consulted for
verification of the information contained on this site. Carteret County assumes no legal responsibility for the information contained on this site, Carteret Count
does not guarantee that the data and map services will be available to users without interruption or error. Furthermore, Carteret County may modify or remove
map services and access methods at will.
SANDS VILLA UTILITIES, INC.
SITE MAP

STATE OF NORTH CAROLINA ) ���f1 y�
AMENDMENT TO DECLARATION OF VELI/D f VVR
SANDS VILLA RESORT '�NdT
COUNTY OF CARTERET ) AND DEC 2015
DECLARATION OF RESTRICTIONS
} CONCERNING SEWER OF
ISLAND QUAY SUBDIVISION PerWaterQuan
n
THIS DECLARATION is made this the 07th day of er mit ng Se o ,
1988, by Island Quay Associates, Inc. and Sands V lla Resort
Homeowners Association, Inc., (hereinafter IQA and SVR and bath
also jointly referred to as Declarant);
KNOW ALL BY THESE PRESENTS:'
,F
THAT WHEREAS, IQA is the record owner of fee simple title to
those tracts or parcels of real property located in Morehead
'.Township, Carteret County, North Carolina, same being:
Island Quay Subdivision as shown on that plat recorded
in Plat Book 26, at Page 93■ Carteret County Registry.
and;
WHEREAS, SVR is the Association which manages and
administers the condominium project known as Sands villa Resort
Phase I located in Morehead Township, Carteret County, North
Carolina, being described in,that Declaration recorded in Book
UO -99, at Page 26, Carteret County Registry, along with any
amendments subsequently recorded; and
WHEREAS, IQA desires* to develop and subdivide its property
for residential use in that, IQA's present intentions are that
all of its property shall be developed into a residential
subdivision project, to be known as Island Quay Subdivision and
may contain as many as fifty (50) lots; provided, however, all
such plans may also hereafter change; and
WHEREAS, Declarant has been advised that no public waste
water and sewage treatment and disposal facility or services
exist for said property; provided, however
THAT, Declarant has also been advised by governmental
ufficials of the municipality of Atlantic Beach, North Carolina,
within whose jurisdiction all said property lies, that Atlantic
Beach intends to construct in the future a public waste water and
sewage treatment and disposal facility, but no firm plans
therefor have been yet made; but, that when such facility is
built all owners within the ccndominium project and subdivision
will be required to "tap -on" and use the public facility, thereby
making any private system superfluous; but
WHEREAS, IQA desires to proceed.wi_th the development -of its
property and desires to insure that all of said property is
provided with adequate waste water and swage treatment and
disposal services, until such time as public services are
available, by IQA's use of a private facility with the capacity
to provide such service to all said property and which shall be
leased by a nonprofit,Corporation, which Declarant shall cause to
be formed and of which all present and future owners of said
property as described above (and only such owners) shall be
members through their respective non-profit Homeowners
Association; and
WHEREAS, SVR has negotiated with IQA and has agreed to allow
IQA the use of the sewage treatment facility located upon the
site of Sands Villa Resort condominium project, under certain
terms and conditions, which are contained herein; and
PREPARED BY DARDEN, COYNE, BRUCE & HARRIS, P.A.
f30K

WHEREAS, SVR is given the authority to execute such
documents and enter into such agreements with third parties by
the amendment to the Declaration, recorded in Book UO -79 at Page
319, Carteret County Registry, and also pursur.nt.to a Resolution
adopted at a special meeting of the homeowners of Sands Villa
Resort condominium project held on July 30, 1988, in accordance
with the above mentioned amendment, which Resolution is on file
and available for review in the Association's minute book.
NOW, THEREFORE, Declarant does hereby declare that all of
"•: the real property described in Exhibit A. which includes Sands
Villa Resort Condominium Phase I and Island Quay subdivision, is
,• held and shall be held, conveyed, hypothecated, encumbered, used,
"occupied and 'improved subject to the following Articles of
Covenants, Conditions, Restrictions, Uses, Limitations and
}: Obligations, which shall be deemed to run with the land and shall
be a burden and a benefit to the Declarant, its successors and
assigns, and any person or entity acquiring or owning an interest
in the real property and improvements, or any subdivision
thereof, their grantees, successors, devisees, heirs, executors,
administrators and assigns.
ARTICLE I
DEFINITIONS
1. Island Quay Associates, Inc.__iIQA) shall mean and refer
to that corporation which is the owner of fee simple title to
that parcel of property known as "Island Quay Subdivision", a
planned unit development project• approved by the Town of Atlantic
Beach, North Carolina, and being the same property on Exhibit A,
described as Island Quay Subdivision.
2, sands Villa Resort Homeowners Association, Inc. (SVR)
shall mean and refer to that not for profit corporation charged
with the management of common areas and facilities of Sands Villa
Resort condominiums, which all owners of condominium units and
unit weeks of Sands Villa Resort are members, being the same
property on Exhibit A, descsribed as Sands Villa Resort
Condominium.
3. Sands villa Utilities, Inc. (SVU) shall mean and refer
to that not for profit corporation formed by Sands Villa Resort
Homeowners Association, Inc, and Island Quay Homeowners
Association, Inc. to lease, operate, run and otherwise manage
that sewage treatment plant and its facilities located currently
upon the site of Sands Villa ROscrL- condominium project.
4. Island Quay owners Associations Inc. (IQOA) shall mean
and ref ez7 to that not profit corporation charged with managing
the common areas and facilities of Island Quay Subdivision, which
all lot owners of Island Quay Subdivision are members.
5. Members shall mean and refer to all of those
individuals, corporations, partnerships or other entitities who
are entitled to membership in Sands Villa Resort Homeowners
Association, Inc. and island Quay Owners Association, Inc.
6. Declarant. shall mean and refer to Island Quay
Associates, Inc. and Sands Villa Resort Owners Association, Inc.
jointly..
7. Facility shall mean and refer to that sewage treatment
plant and appurtenances which currently exist, or additions made
thereto, as located on the site of Sands Villa )resort condominium
project, and being currently the common property of the
homeowners of Sands Villa Resort Owners Association, Inc. being
located on that property as described in Exhibit B.
ARTICLE II
THE FACILITY

SVR and, more specifically,. the owners of units in SVR
currently .own a private tertiary waste water and sewage treatment
and disposal facility (hereinafter "facility°) as common
property, which was constructed -in accordance with all required
permits therefor issued by the duly constituted public
authorities having jurisdiction of the same. The facility has or
shall have a 43,000 gallons per day capacity to -provide waste
water and sewage treatment and disposal service. The facility is
or shall be a private facility and shall not provide or attempt
;to provide -such service to any property, person or entity. except
•the property described in the premises above and the owners
thereof.
.r
ARTICLE III
THE CORPORATION
A. identity. Declarant has caused to be formed Sands Villa
Utilities, Inc. (hereina€ter SVU), which. is a nonprofit North
Carolina corporation. SVU shall lease, operate and manage the
facility, on behalf of its members, who shall be SVR and YQoA.
The facility has been constructed upon that parcel of the above
described property described in Exhibit B, which shall be leased
by SVR to SVU for a rental of $1.00 per year, allowing for a term
co -extensive with the duration of the need for the facility.
Said property is part of what is common areas of SVR, which
common areas shall be SUBJECT TO SAID LEASE, after which
submission, the annual rental shall be paid to SVR, which is the
nonprofit North Carolina corporation charged with the
responsibility for maintaining the condominium project.
The facility itself shall be leased also by SVU; for a
rental of $1.00 a year, subject to the rights reserved herein,
Additionally, SVU is hereby granted an easement upon all of
the property described in Exhibit B, and all improvements now or
hereafter constructed thereon, whether by IQA, SVR or their
successors and/or assigns, for the following purposes;
1. To maintain and repair lines, pipes and drain fields for
the facility, as the same have been constructed upon the
property, 6VU is expressly authorized to relocate upon any of
the property described in the premises above any of the pipes,
lines or drain fields as may be necessary or required for the
safe and proper operation of the facility, so long as the same
does not interfere with the integrity or safety of any existing
improvements thereon. SVU, SVR or IQOA, through its Board of
Directors, agree to execute such easement documents in a
recordable form if it deemed necessary.
2. For ingress, egress and regress to and from all pipes,
lines and drain fields for their maintenance, repair and
reconstruction and for' ingress, egress and regress to and from
any and all improvements constructed uponjany of the property
described in the premises for repair andsinspection to make
certain the member/owner thereof complies with all Rules and
Regulations pertaining to the safe and proper use of the
facility.
The easements shall run with the lands which they
burden and benefit and shall be co --extensive in duration with the
Lease for the property upon which the facility is constructed.
The Articles of Incorporation for SVU are or will be
recorded in of the Carteret County Registry, a copy is attached
hereto as Exhibit "CO.
B. Member -ship and Voting Rights. Membership and
voting rights in SVU shall be as provided in Article VI of its
Articles of Incorporation referred to and incorporated herein as
stated hereinabove.
I

C. Powers. SVU shall have all powers granted to it as
stated in Article V of said Articles of Incorporation.
n. Allocation of Usable Capacity, 6haring of Common
Expenses and Restrictions.
1. In order to comply with all governmental Rules
and Regulations presently in force, it is necessary to allocate
between the properties maximum limitations on use of the capacity
of the facility. Therefore, it is hereby declared that:
(a) All of the propertydescribed in the
premises above which is known as Sands Villa Resort and as
described in Exhibit A is hereby allocated the maximum capacity
of 25,000 gallons per. -day, which is sufficient to service the
full, square footage of all improvements constructed for SVR; and
(b) All of the property described in the
premises above which consists of Island Quay Subdivision and as
desribed in Exhibit A, and which IQA may use for residential
purposes, is hereby allocated the Maximum capacity of 180000
gallons per day, which is sufficient to service the full square
footage of all improvements constructed or to be constructed by
IQA.
Therefore, whether IQA develops or conveys
its property, so long as s&id property. is serviced by the
facility, said property's use is hereby restricted as follows:
Said property shall not be permitted to use more than .18,000 per
day capacity from the facility which capacity may be allocated,
by Declarant or its successors and/or assigns, among parcels of
said property should said property be subdivided; provided such
total allocations do not exceed 18,000 gallons per day capacity
for the entire tract.
2. The common expenses of SVU shall be shared by the
members on a prorata basis in the amount, as shown on Exhibit 0.
As to Island Quay Subdivision, a lot will be presumed to be using
sewer services January 1, 1989. Whether or not the actual use of
the services begins at the aforementioned date, the owner of said
lot will be charged with his prorata share based upon the above
mentioned percentages. It is not necessary that a structure be
built upon the lot or that use is actually made of the sewer
treatment facilities before common expenses shall accrue. As to
Sands Villa Resort, their share of common expense will begin on
January 1, 1989.
E. Management and Maintenance.
1. SVU, as a common expense, shall be responsible for
the maintenance, operation, repair and replacement of the
facility, all pipes and'lines, pump stations, drainage fields and
the leasehold, subject to the following; Those owners of lots in
Island Quay Subdivision shall be solely responsible for the
Initial installation of those pipes, lines, and pump stations
which serve only their lots. Said expense shall be prorated
between all lot owners in Island Quay Subdivision who are deemed
to use the sewer system as provided above, or shall be paid
entirely by IQA. whenever the maintenance, repairs, and
replacement of any item for which the SVU is obligated to
maintain, replace or repair at its expense is occasioned by any
act of a member, his immediate family, guests, or invitees, and
such loss or damage may be covered by any insurance maintained in
force by SVU, the proceeds of the insurance received by SVU shall
be used for the purpose of making such maintenance, repair, or
replacement, except that the member who is responsible for the
act- causing the damage (whether done by himself or by his family,
guests, or invitees) shall be required to pay such portion of the
cost o€ such maintenance, repair or- replacement. as shall, by
reason of the applicability of any deductibility provision of

such insurance, exceed the amount of the insurance proceeds
applicable to such maintenance, repair or replacement.
2. SVU shall have the right to make or cause to be
made such alterations or improvements to the leasehold, the
facility, pipes, lines, pump stations and drainage fields which
do not prejudice the rights of any member in the use and
enjoyment of his property, provided the making of such
alterations and improvements are approved by the Board of
Directors of SVU, and the ,cost of such alterations or
improvements shall be common expenses to be assessed and
collected from all of the members. However, where any
alterations and improvements are exclusively or substantially for
the benefit of any certain member either requesting or needing
the same, then the cost of such alterations or improvements shall
+. be assessed against and collected solely from the member
exclusively or substantially benefitted, the assessment to be
levied in such proportion as may be determined by the Board of
Directors of SVU,
3. SVU may enter into a contract with a management
company or manager for the purposes of providing all elements of
the operation, care, supervision, maintenance, and management of
the facility and property. All the powers and duties of SVU
necessary or convenient for such operation, maintenance and
management may be delegated to and vested in the manager by the
Bgard of Directors,. except such as are specifically required by
this Declaration or the By -Laws, to have the approval of the
Board of Directors or SVU.' The manager is hereby further
authorized to recommend the annual budget and, upon approval
thereof by the Board of Directors, make assessments for common
expenses, and collect such assessments as provided in this
Declaration and the By -Lawn, subject always to the supervision
and right of approval of the Board of Directors.
4. owners maintenance. Every owner shall perform
promptly all maintenance and repair work upon his property which,
if omitted, would affect the facility; every owner being
expressly responsible for the damages and liability which his
failure to do so may engender. ,
5. Limitation Of Liability. Notwithstanding the duty
of SVU to maintain and repair parts of the facility and. property,
SVU shall not be liable to members for injury or damage caused by
any latent condition of the property to be maintained and
repaired by SVU, or caused by the elements or members.
F. insurance.
1. Acquisition. Insurance policies upon the property
and facility shall be purchased by SVU in the name of the Board
of Directors of SVU, as Trustee for the members as their
interests may appear.
2. Coverage. The facility and all other property of
SVU, if any, shall be insured in an amount oqual to the maximum
insurable replacement value, or by such other form of policy as
the Board of Directors annually determines will most reasonably
provide the funds necessary to repair or reconstruct the insured
improvements. Such coverage shall afford protection against (a)
lose or damage by flood, fire and wind or other hazards covered
by standard extended coverage endorsement, and (b) such other
risks as from time to time shall be customarily covered with
respect to facilities and other properly similar in construction,
location and use, including, but not limited to, vandalism and
malicious mischief.
3. Public Liability insurance. General Public
liability insurance shall be secured by SVU in such amount and
with such coverage as shall be deemed necessary by the Board of
Directors, (provided coverage in a minimum amount of
$1,000,000.00 per occurrence shall be acquired and maintained)

including, but not limited to, an endorsement to cover liability
of the members as a group or to a single member. There shall
also be obtained such other insurance coverage as the Board of
Directors or manager shall determine from time to time to -be
desirable or necessary.
4. Premiums. Premiums upon insurance policies
purchased by SVU shall be paid by SVU and chargeable to SVU as a
common expense.
5. Proceeds. All insurance policies purchased by SVU
shall be for the benefit of SVU and the members as their
interests may appear, and shall provide that all proceeds thereof
shall be payable to SVU as insurance trustee under this
Declaration, The Board of Directors of 5VU is hereby irrevocably
°.: appointed agent for each member as their interests may appear for
the purpose of compromising and settling claims arising under the
insurance policies purchased by the Board of Directors for the
benefit of SVU and the members; said Hoard of Directors or its
designee is hereby further empowered to execute and deliver
releases to the insurance carrier upon the payment of claims.
The Board of Directors' duty or its designee's duty upon receipt
of such proceeds shall be to hold the same in trust, for the
purposes elsewhere stated herein or in the By -Laws for' the
benefit of SVU and the members, as their interests may appear.
6. Distribution of Insurance Proceeds. Proceeds of
insurance policies shall be payable to the Board of Directors of
Sands Villa Utilities, Inc., as insurance trustee and shall be
distributed to or for the benefit of the members in the following
manner:
(a) Expense of the Trust. All expenses of the
insurance trustee shall be first paid or provision made therefor,
if any;
(b) Reconstruction or Renai.r. The damage for
which the proceeds are paid is to be repaired or reconstructed
and the remaining proceeds shall be paid to defray the cost
thereof. Any proceeds remaining after defraying such coat shall
be retained by SVU as a reserve to offset future Common expenses.
Repairs shall be begun and completed as soon as is reasonably
possible;
(c) Plane and. Specifications. -Any reconstruction
or repair must be substantially in accordance with the plans and
specifications for the original facility; or if not, then
according to plans and specifications approved by the Hoard of
Directors of SVU, and in accordance with all permits issued by
the appropriate governmental authorities having jurisdiction of
the same.
(d) Assessments. If the proceeds of insurance
are not sufficient to defray the estimated costs of
reconstruction and repair by SVU, or if at any time during
reconstruction and repair, or upon completign of reconstruction
and repair, the funds for the payment of the costs thereof are
insufficient, assessments shall be made against the members in
equal amounts sufficient to provide funds for the payment of such
costs.
G. Cor2oration to Maintain Register of Members. SVU shall
at all times maintain a Register setting forth the names of all
metobers. In the event of the sale or transfer of any members'
property or unit to a third party, the purchaser or transferee
shall notify SVU in writing of his interest in same together with
such recording information as shall be pertinent to identify the
instrument by which such purchaser or transferee has acquired his
interest.
H. Assessments: Liability, Lien"and Enforcement. SVU has
been given the authority to administer the operation and

management of the facility, it being recognized that the
delegation of such duties to one entity is in the best interest
of the members. To properly administer the operation and
management of the facility, SVU will incur for the mutual benefit
of all of the members, costs and expenses which are sometimes
herein referred to as "common expense". To provide the funds
necessary for such proper operation, management, and capital
improvement, SVU has heretofore been granted the right to make,
levy and collect assessments against the members and their
property. in furtherance of this grant of authority to SVU to
make, levy and collect assessments to pay the costs and expenses
for the operation, management of and capital improvements to the
facility and all other corporate property, the following
provisions shall be operative and binding upon all the owners or
members:
1. All assessments levied against the members and
their condominium units or property shall be uniform and, unless
specifically otherwise provided for in this Declaration, all
assessments made by SVU shall be in such an amount that any
assessment levied against a member and his unit or property shall
bear the same ratio to the total assessment made against all
members and their units or property as shown in Exhibit 6.
Should SVU be the owner of a unit or property serviced by the
facility, the assessment which would otherwise be due and payable
to SVU by the owner of such unit or property, reduced by the
amount of income which may be derived from the leasing of such
unit or property by SVU, shah be. apportioned and the assessment
therefor levied equally among all members.
2. Assessments provided for herein shall be payable in
annual, quarterly or monthly installments, or in such other
installments and at such times as may be determined by the Board
of Directors of SVU. Such assessments shall commence for each
member's unit or property on the 1st day of January, 1989.
3. The Board of Directors of SVU shall establish an
annual budget in advance for each fiscal year (which shall
correspond to the calendar year, except that in the. initial year
of operation of the facility the fisbal year shall commence with
the date the Lease is effective). Such budget shall project all
expenses for'the forthcoming year which may be required for the
proper operation, managements, and maintenance of the facility,
including a reasonable allowance for contingencies and reserves,
such budget to take into account projected anticipated income
which is to be applied in redugtion of the amounts required to be
collected as an assessment each year. The Board of Directors
shall keep separate, in accordance with paragraph 4 hereof, items
relating to operation and maintenance from items relating to
capital improvements. Upon adoption of such annual budget by the
Board of Directors of SVU, copies of said budget shall be
delivered to each member and the .assessment for said year shall
be established based upon such budget, although the delivery of a
copy of said budget to each member shall not affect the liability
of any member for such assessment. Should tte Board of Directors
at any time determine, in its sole discretion, th4t the
assessments levied are, or may prove to be, insufficient to pay
the costs of ope=ration and management of the facility, or in the
event of emergencies, the Board of Directors shall have the
authority to levy such additional assessment or assessments it
may deem to be necessary.
4. The Hoard of Directors of SVU, in esLablishing the
annual budget for operation, management, and maintenance of the
facility, must designate therein a sum to be collected and
maintained as a reserve fund for replacement- of and capital
improvements to the facility, which capital improvement and
replacement fund (capital improvement fund) shall be for the
purpose of enabling SVU to replace structural elements and
mechanical equipment constituting a part- of the facility, as well
as the replacement of property which may constitute corporate
property held for the joint use and benefit of the members. The

amount to be allocated to the capital improvement fund may be
established by said Board o€ Directors so as to collect and
maintain a sum reasonably necessary to anticipate the need for
replacement of the facility. The amount collected for the
capital account by'SVU and such monies shall be used only to make
capital improvements to the facility. Any interest earned on
monies in the capital improvement fund must be expended for
replacement of and capital improvements to the facility.
5. All monies collected by SVU shall be treated as the
separate property of SVU, and such monies may be applied by BVU
to the payment of any expense of operating and managing the
facility, or to the proper undertaking of all acts and duties
imposed upon it by virtue of this Declaration, the Articles of
'- Incorporation and the By -Laws of SVU. As monies for any
`.: assessment are paid unto SVU by any member, the same may be co -
mingled with monies paid to SVU by the other members. Although
all funds and common surplus, including other assets of SVU, and
any increments thereto or profits derived therefrom or from the
leasing or use of corporate property shall be held for the
benefit of the members of SVU, no member of SVU shall have the
right to assign, hypothecate, pledge or in any manner transfer
his membership interest therein, excerpt as an appurtenance to his
unit or property. when a member shall cease to be a owner of
property in Sands Villa Resort condominium project or Island Quay
Subdivision by reason of the divestment of ownership of his unit:
or property, by whatever means, SVU shall not be required Lo
account to such member for any share of the funds or assets of
SVU, or which may have been paid to SVU by such member, as all
monies which any member has paid to SVU shall be and constitute
an asset of SVU which may be used in the operation and management
of the facility.
6. The payment of any assessment or installment
thereof shall be in default if such assessment or installment is
not paid to SVU within thirty (30) days of the due date for such
payment. When in default, the delinquent assessment or
delinquent installment thereof due to SVU shall near interest at
the highest rate allowed by law, until such delinquent assessment
or installment thereof, and all interest due thereon, has been
paid in full to SVU. All monies owing to SVU shall be due and
payable at the main office of SVU in the State of North Carolina.
7. The members shall, be personally liable to SVU for
the payment of all assessments, regular or special, which may be
levied by SVU against such member while lowner of a unit or
property. In the event that any member is in default in payment
of any assessment or installment thereof owed to SVU, such member
shall be personally liable for interest on such delinquent
assessment or installment thereof as above provided, and for all
costs of collecting such assessment or installment thereof and
interest thereon, including a reasonable attorney's fee, whether
suit be brought or not.
8. No member may exempt himself from liability for any
assessment levied against hi -m or his unit or property by
abandonment of his unit or property.
9. Recognizing that proper operation and management of
the facility requires Che continuing payment- of costs and
expenses therefor and that such proper, operation and maintenance
results in benefit to all of the members, and that the payment of
such common expenses represented by the assessments levied and

collected by SVU is necessary in order to preserve and protect
the investment of each member, SVU is hereby granted a Lien upon
each member's unit or property serviced by the facility, which
lien shall secure and does secure the monies due for all
assessments now or hereafter levied against the member, which
lien shall also secure interest, if any, which may be due on the
amount of any delinquent assessments owing to SVU, and which lien
shall also .secure all costs and expenses, including a reasonable
att'orney's fee, which may be incurred by SVU in enforcing this
lien upon said unit or property.
PROCEDURE OF COLLECTING EXPENSES
' in order to effectively administer' the collection of
'• the expenses and the assessments of liens, any amounts due under
.�.1 this Declaration shall be collected and considered a part of the
common expense of either Sands Villa Resort Homeowners
Association, Inc. or Island Quay Owners Association, Inc.,
depending upon the location of the property being serviced by the
facility. A proposed budget shall be prepared by the Board of
Directors of SVU in accordance with this document and the By -Laws
prior to January 1 of each year. The budget amount shall then be
pro -rated and collected among SVR and IQOA based upon the
percentages shown in Exhibit D. SVGA shall be required to pay
the following percentages:
40 units x .7042% for a total of 63.37808 plus the
percentage of tje commercial unit which is 1.4120
for a total of 64.7900%.
IQOA shall be required to pay the following
percentages:
50 lots x .70428 for a total of 35.2100%.
The above percentages shall be multiplied by the budget
to arrive at a total figure which will be due from the respective
Owners Association. The individual Owners Association shall then
include this amount in their budget when determining their common
expenses and shall collect this expense as provided in the
Declaration of Condominiums of Sands Villa Resort or the
Declaration of Restrictive Covenants of Island Quay Subdivision,
whichever shall apply. The individual Owners Association shall
pay 1/12th of the expenses for the year on or before the first of
each month to SVU whether they have collected an amount from the
individual condo owners or lob. owners or not. In the event as
determined by the Board of Directors that the expenses of SVU
shall be paid more frequently than monthly, then the SVR and IQOA
agree to do so if necessary to meet expenses which may have been
incurred by SVU. The individual Owners Associations shall not be
relieved from payment of the assessments fee on the account of
individual condo owners or unit owners not paying the individual
assessments to the Owners Associations. It shall be the owner
Association's responsibility to collect expenses of SVU in the
same manner as they collect the other common expenses of their
Association. SVU also grants to SVR and IQOA any and all lien
rights SVU has as provided in this document in order to insure
collection of the expenses of SVU as provided above.
10. Whenever any member's unit or property serviced by
the facility may be leased, sold, or mortgaged by the owner
thereof, SVU, upon written request of the member, shall furnish
to the proposed lessee, purchaser, or mortgagee, a statement
verifying the status of payment of any assessment which shall be
due and payable to SVU by such member. Such statement shall be
executed by any officer of SVU, and any lessee, purchaser, or
mortgagee may rely upon such statement in concluding the proposed
lease, purchase or mortgage transaction, and SVU shall be bound
by such statement.
In the event- that a member's unit or property
serviced by the facility is to be leased, sold or mortgaged at a

time when payment of any assessment against the member due to SVU
shall be in default (whether or not a claim of lien has been
recorded by SM, than the rent, proceeds of such purchase or
mortgage proceeds shall be applied by the lessee, purchaser or
mortgagee first to payment of any then delinquent assessment or
installments thereof due to SVU before the payment of any rent,
proceeds of purchase or mortgage proceeds to the owner of any
unit or property who is responsible for payment of such
delinquent assessment.
In any voluntary conveyance of a member's unit or
property, the purchaser thereof shall be jointly and.severally
liable with seller for all unpaid assessments against seller
levied prior to the'time of such voluntary canveyance,. without
prejudice to the rights of the purchaser to recover from seller
the amounts paid by purchaser therefor.
Institution of a suit at law to attempt to effect
collection of the payment of any delinquent assessment shall not
be an election by SVU. which shall prevent it from thereafter
seeking, by foreclosure action, enforcement of the collection of
any sums remaining owing to it, nor shall proceeding by
foreclosure to attempt such collection be deemed to be an
election precluding the institution of a suit at law to collect
any sum then remaining owing to Corporation.
I. Common Surplus. Common surplus, meaning all funds and
other assets of SVU (including excess of receipts of SVU,
including, but not limited to assessments, rents and revenues
from whatever source over amount of the common expense), shall be
owned by the members in the shares as provided in. Exhibit D;
provided, however, that said common surplus shall be held by SVU
in the manner, and subject to the terms, provisions, and
conditions of this Declaration, imposing certain limitations and
restrictions upon the use and distribution thereof.
ARTICLE IV
TERMINATION OF BARDS VILLA UTILITIES INC.
A. The Deolarant intends that the facility shall be a
permanent facility. However, Declarant has. been informed by
governmental authorities that in the event a public facility,. as
envisioned, is constructed, then all property to be serviced by
the facility shall be required to "tap—on" or be connected to the
public facility. In that event;, all members shall incur and bear
B. If such public facility shall be constructed and all
members are required to make use of the same, then the private
facility constructed by the Declara-nt shall be surplusage,
Therefore, IQA reserves the absolute, exclusive right and option
to purchase from SVR the facility (but not. the real property upon
which it is situated) and all of its structures, equipment and
machinery, once all the property and units served by the facility
are being served by the public facility. The purchase price
shall be as agreed upon by the aVR and IQA, and IQA shall bear
the full cost of dismantling and removing the same if purchased.
The Lease for the facility and the real property upon which the
facility is located shall then terminate, and the property shall
remain as common areas of Sands Villa Resort, forever discharged
of any such leasehold, and Declarant shall be responsible, in
dismantling and removing the facility, for restoring said real
property to its natural state. Should IQA fail to notify SVR in
writing of its intention to purchase the facility within sixty
(60) days of the date SVU has notified IQA in writing that all
members' property and units are being serviced by the public
facility, then IQA's right to purchase same shall be deemed to
have been waived and SVR may dispose of the facility as it deems
appropriate. In that event SVR, as a common expense, shall be

responsible for restoring the real property to its natural state,
it if so desires.
C. After termination of said Lease and disposition of the
facility, the Board of Directors. of 5VU shall immediately proceed
with the dissolution and .liquidation of Sands Villa Utilities,
Inc. After payment of all costs, fees and expenses incurred in
such liquidation and dissolution, including a reasonable
attorney's fee, any common surplus remaining shall be distributed
to the members in equal shares. Additionally, the Board of
Directors of SVU shall cause to be filed SVU's Certificate of
Completed Liquidation in the Office of the Register of Deeds of
Carteret County, North Carolina, and the same shall be .deemed to
be a revocation by all owners of the ptope:rties and units
formerly served by the facility of this Declaration of
Restrictions, which thereafter shall be of nor force or effect.
D. It is anticipated that if a public sewer system is
available for members, then those improvements including service
lines, lift station and related property will be dedicated to the
Town of Atlantic Beach for use in servicing the property.
ARTICLE V
MISCELLANEOUS
A. Nothing contained herein shalt be deemed to be a
prohibition to or restriction upon the Declarant from further
restricting or developing any of the property described in the
premises hereof in any manner not inconsistent with the
provisions hereof.
B. This Declaration of Restrictions may be amended only by
a written instrument executed and acknowledged by both SVR and
IQHA and shall become effective only after recordation of the
same in the Carteret County Registry, North Carolina, except that
this document may be amended by the addition of a new phase of
Sands Villa Resort, upon recordation of the appropriate amendment
as provided in the Declaration of Sands Villa Resort_ Condominium.
Upon the recordation of such an amendment adding a new phase to
Sands Villa Resort Condominium, this document may also be
amended, making such new units subject hereto and changing the
percentage of common expense to be paid by each owner. owners of
units in the new phase shall become members of Sands Villa Resort
Homeowners Association, Inc. and shall be subject to the rights
and restrictions of this Declaration. Said amendment need only
be executed by the Board of Directors of 5VU. Said addition to
Sands Villa Resort Condominium shall only be allowed to utilize
the sewage treatment facility if it is determined by the
appropriate state, local and federal authorities that sufficient -
capacity exists to service said units. Any amendment, except For
addition of a new phase of Sands Villa Resort as provided above
shall become effective after execution by the president• and
secretary of both SVR and IQHA; and other condominium owners' and
lot owners' consent shall not be necessary
C. Rights Reserved Unto Institutional Lenders,
"institutional Lender".or "Institutional Lenders", as the terms
are used herein, shall mean and refer to banks, savings and loan
associations, mortgage companies, insurance companies, the
Federal National Mortgage Association (FNKA4 r the Federal Home
Loan Mortgage Corporation (FHLMC) and/or other entities that in
the normal course of business, make or invest in mortgages. So
long as any institutional lender or institutional lenders shall
hold any mortgage upon any unit or property serviced by the
facility, or shall be the owner of any unit or property serviced
by the facility, such institutional lender or institutional
lenders shall have the following rights:
(i) To approve the company or companies with whom
casualty insurance is placed, as well as to receive notice of any

lapse, cancellation or material modification of any insurance
policy or fidelity bond maintained by the Owner's Corporation.
(ii) To examine, during reasonable business hours and
upon reasonable notice, the books and records of SVU to be
furnished upon request at lease one copy of the annual financial
statement and report of SVU, prepared by a certified public
accountant designated by SVU, such financial statement and report
to be furnished by April 15 of each calendar year.
(iii) To be given notice by SVU of the call of -any
meeting of the membership to be held for the purpose of
" considering any proposed amendment to this Declaration, 'or the
Articles of Incorporation and By -Laws of SVU, thich notice shall
'• state the nature of the amendment being proposed, and to be given
f` notice by SVU of losses due to casualty or condemnation.
( iv) To be given notice of default by any member
owning a unit or property encumbered by a mortgage held by the
institutional lender or institutional lenders, such notice to be
given in writing and to be sent to the principal' office of such
institutional lender or institutional lenders, or to the place
which it or they may designate in writing. whenever any
institutional lender or institutional' lenders desire the
provisions of this Article to be applicable to it, it shall serve
or cause to be served written notice of such fact upon SvU by
registered wail or certified mail addressed to SVU and sent Lo
its address stated herein, identifying the unit or property upon
which any such institutional lender or institutional lenders"hold
any mortgage or mortgages, or identifying any units or property
owned by them, or any of them, together with sufficient pertinent
facts to identify any mortgage or mortgages which may be held by
it or them, and which notice shall designate the place to which
notices are to be given by SVU to "such institutional lender or
institutional lenders.
D. Severability. In the event that any of the terms,
provisions,' or covenants of this Declaration are held to be
partially or wholly invalid or ungnforceable for any reason
whatsoever, such holding shall not affect, alter, modify, or
impair in any manner whatsoever any of the other terms,
provisions, or covenants hereof or the remaining portions of any
terms, provisions, or covenants held to be partially invalid or
unenforceable..
E. Liberal Construction. The provisions of this
Declaration shall be liberally construed to effectuate its
purposes.
F. Declaration 41ndin on Assigns and 5ubse cent owners;
The restiTct ons and burdens imposed y the Art Iles of this
Declaration are intended to and shall constitute covenants
running with the land, and shall constitute an equit-able
servitude upon each unit or parcel subdivided from the property
described in the premises above: this DgclaraLion shall be
binding upon the Declarant, its successors and assigns, and upon
all parties who may subsequently become owners of units in the
condominium project or lots of Island Quay Subdivision, and their
respective heirs, devisees, legal representatives, successors and
assigns. This Declaration and the exhibits attached hereto and
amendments hereof shall be construed and controlled by and under
the laws of the State of North Carolina. This Declaration shall
automatically expire upon the termination of such as provided in
Article IV C. herein.
g. Eminent Domain. in the event of a taking by eminent-.
domain (or condemnation or conveyance in lieu of condemnation) of
pant of all of SVR's property, the award of such taking shall be
payable to SVR, which shall represent the membersnamed in the
proceedings. Said award shall be utilized to the extent possible
for the repair, restoration, replacement or improvement of the
facility, if only part is taken. Any funds not utilized (in the
P6.

-case of a partial taking) shall be applied in payment of common
expenses otherwise assessable.
H.' Warranties and Representations. The Declarant.
specifically disclaims any intent to have made any warranty or
representation in connection with the facility, except as
specifically set forth herein, and no personal shall rely upon
any warranty or representation not so specifically made herein,
IN WITNESS WHEREOF, the. parties hereto have hereunto set
their hands and seals, or if corporate, have caused this
instrument to be signed in its corporate name by its duly
authorized officers and its seal to be hereunto affixed by
.''authority of its Board of Directors, the day and year first above
;t.
written.
• •-'�'�•I fig-11�'�f�
P VI V SANDS VIL RESORT HOMEOWNERS
C- y r• : ASSOCIRT N INC.
zyo �..:
k, r` BY:
TE
fSLAND QUAY ASSOCIATES, INC.
BY:
STATE OF ,
COUNTY OF k-1=0
X, a Notary Public of the aforesaid County and Stale, do
hereby certify that -j—,t eQ`' (.(-�4�.ti,� personally appeared
before me this day and acknowledged that a she -is the
Secretary of Sands Villa Resort Homeowners` Association, Inc., a
non-profit corporation, and that by authority duly given and as
the act of the corporation, the foregoing instrument was signed
in its name by its President, sealed with its corporate
seal, and attested by himselfthers as its
Secretary.'
Witness my hand and official stamp or seal, this
Of 1988.
NOTARY PUBLIC _ ,. K J. C
b
My Commission Expires;
STATE OF NO,
COUNTY OF '(,t j ARt.I
I, a Notary Public of the aforesaid County and State, do
hereby certify that _rM T),1�Ar)11�,')r= personally appeared
before me this day and cka' nowle8ged that he/ personally
the
Secretary of Island Quay Associates, Inc., a North Carolina
corporation, and that by authority duly given and as the act of
the corporation, the foregoing instrument was signed in its name
by its President, sealed with its corporate seal, and
attested byhimself/herse•1-f as its Secretary.

xtnes my hand and official stamp or seal, this 4r_ 1//� day
of �. , 1988.
NOTARY FUBUC
My commission Expires:
QT i-7- q
y'R/3lsland.Ame
:31 yzs PUBLIC i v
calP;,..''�
NORTH CAitill.DM, LAWIPIET .#� 4— f � ��z��
Tho foregaija cer#idea#°f�1 a'{ R
Is (a�w) cerulicr# 1,7 �.�" rrrriAC#.'4'lifs Iz���t;,?tE i 4�as pry
setstcd o rv=isl,P'4lsi ;n°I rnwacd i� tills Office in
�
vas day ef�` .1 �, lJ& n#l.,.. � 6110ck .
Gl'i- 8n Finer
LLtS#ef

EXHIBIT A
DESCRIPTION OF_ISLAND-QUAY SUBDIVISION
Being all of that property as shown on that plat entitled,
"Island (quay Subdivision, (A Planned Unit Development)", prepared
by Pate, Phillips & Associates, P.A. dated. June 20, 2988, with
':."the final revision an August 29, 1988 and as recorded in P.laL
Book 26 at Page 93, Carteret County Registry.
DESCRIPTION OF SANDS VILLA RESORT CONDOMINIUM
Being those condominium units and common property described
in that Declaration of Unit Ownership entitled, "Sands Villa
Resort. Declaration of Condominiums", as recorced in Book UO -49,
Page 263 and amended in Book UO -79 at Page 319, and the plats
relating thereto recorded in Plat Book 10-1 at Pages 85-104,
Carteret County Register of Deeds Office,
I

EXRIHIT H
SEWAGE TREATMENT PLAT SITE
Being that property shown as "Wastewater Plant', "Rotary Dist.
No. 1", "Rotary dist. No. 211, "Lift Station" and the related
green areas as shown on that plat entitled, "AS'- Built Plat of
Sands Villa Resort, Phase I",'prepared by Floyd, Coleman, Askens
s Kellahan, Engineers 6 Surveyors. July 10, 1985 and revised
July 23, 1985, and as recorded in Plat Book 10-I, Page 86 of the
Carteret County iiegistry. _

inhibit C
ARTICLES OF INCORPORATION
OF
SANDS VILLA' UTILITIES, INC.
In accordance with the requirements of Chapter 55A of the
North Carolina General Statutes, the undersigned, a ua w r:al
person of full age, has this day executed these Articles. of
incorporation for the purpose of forming a non-profit corporation
and hereby certifies:
ARTICLE I
The name of the corporation is Sands Villa Utilities, Inc.,
hereinafter called the "Corporation".
ARTICLE T1
The initial registered office of the Corporation is located
at #2 Hoop hole Creek_, Atlantic Beach, Carteret County, North
Carolina 28512,
LR ICLE III
J. Tracy Bowling, whose address is #2 Hoop Hole Creels,
Atlantic Beach, North Carolina 28812, is hereby appointed the
initial registered agent of this corporation.
ARTICLE IV ,
This Corporation does not contemplate pecuniary gain or
profit to the members thereof and no part of the Corporation's
income shall inure to the benefit of any of its officers,
directors, or members, or any other individual or entity.
This non-profit corporation is formed for the sole purpose
-:of owning, leasing, operating, maintaining and/or repairing, as
necessary, that certain private Waste Water and Sewage Treatment

and Disposal Facility {hereinafter "facility"j built upon that
tract of land described in Exhibit "A", which tract and facility
will be leased to the Corporation, for the provision of waste
water and sewage treatment and disposal services for those
certain tracts of land and only those certain tracts of land
located in Morehead Township, Carteret County, North Carolina,
and described in Exhibit "B" and "B-1" and the owners thereof,
J
whose Homeowners associations shall be mandatory members of the
corporation. Members, as provided herein, shall be defined as
those individuals who are entitled to be members of Island Quay
Homeowners Association, Inc. and Sands Villa Resort homeowners
Association, Inc. However, only the two Associations and not the
individual condominium owners and/or lot owners shall have voting
rights as provided in Article VI. The Corporation may own,
operate, lease, sell, trade, and otherwise deal with property,
whether real or personal, as may be necessary or convenient in
the fulfillment of these purposes,
ARTICLE V
The Corporation shall have the following powers:
1. The Corporation shall have all the powers and privileges
granted to non-profit corporations under the law pursuant to
which this Corporation is chartered and all of the powers and '
privileges which may be granted unto said Corporation under any
other applicable laws of the State of North Carolina reasonably
necessary to implement and effectuate the purposes of the
Corporation, including, but not being limited to the following:

(a) To maintain, repair, replace, operate and manage
the facility and the property upon which it is built, and all of
the facility's pipes, lines, pumping stations' and drain fields,
Including the right to reconstruct improvements after casualty
and to make further improvement to the same, as necessary, and to
make and enter into any and all contracts necessary or desirable
to accomplish said purposes, This power shall include the power
to inspect all property, and the improvements thereon, which this
corporation is intended to serve, and to make certain all Rules
and Regulations are observed by members and to insure the safe
and proper operation of the facility.
(b) To levy and collect assessments against members of
the Corporation, as previously defined, to defray the common
expenses of the Corporation As may be provided in the Declaration
of Restrictions for the property described as Exhibit B and BI
below and in the By -Laws of this Corporation which may be
hereafter adopted, including the right to levy and collect
assessments for the purposes of acquiring, operating, leasing,
managing and otherwise trading and dealing with such property,
whether real or personal, incli.tding Condominium units anis
residential lots, which may be necessary or convenient in the
operation and management of the facility and in accomplishing the
purposes set forth herein,
(c) To contract for the management of.the facility and
to delegate to such contractor all of the powers and duties of
_.the Corporation except those which may be required by the By -Laws

and the Declaration of Restrictions to have approval of the Board
of Directors or membership of the Corporation.
(d) To acquire and enter into, now or at any time
hereafter, leases, and agreements thereby, .the Corporation
acquires leaseholds, memberships, and other possessory or use
interests in Lands or facilities, whether or not contiguous to
the lands of the facility to. facilitate the fulfillment of the
purposes of the corporation.
(e) To enforce the provisions of the Declaration of
Restrictions, these Articles of incorporation, and the By -taus of
the Corporation which may be hereafter adopted, and make and/or
enforce all Rules and Regulations required to be adopted or
observed for the safe and proper operation and use of the
facility. The Corporation may terminate the services provided by
the facility to any member and his unit or property for failing
to observe and obey the same.
M To exercise, undertake and acoomplish all of the
rights, duties and obligations which may be granted to or imposed
upon the Corporation pursuant to the Declaration of Restrictions
for the property described below which pertain to this
corporation.
2. The Corporation shall have no power to levy any I
assessment against any member in excess of -that 'member's prorata
share of the actual operation expenses of the facility in
accordance with the provisions of the By -Laws of the Corporation
�o-r the Declaration of Restrictions which will be recorded in the
Carteret County Registry.

service provided by Sands Villa Utilities, Inc. anis they shall
be, along With the unit owners of Sands Villa Resort condominium
project, bound by the terms of those restrictions recorded
through their respective non-profit homeowners associations.
With respect to any remainder of the Island Quay Subdivision
that is not developed into residential lots, those lots shall
still. be considered part of Island Quay Subdivision and shall
stili receive the benefits and be bound by those restrictions
contained in these Articles, By -Laws and the Declaration of
Covenants. That portion not developed into residential lots
shall also be considered members of Island Quay Homeowners
Association, Inc. However, such membership shall terminate upon
• them being divested of such title, voluntarily or involuntarily,
and.the owner acquiring such title shall automatically become a
member of the Island Quay Homeowners Association, Inc.
3. In order to effectively administer the collection of the
expenses and the assessments of liens, if necessary, any amounts
determined to be due under this Declaration shall be considered a
part of the common expense of the respective non-profit
organization in which the member owns property serviced by the
facility.' In other words, if a member is a owner of a
condominium or time share in Sands Villa Resort, then his share
of the common expenses of the facility will be added to his share
of the assessments due otherwise to sands Villa Resort Homeowners
Association, Inc. to arrive at a new figure which shall then be
:--the assessments .due. This assessment shall be collected as
allowed by the Declaration and By -Laws of Sands Villa Resort
1

Homeowners Association, Inc. and shall not be considered separate
and apart.. The assessments shall .have the same lien rights as
allowed by the above mentioned Declaration and By -Laws of Sands
Villa Resort for non-payment thereof. Additionally, if a member
is an owner of a lot in Island quay Subdivision, then his share
of the common expenses of the facility will be•added to his share
of the assessments due otherwise to Island Quay Homeowners
Association, Inc. to arrive at a new figure which shall then be
the assessments due. This assessment shall be collected as
allowed by the Declaration and By -Laws of Island Quay Homeowners
Association, Inc. and shall not be considered separate and apart.
The..assessments shall have the same lien rights as allowed by the
above mentioned _ Declaration and By -Laws of Island Quay
Subdivision for non-payment thereof.
Therefore, there shall be a maximum number of users of
the sewer facility serviced by this corporation, which shall
equal the total number of units in Sands Villa Resort
condominiums, all Phases, plus the total number of lot owners in
Island Quay plus the total number of subdivisions of Bowling
property, if any, not developed as part of Island Quay. The
'k
right to use the facility shall run with title to the units ,
and/or lots or subdivisions of land, and.shall automatically
terminate upon the owner being divested- of record ownership of
fee simple title thereto.
4. The interest of a member in the funds and assets of the
'Corporation cannot be assigned, hypothecated or transferred in
any manner, except as an appurtenance to his title to either his

ARTICLE VI
The qualification of the members, the manner of their
admission to membership and termination of such membership, and
voting by members shall be as follows:
1. Membership in the corporation shall be limited solely to
Sands villa Resort Homeowners Association, Inc. and Island Quay
Homeowners Association, Inc.
2. As of the date of this document, the members of this
Corporation are Sands Villa Resort Homeowners Association, Inc.
and Island Quay homeowners Association, Inc. Sands Villa
Homeowners Association, Inc. consists of the owners of the
condominiums and time-shares of that condominium project known as
Sands Villa Resort who shall receive the benefit of the utility
services provided by Sands Villa Utilities, Inc. Island Quay
Homeowners Association, Inc. currently consists of the lot owners
of Island Quay Subdivision who, at the time of recording of this
document, are Island quay Associates, Inc. However,.Island Quay
Associates, Inc. intends to, and may.construct upon the portions
of Island Quay Subdivision, which subdivision shall lie west and
north of Sands Villa Resort, and 'shall consist of a single family
PVD whioii may be developed in phases and which may contain as
many as fifty (60) individual homesites. Said subdivision shall ,
be maintained and admipistered by island• Quay Homeowners
Association, Inc. which shall be the non-profit corporation for
which all lot owners in Island Quay Subdivision will be mandatory
members. Those members of Island Quay Homeowners Association,
Inc. will be those individuals who also benefit from the utility

unit or parcel of property. The funds and assets of the
Corporation shall belong solely to the Corporation subject to the
limitation that the same be expended, held or used for the
benefit of membership of the hr"meowners associations and for the
purposes authorized herein, in the Declaration of Restrictions
and in the By -Laws which may be hereafter adopted.
` B. On all matters which the membership -shall be entitled to
vote. each member shall have one vote, the members being Sands
Villa Resort Homeowners Association and Island (,quay Homeowners
Association, The vote of each member may be cast or exercised by
the member in such manner as may be provided by the By -Laws
hereafter adopted by the Corporation.
ARTICLE V11
The Corporation shall have perpetual existence, unless
terminated as provided in the Declaration of Restrictions, the
BY -Laws or by law.
ARTICLE VIII
The affairs of the Corporation shall be managed by the
President of the Corporation, assisted by the Vice President,
Secretary and Treasurer and, 'if any, the Assistant Vice
Presidents, the Assistant Secretaries, Assistant Treasurers,
subject to the directions of the Board of Directors. The Board
of Directors, or the President with the approval of the Board of
Directorsr may employ a managing agent" and/or. such other
managerial and superv.isor.y personnel or entities to administer or
�ass%st
in the administration of the operation and management of
the facility and the affairs of the Corporation, and any such
.�1 C1 a.

person or entity may be so employed without regard to whether
such person or entity is a member of the Corporation or a
director or officer of the Corporation, as the case may be.
AETICLE IX
The number of members of the first Board of Directors of the
Corporation shall be five (5). The number of members of
succeeding Boards of Directors shall be as Provided from time to
time by the By -Laws of the Corporation. The members of the Board
of Directors shall be elected by Lie mekbers of the Corporation
at the annual meeting of the membership as provided by the By -
Laws of the Corporation, and the Board of Directors shall be
members of the Corporation or shall be authorized
representatives, officers or amployees of a corporate or
partnership member of the Corporation.
ARTICLE X
The Board of Directors shall elect a President, Vice
President, Secretary and Treasurer, and as many Assistant Vice -
Presidents, Assistant Secretaries and Assistant Treasurers as the
Board of Directors shall determine, The President shall be
elected from among the membership of the Board of Directors, but
no other officer need be a Director. The same person may hold
two offices, the duties of which are not incompatible; provided,
however, that, the offices pf the President and Vice President or
Assistant Vice President, if any, shall not be held by the same
person, nor shall the office of the President and Secretary or
I
Assistant Secretary, if any, be held by the same person.
ARTICLE XI t
t

The names and addresses .of the initial Board of Directors
who, subject to the provisions of these Articles of
Incorporation, the Sy-Laws, and the laws of the State of North
Carolina, shall hold office until the first annual meeting of the
=`s membership (or until their successors are elected and qualified)
_F- are as follows:
T. TRACY BOWLING Atlantic Beach Causeway
P.O. Box 1156
Atlantic Beach, Carteret County
North Carolina 28557
.TERRY BLOUNT 105 Rainbow Harbor
Myrtle Beach, Horry County
South Carolina 29577
JOE CARTER 105 Rainbow Harbor
Myrtle Beach, Horry County
South Carolina 29577
JOHN M. HARRIS 1210 Arendell Street
P.Q. Drawer 3650
Morehead City, Carteret County
North Carolina 28557
ARCHIE FOSE Unit $3.1, Sands Villa Resort
Fort Macon Road,
Atlantio Beach, Carteret County
North Carolina 28512
The original BY-Laws of the Corporation shall be adopted by ,
a majority vote of the members of the Corporation present at a +
meeting of members at which a majority of the membership is
present, and, thereafter', such By-Laws may be altered or
rescinded in such manner as said By-Laws may provide.
ARTICLE XIII
Every, Director -and officer of the Corporation shall be
indemnified by the Corporation aganst all expenses and

liabilities, :including attorney fees, reasonably incurred by or
imposed upon him in connection with any proceeding to which he
may be party, or in which he may become involved, by reason of
his being or, having been a Director or officer at the time such
expenses are incurred, except in such cases wherein the Director
or officer is adjudged guilty- of willful misfeasance or
malfeasance in the performance of duties; provided, that, in the
event of any claim for reimbursement or indemnification hereunder
based upon a settlement by the Director or officer seeking such
reimbursement or indemnification, the indemnification herein
shall only apply if the Board of Directors approves such
settlement and reimbursement as being in the best interests of
` the Corporation. The foregoing right of indemnification shall be
in addition to and not exblusive of all other rights to which
such Director or officer may be entitled.
ARTICLE :CIV
An amendment or amendments to these Articles of
Incorporation shall require the approval of both Sand Villa
Resort Homeowners Association and Island Quay Homeowners
Association. ;i
ARTICLE XV
The name and address of the incorporator is as follows:
JOHN M. HARRIS 1210 krendell Street
P.O. Drawer 3650
Morehead City, Carteret County
North Carolina 28557
IN WITNESS WHEREOF, I, the undersigned incorporator, have
hereunto set my hand and seal, this oCd day of
1988.

STATE OF NORTH CAROLINA
COUNTY OF CARTERET
This is to o tify tha on, th s the 2 -1 day of (''��r? ,
19$8, before me, �YQ f�. '$"? �f%-'� , a Notary Public of said
County and State, personally appeared JOHN K. HARRIS, who I am
'
satisfied is the person named in and who executed the foregoing
Articles of Incorporation of Sands Villa Utilitiea, Ina., and
having first made known to him the contents thereof, he did
acknowledge that he signed, sealed and delivered the same as his
voluntary art and deed for the uses and purposes therein.
expressed.
IN WTTNISSW EREOF, T hav hereunto set my official stamp or
seal this the day of k_!
-)10-tez'
tJ NOTARY PUBLIC
My Commission Expires:
n
a:SVU.AI.r2

EXHIBIT A
Sewer Site
Being that property shown an "Wastewater Plant", "Rotary
Dist. No. 1", "Rotary Dist. No. 2", "Lift Station" and the
related green areas as shown on that plat entitled, "AS - Built
Plat of Sands Villa Resort, Phase I", prepared by Floyd, Coleman,
Askens & Xellahan, Engineers & Surveyors. . July 10, 1985 and
revised July 23., 1985, and as recorded in Plat Book 10-I, Page 86
of the Carteret County Registry.
EXHIBIT B
Description of Island Quay Subdivision
..Being all of that property as shown on that plat entitled,
"Island Quay Subdivision, (A Planned Unit Development)", prepared
.by Pate, Phillips &- Associates, P.A. dated June 20, 1988, with
the final revision on August 29, 1988 and as recorded in Plat
Book 26 at Page 93, Carteret'County Registry.
EXHIBIT B-1
Description of Sander Villa Resort
Being those condominium units and common property described
in that Declaration of Unit Ownership entitled, "Sands Villa
Resort Declaration of Condominiums:', as recorded in Book UO -49,
Page 263 and amended in Book UO -79 at Page 319, and the plats
relating thereto recorded in Plat Book 10-I at Pages 85-104,
Carteret County Register of Deeds Office.
0

EXEIBIr n
Percentage of Common Euenses of Sands Villa Utilities, Inc,
The percentage of common expenses of Sands Villa Utilities,
Inc. shall be the following:
1. For condominium units numbered 109 through 126, 209
through 226, 309 through 326, 409 through 425, and 509 through
528, the percentage of common expense shall be .7442%.
2. For lots 1 through 50 of Island Quay Subdivision, the
percentage of common expense shall be .7042%.
3. For commercial unit, C-1, Sands Villa Resort, the
percentage of Common expense shall be 1.41208. !
The above percentages will be multiplied by the total common
expense to arrive at an amount payable by each condominium unit
and lot owner as provided by this Declaration. The individual,
owners's Association will then compute a total Association amount
due to SVU as common expense based upon these percentages. In the
event that additional units are added to Sands Villa Resort, the
above percentages will be decreased, but the percentages will
remain equal for lot owners and condominium units, including
those new units added, with the commercial unit having twice the
percentage of the other units.