Brunswick County Feasibility Report-2nd Draft 9-16-19

COUNTY OF BRUNSWICK,
NORTH CAROLINA
Financial Feasibility Evaluation

of Proposed Enterprise Systems
Revenue and Revenue Refunding Bonds,
Series 2019
Draft Report
September 16, 2019

EVALUATION BY FINANCIAL FEASIBILITY CONSULTANTS
County of Brunswick, North Carolina
Enterprise Systems Fund
Revenue Bonds, Series 2019
We have evaluated the accompanying Forecast Statement of Revenues, Expenses, Debt Service,
and Debt Service Coverage (the “Forecast Statement”) for the County of Brunswick, North
Carolina (“County”) Enterprise Systems for the six fiscal years ending June 30, 2019 through
June 30, 2024. Our evaluation was conducted in accordance with guidelines for the water and
wastewater industry and included such procedures as we considered necessary to evaluate the
assumptions of the County.
In evaluating the financial feasibility of the project, those assumptions that we believe are most
significant include:
 Projected demand for water and wastewater services during the six-year forecast
period;
 Projected payments and revenues from wholesale and municipal customers based on
specific agreements;
 Projected operating costs for providing water and wastewater services to meet
demand during the forecast period;
 Projected water and wastewater rates during the forecast period; and
 Projected future debt issues and the timing of additional debt service payments in
order to meet capital investment needs.
The accompanying Forecast Statement of Revenues, Expenses, Debt Service and Debt Service
Coverage is presented on an accrual basis, and is then adjusted to be consistent with the County’s
budgeting process for the Enterprise Systems, and the specific requirements of the coverage tests
identified in the General Trust Indenture dated as of May 1, 2004, as amended, (the “General
Indenture”), and a series indenture, Number 10, dated November 1, 2019, (the “Series Indenture”
and together with the General Indenture, the “Indenture”) each between the County and U.S.
Bank National Association as Trustee (“General Indenture”). The Forecast Statement, together
with the Summary of Significant Forecast Assumptions, which is included as an integral part of
the forecast, constitutes the “Feasibility Evaluation” for the proposed capital projects and bond
financing.
In our opinion, the accompanying Forecast Statement is presented in conformity with industry
guidelines for presentation of a forecast, and the underlying assumptions provide a reasonable
basis for the County’s forecast. Based upon the assumptions in our report, the projected Net
Revenues provide adequate funds to maintain the debt service coverage ratios required by the
General Indenture during the forecast period for the issuance of the County’s proposed
Enterprise Systems Revenue and Revenue Refunding Bonds, Series 2019. However, there will
usually be differences between the forecast and actual results, because events and circumstances
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frequently do not occur as expected, and those differences may be material. We have no
responsibility to update this report for events and circumstances occurring after the date of this
report.
Raftelis Financial Consultants, Inc.
Charlotte, North Carolina By: Elaine Vastis Conti

September 16, 2019 Vice President
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Forecast Statement

Forecast Statement of Revenues, Expenses, Debt, and Debt Service Coverage
For the Fiscal Year Ending June 30th
Unaudited (1) Forecast

2019 2020 2021 2022 2023 2024
Operating Revenues
User Charges (2) $ 53,282,678 $ 51,533,277 $ 53,539,138 $ 60,160,580 $ 60,308,050 $ 60,798,688
Other Operating Revenues (3) 1,897,033 834,744 808,265 808,265 808,265 808,265
Subtotal: Operating Revenues $ 55,179,711 $ 52,368,021 $ 54,347,403 $ 60,968,845 $ 61,116,315 $ 61,606,953
Operating Expenses (4)

Salaries, Fringe Benefits & Operating Expenditures $ (28,012,426) $ (26,496,278) $ (26,513,953) $ (29,295,630) $ (30,050,262) $ (30,925,706)
Depreciation and amortization (13,167,946) (13,783,535) (14,427,901) (15,102,392) (15,808,414) (16,547,442)
Subtotal: Operating Expenses $ (41,180,372) $ (40,279,813) $ (40,941,854) $ (44,398,022) $ (45,858,676) $ (47,473,147)
Operating Income $ 13,999,339 $ 12,088,208 $ 13,405,549 $ 16,570,824 $ 15,257,639 $ 14,133,806

Non-operating Revenues (Expenses):
Investment Earnings $ 633,875 $ 230,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000
Interest Expense (4,709,974) (4,551,790) (5,677,459) (5,693,119) (11,409,422) (10,901,548)
Subtotal: Non-operating Revenues (Expenses) $ (4,076,099) $ (4,321,790) $ (5,477,459) $ (5,493,119) $ (11,209,422) $ (10,701,548)
Income Before Transfers and Capital Contributions $ 9,923,240 $ 7,766,419 $ 7,928,090 $ 11,077,705 $ 4,048,216 $ 3,432,258
Adjustments (5)
Plus: Depreciation and amortization $ 13,167,946 $ 13,783,535 $ 14,427,901 $ 15,102,392 $ 15,808,414 $ 16,547,442
Plus: Interest Expense 4,709,974 4,551,790 5,677,459 5,693,119 11,409,422 10,901,548
Plus: Amortized Assessment Revenues 2,744,862 2,744,862 2,347,508 2,347,508 284,462 -
A Net Revenues $ 30,546,022 $ 28,846,605 $ 30,380,958 $ 34,220,723 $ 31,550,514 $ 30,881,247
Plus 20% of Surplus Account (6) 11,773,599 11,773,599 11,773,599 11,773,599 11,773,599 11,773,599
B Net Revenues plus 20% of Surplus Account $ 42,319,621 $ 40,620,204 $ 42,154,557 $ 45,994,322 $ 43,324,113 $ 42,654,846
Bonds
Series 2004B (7) $ 603,875 $ 251,614 $ - $ - $ - $ -
Series 2009 (Build America Bonds) 1,946,042 1,908,502 1,945,315 - - -
Series 2012 Refunding Bonds (7) 2,152,200 1,458,950 1,537,900 1,546,525 - -
Series 2012B 1,088,079 1,088,293 1,089,026 1,088,257 - -
Series 2012C 699,955 699,862 699,769 699,654 699,533 326,910
Series 2015 Refunding 5,786,531 5,783,781 5,787,281 5,781,281 4,610,281 4,613,281
Series 2015 Bonds 1,053,925 1,053,925 1,052,925 1,055,925 1,053,175 1,053,925
Series 2019 Refunding Bonds (7) - 564,531 1,107,247 1,109,258 2,650,035 2,651,127
Series 2019 Bonds (8) - 850,800 3,407,000 4,383,550 4,941,100 4,943,850
Proposed Series 2020 Bonds (9) - - - - 7,849,100 7,843,850
C Subtotal: Revenue Bond Debt Service $ 13,330,607 $ 13,660,257 $ 16,626,463 $ 15,664,450 $ 21,803,224 $ 21,432,943
D 120% of Revenue Bond Debt Service $ 15,996,729 $ 16,392,309 $ 19,951,756 $ 18,797,340 $ 26,163,869 $ 25,719,532
Debt Service Coverage - Revenue Bonds

Calculated Using Net Revenues (A/C) 2.29 2.11 1.83 2.18 1.45 1.44
Net Revenues Available for G.O.,
Subordinate, and Other Debt Service $ 17,215,414 $ 15,186,348 $ 13,754,495 $ 18,556,273 $ 9,747,291 $ 9,448,304
G.O. Indebtedness
2012 GO Refunding BSL $ 295,450 $ 293,650 $ 292,550 $ 295,550 $ 293,150 $ 295,450
Subtotal: G.O. Debt Service $ 295,450 $ 293,650 $ 292,550 $ 295,550 $ 293,150 $ 295,450
Subordinate and Other Indebtedness

State Revolving Fund Loans
WBRWWTP SRLF $ 1,835,665 $ 1,824,640 $ 1,813,615 $ 1,802,590 $ 1,791,565 $ 1,780,540
NEBWWTP 2006 SRF (Leland & NBSD Portions) 308,600 301,620 294,641 287,661 280,682 -
Subtotal: Subordinate Debt Service $ 2,144,265 $ 2,126,260 $ 2,108,256 $ 2,090,251 $ 2,072,247 $ 1,780,540
CG&L Loans
Sunset Beach ARRA $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
2011 Caswell Beach ARRA Loan 75,000 75,000 75,000 75,000 75,000 75,000
Subtotal: Other Debt Service $ 175,000 $ 175,000 $ 175,000 $ 175,000 $ 175,000 $ 175,000
E Subtotal: G.O., Subordinate, and Other Debt Service $ 2,614,715 $ 2,594,910 $ 2,575,806 $ 2,560,801 $ 2,540,397 $ 2,250,990
F Total Debt Service: Revenue Bonds plus G.O., $ 15,945,323 $ 16,255,167 $ 19,202,269 $ 18,225,251 $ 24,343,621 $ 23,683,933
G Total Debt Service: 120% of Revenues Bonds plus 100% $ 18,611,444 $ 18,987,219 $ 22,527,562 $ 21,358,141 $ 28,704,266 $ 27,970,522
of G.O., Subordinate, and Other Debt Service (D+E)
Debt Service Coverage - Total Debt (10)
Calculated using Net Revenues (A/F) 1.92 1.77 1.58 1.88 1.30 1.30
Calculated using Net Revenues plus 2.27 2.14 1.87 2.15 1.51 1.52
20% of Surplus Account (B/G)
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Forecast Statement

Forecast Statement of Revenues, Expenses, Debt, and Debt Service Coverage
Unaudited (1) Forecast

2019 2020 2021 2022 2023 2024
Net Revenues After Total Debt - Excluding Amortized (11) $ 11,855,837 $ 9,846,576 $ 8,831,181 $ 13,647,964 $ 6,922,432 $ 7,197,314
Assessments
Other Expenditures and Transfers (12)
Capital Outlay $ (5,054,194) $ (6,347,915) $ (3,163,677) $ (3,317,117) $ (3,258,811) $ (3,391,605)
Interfund Transfers - To Capital Reserve (1,865,558) (3,800,000) - - - -
Total Other Expenditures and Transfers $ (6,919,752) $ (10,147,915) $ (3,163,677) $ (3,317,117) $ (3,258,811) $ (3,391,605)
Surplus Revenues/Deficit Remaining After Total Cash Needs $ 4,936,085 $ (301,339) $ 5,667,504 $ 10,330,847 $ 3,663,621 $ 3,805,709
Ending Fund Balance (6) $ 60,222,925 $ 59,921,586 $ 65,589,090 $ 75,919,937 $ 79,583,558 $ 83,389,267
Notes to the Forecast Statement:

(1) Fiscal year (FY) 2019 data represents unaudited financial information obtained from the County. It should be
noted that expenses in FY 2019 include approximately $2,600,000 of costs incurred due to the impacts of
Hurricane Florence. While reimbursements from the Federal Emergency Management Agency (FEMA) for the
full amount are anticipated, only a minimal amount (approximately $216,000) was received in FY 2019.
(2) User Charges include: revenues from water and wastewater user rates and charges assessed to retail and
wholesale customers; payments from other jurisdictions, or participants, for an allocated share of debt service
costs; revenues from participant agreements; and revenues from other user charges, including tap and
connection fees, capital recovery fees, septage and late payment penalties, etc., all of which can be included as
Revenues as provided in the Indenture. Revenues from water and wastewater user rates and charges include
retail and wholesale water rate increases in FY 2022, no retail sewer rate increases, and minimal wholesale
sewer rate increases over the forecast period. In addition, revenues reflect the anticipated loss in several water
wholesale customers (the Town of Leland and H2GO) and one sewer wholesale customer (the City of
Southport). Revenues from capital recovery fees for FY 2020 and beyond are conservative and are based on a
10-year average, as opposed to recent levels.
(3) Other Operating Revenues include: miscellaneous revenues; reimbursements to the County for contracted
operations and maintenance services provided to other jurisdictions; and government subsidies on a portion of
the interest associated with Build America Bonds (“BAB”).
(4) Operating expenses for FY 2019 include approximately $2.6 million associated with the impact of Hurricane
Florence, but this additional $2.6 million is not anticipated to impact operating expenses in future years. Water
operating expenses increase by $2.9 million in FY 2022 when the low-pressure reverse osmosis (LPRO) system
goes on-line, but this increase is offset by a $500,000 reduction in variable operating costs (chemical and
electricity costs) associated with the loss of two wholesale water customers. Operating costs in FY 2022 also
reflect reduced variable costs of approximately $120,000 associated with the City of Southport leaving the
sewer system.
(5) The audited financial statements for the County’s Enterprise Systems, as presented in the County’s CAFR, are
presented on an accrual basis and are consistent with generally accepted accounting principles for deriving
Income Before Transfers and Capital Contributions. This amount must then be adjusted to determine Net
Revenues, consistent with the requirements of the Indenture, for the purpose of calculating debt service
coverage ratios and demonstrating compliance with the Rate Covenants in the Indenture. The Adjustments are
explained below:
a. For the forecast years, the depreciation expense is estimated by multiplying the prior year’s
depreciation expense by the average increase in depreciation over the past several years. Since this
expense is not included in the calculation of Net Revenues, this simplified approach has no impact on
the forecast coverage ratios.
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Forecast Statement
b. Expenses associated with other post employee benefits (OPEB) are included in the County’s FY 2019
Operating Expenses. According to the County’s Indenture, OPEB expenses are not included as
expenses for debt service coverage calculations. Therefore, OPEB expenses have been added back as
an Adjustment for FY 2019. Forecast Operating Expenses for FY 2020 and beyond do not include any
OPEB expenses and therefore no Adjustment is needed over the forecast period.
c. The County currently receives assessment revenues from the communities of Calabash, Sunset Beach,
and Boiling Springs Lake. The County’s Indenture specifies that the County can include the amortized
assessments in Net Revenues for calculating the debt service coverage ratio. These assessments are
amortized over a ten-year period to reflect the term of the assessment period but will decrease and
cease over the forecast period.
(6) The amount available in the Surplus Account is calculated by multiplying the Expendable Net Assets shown in
the County’s FY 2019 CAFR on pages C-1 and D-1, plus the capital reserve cash balanced provided by County
staff, by 20%. Expendable Net Assets represent unrestricted cash and cash equivalents available to use for any
purpose. While the Expendable Net Assets are anticipated to increase over the forecast period, the County
typically uses surplus revenues to pay for capital expenditures. To be conservative, 20% of the Surplus
Account is estimated based on the current estimated Expendable Net Assets ($60,222,925), rather than the
projected increases in the Expendable Net Assets over the forecast period.
(7) The forecast debt service payments for the Series 2019 Revenue Refunding Bonds were provided by the
underwriter, Robert W. Baird & Co. Incorporated, dated September 12, 2019. The Series 2019 Revenue
Refunding Bonds will refund the Series 2004B Bonds and a portion of the Series 2012 Refunding Bonds.
(8) The proposed debt service payments for the Series 2019 Revenue Bonds were provided by the underwriter,
Robert W. Baird & Co. Incorporated, dated September 12, 2019.
(9) The proposed debt service payments for the Series 2020 Bonds were provided by the underwriter, Robert W.
Baird & Co. Incorporated, dated September 12, 2019, which will be used to fund future capital improvement
projects.
(10) Under Section 6.6 (b) of the Rate Covenant in the Indenture, this ratio is required to be greater than 1.00.
(11) To determine the surplus or deficit remaining at the end of each FY, amortized assessment revenues are
subtracted from Net Revenues since these assessments do not represent the cash received in each FY but rather
the amortization of these revenues.
(12) Other expenditures and transfers include capital outlay and transfers to the capital reserve fund for the funding
of capital improvement projects paid for out of revenues generated from user rates and charges. Capital Outlay
in future years is based on historical averages, excluding non-recurring projects that were funded in FY 2019
and FY 2020.
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Explanatory Note 1 Basis of Presentation
THE COUNTY OF BRUNSWICK

SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS
FOR THE SIX FISCAL YEARS ENDING

JUNE 30, 2019 THROUGH JUNE 30, 2024
1. Basis of Presentation
Raftelis Financial Consultants, Inc. (“Raftelis”) has been engaged by the County of Brunswick,
North Carolina (the “County”) to evaluate the financial feasibility of proposed improvements to
its water and wastewater utility systems (the “Enterprise Systems”). The opinion letter to the
County is based upon the Forecast Statement of Revenues, Expenses, Debt Service, and Debt
Service Coverage (the “Forecast Schedule”) and the Summary of Significant Forecast
Assumptions (taken together, the “Feasibility Evaluation”) which presents, to the best of the
County’s knowledge and belief, based upon available information, the expected revenue,
expenses, debt service, and debt service coverage for the County’s Enterprise Systems during the
forecast period.
All schedules in the Feasibility Evaluation have been presented in accordance with the County’s
annual accounting cycle, based upon its fiscal year beginning July 1 and ending June 30 (“Fiscal
Year” or “FY”). Accordingly, the forecast reflects the County’s judgment as of September 16,
2019, the date of this forecast, of the expected conditions and the County’s expected course of
action during each of the six fiscal years ending June 30, 2019 through June 30, 2024.
The Feasibility Evaluation has been included as a part of the Official Statement for the County’s
Enterprise Systems Revenue and Revenue Refunding Bonds, Series 2019 (“Series 2019 Bonds”),
to be issued under the General Trust Indenture, dated as of May 1, and Series Indenture, Number
10, dated as of November 1, 2019 (the “Series Indenture” and together with the General
Indenture the “Indenture”), each between the County and U.S. Bank National Association,
successor to First-Citizens Bank & Trust Company, as “Trustee.” The proceeds from the Series
2019 Bonds (approximately $83.3 million1) will be used to finance improvements to the
County’s water and wastewater systems, including the County’s portion of a 54” parallel raw
water main from the Cape Fear River to the County’s Northwest Water Treatment Plant, a 2.5
million gallon per day (“MGD”) expansion to the Northeast Wastewater Treatment Plant, and
two additional sewer transmission mains from the Northeast Wastewater Treatment Plant to the
western and eastern parts of the County.
The Feasibility Evaluation has been based upon cost, operating, demographic and other relevant
information provided by the County, as well as the financing plan provided by the lead
underwriter, Robert W. Baird & Co. Incorporated (the “Lead Underwriter”). The Feasibility
Evaluation is presented in conformity with the methodology for calculating debt service
coverage of long-term indebtedness set forth in the Indenture. (The definitions of capitalized
terms, not specifically identified in this document, are provided in the Indenture).
1
Based on estimated pricing information provided by the Lead Underwriter on September 12, 2019.
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Explanatory Note 1 Basis of Presentation
Compliance with the Rate Covenant is demonstrated on the Lead Schedule under the heading
Debt Service Coverage – Total Debt. The General Indenture sets forth a two-part test, in Section
6.6 - Rate Covenant, requiring that the County set rates and charges for each Fiscal Year such
that (a) the Revenues for each Fiscal Year, plus 20% of the balance in the Surplus Account at the
end of the preceding Fiscal Year, is at least equal to (i) Current Expenses for that Fiscal Year,
plus (ii) 120% of the Principal and Interest Requirements on the Bonds to become due during
that Fiscal Year, plus (iii) 100% of the Principal and Interest Requirements on General
Obligation (“G.O.”) Indebtedness and Subordinate Indebtedness to become due that Fiscal Year,
plus (iv) 100% of the Principal and Interest Requirements on Other Indebtedness to become due
that Fiscal Year; and that (b) Revenues in each Fiscal Year are at least equal to the total of (i)
Current Expenses for that Fiscal Year, plus (ii) 100% of the Principal and Interest Requirements
on the Bonds to become due that Fiscal Year , plus (iii) 100% of the Principal and Interest
Requirements on G.O. Indebtedness and Subordinate Indebtedness, plus (iv) 100% of the
Principal and Interest Requirements on Other Indebtedness to become due that Fiscal Year, plus
(v) 100% of the amount required to reimburse the provider of a Qualified Reserve Fund
Substitute for any amounts owing under the General Indenture.
The existing debt has been segregated between parity indebtedness (defined as Bonds in the
Indenture), Subordinate Indebtedness, G.O. Indebtedness, and Other Indebtedness. Although the
County has the legal authority to levy ad valorem taxes to pay the debt service on G.O.
Indebtedness incurred to pay for Enterprise Systems assets, the County intends to pay such debt
service with Revenues of the Enterprise Systems.
Forecasts of revenues and expenses are prepared on a cash basis, consistent with the County’s
budgeting process for the Enterprise Systems, and the specific requirements of the covenants
identified in the Indenture. On the lead schedules, Net Revenues plus 20% of the Surplus
Account is calculated to be consistent with the requirements in Section 6.6 (a) in the General
Indenture whereby Net Revenues are adjusted by adding 20% of the balance in the Surplus
Account from the end of the previous Fiscal Year for calculating coverage on Bonds.
The assumptions disclosed herein are those that the County believes are significant to the
forecast. There will usually be differences between forecasted and actual results because events
and circumstances frequently do not occur as expected, and those differences may be material.
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Explanatory Note 2 Background and Scope of Operations
2. Background and Scope of Operations

Governance
The County is governed by a five-member Board of Commissioners (“Board”) elected on a
partisan basis. Commissioners are elected at large from each representative district for four-year
staggered terms in November of even numbered years. The Board elects a chairman and vice
chairman from among its members.
The Board is responsible for the adoption of the annual budget, setting of the annual property tax
rate, appointment of various offices (County Manager, County Attorney, Clerk to the Board, and
members of County boards and commissions), adoption of policies concerning the operation of
the County, planning of County needs, and enactment of local ordinances. The Board has
authority to call bond referenda, enter into contracts, and establish new programs and
departments. The Board is also responsible for setting and adjusting all rates, charges and fees
for recovery of all costs associated with the operations and maintenance of the Enterprise
Systems.
As shown in the organization chart in Exhibit 1, the County Manager is the chief administrative
officer of the County. The manager is responsible for overseeing and coordinating the activities
of all County departments and is the official representative of the County. The major duties
include executing all orders and policies set forth by the Board, attending all Board meetings,
making recommendations on appropriate matters of business, recommending an annual budget,
and advising the Board of the financial condition of the County.
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Exhibit 1
County Organizational Chart as of August 20, 2018
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Overview of County Service Area

Water Services
The County receives its raw water supply from two sources: the Cape Fear River (surface water)
and the Castle Hayne aquifer (groundwater). Raw water supplied by the Cape Fear River is
purchased from the Lower Cape Fear Water and Sewer Authority (“LCFWSA”) via a pumping
facility located in Bladen County on the Cape Fear River, which is capable of pumping
approximately 45 MGD. The LCFWSA service area includes Bladen, Columbus, Brunswick,
New Hanover, and Pender counties with its largest customers being the County and the Cape
Fear Public Utility Authority (“CFPUA”), which serves New Hanover County. The LCFWSA is
currently permitted to withdraw 96 MGD from the Cape Fear River. A parallel raw water main
project has been proposed to increase capacity to no less than 96 MGD. The 2019 Interlocal
Agreement and amendment between the County, the LCFWSA, and CFPUA states that after the
construction of the proposed raw water main improvements, the LCFWSA is required to provide
the County with 52.08% of the raw water system capacity, expected to be no less than 50 MGD.
The LCFWSA has contracted with the County to provide operations and maintenance services
for its raw water facilities, including the Kings Bluff pumping station, raw water main, raw water
storage tank, and metering facilities. The LCFWSA has installed a back-up power generation
facility at the pumping station, further ensuring service reliability to the County and its other raw
water customers.
The County owns two water treatment plants with a combined rated capacity of 30 MGD. Both
treatment plants operate 24 hours a day, seven days a week. The largest of the two plants, the
Northwest Water Treatment Plant (“Northwest WTP”), provides treatment for surface water
purchased from the LCFWSA. The Northwest WTP currently has a treatment capacity of 24
MGD. The North Carolina Highway 211 Groundwater Treatment Plant (“211 WTP”) provides
treatment for water pumped from the Castle Hayne aquifer, with a total capacity of 6 MGD.
The County’s distribution system consists of over 1,071 miles of pipeline ranging from 2” to 42”
that is maintained by a staff of 32 employees. In addition to the Clearwell water storage at each
of the water treatment plants, water storage is provided by three 1,000,000-gallon elevated tanks,
one 750,000-gallon elevated tank, one 400,000-gallon elevated tank, five 300,000-gallon
elevated tanks, and one 400,000 gallon ground storage tank. The County’s average water usage
in FY 2018 was 13.63 MGD, with a peak demand of approximately 23.23 MGD.
The County provides retail water service to residential, commercial, irrigation, and industrial
customers located within the County. The County also provides wholesale water service to
several municipalities and sanitary districts, the largest of which is the Brunswick Regional
Water and Sewer (H2GO), which serves the Towns of Leland and Belville. The County also
provides wholesale water to the Towns of Bald Head Island, Holden Beach, Leland, Navassa,
Northwest, Oak Island, Ocean Isle Beach, Shallotte, and Southport. The County’s retail
customers currently account for approximately 60% of total water flow and the wholesale
customers currently account for approximately 40% of the total water flow.
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Wastewater Services
The County’s total wastewater treatment capacity is 10.855 MGD, provided by 6 wastewater
treatment facilities. The County’s two largest facilities are the Northeast Brunswick Regional
Water Reclamation Facility (“NBRWRF”), with treatment capacity of 2.475 MGD (and planned
expansion to 4.975 MGD), and the West Brunswick Regional Water Reclamation Facility
(“WBRWRF”), with treatment capacity of 6 MGD and a 0.5 MGD facility for effluent disposal.
The NBRWRF provides retail services to an industrial park located within the County service
area, the Town of Sandy Creek, and surrounding areas. It provides wholesale services to the
Brunswick Regional Water and Sewer (H2GO) and the Towns of Navassa, Leland and
Northwest. The facility began services in July 2003 with a rated treatment capacity of 2.475
MGD and the County plans for a 2.5 MGD expansion project to increase total system capacity to
4.975 MDG, scheduled to be completed by June 2021. The Series 2019 Bonds will fund the
expansion.
The WBRWRF provides retail services to the County’s retail sewer customers and provides
wholesale services to the Towns of Holden Beach, Oak Island and Shallotte. The City of
Southport has historically been serviced as a wholesale customer but currently purchases
capacity from the County.
The County operates several local wastewater treatment plants that have capacities of slightly
more than 2 MGD. Acquired by the County from the Town of Ocean Isle Beach in 2012, the
Ocean Isle Beach Wastewater Treatment Plant (“OIBWRF”) provides 1.05 MGD of wastewater
treatment capacity for the Town of Ocean Isle Beach and County retail customers in Ocean
Ridge and surrounding developments, including Ocean Isle Palms and Town Ridge. The
Shallotte Wastewater Treatment Plant has a permitted capacity of 0.5 MGD, the Sea Trail
Wastewater Treatment plant has a permitted capacity of 0.3 MGD, and the Carolina Shores
Wastewater Treatment Plant has a capacity of 0.53 MGD.
The County’s collection system consists of over 600 miles of gravity and force main pipeline,
ranging in size from 2” to 24”, and 153 completed pump stations supported by direct back-up
power or connections with trailer-mounted generators.
Wastewater Participant Agreements

The County has entered into various Sewer Service Agreements and/or Memorandums of
Understanding with various participants in its wastewater system. The various agreements with
each participant define the percentage of capacity that each participant owns in each plant.
Participants are responsible for the corresponding percentages of debt service associated with
expansions or upgrades to these shared plants, as shown in Exhibit 2. These debt service
obligations represent costs that will be passed on to each participant’s retail customers through
user rates and charges.
The County has entered into agreements with H2GO, The Town of Leland, the Town of
Navassa, and the City of Northwest to reserve capacity in the NBRWRF. Each participant is
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required to share in the operational and capital costs associated with the NBRWRF. The
participants pay for the portions of debt service associated with their respective portions of the
plant’s capacity, and then they pay a rate for treatment for each 1,000 gallons of wastewater
treated at the plant.
The 2.5 MGD expansion to the NBRWRF, to be funded with the proposed Series 2019 Bonds, is
necessary to meet the sewer flow demands of the Towns of Leland and Navassa and the City of
Northwest. The County has entered into an agreement with the Town of Leland and H2GO for
additional sewer treatment capacity and their proportionate share of debt service associated with
the proposed Series 2019 Bonds. However, the County and the Town of Navassa have not
entered into an agreement.
The County has entered into agreements with the Towns of Holden Beach, Shallotte and Oak
Island to reserve capacity in the WBRWRF. The participants pay for the portions of debt
service associated with their respective portions of the plant’s capacity, and then they pay a rate
for treatment for each 1,000 gallons of wastewater treated at the plant. Under the agreements,
the participants are allocated 76% of the plant capacity and must pay for any future expansions in
accordance with their portions of capacity.
The following exhibit shows the various percentages of debt service to be reimbursed by the
participants.
Exhibit 2
Percentage of Debt Service to be Reimbursed by Participants
Debt Service County Leland Navassa Northwest H2GO Holden Beach Oak Island Shallotte
Series 2004A refunded in 2012 44.8% 25.1% 8.9% 21.2%

2006 SRF 40.4% 59.6%
SRF $20 Million Issued in 2006 66.7% 33.3%
SRF $10 Million Issued in 2006 66.7% 33.3%
Series 2008A Refunded in 2015 28.6% 71.4%
Series 2012B 15.7% 50.0% 15.8% 1.8% 16.7%
Series 2012C 63.6% 23.8% 3.8% 0.9% 7.9%
Series 2019 Bonds - sewer plant expansion/mains 20.9% 32.3% 46.8%
Notes:
(1) The County has entered into an agreement with the Town of Leland and H2GO for additional sewer treatment
capacity and their proportionate share of debt service associated with the proposed Series 2019 Bonds. The
Town of Navassa has not entered into this agreement.
Assessments
In 2007, the County entered into agreements with the Towns of Sunset Beach and Calabash
whereby the County constructed wastewater collection systems that provide sewer service to
those sections of each town without sewer service (approximately 4,800 lots). In 2010, with
construction complete on new wastewater collection systems, the County became the retail
wastewater service provider for the customers located in these areas. The construction of the
collection systems also resulted in the connection of over 3,000 new customers (The wastewater
collection system project was funded by the Series 2008 Bonds). The annual loan payments for
DRAFT Page 12
the Series 2008 Bonds were paid from revenues from assessments charged to individual
customers in Sunset Beach and Calabash as they connected to the sewer collection system.
These assessments were collected by Sunset Beach and Calabash and remitted to the County
over a ten-year period.
In 2010, the County and the Town of Boiling Spring Lakes entered into an agreement whereby
the Town conveyed its water system to the County and the County constructed a sewer system in
the commercial corridor of the Town to serve approximately 207 parcels. To fund the
construction of the sewer system, the County received assessments, over a ten-year period,
charged to new commercial customers.
In 2015, the Town of Caswell Beach conveyed its utility system to Brunswick County; a
combination of gravity, low pressure, and vacuum systems that pump wastewater to the Town of
Oak Island’s Fish Factory Road WWTP for treatment. This acquisition resulted in the addition
of approximately 540 sewer customers.
Potential Changes to Water and Wastewater Customer Base
The County has been made aware that two of its wholesale water customers, H2GO and the
Town of Leland, are investigating alternative water supplies. To be conservative, Revenues
projected over the six-year forecast period assume the loss of these two wholesale customers by
FY 2022. Collectively, the two wholesale customers account for 11.8% of the County’s water
revenues from user rates and charges.
The County is also conservatively anticipating the loss of the City of Southport, which is
currently the County’s fifth largest wholesale sewer customer (approximately 3.2% of sewer
revenues from rates and charges). Revenues projected over the six-year forecast period assume
the loss of this wholesale sewer customer beginning in FY 2021, and completely leaving the
County’s system in FY 2022.
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Explanatory Note 3 Regulations
3. Regulations
The County is regulated by the United States Environmental Protection Agency (“EPA”) and the
North Carolina Department of Environmental Quality (“DEQ”). The County is currently in
compliance with all federal and State environmental legislation and regulations, and necessary
measures are being taken to ensure that the State’s Division of Water Quality standards for
discharge and non-discharge are met in the future.
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Explanatory Note 4 Demand for Services
4. Demand for Services

Due to its location along the southern coast of North Carolina and the presence of many coastal
communities and developments, the County has experienced substantial growth in recent years,
especially along the coast. Since 2010, the County’s population has increased by 27.3%2. This
growth has increased the need for the County to provide wastewater service, in addition to the
water service it already provides to a majority of the County, to address the needs of a growing
customer base.
Water Demand
The County currently serves as the regional provider of water services to a majority of
Brunswick County. New developments and resort communities closer to the coast continue to
demonstrate high growth in demand. The County provides wholesale water service to several
municipalities, the largest of which are Oak Island, the Town of Ocean Isle Beach, Holden
Beach, and Shallotte. The majority of the County’s wholesale customers provide service
predominately to residential customers. The County also provides water to several larger
industrial customers that have demonstrated stable or declining levels of demand in recent years
due to water conservation measures undertaken in their industrial processes. Because most of
the County’s retail customer base is made up of residential customers, and since the wholesale
customers provide service to a predominantly residential customer base, a majority of total
demand is based on residential usage.
Exhibit 3 presents the projections of water demand for the forecast period. Water usage for retail
and wholesale customers has increased on average by approximately 3.0% to 3.5% per year over
the past several years. The County’s retail and wholesale customer base is expected to continue
growing, but at a more moderate pace. Retail water flow is anticipated to increase by 2.6% per
year, while wholesale water flow is anticipated to increase at a rate of 2.0% per year over the
forecast period. However, as mention previously, it is anticipated that H2GO and the Town of
Leland will cease to be water wholesale customers of the County by FY 2022. Therefore, a
decline in wholesale water use is expected to occur in FY 2022, as shown in Exhibit 3. No
increase is anticipated for industrial and irrigation customers. Because irrigation flow is more
variable and impacted by weather, irrigation flow for FY 2020 has been conservatively estimated
based on the historical 3-year average. For the remaining years of the forecast period after FY
2022, the combined annual increase in total water flow is projected to be approximately 1.9% per
year.
Sewer Demand
The County is a regional provider of wastewater service for a number of separate service areas.
Apart from its retail, industrial, and commercial customers, the County also serves several
wholesale customers through its three major wastewater treatment facilities.
22
https://www.census.gov/quickfacts/brunswickcountynorthcarolina
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The WBRWRF provides retail services to the County’s retail sewer customers and provides
wholesale services to the Towns of Holden Beach, Oak Island and Shallotte. The City of
Southport has historically been serviced as a wholesale customer (up until FY 2019) but
currently purchases capacity from the County (and is now purchasing water at the retail sewer
rate). In December of 2019, the City of Southport is scheduled to remove their flow from the
County’s sewer system.
The NBRWRF provides service to the Town of Leland, Town of Navassa, H2GO and the City of
Northwest. The County plans to expand the NBRWRF by 2.5 MGD, scheduled to begin
December 2019.
Exhibit 3 presents the projections of wastewater demand for the forecast period. Sewer flow is
anticipated to increase on average by 1.6% per year, with the exception of the demand decline
projected for FY 2022 due to the loss of the City of Southport’s sewer flow. This 1.6% annual
increase is modest compared to the historic annual increases in sewer flows of over 5% per year
over the past several years.
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Exhibit 3
Demand Projections (1)
Projected For the Fiscal Year Ending June 30th

Water Usage Summary (in 1,000 gallons) (1) 2019 2020 2021 2022 2023 2024
Retail
Block 1 1,243,032 1,208,330 1,239,264 1,270,990 1,303,529 1,336,900
Block 2 294,284 369,562 379,023 388,726 398,678 408,884
Block 3 147,843 162,328 166,484 170,746 175,118 179,601
1,685,160 1,740,220 1,784,771 1,830,462 1,877,324 1,925,385
Irrigation % Change 3.3% 2.6% 2.6% 2.6% 2.6%
Block 1 287,516 219,420 219,420 219,420 219,420 219,420
Block 2 155,476 246,847 246,847 246,847 246,847 246,847
Block 3 100,485 82,282 82,282 82,282 82,282 82,282
646,861 548,549 548,549 548,549 548,549 548,549
% Change -15.2% 0.0% 0.0% 0.0% 0.0%
Industrial
Block 1 641,874 641,874 641,874 641,874 641,874 641,874
Wholesale 1,895,641 1,933,553 1,972,225 1,070,827 1,092,244 1,114,089
Total Billed Water Volume 4,222,674 4,315,647 4,398,869 3,543,164 3,611,442 3,681,348
% Change 2.2% 1.9% -19.5% 1.9% 1.9%
Wastewater Flow (in 1,000 gallons) (2)

Retail - usage under 3kgal 650,412 670,193 690,575 711,577 733,218 755,517
Retail - usage over 3kgal 295,663 491,415 496,215 310,063 314,863 319,663
Industrial/Commercial 807 807 807 807 807 807
Wholesale N. Brunswick Regional Facility 747,004 754,474 762,018 769,638 777,335 785,108
Wholesale West Regional Facility 665,858 479,655 484,451 489,296 494,189 499,130
Wholesale Ocean Isle Facility 143,103 144,534 145,980 147,439 148,914 150,403
Total Billed Wastewater Volume 2,502,847 2,541,078 2,580,047 2,428,821 2,469,325 2,510,629
% Change 1.5% 1.5% -5.9% 1.7% 1.7%
Notes:
(1) As explained later in this report, the County altered its block cut-offs, which is anticipated to shift water use
within the first and second tiers in FY 2020. The growth in retail water usage is being escalated by 2.6% per
year. The growth in water irrigation and industrial usage is being held constant. The growth in water wholesale
usage is being escalated by 2% per year. However, FY 2022 wholesale usage will decrease with wholesale
customers H2GO and Leland leaving.
(2) The growth in retail wastewater flow under 3kgal is based on the growth rate of wastewater accounts per year.
The growth in retail wastewater flow above 3kgal is being escalated by 1% per year. Growth in industrial
wastewater flow is held constant. The growth in wholesale wastewater flow is being escalated by 1% per year.
The re-classification of the City of Southport from a wholesale customer to a retail customer, and the loss of this
customer starting in FY 2021 (but fully leaving the system by FY 2022), causes shifts in sewer demand over the
forecast period.
In FY 2018 the County served 41,557 water accounts and 17,719 wastewater accounts. The
number of connected water customers has continued to grow at a rate of 3.5% per year over the
last five years. The number of connected sewer customers has grown on average by 7.9% per
year over the last five years. The number of retail water and sewer customers served by the
County is forecast to increase at a moderate pace of 2.7% and 3.0%, respectively, over the
projection period. Exhibit 4 presents the projected growth in the number of water and wastewater
accounts.
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Exhibit 4
Projected Number of Water and Sewer Accounts
Projected For the Fiscal Year Ending June 30th

Number of Water Accounts (1) 2019 2020 2021 2022 2023 2024
Availability of Service
Meter Size
3/4" 40,884 42,047 43,244 44,474 45,739 47,040
1" 1,413 1,413 1,413 1,413 1,413 1,413
2" 108 108 108 108 108 108
3" 4 4 4 4 4 4
4" 18 18 18 18 18 16
6" 21 21 21 21 21 21
8" 13 13 13 13 13 13
10" - - - - - -
12" 3 3 3 3 3 3
Total Water Accounts 42,464 43,627 44,824 46,054 47,319 48,618
% Change 2.7% 2.7% 2.7% 2.7% 2.7%
Number of Wastewater Accounts

Retail
Availability of Service - - - - - -
Base Service Charge 18,067 18,616 19,183 19,766 20,367 20,987
18,067 18,616 19,183 19,766 20,367 20,987
% Change 3.0% 3.0% 3.0% 3.0% 3.0%
Industrial 774 774 774 774 774 774
Wholesale
N. Brunswick Regional Facility 4 4 4 4 4 4
West Regional Facility 4 4 4 4 4 4
Ocean Isle Facility 1 1 1 1 1 1
9 9 9 9 9 9
Total Wastewater Accounts 18,850 19,399 19,966 20,549 21,150 21,770

% Change 2.9% 2.9% 2.9% 2.9% 2.9%
Notes:
(1) To be conservative, the number of water customers with meters larger than ¾” are assumed to remain constant
throughout the forecast. The number of customers with ¾” meters are anticipated to grow by 2.8% per year
which represents the average over the past 8 years. In comparison, the increase in water customers over the past
3 years was 3.8%.
Exhibit 5 presents the County’s ten largest water and wastewater customers and their annual
usage and sales revenue for FY 2019. The ten largest water users, which include several
wholesale municipal customers, account for 50.4% of overall water usage and 33.9% of overall
water sales revenue. The ten largest wastewater users, which include several wholesale
municipal customers, account for 70.2% of overall wastewater flow and 23.7% of overall
wastewater sales revenue. As previously stated, the County anticipates losing H2GO and the
Town of Leland as water wholesale customers. These two wholesalers combined represent
11.8% of total revenues from user rates and charges. The City of Southport, which is scheduled
to leave the County system by FY 2022, represents 3.2% of total sewer revenues from user rates
and charges.
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Exhibit 5
County’s Ten Largest Water and Wastewater Customers for FY 2019
Sales Metered Use Percentage of Percentage of

Revenue Gallons Total Revenue Total Metered
Largest Water Customers Use
H2GO (Formerly North Bruswick Sanitary
District)* $ 2,056,535 701,888,980 9.6% 14.2%
Archer Daniels Midland (ADM) 1,044,905 356,623,000 4.9% 7.2%
Town of Oak Island* 961,015 327,991,550 4.5% 6.6%
Town of Ocean Isle Beach* 595,977 203,405,220 2.8% 4.1%
City of Southport* 553,454 188,892,190 2.6% 3.8%
Capital Power Corporation (Cogentrix) 509,915 174,032,320 2.4% 3.5%
Town of Shallotte* 487,540 166,396,000 2.3% 3.4%
Town of Leland* 467,827 159,668,000 2.2% 3.2%
Town of Holden Beach* 432,605 147,646,800 2.0% 3.0%
Duke Energy 180,466 61,592,368 0.8% 1.2%
Total for Ten Largest Users $ 7,290,240 2,488,136,428 33.9% 50.4%
All Other Users 14,218,516 2,452,574,393 66.1% 49.6%
Total System Water Use $ 21,508,755 4,940,710,821 100.0% 100.0%
Sales Metered Use Percentage of Percentage of

Revenue Gallons Total Revenue Total Metered
Largest Wastewater Customers Use
Town of Leland* $ 781,113 355,051,588 4.9% 15.6%
H2GO (Formerly North Bruswick Sanitary
District)* 661,681 300,764,015 4.2% 13.2%
Town of Oak Island* 541,391 246,087,000 3.4% 10.8%
Town of Southport* 500,799 227,635,913 3.2% 10.0%
Town of Shallotte* 330,174 150,079,184 2.1% 6.6%
Town of Ocean Isle Beach* 543,792 143,103,160 3.4% 6.3%
Town of Navassa* 184,936 84,061,855 1.2% 3.7%
Town of Holden Beach* 173,227 78,739,347 1.1% 3.5%
Novant Health Medical Center 51,280 7,889,214 0.3% 0.3%
City of Northwest* 15,677 7,126,061 0.1% 0.3%
Total for Ten Largest Users $ 3,768,393 1,593,411,276 23.7% 70.2%
All Other Users 12,114,458 677,584,505 76.3% 29.8%
Total System Wastewater Use $ 15,882,852 2,270,995,781 100.0% 100.0%
* Indicates a municipal whloesale customer of the County, all of which have an underlying retail customer
base that is predominantly residential. It should be noted H2GO is one of the County's ten largest
wholesale water customers.
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Explanatory Note 5 Capital Improvements Plan
5. Capital Improvement Plan

Each year the County updates a five-year capital improvement plan (“CIP”) for the Enterprise
Systems as part of the annual budget process. The CIP for FY 2020 through FY 2024 identifies
approximately $200.64 million in Enterprise Systems improvements, including $163.75 million
in water improvements and $36.9 million in wastewater improvements. Exhibit 6 presents a
summary of the CIP projects for the forecast period and their anticipated funding sources. A
description of each project to be funded with the Series 2019 Bonds is provided after Exhibit 6.
It should be noted more recent project construction cost information has been obtained since the
development of the County’s five-year CIP, and therefore the project amounts explained in this
section differ from the County’s five-year CIP.
Exhibit 6: Capital Improvement Plan
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Totals

Water Capital Improvement Plan - Projects
Shallote Water Transmission Main $ 4,500,000 $ - $ - $ - $ - $ 4,500,000
Utility Operations Center Expansion 590,000 - - - - 590,000
Northwest Water Plant Expansion 47,214,750 - - - - 47,214,750
Northwest Water Plant Low Pressure Reverse Osmosis
68,379,890 - - - - 68,379,890
Advanced Treatment
54" LCFWSA Parallel Raw Water Main 41,574,635 - - - - 41,574,635
Highway 74/76 Industrial Park Waterline Extension 1,490,000 - - - - 1,490,000
Subtotal: Water Projects $ 163,749,275 $ - $ - $ - $ - $ 163,749,275
Water Capital Improvement Plan - Sources
Capital Reserves $ 2,896,289 $ - $ - $ - $ - $ 2,896,289
Pay-Go (Funded through rates) 2,780,000 - - - - 2,780,000
Series 2019 Bonds 41,574,635 - - - - 41,574,635
Proposed Series 2020 Bonds (1) 115,594,640 - - - - 115,594,640
To be determined (2) 903,711 - - - - 903,711
Subtotal: Funding Sources $ 163,749,275 $ - $ - $ - $ - $ 163,749,275
Notes:
(1) The Northwest Water Plant Expansion and the LPRO system are anticipated to be funded by revenue
bonds.
(2) The sources for projects that are “yet to be determined” are assumed to be funded with Pay-Go (funded
through rates) for purposed of developing the Feasibility Study.
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(3) Exhibit 6: Capital Improvement Plan (continued) (2)

FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Totals
Wastewater Capital Improvement Plan - Projects
Northeast Brunswick Regional WWTP 2.5 MDG
$ 36,708,000 $ - $ - $ - $ - $ 36,708,000
Expansion (1)
Enterprise Funded Low Pressure Main Extension 185,820 - - - - 185,820
Subtotal: Water Projects $ 36,893,820 $ - $ - $ - $ - $ 36,893,820
Wastewater Capital Improvement Plan - Sources
Capital Reserves $ 185,820 $ - $ - $ - $ - $ 185,820
Series 2019 Bonds 36,708,000 - - - - 36,708,000
Subtotal: Funding Sources $ 36,893,820 $ - $ - $ - $ - $ 36,893,820
Notes:
(1) The debt service costs associated with the expansion of the Northeast WWTP expansion will be funded
through the issuance of revenue bonds, the debt service of which will be paid directly by participant
reimbursements. The total cost of this project includes the wastewater treatment plant expansion as well as
the two system force main improvements; the West force main and the East force main.
(2) If the City of Southport does not leave the County’s system, the County will need to expand the capacity in
the WBRWRF and will therefore incur additional capital project costs. However, the City of Southport,
and the other wholesale customers serviced by the plant, would share in these additional project costs.
Projects to be Funded with the Series 2019 Bonds
54” Lower Cape Fear Raw Water Line - $26.6Million (County Portion)
The Lower Cape Fear Water and Sewer Authority (LCFWSA) is a primary supplier of raw water
to southeast North Carolina, serving Brunswick County, Cape Fear Public Utility Authority
(CFPUA), Pender County, and two industries located on the US 421 corridor in New Hanover
County. LCFWSA withdraws raw water from the Cape Fear River above Lock & Dam No. 1 at
King’s Bluff. The LCFWSA’s Kings Bluff Raw Water Supply System is comprised of the Kings
Bluff Raw Water Pump Station, parallel 48-inch and 60-inch screened intakes, 24 miles of 48-
inch raw water transmission main, a 29 MGD intermediate booster pump station, and a 3 MG
ground storage tank.
The current capacity of the LCFWSA Kings Bluff Water Supply System is limited to
approximately 48 MGD by the existing 14-mile, 48-inch prestressed concrete cylinder pipe
(PCCP) transmission main, which conveys raw water from the Kings Bluff pump station to the 3
MG ground tank located near Brunswick County’s Northwest Water Treatment Plant.
To meet increasing water demands and to provide redundancy, LCFWSA and its regional
partners intend to construct a 54” diameter raw water line parallel to the existing 48” diameter
raw water line. The new line will begin at the Kings Bluff pump station and terminate at the 3
MG tank located near Brunswick County’s Northwest Water Treatment Plant. The addition of
the new raw water line is expected to increase the raw water capacity from 48 MGD to 96 MGD.
The line will also provide redundancy since the existing line is aging.
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LCFWSA will own the new line and give use rights to the County and other partners. However,
the County will serve as the operator of the project and its construction. The County is charged a
portion of the project relative to its use of the raw water system.
The estimated cost of the County’s portion of the project is $26.6 million, which includes
engineering, surveying, permitting, and construction. This cost estimate does not include
easement purchase, legal fees, County inspection costs, or County administrative costs.
Northeast Brunswick Regional Wastewater Treatment Plant Expansion - $45.4Million
The Northeast Brunswick Regional Wastewater Treatment Plant receives wastewater from
Brunswick County, Brunswick Regional Water & Sewer (H2GO), the Town of Leland, and the
Town of Navassa. The plant is rated for 2.475 million gallons per day (MGD) and is located on
Royster Road in the Town of Navassa.
Wastewater flows into the Northeast Regional WWTP have been steadily increasing due to
growth in the northeast area of Brunswick County. The average monthly flows into the
treatment plant have at times exceeded 90% of the design capacity.
Based on an Engineering Report prepared by McKim & Creed and input from regional partners,
the County decided to expand the Northeast Brunswick Regional Wastewater Treatment Plant by
2.5 MGD to a total rated capacity of 4.975 MGD. The expansion of the treatment plant will
include new headworks, flow equalization, two oxidation ditches with a jet aeration system,
secondary clarifiers, tertiary disc filters, UV disinfection, an effluent pumping station, a sludge
thickening system, odor control, an outfall sewer, instrumentation, controls, and a stand-by
generator. Two sewer force mains will be constructed to convey flow to the expanded Northeast
Brunswick Regional Wastewater Treatment Plant. A separate description of the force main
projects is provided below.
The estimated cost of the project is $45.4 million, which includes engineering, surveying,
permitting and construction. This cost estimate does not include easement purchase, legal fees,
County inspection costs, or County administrative costs.
Northeast Brunswick Regional Wastewater System Force Main Improvements - $6.5 Million
In conjunction with the planned expansion of the Northeast Brunswick Regional Wastewater
Treatment Plant, two force main projects will be constructed to increase sewage transmission
capacity to the plant.
The West Force Main consists of approximately 14,890 linear feet of 16” diameter pipe. The
West Force Main begins at the intersection of Mt. Misery Road and Lincoln School Road, and
travels along Mt. Misery Road, I-140, Cedar Hill Road, and Royster Road (west of the WWTP).
At the plant the force main will connect to a common force main header at the proposed
headworks of the treatment plant expansion. This proposed force main will reroute flow
DRAFT Page 22
originating outside the Town of Navassa away from a pumping station belonging to the Town of
Navassa, and directly to the Northeast Brunswick Regional Wastewater Treatment Plant.
The estimated cost of the West Force Main project is $2.9 million, which includes engineering,
surveying, permitting and construction. This cost estimate does not include easement purchase,
legal fees, County inspection costs, or County administrative costs.
The East Force Main consists of approximately 11,550 linear feet of 18” diameter pipe. The
East Force Main begins on Navassa Road and continues to the north and along Cedar Hill Road
and Davis Creek Road. The force main is routed cross-country to Royster Road (east of the
WWTP). At the plant the force main will connect to a common force main header at the
proposed headworks of the treatment plant expansion.
The estimated cost of the East Force Main project is $3.6 million, which includes engineering,
surveying, permitting and construction. This cost estimate does not include easement purchase,
legal fees, County inspection costs, or County administrative costs.
Other Projects in the Capital Improvement Plan to be Funded with Future Debt
Northwest Water Treatment Plant Expansion - $47.5 Million
The Brunswick County Northwest WTP is located on Clearwell Drive near the Town of
Northwest. The plant treats water withdrawn from the Cape Fear River at the Army Corps of
Engineers Cape Fear Lock and Dam #1. A conventional clarification-filtration-disinfection
treatment process is used. The Northwest WTP currently has a rated treatment capacity of 24
million gallons per day (MGD).
Water demands have been steadily increasing due to strong growth within the County. Peak daily
summertime demands have exceeded 90% of plant capacity at times.
The discovery of perfluoroalkyl substances in the Cape Fear River in June 2017 led to the
incorporation of an advanced low-pressure reverse osmosis (LPRO) system into the design (refer
to next project for more details). In order to maximize the County’s capacity in the raw water
transmission line, and to provide 36 MGD of LPRO treated water, the conventional treatment
capacity will be expanded from 24 to 45 MGD. The expansion will include new rapid mixers,
clarifier upgrades, filters, flow equalization, RO process, RO water conditioning equipment, and
associated piping, chemical feed systems, and electrical upgrades and controls.
The estimated cost of expanding the conventional treatment capacity to 45 MGD is $47.5
million, which includes engineering, surveying, permitting and construction. This cost estimate
does not include the cost of the RO portion of the project, which is included in a separate
description below. The cost estimate also does not include easement purchase, legal fees, County
inspection costs, or County administrative costs.
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Northwest Water Treatment Plant – Reverse Osmosis - $89.5 Million
As mentioned, the discovery of perfluoroalkyl substances in the Cape Fear River in June 2017
led to the incorporation of an LPRO system into the design of the NWTP. Based on research and
pilot plant testing, conventional treatment followed by low-pressure reverse osmosis has been
chosen as the most efficient and effective method to produce safe water for the customers of
Brunswick County. The LPRO facility addresses water quality issues in the Cape Fear River
both now and in the years to come. Construction is anticipated to begin in January 2020 and take
less than three years to complete.
The County plans to install LPRO treatment at the Northwest WTP, discussed above. The LPRO
treatment process will include flow equalization, high pressure pumps, filters, membrane
modules, membrane cleaning equipment, LPRO water conditioning equipment, laboratory space,
a control room, a meeting space, and associated piping, chemical feed systems, and electrical
upgrades and controls. A 4-mile pipeline will convey concentrate flow from the LPRO process to
the Cape Fear River.
The estimated cost of the LPRO treatment process is $89.5 million, which includes engineering,
surveying, permitting and construction. This cost estimate does not include easement purchasing
costs, legal fees, County inspection costs, or County administrative costs.
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Explanatory Note 6 Financing Plan
6. Financing Plan
The Underwriter has provided the County with various financing strategies for the applicable
CIP projects funded with the Series 2019 Bonds. The County has selected a financing plan
designed to accomplish the following objectives:
 Conform with credit criteria established by rating agencies;

 Minimize debt service and related charges;
 Provide funds in the most cost-effective manner; and
 Lessen the impact on rates.
The financing plan envisions that approximately $83.3 million of Series 2019 Bonds will be sold.
The Sources and Uses of Funds schedule for the Series 2019 Bonds is presented in Exhibit 7.
Exhibit 7
Estimated Sources and Uses of Funds for the Series 2019 Bonds
Series 2019
Sources: Bonds
Par amount of Series 2019 Bonds $ 83,310,000

Net Original Issue Premium 14,137,639
Total $ 97,447,639
Uses:
Project Fund Deposits:
LCFWSA Parallel Raw Water Main $ 26,616,373
Northeast Brunswick Regional WWTP 2.5 MGD Expansion 45,426,357
Northeast Brunswick Regional Eastern Transmission Main 3,596,395
Northeast Brunswick Regional Western Transmission Main 2,872,999
Refunding Escrow Deposits:
Cash Deposit $ 2,595,250
SLGS Purchases 13,585,533
Subtotal $ 94,692,907
Capitalized Interest 2,130,090
Cost of Issuance 620,693
Additional Proceeds 3,949
Total $ 97,447,639
Exhibit 8 shows the debt service schedule for the County’s current outstanding revenue bonds,
G.O. bonds, and SRF Loans. This exhibit also shows the debt service associated with the Series
DRAFT Page 25
2019 Bonds and other proposed debt necessary to finance the County’s CIP over the forecast
period.
Exhibit 8
Existing and Proposed Long-Term Debt Service
Fiscal Year Ending June 30th

2019 2020 2021 2022 2023 2024
Water Fund
Bonds
CBU Revenue Bond – Series 2004 (1) $ 181,162 $ 75,484 $ - $ - $ - $ -
Series 2015 Rev - 10 Refd Water lines 85,753 88,307 85,857 83,092 79,594 78,036
Series 2015 Rev - 10 Refd NW PLn 887,103 880,736 874,271 860,014 795,854 798,062
Series 2015 Revenue Bonds - Northwest Plant Expansion Phase II 541,494 541,244 540,494 544,244 542,544 545,044
Series 2015 Revenue Bonds - Danford Road Project 250,963 251,213 251,213 250,963 250,563 249,813
Series 2019 Refunding Bonds (1) - 101,340 172,500 172,950 173,025 172,725
Series 2019 Bonds (2) - - - 965,550 1,525,850 1,524,600
Subtotal: Revenue Bond Debt Service $ 1,946,475 $ 1,938,323 $ 1,924,335 $ 2,876,812 $ 11,216,529 $ 11,212,130
G.O. Indebtedness
2012 GO Refunding BSL 295,450 293,650 292,550 295,550 293,150 295,450
Total Debt Service - Water Fund $ 2,241,925 $ 2,231,973 $ 2,216,885 $ 3,172,362 $ 11,509,679 $ 11,507,580
2019 2020 2021 2022 2023 2024

Wastewater Fund
Bonds
Carolina Shores Private Placement (Series 2004 B Revenue Bonds) (1) $ 422,712 $ 176,130 $ - $ - $ - $ -
Series 2009 (Build America Bonds) (Calabash&Sunset Beach Portions)(4) 1,946,042 1,908,502 1,945,315 - - -
Series 2012 Revenue Bonds - Refunding of 2004A (1) 2,152,200 1,458,950 1,537,900 1,546,525 - -
2012B NE Brunswick Plant Revenue Bonds - Bank Financing 1,088,079 1,088,293 1,089,026 1,088,257 - -
2012C Combined Enterprise System Revenue Bonds - PNC Bank 699,955 699,862 699,769 699,654 699,533 326,910
Series 2015 Refunding of th Series 2008A Revenue Bonds 3,678,906 3,674,156 3,674,656 3,674,906 3,677,156 3,676,156
Series 2015 WW Revenue Bonds O.I.B. WWTP Projects 261,469 261,469 261,219 260,719 260,069 259,069
Series 2015 Refunding of the Series 2010 RZEDB - Sunset Beach Portion 1,070,226 1,077,495 1,086,642 1,099,525 - -
Series 2015 Refunding of the Series 2010 RZEDB - Sewer Lines Portion 64,543 63,088 65,855 63,744 57,678 61,027
Series 2019 Refunding Bonds - 463,191 934,747 936,308 2,477,010 2,478,402
Series 2019 Bonds - WWTP Expansion (5) - 744,800 2,987,000 2,990,750 2,986,500 2,989,500
Series 2019 Bonds - Eastern Transmission Main (6) - 58,900 232,250 238,000 238,250 238,250
Series 2019 Bonds - Western Tranmsission Main (7) - 47,100 187,750 189,250 190,500 191,500

WBRWWTP SRLF (20&10 Mil West Regional) 1,835,665 $ 1,824,640 $ 1,813,615 $ 1,802,590 $ 1,791,565 $ 1,780,540
NEBWWTP 2006 SRF (Leland&NBSD Portions) 308,600 301,620 294,641 287,661 280,682 -
Subtotal: Subordinate Debt Service $ 2,144,265 $ 2,126,260 $ 2,108,256 $ 2,090,251 $ 2,072,247 $ 1,780,540
Other Indebtedness
Sunset Beach ARRA $100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Subtotal: Other Debt Service $ 175,000 $ 175,000 $ 175,000 $ 175,000 $ 175,000 $ 175,000
Total Debt Service - Wastewater Fund $ 13,703,397 $ 14,023,195 $ 16,985,384 $ 15,052,889 $ 12,833,942 $ 12,176,353
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Exhibit 8 (Continued)
Existing and Proposed Long-Term Debt Service
Fiscal Year Ending June 30th

Combined Funds 2019 2020 2021 2022 2023 2024
Bonds
Existing
CBU Revenue Bond – Series 2004 (1) $ 181,162 $ 75,484 $ - $ - $ - $ -
Carolina Shores Private Placement (Series 2004 B Revenue Bonds) 422,712 176,130 - - - -
Series 2009 (BAB) (Calabash&Sunset Beach Collection System Portions) (4) 1,946,042 1,908,502 1,945,315 - - -
Series 2012 Revenue Bonds - Refunding of 2004A (1) 2,152,200 1,458,950 1,537,900 1,546,525 - -
2012B NE Brunswick Plant Revenue Bonds - Bank Financing 1,088,079 1,088,293 1,089,026 1,088,257 - -
2012C Combined Enterprise System Revenue Bonds - PNC Bank 699,955 699,862 699,769 699,654 699,533 326,910
Series 2015 Refunding of th Series 2008A Revenue Bonds 3,678,906 3,674,156 3,674,656 3,674,906 3,677,156 3,676,156
FY 2015 WW Revenue Bonds O.I.B. WWTP Projects 261,469 261,469 261,219 260,719 260,069 259,069
Series 2015 Refunding of the Series 2010 RZEDB - Sunset Beach Portion 1,070,226 1,077,495 1,086,642 1,099,525 - -
Series 2015 Refunding of the Series 2010 RZEDB - Sewer Lines Portion 64,543 63,088 65,855 63,744 57,678 61,027
$ 13,330,607 $ 12,244,926 $ 12,112,216 $ 10,171,643 $ 6,362,989 $ 5,994,116
Proposed
Series 2019 Refunding Bonds (1) - 564,531 1,107,247 1,109,258 2,650,035 2,651,127
Series 2019 Bonds (2) - - - 965,550 1,525,850 1,524,600
Series 2019 Bonds (5) - 744,800 2,987,000 2,990,750 2,986,500 2,989,500
Series 2019 Bonds (6) - 58,900 232,250 238,000 238,250 238,250
Series 2019 Bonds (7) - 47,100 187,750 189,250 190,500 191,500
$ - $ 1,415,331 $ 4,514,247 $ 5,492,808 $ 15,440,235 $ 15,438,827
G.O. Indebtedness
Existing
2012 GO Refunding BSL 295,450 293,650 292,550 295,550 293,150 295,450
Subordinate Indebtedness
Existing
WBRWWTP SRLF (20&10 Mil West Regional) $ 1,835,665 $ 1,824,640 $ 1,813,615 $ 1,802,590 $ 1,791,565 $ 1,780,540
$ 2,144,265 $ 2,126,260 $ 2,108,256 $ 2,090,251 $ 2,072,247 $ 1,780,540
Other Indebtedness
Sunset Beach ARRA $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
$ 175,000 $ 175,000 $ 175,000 $ 175,000 $ 175,000 $ 175,000
Total Debt Service Coverage - Parity, G.O. and $ 15,945,323 $ 16,255,167 $ 19,202,269 $ 18,225,251 $ 24,343,621 $ 23,683,933
Notes:
(1) The Series 2019 Revenue Refunding Bonds will refund the Series 2004 B Bonds and a portion of the Series
2012 Refunding Bonds. The all-in true interest cost on the entire Series 2019 Bonds is 2.96%.
(2) This portion of the Series 2019 Bonds proceeds, (par value of $26.6 million and a 30-year term) will fund the
LCFWSA Parallel Raw Water Main. Estimated pricing information was provided by the Lead Underwriter on
September 12, 2019. The all-in true interest cost on the entire Series 2019 Bonds is 2.96%.
(3) A portion of proceeds from the Proposed Series 2020 Bonds (par value of $47.5 million and a 30-year term)
will fund the Northwest Water Treatment Plant Expansion. Another portion will fund the Northwest Water
Plant Reserve Osmosis (RO) (par value of $89.5 million and 30-year term). Estimated pricing information was
provided by the Lead Underwriter on September 12, 2019. Projected Series 2020 Bonds is parity debt. The all-
in true interest cost on the entire proposed Series 2020 Bonds is 3.024%.
(4) Represents net debt, after the subsidy is applied towards debt service.
(5) This portion of the Series 2019 Bonds proceeds (par value of $45.4 million and a 20-year term) will fund the
Northeast Brunswick Regional WWTP 2.5 MGD Expansion. Estimated pricing information was provided by
DRAFT Page 27
the Lead Underwriter on September 12, 2019. The all-in true interest cost on the entire Series 2019 Bonds is
2.96%.
Northeast Brunswick Regional Eastern Transmission Main Improvement. Estimated pricing information was
provided by the Lead Underwriter on September 12, 2019. The all-in true interest cost on the entire Series 2019
Bonds is 2.96%.
Northeast Brunswick Regional Western Transmission Main Improvement. Estimated pricing information was
provided by the Lead Underwriter on September 12, 2019. The all-in true interest cost on the entire Series 2019
Bonds is 2.96%.
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Explanatory Note 7 Operating and Non-Operating Expenses, Expenditures & Transfers
7. Operating and Non-Operating Expenses, Expenditures & Transfers

Expenses are categorized as operating expenses, non-operating expenses, or other budgeted
expenditures and transfers. Operating expenses represent normal recurring expenses incurred
during the County’s annual accounting cycle based upon its fiscal year ending June 30th.
Projected operating expenses are based on budget information from the FY 2020 water and
wastewater budget fund ordinances and documented assumptions related to County wide system
expansion. Various growth rates have been used to project water and wastewater operating
costs. The majority of the costs are escalated by a growth rate of 2.5% -3%, consistent with
historical increases with the exception of FY 2019; FY 2019 expenses were unusually high due
to the impact of Hurricane Florence. While the forecast of operating expenses accounts for this
increase in expenses in FY 2019, operating expenses for FY 2020 and beyond have been
normalized. Costs associated with salaries, benefits, chemicals, and utilities have been escalated
at 3.5% per year.
Operating expenses for the water system are anticipated to increase by $2.9 million in FY 2022
due to the LPRO facility. The increase is offset slightly by reductions in variables costs, such as
chemical and electricity costs, from the loss of H2GO and the Town of Leland. Sewer operating
expenses also decline slightly in FY 2021 and FY 2022 with the loss of the City of Southport.
Non-operating expenses include existing and proposed debt service payments. Proposed water
and wastewater debt obligations include SRF Loans, Bonds, and other debt service. Debt service
on the Series 2019 Bonds, for only the debt associated with the LCFWSA parallel raw water
main, is delayed until FY 2022 through the use of capitalized interest, as shown in the
amortization schedules provided by the Underwriter. The first full year of debt service for this
particular obligation will begin in FY 2022. Non-operating expenses increase significantly over
the forecast period in future years as annual debt service payments with Series 2019 Bonds and
other proposed Bonds commence.
Other budgeted expenditures and transfers include capital outlays, rate funded capital
improvement projects, and interfund transfers. Projected capital outlays in FY 2020 and beyond
for both water and wastewater are based on normalized capital outlays escalated at 3% for water
and 3% for wastewater. The County’s annual capital outlay for the water and sewer systems
typically averages approximately $3.3 million for continued water and sewer operations. In
2019 and 2020, operating capital outlay increased $2-$3 million because the County, along with
regional participants, funded both sewer transmission lines to separate participant flow in the
NBRWRF and in the WBRWRF, and a high rate infiltration system and jet aeriation conversion
project. These capital expenditures are not expected to recur in future years of the forecast
period. Interfund transfers occurring in FY 2019 include transfers to the Capital Reserve Fund to
fund CIP projects funded with revenues generated from rates. The County does not anticipate
funding any CIP projects through rates beyond FY 2022.
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Exhibit 9
Operating and Non-Operating Expenses, Expenditures, & Transfers – Water Fund
Actual Projected for Fiscal Year Ending June 30th

Water Fund 2019 (1) 2020 2021 2022 2023 2024

Administration $ 4,462,187 $ 3,241,806 $ 3,338,370 $ 3,437,831 $ 3,540,276 $ 3,645,795
NW Water Treatment Plant 5,226,744 4,760,501 4,864,433 7,161,650 7,338,575 7,581,707
211 Water Treatment Plant 1,628,790 1,879,324 1,814,429 1,883,007 1,917,102 1,988,760
Distribution Division 2,432,652 2,534,421 2,362,661 2,414,099 2,467,081 2,521,652
LCFWSA - Reimbursable 366,169 390,985 357,031 365,317 373,853 382,645
Customer Service 1,058,677 1,127,742 1,161,469 1,196,208 1,231,990 1,268,844
Instrumentation/Electrical Division 1,254,756 1,333,086 1,337,707 1,370,791 1,404,868 1,439,967
Construction 1,260,046 1,108,196 1,140,167 1,173,097 1,207,015 1,241,950
Subtotal: Operating Expenses $ 17,690,021 $ 16,376,061 $ 16,376,266 $ 19,002,000 $ 19,480,758 $ 20,071,319
% Change -7.4% 0.0% 16.0% 2.5% 3.0%
Debt Service Payments

Bonds
CBU Revenue Bond – Series 2004 $ 181,162 $ 75,484 $ - $ - $ - $ -
Series 2019 Refunding Bonds - 101,340 172,500 172,950 173,025 172,725
Series 2019 Bonds - - - 965,550 1,525,850 1,524,600
Proposed Series 2020 Bonds - - - - 2,721,850 2,718,600
$ 1,946,475 $ 1,938,323 $ 1,924,335 $ 2,876,812 $ 11,216,529 $ 11,212,130
G.O. Indebtedness
2012 GO Refunding BSL 295,450 293,650 292,550 295,550 293,150 295,450
$ 295,450 $ 293,650 $ 292,550 $ 295,550 $ 293,150 $ 295,450
Subtotal: Debt Service Payments $ 2,241,925 $ 2,231,973 $ 2,216,885 $ 3,172,362 $ 11,509,679 $ 11,507,580
Other Budgeted Expenditures

Capital Outlay (3) $ 1,788,696 $ 2,831,000 $ 1,439,030 $ 1,481,731 $ 1,502,213 $ 1,523,309
Interfund Transfers
To Capital Reserve- Rate Funded CIP 790,000 3,800,000 - - - -
$ 790,000 $ 3,800,000 $ - $ - $ - $ -
Subtotal: Other Budgeted Expenses $ 2,578,696 $ 6,631,000 $ 1,439,030 $ 1,481,731 $ 1,502,213 $ 1,523,309
Total Water Fund Expenditures and Transfers $ 22,510,642 $ 25,239,034 $ 20,032,181 $ 23,656,093 $ 32,492,650 $ 33,102,208
% Change 12.1% -20.6% 18.1% 37.4% 1.9%
Notes:
(1) Expenses increase in FY 2019 (by approximately $1,755,000) due to the impacts of Hurricane Florence.
(2) Water operating expenses are anticipated to remain flat in FY 2021 because repair and maintenance costs were
normalized based on historical averages. Water operating expenses increase by $2.9 million in FY 2022 when
the LPRO system goes on-line, but this increase in expenses will be offset by a $500,000 reduction in chemical
and electricity costs associated with the loss of two wholesale customers.
(3) Capital Outlay in future years are based on historical averages, excluding non-recurring projects that were
experienced in FY 2019 and FY 2020.
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Operating and Non-Operating Expenses, Expenditures, and Transfers – Sewer Fund
Wastewater Fund Actual Projected for Fiscal Year Ending June 30th
2019 (1) 2020 2021 2022 2023 2024
Administration $ 938,093 $ 1,374,741 $ 1,385,150 $ 1,426,879 $ 1,469,971 $ 1,514,471
Collection Division 3,609,592 3,262,166 3,112,619 3,180,144 3,249,806 3,321,673
Construction Division 626,822 411,304 423,897 436,876 450,255 464,043
Northeast Regional Wastewater 1,080,473 1,051,705 1,081,187 1,111,654 1,143,140 1,175,679
Southwest Regional Wastewater 674,831 747,305 768,763 790,922 813,805 837,437
West Regional Wastewater 2,875,778 2,727,811 2,804,623 2,768,910 2,846,934 2,927,571
Ocean Isle Beach WWTP 516,816 545,185 561,448 578,245 595,593 613,511
Subtotal: Operating Expenses $ 10,322,405 $ 10,120,217 $ 10,137,687 $ 10,293,630 $ 10,569,504 $ 10,854,387
% Change -2.0% 0.2% 1.5% 2.7% 2.7%
Debt Service Payments

Bonds
CBU Rev Bonds Series 2004B $ 422,712 $ 176,130 $ - $ - $ - $ -
Series 2009 BAB 1,946,042 1,945,572 1,945,315 - - -
Series 2012 Revenue Bonds - Refunding of 2004A 2,152,200 1,458,950 1,537,900 1,546,525 - -
Series 2012B Revenue Bonds - Enterprise 1,088,079 1,088,293 1,089,026 1,088,257 - -
Series 2012C Revenue Bonds - Enterprise 699,955 699,862 699,769 699,654 699,533 326,910
Series 2015 Revenue Bond - 2008A Refund 3,678,906 3,674,156 3,674,656 3,674,906 3,677,156 3,676,156
Series 2015 Revenue Bond - OIB WWTP 261,469 261,469 261,219 260,719 260,069 259,069
Series 2015 Revenue Bond - 2010 (RZEDB) Refund 1,070,226 1,077,495 1,086,642 1,099,525 - -
Series 2015 Revenue Bond - 2010 (RZEDB) Refund 64,543 63,088 65,855 63,744 57,678 61,027
Series 2019 Refunding Bonds - 463,191 934,747 936,308 2,477,010 2,478,402
Series 2019 Bonds-WWTP Expansion - 744,800 2,987,000 2,990,750 2,986,500 2,989,500
Series 2019 Bonds - Eastern Transmission Main - 58,900 232,250 238,000 238,250 238,250
Series 2019 Bonds - Western Transmission Main - 47,100 187,750 189,250 190,500 191,500
$ 11,384,132 $ 11,759,005 $ 14,702,129 $ 12,787,638 $ 10,586,695 $ 10,220,813
Subordinate Indebtedness
WBRWWTP SRLF (20&10 Mil West Regional) 1,835,665 1,824,640 1,813,615 1,802,590 1,791,565 1,780,540
Other Indebtedness
Sunset Beach ARRA 100,000 100,000 100,000 100,000 100,000 100,000
$ 2,319,265 $ 2,301,260 $ 2,283,256 $ 2,265,251 $ 2,247,247 $ 1,955,540
Subtotal: Debt Service Payments $ 13,703,397 $ 14,060,266 $ 16,985,384 $ 15,052,889 $ 12,833,942 $ 12,176,353
Other Budgeted Expenditures

Capital Outlay (3) $ 3,265,498 $ 3,516,915 $ 1,724,647 $ 1,835,386 $ 1,756,598 $ 1,868,296
Interfund Transfers
To Capital Reserve- Rate Funded CIP 1,075,558 750,000 - - - -
Subtotal: Other Budgeted Expenses $ 4,341,056 $ 4,266,915 $ 1,724,647 $ 1,835,386 $ 1,756,598 $ 1,868,296
Total Wastewater Fund Expenditures and Transfers $ 28,366,858 $ 28,447,398 $ 28,847,718 $ 27,181,905 $ 25,160,044 $ 24,899,036
% Change 0.3% 1.4% -5.8% -7.4% -1.0%
Notes:
(1) Expenses increase in FY 2019 (by approximately $855,000) due to the impacts of Hurricane Florence.
(2) Wastewater operating expenses are anticipated to remain flat in FY 2021 because repair and maintenance costs
were normalized based on historical averages. Operating expenses will decrease slightly when the City of
Southport leaves the County’s system, which is anticipated to occur in FY 2022.
(3) Capital Outlay in future years is based on historical averages, excluding non-recurring projects that were
experienced in FY 2019 and FY 2020.
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Explanatory Note 9 Revenues
8. Rates and Charges

As an enterprise fund, water and wastewater operations are financed and operated as a distinct,
self-sufficient business enterprise. Appropriate fees and charges have been established to ensure
that the water and wastewater operations can operate on a self-sustaining basis. In order to
provide a more complete basis for evaluating recent and projected customer impacts, information
on historical water rates and the total monthly cost for an average customer are provided in
Exhibit 12.
Water Rate Structure

The County assesses fixed and volumetric water charges that vary with respect to meter size and
customer class:
 Monthly Base Charges: All customers (except for irrigation customers) are assessed a
monthly base charge that increases with respect to meter size.
 Volumetric Rates: The County also assesses a volumetric charge per 1,000 gallons of
water usage. The County has an increasing block rate structure for retail customers
(which includes residential and commercial customers). The usage included in the
respective blocks, or tiers, for retail customers varies with meter size, so that larger
meters are allowed more usage in each tier as compared to smaller meters. Irrigation
customers also have an increasing block rate structure. Wholesale water rate customers
pay a rate per 1,000 gallons based on contracts between each wholesale provider and the
County. These contracts stipulate that wholesale volumetric rates will increase in
proportion to the producer price index. Industrial customers have historically paid the
same rate as wholesale customers.
Exhibit 10 shows the history of water rates since 2010. As shown, retail water rates have
remained mostly unchanged since 2010, with the exception of a few changes in FY 2015, while
industrial/wholesale water rates have fluctuated according to changes in the producer price
index.
Existing Wastewater Rates
The County’s wastewater rate structure distinguishes among customer classes, but unlike the
water rates, wastewater fixed fees are not scaled with respect to meter size.
 Monthly Base Charges: Single-family and multi-family customers are assessed a
minimum charge per month, regardless of meter size. This charge includes the first 3,000
gallons of consumption. Multi-family customers are allowed 3,000 gallons per unit. All
other customer classes, including commercial, industrial, and wholesale, pay a base
charge per month, which does not include a usage allowance.
 Volumetric Rates for Retail Customers: Residential customers pay a rate per 1,000
gallons for all sewer flow above 3,000 gallons. Commercial customers pay per 1,000
gallons for all sewer flow. Industrial customers pay a rate per 1,000 gallons based on a
declining block structure.
DRAFT Page 32
 Volumetric Rates for Wholesale Customers: Wholesale customers pay a rate per 1,000
gallons based on the costs associated with the wastewater plants that provide wastewater
service to each respective wholesale customer.
Exhibit 10 shows the history of wastewater rates since 2010. As shown, retail wastewater rates
(residential, commercial, and industrial) have remained unchanged since 2010, while wholesale
wastewater rates have fluctuated according to changes in operating costs associated with each
wastewater treatment facility.
Exhibit 10
History of Water and Sewer Rates and Rate Structure

Water Rates 2010 2011 2012 2013 2014 2015 (1) 2016 2017 2018 2019
Base Service Charge
3/4" $ 11.00 $ 11.00 $ 11.00 $ 11.00 $ 11.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00
1" $ 15.00 $ 15.00 $ 15.00 $ 15.00 $ 15.00 $ 16.00 $ 16.00 $ 16.00 $ 16.00 $ 16.00
1 1/2 $ 17.00 $ 17.00 $ 17.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00
2" $ 19.00 $ 19.00 $ 19.00 $ 19.00 $ 19.00 $ 20.00 $ 20.00 $ 20.00 $ 20.00 $ 20.00
3" $ 23.00 $ 23.00 $ 23.00 $ 23.00 $ 23.00 $ 24.00 $ 24.00 $ 24.00 $ 24.00 $ 24.00
4" $ 27.00 $ 27.00 $ 27.00 $ 27.00 $ 27.00 $ 28.00 $ 28.00 $ 28.00 $ 28.00 $ 28.00
6" $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 32.00 $ 32.00
8" $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00
10" $ 39.00 $ 39.00 $ 39.00 $ 39.00 $ 39.00 $ 39.00 $ 39.00 $ 39.00 $ 39.00 $ 39.00
12" $ 43.00 $ 43.00 $ 43.00 $ 43.00 $ 43.00 $ 43.00 $ 43.00 $ 43.00 $ 43.00 $ 43.00
% Change (3/4") 0.0% 0.0% 0.0% 0.0% 9.1% 0.0% 0.0% 0.0% 0.0%
Volumetric Rates
Retail (Residential/Commercial)
Block 1 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05
Block 2 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.10
Block 3 3.15 3.15 3.15 3.15 3.15 3.15 3.15 3.15 3.15 3.15
% Change (Block 1) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Irrigation (2)
Block 1 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05 $ 3.05
Block 2 $ 3.15 $ 3.15 $ 3.15 $ 3.25 $ 3.25 $ 3.25 $ 3.25 $ 3.25
Block 3 $ 3.25 $ 3.25 $ 3.25 $ 3.50 $ 3.50 $ 3.50 $ 3.50 $ 3.50
Block 4 $ 3.50 $ 3.50 $ 3.50 $ 4.00 $ 4.00 $ 4.00 $ 4.00 $ 4.00
Block 5 $ 4.00 $ 4.00 $ 4.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00
% Change (Block 2) 0.0% 0.0% 3.2% 0.0% 0.0% 0.0% 0.0%
Industrial/Wholesale
Block 1 - All usage $ 2.45 $ 2.58 $ 2.76 $ 2.76 $ 2.76 $ 2.82 $ 2.80 $ 2.74 $ 2.82 $ 2.93
% Change 5.3% 7.0% 0.0% 0.0% 2.2% -0.7% -2.1% 2.9% 3.9%

Wastewater Rates 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Residential
Base Service Charge (meter removed and zero gallons) $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00
Base Service Charge (includes 1st 3 kgal) 39.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00
Usage over 3kgal (per kgal) 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50
% Change - usage 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Industrial/Commercial
Base Service Charge $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00
All usage (per kgal) 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50
% Change - usage 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Wholesale N. Brunswick Regional Facility
% Change - usage -11.1% -6.3% 0.0% 23.3% -13.5% -6.3% 0.0% 0.0% 46.7%
Wholesale West Regional Facility
% Change - usage 0.0% -6.3% -14.4% 5.9% -3.7% -5.8% -10.2% 0.0% 0.0%
Wholesale Ocean Isle Facility
Base Service Charge $ 45.00 $ 45.00 $ 45.00 $ 45.00
All usage (per kgal) 2.93 2.93 2.93 3.80
% Change - usage 0.0% 0.0% 29.7%
Average monthly water and wastewater bill for the average

residential customer using 4,500 gallons and 3/4" meter $ 73.48 $ 73.48 $ 73.48 $ 73.48 $ 73.48 $ 74.48 $ 74.48 $ 74.48 $ 74.48 $ 74.48
% Change 0.0% 0.0% 0.0% 0.0% 1.4% 0.0% 0.0% 0.0% 0.0%
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Recent Changes to Water Rate Structure
In late 2018, the County engaged Raftelis to perform a cost of service analysis for retail and
wholesale water rates, including irrigation and industrial rates. The results of the cost of service
analysis resulted in several recommended rate structure changes, which were approved by the
County Commission and implemented on July 1, 2019. Specifically, to promote conservation,
the first block for residential customers was reduced from 6,000 to 5,000 gallons, the five-tier
irrigation rate structure was reduced to three tiers, and the rates for each tier in relation to the
first tier (“differential”) were increased. It should be noted that the rates implemented are
revenue neutral.
Projection in Rates Over Forecast Period

Exhibits 11 and 12, respectively, display the current and projected water and wastewater charges
during the forecast period. The County has proposed increasing water rates once over the
forecast period, in FY 2022, to make water rates sufficient to cover anticipated debt service (both
the proposed Series 2019 Bonds and future debt), increased operating expenses associated with
the LPRO system, and the loss of two wholesale water customers. The County is not
anticipating any increases in wastewater retail rates, nor any substantial increases in wastewater
wholesale rates during the forecast period. As shown, the rate increases in FY 2022 are
anticipated to result in a 12.5% increase to the combined water and sewer bill for the average
customer using 4,500 gallons of water.
DRAFT Page 34
Exhibit 11
Projected Water Charges

Water Rates 2019 2020 2021 2022 2023 2024
Base Service Charge
3/4" $ 12.00 $ 12.00 $ 12.00 $ 16.00 $ 16.00 $ 16.00
1" 16.00 16.00 16.00 20.00 20.00 20.00
1 1/2" 18.00 18.00 18.00 22.00 22.00 22.00
2" 20.00 20.00 20.00 24.00 24.00 24.00
3" 24.00 24.00 24.00 28.00 28.00 28.00
4" 28.00 28.00 28.00 32.00 32.00 32.00
6" 32.00 32.00 32.00 36.00 36.00 36.00
8" 35.00 35.00 35.00 39.00 39.00 39.00
10" 39.00 39.00 39.00 43.00 43.00 43.00
12" 43.00 43.00 43.00 47.00 47.00 47.00
% Change 0.0% 0.0% 33.3% 0.0% 0.0%
Irrigation (1) $ - $ - $ - $ 5.00 $ 5.00 $ 5.00
Volumetric Rates
Residential
Block 1 $ 3.05 $ 2.85 $ 2.85 $ 4.00 $ 4.00 $ 4.00
Block 2 3.10 3.30 3.30 4.60 4.60 4.60
Block 3 3.15 3.85 3.85 5.40 5.40 5.40
% Change -6.6% 0.0% 40.4% 0.0% 0.0%
Irrigation
Block 1 $ 3.05 $ 3.30 $ 3.30 $ 4.60 $ 4.60 $ 4.60
Block 2 3.25 4.30 4.30 6.00 6.00 6.00
Block 3 3.50 5.70 5.70 8.00 8.00 8.00
Block 4 4.00 5.70 5.70 8.00 8.00 8.00
Block 5 6.00 5.70 5.70 8.00 8.00 8.00
Industrial
Block 1 $ 2.93 $ 2.96 $ 2.96 $ 4.72 $ 4.72 $ 4.72
% Change 1.0% 0.0% 59.5% 0.0% 0.0%
Wholesale (1)
Block 1 - All usage $ 2.93 $ 2.96 $ 2.96 $ 5.59 $ 5.59 $ 5.59
% Change 1.0% 0.0% 88.9% 0.0% 0.0%
Notes:
(1) The County anticipates implementing a base charge for irrigation services in FY 2022, which remain constant
over the forecast period.
DRAFT Page 35
Exhibit 12
Projected Wastewater Charges

Wastewater Rates 2019 2020 2021 2022 2023 2024
Residential/Commercial
Base Service Charge (includes 1st 3 kgal) 39.00 39.00 39.00 39.00 39.00 39.00
Usage over 3kgal (per kgal) 6.50 6.50 6.50 6.50 6.50 6.50
% Change 0.0% 0.0% 0.0% 0.0% 0.0%
Industrial
Base Service Charge $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00 $ 45.00
Block 1 6.50 6.50 6.50 6.50 6.50 6.50
Block 2 5.50 5.50 5.50 5.50 5.50 5.50
Block 3 4.50 4.50 4.50 4.50 4.50 4.50
Block 4 3.00 3.00 3.00 3.00 3.00 3.00
% Change 0.0% 0.0% 0.0% 0.0% 0.0%
Wholesale N. Brunswick Regional Facility (1)
All usage (per kgal) 2.20 2.20 2.20 2.20 2.20 2.20
% Change 0.0% 0.0% 0.0% 0.0% 0.0%
Wholesale West Regional Facility (1)
% Change 0.0% 0.0% 0.0% 0.0% 0.0%
Wholesale Ocean Isle Facility (1)

% Change 0.0% 0.0% 0.0% 0.0% 0.7%
Combined water and sewer bill for residential $ 74.48 $ 73.58 $ 73.58 $ 82.75 $ 82.75 $ 82.75
customers using 4,500 gallons of water
% Change -1.2% 0.0% 12.5% 0.0% 0.0%
Notes:
(1) The wholesale wastewater rates are based on contractual agreements to reimburse the County for each
wholesale customer’s proportional share of operations and maintenance costs in each plant.
DRAFT Page 36
9. Revenues
To meet the financial obligations of the Series 2019 Bonds, other debt service obligations and
other water and wastewater expenses, water and wastewater revenue requirements must be
recovered exclusively from revenues associated with the water and wastewater systems.
Revenues, as defined in the General Indenture, include operating revenues (charges for services
and other operating revenues) and non-operating revenues as identified in this Feasibility
Evaluation.
Water
Exhibit 13 shows the projection of water operating and non-operating revenues during the
forecast period. Operating revenues are comprised of revenues from user rates and charges,
revenues from participant charges, and revenues from other user charges and fees. Revenues
from user rates and charges consist primarily of revenues from base charges and volumetric rates
for retail and wholesale customers.
County water revenues generated from base service charges are determined by multiplying the
number of meters by meter size by the corresponding base service fees. County water revenues
from volumetric rates are calculated by multiplying total usage per block by the corresponding
rate for each block. Since FY 2015, water user charge revenues have increased by an average of
3.5% per year, largely due to increased customer growth. However, the model accounts for a
slower growth rate in user charge revenue to be conservative. Water use projections reflect the
loss of two wholesale water customers in FY 2022. User charges for water are anticipated to
increase by 36.3% in FY 2022 due to the projected rate increase to cover debt service payments,
increased operating expenses with the LPRO system, and the loss of the two wholesale
customers. Excluding FY 2022, revenue from User charges for the water system is anticipated to
increase by an average 2.0 % per year over the six-year forecast period.
Revenues from other user charges are comprised of service charges, transmission line fees, tap
and connection fees, late payment penalty fees, and capital recovery fees. Late payment charges
and service charges are projected to remain constant throughout the forecast period. Tap and
connection fees directly offset expenses associated with connecting new water customers to the
system. To ensure that projections are conservative, projected growth from transmission line fees
and capital recovery fee revenue is normalized, as opposed to being based on recent high growth
from new customers connecting to the system.
In the spring of 2018, the County conducted an analysis to comply with North Carolina General
Statute 162A Article 8 (System Development Fees). These system development fees are
reported as “capital recovery fees” in this report. The analysis provided a maximum cost-
justified level of system development fees (cost per gallon per day) that can be assessed by the
County. The County implemented system development fees that were less than the maximum
cost-justified fees. The projection of revenues from these fees over the forecast period is
conservative since the projections are based on revenues generated over the last ten years, as
opposed to recent years with higher growth.
Other operating revenues include fees from contract O&M services and miscellaneous revenues.
Contract revenues received from the LCFWSA are used to reimburse the County for expenses
DRAFT Page 37
associated with water services. The revenues are therefore tied directly to the budgeted expenses
projected by the County. Miscellaneous revenues are anticipated to remain constant over the
forecast period.
Non-operating revenues include interest earned on investments. Investments include unrestricted

fund balances which are estimated to yield a conservative rate of return compared to historical
averages.
Overall, total water revenues are expected to increase on average by 1.2% per year, excluding
FY 2022, throughout the forecast period. This trend is driven primarily by growth in the number
of retail customers.
Wastewater
As presented in Exhibit 13, operating revenues consist primarily of revenue from user rates and
charges, revenues from participant charges, revenues from assessments, and revenues from other
user charges. Revenues from user rates and charges consist primarily of base service charges
and volumetric rates assessed to retail and wholesale customers. Wastewater revenues generated
from residential customers are calculated by taking the sum of the base service charge multiplied
by the number of residential wastewater customers, and the residential usage above 3,000 gallons
multiplied by the volumetric rate. Wastewater revenues generated from industrial and wholesale
customers is based on the base service charge multiplied by the number of industrial and
wholesale customers, and total usage multiplied by the corresponding volumetric rate. The re-
classification of the City of Southport from a wholesale customer to a retail customer, and the
loss of this customer starting in FY 2021 (but fully leaving the system by FY 2022), causes
revenue from User Charges to fluctuate over the forecast period. Revenue from user charges
increases on average by 2.2% in FY 2021, FY 2023 and FY 2024 due to anticipated growth in
the number of retail customers. These increases are less than the average increase in User
Charges over the past two years of 6.4% per year.
Revenues from participants are based on reimbursements from the County’s participants, or
municipal customers, for debt service issued by the County but benefiting these
participants/customers (see Explanatory Note 2 for additional information). The County has
entered into contracts with H2GO and the Town of Leland to pay for the debt service associated
with the Series 2019 Bonds in proportion to their portion of capacity in the plant, which is 47%
and 32%, respectively. However, the Town of Navassa has not entered into a contract with the
County for its portion of debt and therefore no reimbursement from the Town of Navassa for the
Series 2019 Bonds is assumed over the Forecast period.
Revenues from assessments relate to assessments to be levied and collected by Sunset Beach,
Calabash, and Boiling Springs. These assessments were collected over a ten-year period and will
be ending during the Forecast Period.
Revenues from other user charges are comprised of revenues from tap and connection fees,
capital recovery fees, transmission line capital recover fees, late payment penalty fees, septage
fees, and transmission system O&M reimbursements. To ensure that projections are
conservative, projected growth from transmission line fees and capital recovery fee revenue is
DRAFT Page 38
normalized, as opposed to being based on recent high growth from new customers connecting to
the system. Revenues from tap and connection fees directly offset expenses associated with
connecting new wastewater customers to the system. All other user charges are conservatively
estimated to remain constant over the forecast period.
Non-operating revenues include interest earned on investments. Investments include unrestricted

fund balances that are expected to yield a rate of return that is conservative as compared to
historical averages.
Overall, total wastewater revenues are expected to decrease over the forecast period due to
declining revenues from assessments.
Exhibit 13
Estimated Annual Revenues – Water Fund

Water Revenues 2019 2020 2021 2022 2023 2024
Operating Revenues
User Charges (1)
Retail/Wholesale User Charges
Base Service Charge $ 6,188,355 $ 6,374,613 $ 6,546,952 $ 9,583,069 $ 9,842,312 $ 10,108,136
Volumetric Charges
Retail 7,276,358 7,542,794 7,678,178 10,942,802 11,142,338 11,346,983
Industrial 2,104,894 1,899,947 1,899,947 3,029,645 3,029,645 3,029,645
Wholesale 5,795,469 5,732,499 5,847,056 5,995,289 6,115,100 6,236,572
Subtotal: Retail/Wholesale User Charges $ 21,365,076 $ 21,549,853 $ 21,972,132 $ 29,550,804 $ 30,129,395 $ 30,721,336
% Change 0.9% 2.0% 34.5% 2.0% 2.0%
Other User Charges
Service Charges $ 150,040 $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ 150,000
Late Payment Penalty 172,894 150,000 150,000 150,000 150,000 150,000
Taps & Connections (2) 1,097,730 850,000 799,000 799,000 799,000 799,000
Transmission line fee (2) 461,055 461,055 319,000 319,000 319,000 319,000
Capital Recovery Fees (2) 1,279,536 1,118,000 946,000 900,000 900,000 900,000
Subtotal: Other User Charges 3,161,255 2,729,055 2,364,000 2,318,000 2,318,000 2,318,000
Total: User Charges $ 24,526,331 $ 24,278,908 $ 24,336,132 $ 31,868,804 $ 32,447,395 $ 33,039,336
% Change -1.0% 0.2% 31.0% 1.8% 1.8%
Other Operating Revenues
Miscellaneous Revenues (3) $ 852,801 $ 332,280 $ 332,280 $ 332,280 $ 332,280 $ 332,280

LCFWSA O&M Reimbursement 367,518 390,985 390,985 390,985 390,985 390,985
Subtotal: Other Operating Revenues $ 1,220,319 $ 723,265 $ 723,265 $ 723,265 $ 723,265 $ 723,265
Total: Water Operating Revenues $ 25,746,650 $ 25,002,173 $ 25,059,397 $ 32,592,069 $ 33,170,660 $ 33,762,601
% Change -2.9% 0.2% 30.1% 1.8% 1.8%
Non-Operating Revenues
Total Water Revenues $ 26,066,258 $ 25,132,173 $ 25,159,397 $ 32,692,069 $ 33,270,660 $ 33,862,601

% Change -3.6% 0.1% 29.9% 1.8% 1.8%
Notes:
(1) User charges are calculated by multiplying the projected number of customers and water demand shown in
supporting schedules 3 and 4 by the projected rates shown in supporting schedule 5. To be conservative,
Revenues in FY 2020 are estimated based on water demand, which is in turn based on average use over several
years. Revenues increase significantly in FY 2022 due to the water rate increase. Revenues reflect the loss of
two water wholesale customers (the Town of Navassa and H2GO) and one sewer wholesale customer (the City
of Southport).
DRAFT Page 39
(2) Revenues from tap and connection fees, capital recovery fees, and transmission line fees for FY 2020 and
beyond are conservative and are based on a 10-year average as opposed to recent levels.
(3) Miscellaneous revenues in FY 2019 include a receipt from the Golden Leaf Foundation Grant.
DRAFT Page 40
Estimated Annual Revenues – Wastewater Fund
Wastewater Revenues 2019 2020 2021 2022 2023 2024
Operating Revenues
User Charges (1)
Retail/Wholesale User Charges
Retail Monthly Charges
Base Charges $ 8,879,400 $ 9,136,550 $ 9,401,520 $ 9,674,548 $ 9,955,880 $ 10,245,768
Retail Volume Charges
Retail (above 3 kgal) 2,071,230 3,194,199 3,225,399 2,015,407 2,046,607 2,077,807
Industrial 5,249 5,249 5,249 5,249 5,249 5,249
Subtotal: Retail Charges $ 10,955,879 $ 12,335,997 $ 12,632,167 $ 11,695,203 $ 12,007,735 $ 12,328,824
Wholesale Charges (2)
Wholesale N. Brunswick Regional Facility $ 1,643,408 $ 1,659,842 $ 1,676,440 $ 1,693,205 $ 1,710,137 $ 1,727,238
Wholesale West Regional Facility 1,464,888 1,055,240 1,065,792 1,076,450 1,087,215 1,098,087
Wholesale Ocean Isle Beach WWTP 543,792 549,230 554,722 560,269 565,872 575,621
Subtotal: Wholesale Charges $ 3,652,088 $ 3,264,312 $ 3,296,955 $ 3,329,925 $ 3,363,224 $ 3,400,946
Subtotal: Retail/Wholesale User Charges $ 14,607,967 $ 15,600,309 $ 15,929,122 $ 15,025,128 $ 15,370,959 $ 15,729,770
% Change 6.8% 2.1% -5.7% 2.3% 2.3%
Participant User Charges (3)
WBRWRF - Shallotte Participant Payments $ 498,424 $ 498,570 $ 498,289 $ 499,275 $ 498,649 $ 498,479
WBRWRF - Oak Island Participant Payments 2,817,847 2,807,718 2,807,520 2,808,511 2,809,584 2,809,056
WBRWRF - Holden Beach Participant Payments 1,151,940 1,129,240 1,124,001 1,122,618 1,117,438 1,114,288
NBRWRF - Leland Participant Payments 914,228 1,184,746 2,008,817 2,002,874 1,455,959 1,100,632
H2GO Partner Reimbursement 243,091 641,651 1,843,196 1,841,390 1,660,852 1,596,043
Navassa Partner Reimbursement 94,004 94,002 94,003 94,003 93,992 64,631
Northwest Partner Reimbursement 26,406 26,680 26,605 26,523 6,768 -
NBRWRF Expansion 129,711 129,711 129,711 129,711 129,711 129,711
City of Northwest 56,742 56,742 56,742 56,742 56,742 56,742
Ocean Isle Contribution 275,000 275,000 275,000 275,000 275,000 275,000
Southport Contribution 633,333 - - - - -
Subtotal: Participant User Charges $ 6,970,437 $ 6,844,061 $ 8,863,885 $ 8,856,648 $ 8,104,696 $ 7,644,582
Other User Charges
Taps & Connections (4) $ 2,011,658 $ 1,200,000 $ 1,200,000 $ 1,200,000 $ 1,200,000 $ 1,200,000
Capital Recovery Fees (4) 3,239,268 2,100,000 1,800,000 1,800,000 1,800,000 1,800,000
Transmission Line Capital Recovery Fees (4) 1,058,844 700,000 600,000 600,000 600,000 600,000
Septage 127,280 90,000 90,000 90,000 90,000 90,000
Grinder Pump 554,590 550,000 550,000 550,000 550,000 550,000
Interest and Penalties on Past Assessments 106,146 100,000 100,000 100,000 75,000 75,000
Late Payment Penalty 80,157 70,000 70,000 70,000 70,000 70,000
Subtotal: Other User Charges $ 7,177,943 $ 4,810,000 $ 4,410,000 $ 4,410,000 $ 4,385,000 $ 4,385,000
Total: User Charges $ 28,756,347 $ 27,254,369 $ 29,203,006 $ 28,291,776 $ 27,860,655 $ 27,759,352
% Change -5.2% 7.1% -3.1% -1.5% -0.4%
Other Operating Revenues
Miscellaneous Revenues (5) $ 583,988 $ 85,000 $ 85,000 $ 85,000 $ 85,000 $ 85,000
Subsidies (6):
BAB Subsidy 92,726 26,479 - - - -
Subtotal: Other Operating Revenues $ 676,714 $ 111,479 $ 85,000 $ 85,000 $ 85,000 $ 85,000
Total: Wastewater Operating Revenues $ 29,433,061 $ 27,365,848 $ 29,288,006 $ 28,376,776 $ 27,945,655 $ 27,844,352
% Change -7.0% 7.0% -3.1% -1.5% -0.4%
Non-Operating Revenues
Total Wastewater Revenues $ 29,747,328 $ 27,465,848 $ 29,388,006 $ 28,476,776 $ 28,045,655 $ 27,944,352

% Change -7.7% 7.0% -3.1% -1.5% -0.4%
Adjustments:
Existing Amortized Assessment Revenues (7)
Calabash/Sunset Beach Assessments $ 2,460,400 $ 2,460,400 $ 2,063,046 $ 2,063,046 $ - $ -
Boiling Springs Assessments 284,462 284,462 284,462 284,462 284,462 -
Subtotal: Existing/Proposed Amortized Assessment Revenues $ 2,744,862 $ 2,744,862 $ 2,347,508 $ 2,347,508 $ 284,462 $ -
DRAFT Page 41
Notes:
(1) User charges are calculated by multiplying the projected number of customers and wastewater flow shown in
Supporting Schedules 3 and 4 by the projected rates shown in Supporting Schedule 5. Revenues reflect the
transition of the City of Southport from a wholesale customer in the West Regional Facility to a retail customer
in FY 2020, until the City of Southport leaves the County’s system (which is anticipated to occur in FY 2022).
(2) Represents wholesale customers’ proportionate shares of total O&M costs at the plants as specified in the
contractual agreements.
(3) Represents the share of debt service costs allocated to each participant based on contractual agreements. It
should be noted the Town of Navassa has not signed the contract for their share of capacity in the plant
expansion to the NBRWRF, and therefore their reimbursement for their proportion of debt is not included.
(4) Revenues from taps and connection fees, capital recovery fees, and transmission line fees for FY 2020 and
beyond are conservative and are based on a 10-year average as opposed to recent levels.
(5) While reimbursements from the Federal Emergency Management Agency (FEMA) is anticipated, only a
minimal amount (approximately $216,000) was received in FY 2019.
(6) Represents the subsidy on the Series 2009 Bonds (BAB), which is anticipated to end in 2020.
(7) The County currently receives assessment revenues from the communities of Calabash, Sunset Beach, and
Boiling Springs Lake. The County’s Indenture specifies that the County can include the amortized assessments
in Net Revenues for calculating the debt service coverage ratio. These assessments are amortized over a ten-
year period, the term of the assessment.
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Explanatory Note 10 Cost of Service Comparison
10. Cost of Service Comparison

One of the County’s key objectives is to maintain rates and charges at a level sufficient to
recover existing costs and capital costs associated with the Series 2019 Bonds. The County
adopted its present rates for both water and wastewater charges on July 1, 2019. Exhibit 14
shows a comparison of water and wastewater costs with other representative communities as of
July 2019. The County’s projected monthly bill is based on the County’s typical retail customer
using a ¾” meter and 4,500 gallons of water per month.
As shown, the current combined water and wastewater bill for a residential customer using 4,500
is $73.58 or $883 per year. The estimated water and wastewater bill for the average residential
customer in FY 2022, after the water rate increase is enacted, is $82.75 or $993 per year. The
County has an average overall median household income (“MHI”) of $51,164.3 The ratio of the
typical customer’s water and wastewater bill to MHI is approximately 1.73% for the current
water/wastewater bill and 1.94% for the estimated bill in FY 2022. Both figures fall within the
combined affordability guideline of 4% as identified by the EPA’s Financial Capability
Assessment publication.4
Exhibit 14
Comparison of Rates with Other Representative Communities
Water Sewer Total (1)

City of Southport $ 33.50 $ 80.10 $ 113.60
City of Wilmington (CFUA) $ 45.65 $ 49.94 $ 95.59
Proposed FY 2022 Brunswick County $ 34.00 $ 48.75 $ 82.75
Onslow County Water & Sewer Authority $ 27.60 $ 50.73 $ 78.33
Town of Oak Island $ 33.11 $ 42.58 $ 75.69
Carolina Beach $ 26.93 $ 47.79 $ 74.71
Brunswick County $ 24.83 $ 48.75 $ 73.58
Beaufort-Jasper Water & Sewer Authority $ 24.73 $ 41.61 $ 66.33
H2GO $ 28.50 $ 36.35 $ 64.85
City of Georgetown $ 24.86 $ 34.41 $ 59.27
Grand Strand Water & Sewer Authority $ 27.47 $ 30.76 $ 58.23
Little River $ 21.84 $ 21.88 $ 43.71
North Myrtle Beach $ 18.61 $ 21.95 $ 40.56
Wrightsville Beach $ 16.10 $ 19.96 $ 36.06
Myrtle Beach $ 10.96 $ 21.19 $ 32.15
Emerald Isle (2) $ 24.00 $ 24.00
Average $ 26.42 $ 39.78 $ 63.71
(1) The calculation of monthly water and wastewater bills assumes a residential
customer uses 4,500 gallons of water per month.
(2) Residential customers on Emerald Isle have septic tanks.
Water is provided through Bogue Banks Water Corporation.
3 According to the Census, see factfinder.census.gov.

4 Combined Sewer Overflows: Guidance for Financial Capability Assessment and Schedule Development
(Environmental Protection Agency, March 1997) page 19.
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Explanatory Note 11 Expendable Net Position
11. Fund Balances

As shown in Exhibit 15, the County had an expendable net position at the end of FY 2018
(which is the beginning net position of FY 2019) of approximately $58.8 million in the Water
Fund and Sewer Fund. Contributions to this balance primarily came from revenues generated
through rates. The Surplus Account is calculated by multiplying the beginning cash balance by
20%. The surplus account is increasing over the forecast period because although the full impact
of all forecast and proposed debt does not start until FY 2023, the County anticipates increasing
water rates in FY 2022. In addition, several existing debt issues for the sewer system end during
the forecast period. It is the County’s practice to use surplus funds to pay for repair and
replacement or other capital projects necessary to maintain the water and wastewater systems.
Therefore, while the estimated expendable net position is shown in Exhibit 15, to be
conservative, 20% of the Surplus Account (which is used for the debt service coverage
calculation on the lead Forecast Schedule), is based on assuming the expendable net position
remains constant over the forecast period ($58,867,995).
It should be noted that investment income is calculated by applying a rate of return to the
expendable net position. The investment income reflected in revenues as shown in Explanatory
Note 9 is based on very conservative estimates which are much lower than investment income
realized in the past several years.
Exhibit 15
Expendable Net Position
Unaudited Projected For the Fiscal Year Ending June 30th

2019 (1) 2020 (2) 2021 2022 2023 2024
Water/Sewer Enterprise Fund

Expendable net Position -Beginning $ 58,867,995 $ 60,222,925 $ 59,921,586 $ 65,589,090 $ 75,919,937 $ 79,583,558
Surplus/(Deficit) from rates (301,339) 5,667,504 10,330,847 3,663,621 3,805,709
Expendable Net Position -Ending $ 60,222,925 $ 59,921,586 $ 65,589,090 $ 75,919,937 $ 79,583,558 $ 83,389,267
Total Ending Balance Available

for Surplus Account $ 60,222,925 $ 59,921,586 $ 65,589,090 $ 75,919,937 $ 79,583,558 $ 83,389,267
Surplus Account - Available for Coverage

20% of Suplus Account (3) $ 11,773,599 $ 12,044,585 $ 11,984,317 $ 13,117,818 $ 15,183,987 $ 15,916,712
Suplus Account - Assuming Constant Balance (3) $ 58,867,995 $ 58,867,995 $ 58,867,995 $ 58,867,995 $ 58,867,995 $ 58,867,995
20% of Surplus Account - used for coverge calculation $ 11,773,599 $ 11,773,599 $ 11,773,599 $ 11,773,599 $ 11,773,599 $ 11,773,599
Notes:
(1) The beginning FY 2019 O&M Account balance represents the expendable net assets shown in the County’s
fiscal year 2018 Comprehensive Annual Financial Report from pages C-1 and D-1.
(2) The beginning FY 2020 O&M Account balance represents the unaudited Expendable Net Assets estimated
at the end of FY 2019.
(3) The Surplus Account is calculated by multiplying the beginning cash balance by 20%. Since the County’s
policy is to use surplus fund to pay for capital projects, to be conservative, for calculating coverage ratios,
20% of the Surplus Account is estimated on the current expendable net assets value, which is assumed to
remain constant over the forecast period
DRAFT Page 44
Explanatory Note 12 Additional Bonds Test
12. Additional Bonds Test

The County may issue additional bonds only if the requirements set forth in Section 6.8 (d) of the
General Indenture, detailed below, are met:
(1) (A) the Net Revenues for the most recent Fiscal Year for which audited financial statements
are available, adjusted in the manner hereinafter provided, together with 20% of the balance in
the Surplus Account at the end of the such Fiscal Year, were at least equal to (a) 120% of (1.20
times) the maximum Principal and Interest Requirements on the Bonds, including the Series of
Bonds to be issued, (b) 100% of (1.00 times) the Principal and Interest Requirements for
Subordinate Indebtedness in that Fiscal Year, (c) 100% of (1.00 times) the Principal and Interest
Requirements for General Obligation Indebtedness in that Fiscal Year and (d) 100% of (1.00
times) the Principal and Interest Requirements for Other Indebtedness in that Fiscal Year, and
(B) the Net Revenues for the most recent Fiscal Year for which audited financial statements
are available, adjusted in the manner hereinafter provided, were at least equal to (a) 100% of
(1.00 times) the maximum Principal and Interest Requirements on the Bonds, including the Series
of Bonds to be issued, (b) 100% of (1.00 times) the Principal and Interest Requirements for
Subordinate Indebtedness in that Fiscal Year, (c) 100% of (1.00 times) the Principal and Interest
Requirements for General Obligation Indebtedness in that Fiscal Year and (d) 100% of (1.00
times) the Principal and Interest Requirements for Other Indebtedness in that Fiscal Year; or
(2) (A) the County has met the Rate Covenant set forth in Section 6.6 of the General Indenture
for the most recent Fiscal Year for which audited financial statements are available, as certified
by the Finance Director; and
(B) the Net Revenues, as projected by a report of a Consulting Engineer filed with the
Trustee, for the first two Fiscal Years following (I) the date that the acquisition and construction
of improvements to the Enterprise Systems financed with the proceeds of the Series of Bonds to
be issued are complete or (II) the date the proposed Series of Bonds are issued, are at least equal
to (a) 120% of (1.20 times) the Principal and Interest Requirements on the Bonds, including the
Series of Bonds to be issued, for such Fiscal Years, (b) 100% of (1.00 times) the Principal and
Interest Requirements for Subordinate Indebtedness to become due in such Fiscal Years, (c)
100% of (1.00 times) the Principal and Interest Requirements for General Obligation
Indebtedness to become due in such Fiscal Years and (d) 100% of (1.00 times) the Principal and
Interest Requirements for Other Indebtedness to become due in such Fiscal Years; and
(3) no Event of Default under this General Indenture has occurred and is continuing; and
(4) other than for a Series of refunding Bonds, the Consulting Engineer certifies that the amounts
to be on deposit in the Construction Fund after the issuance of the Series of the Bonds is
sufficient to pay the Costs of Construction related to such Series.
Exhibit 16 shows satisfaction of the first set of the two-pronged additional bonds tests (1) A and (1) B of
Section 6.8 (d) of the General Indenture.
DRAFT Page 45
Exhibit 16
Additional Bonds Test
Audited FY 2018
(1)
Operating Revenues
Revenues:
User Charges $ 50,925,815
Other Revenues $ 3,295,962
Subtotal: Operating Revenues $ 54,221,777
Operating Expenses
Salaries, Fringe Benefits and Operating Expenditures $ (26,521,334)
Depreciation and Amortization $ (12,749,056)
Subtotal: Expenditures $ (39,270,390)
Operating Income $ 14,951,387
Nonoperating Revenues (Expenses):

Investment Earnings $ 326,059
Interest Expense $ (6,343,696)
Subtotal: Nonoperating Revenues (Expenses) $ (6,017,637)
Income Before Transfers and Capital Contributions $ 8,933,750
Adjustments:
Plus: Depreciation and amortization $ 12,749,056
Plus: Amortized Assessment Revenues $ 2,744,862
Plus: OPEB $ 932,496
Plus: Interest Expense $ 6,343,696
Subtotal: Adjustments $ 22,770,110
Net Revenues $ 31,703,860 A

Plus 20% of Surplus Account (2) $ 10,824,107
Net Revenues plus 20% of Surplus Account 42,527,967 B
Additional Bonds Test (1) (A)
Debt Service (3)

120 % of Maximum Parity Debt (3) $ 19,951,756
100% of G.O., Subordinate, and Other Debt Service $ 2,710,161
Total: Debt Service - Test (1) (A) $ 22,661,916 C
Debt Service Coverage Ratio (4) 1.88 B/C

Net Revenues plus 20% of Surplus Account divided by Total Debt Service - Test (1) (A)
Additional Bonds Test (1) (B)
Debt Service
100% of Maximum Parity Debt Service $ 16,626,463
100% of G.O., Subordinate, and Other Debt Service $ 2,710,161
Total: Debt Service - Test (1) (B) $ 19,336,624 D
Debt Service Coverage Ratio (5) 1.64 A/D

Net Revenues divided by Total Debt Service - Test (1) (B)
DRAFT Page 46
Notes:
(1) The audited information corresponds to Exhibit H in the County's FY 2018 Comprehensive Audited
Financial Report titled “Statement of Revenues, Expenses, and Changes in Net Assets – Proprietary
Funds”.
(2) Based on funds available in the Surplus Account of approximately $54.1 million.
(3) Maximum parity debt on total parity debt occurs in FY 2021. Debt service for G.O., Subordinate and
Other Debt Service also represents debt service in FY 2018. Debt service for the Series 2019 Bonds is
based on estimated pricing information provided by the Lead Underwriter on September 2019.
(4) Calculated according to Section 6.8 (d) (1)(A) of the General Indenture. Net Revenues plus 20% of the
Surplus Account are divided by the sum of 120% of the maximum Principal and Interest Requirements on
parity debt (including existing debt and the Series 2019 Bonds) plus 100% of G.O., Subordinate, and Other
Debt. This ratio is required to be greater than 1.00.
(5) Calculated according to Section 6.8 (d) (1)(B) of the General Indenture. Net Revenues are divided by the
sum of 100% of the maximum Principal and Interest Requirements on parity debt (including existing debt
and the Series 2019 Bonds) plus 100% of G.O., Subordinate, and Other Debt. This ratio is required to be
greater than 1.00.
DRAFT Page 47

Brunswick County Feasibility Report-2nd Draft 9-16-19

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Brunswick County Feasibility Report-2nd Draft 9-16-19

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COUNTY OF BRUNSWICK,

Financial Feasibility Evaluation

September 16, 2019

Raftelis Financial Consultants, Inc.

Charlotte, North Carolina By: Elaine Vastis Conti

County of Brunswick, North Carolina

Unaudited (1) Forecast

Operating Expenses (4)

Operating Income $ 13,999,339 $ 12,088,208 $ 13,405,549 $ 16,570,824 $ 15,257,639 $ 14,133,806

Debt Service Coverage - Revenue Bonds

Subordinate and Other Indebtedness

County of Brunswick, North Carolina

Unaudited (1) Forecast

Notes to the Forecast Statement:

THE COUNTY OF BRUNSWICK

FOR THE SIX FISCAL YEARS ENDING

2. Background and Scope of Operations

Overview of County Service Area

Wastewater Participant Agreements

Series 2004A refunded in 2012 44.8% 25.1% 8.9% 21.2%

Potential Changes to Water and Wastewater Customer Base

4. Demand for Services

Projected For the Fiscal Year Ending June 30th

Wholesale 1,895,641 1,933,553 1,972,225 1,070,827 1,092,244 1,114,089

Wastewater Flow (in 1,000 gallons) (2)

Projected For the Fiscal Year Ending June 30th

Number of Wastewater Accounts

Industrial 774 774 774 774 774 774

Total Wastewater Accounts 18,850 19,399 19,966 20,549 21,150 21,770

Sales Metered Use Percentage of Percentage of

Sales Metered Use Percentage of Percentage of

5. Capital Improvement Plan

Exhibit 6: Capital Improvement Plan

FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Totals

(3) Exhibit 6: Capital Improvement Plan (continued) (2)

Projects to be Funded with the Series 2019 Bonds

Northeast Brunswick Regional Wastewater Treatment Plant Expansion - $45.4Million

Northwest Water Treatment Plant Expansion - $47.5 Million

Northwest Water Treatment Plant – Reverse Osmosis - $89.5 Million

 Conform with credit criteria established by rating agencies;

Par amount of Series 2019 Bonds $ 83,310,000

Fiscal Year Ending June 30th

2019 2020 2021 2022 2023 2024

Subordinate and Other Indebtedness

Fiscal Year Ending June 30th

7. Operating and Non-Operating Expenses, Expenditures & Transfers

Actual Projected for Fiscal Year Ending June 30th

Operating Expenses (2)

Debt Service Payments

Other Budgeted Expenditures

Debt Service Payments

Other Budgeted Expenditures

8. Rates and Charges

Water Rate Structure

Existing Wastewater Rates

For the Fiscal Year Ending June 30th

For the Fiscal Year Ending June 30th

Average monthly water and wastewater bill for the average

Recent Changes to Water Rate Structure

Projection in Rates Over Forecast Period

For the Fiscal Year Ending June 30th

Irrigation (1) $ - $ - $ - $ 5.00 $ 5.00 $ 5.00

For the Fiscal Year Ending June 30th

Wholesale Ocean Isle Facility (1)