FRIPP ISLAND PUBLIC SERVICE DISTRICT

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1 1. Call to Order 2. Pledge of Allegiance FRIPP ISLAND PUBLIC SERVICE DISTRICT Thursday, June 21, 2018 Fripp Island Fire Station 1:30 p.m. AGENDA 3. US Hwy 21 (Sea Island Parkway) Waterline Relocation Project - Review of project bids. - Resolution Approving Financing of Waterline Project and SRF Loan Agreement 4. Executive Session - Legal Matters Pertaining to Erosion Protection & Beach-Related Activities 5. Upon returning to public session, the Commission may take such action(s) as it deems appropriate on the items discussed in executive session. 6. Adjourn

2 FRIPP ISLAND PUBLIC SERVICE DISTRICT Minutes: Special Commission Meeting on June 21, 2018 Present: Rick E. Keup, Richard S. Combes, Warren S. McKay, and John Derrick, and James L. Parks Absent: Staff: Guests: Dan H. McCormick Angie Hughes, District Manager, Joshua Horton, Fire Chief; Kim Hinchey, Office Manager Lon Carlson, Stuart Mitchell, and Michael Luning (JMT) 1. Chairman Keup called the meeting to order at 1:30 p.m. 2. Chairman Keup led the Commission in the Pledge of Allegiance. 3. US Hwy 21 (Sea Island Parkway) Waterline Relocation Project (a) After reviewing the bids received and the recommendation of Johnson, Mirmiran & Thompson, Inc. (Att A), the Commission approved the apparent low bid of $2,695, submitted by Quality Enterprises USA, Inc., as recommended by the District s project engineer, and authorized the District Manager to execute a contract with Quality Enterprises USA, Inc., as allowed by the District s procurement regulation, by motion of Mr. Combes. (b) The Commission adopted a resolution approving the financing of the improvement, construction and equipping of certain water supply/distribution facilities of the Fripp Island Public Service District, South Carolina, through the borrowing of not exceeding three million two hundred thousand dollars ($3,200,000) from the State Drinking Water Revolving Loan Fund, by agreement with the South Carolina Water Quality Revolving Fund Authority, pursuant to Title 48, Chapter 5, Code of Laws of South Carolina 1976, as amended; providing for the agreement to make and to accept a loan, the execution and delivery of a loan agreement between the Fripp Island Public Service District, South Carolina and the South Carolina Water Quality Revolving Fund Authority, the execution and delivery of a promissory note from the Fripp Island Public Service District, South Carolina to the South Carolina Water Quality Revolving Fund Authority; to provide for the levy and collection of property taxes for the payment of the promissory note; and other matters relating thereto (Att B), upon a motion by Mr. Parks. 4. The Commission entered executive session to discuss legal matters pertaining to erosion protection and beach-related activities at 1:54 p.m., upon a motion by Mr. Derrick. The Commission resumed open session at 2:56 p.m., upon a motion by Mr. Parks. 5. There being no further business, the meeting adjourned at 2:57 p.m., upon a motion by Mr. Parks. Rick E. Keup Chairman Angel L. Hughes Secretary

3 Att A

4 Bid Tabulations (Bid Date 6/15/2018) US 21 (Sea Island Parkway) Water Main Relocation Fripp Island Public Service District apparent low bidder Engineers Estimate Quality Enterprises USA, INC. IPW Construction Group, LLC Item No. 1 Mobilization LS 1 $265, $265, $285, $285, $182, $182, Erosion and Sediment Control LS 1 $15, $15, $46, $46, $196, $196, Traffic Control LS 1 $150, $150, $40, $40, $301, $301, Estimated Description Unit Bid Unit Price Bid Price Quantity 10 Inch Diameter Water Main Installation via Open Cut 10 Inch Diameter Water Main Installation via Horizontal Directional Drilling (HDD) Bid Unit Price Bid Price Bid Unit Price Bid Price LF 2,797 $ $456, $ $285, $ $788, LS 1 $1,612, $1,612, $1,892, $1,892, $3,503, $3,503, Air Release Valve and Manhole EA 2 $10, $20, $6, $13, $14, $28, Environmental Monitoring LS 1 $38, $38, $75, $75, $112, $112, Inch Diameter Gate Valves/Vault EA 1 $5, $5, $3, $3, $14, $14, Fire Hydrant EA 1 $9, $9, $9, $9, $8, $8, Abandon Existing Pipeline LS 1 $50, $50, $45, $45, $52, $52, Total of Engineering Estimate $2,620, % Contingency $262, Total of All Unit Price Bid Items $2,882, $2,695, $5,188,731.51* * Math Error on IPW original Bid Form (50 cent)

5 Att B A RESOLUTION APPROVING THE FINANCING OF THE IMPROVEMENT, CONSTRUCTION AND EQUIPPING OF CERTAIN WATER SUPPLY/DISTRIBUTION FACILITIES OF THE FRIPP ISLAND PUBLIC SERVICE DISTRICT, SOUTH CAROLINA, THROUGH THE BORROWING OF NOT EXCEEDING THREE MILLION TWO HUNDRED THOUSAND DOLLARS ($3,200,000) FROM THE STATE DRINKING WATER REVOLVING LOAN FUND, BY AGREEMENT WITH THE SOUTH CAROLINA WATER QUALITY REVOLVING FUND AUTHORITY, PURSUANT TO TITLE 48, CHAPTER 5, CODE OF LAWS OF SOUTH CAROLINA 1976, AS AMENDED; PROVIDING FOR THE AGREEMENT TO MAKE AND TO ACCEPT A LOAN, THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT BETWEEN THE FRIPP ISLAND PUBLIC SERVICE DISTRICT, SOUTH CAROLINA AND THE SOUTH CAROLINA WATER QUALITY REVOLVING FUND AUTHORITY, THE EXECUTION AND DELIVERY OF A PROMISSORY NOTE FROM THE FRIPP ISLAND PUBLIC SERVICE DISTRICT, SOUTH CAROLINA TO THE SOUTH CAROLINA WATER QUALITY REVOLVING FUND AUTHORITY; TO PROVIDE FOR THE LEVY AND COLLECTION OF PROPERTY TAXES FOR THE PAYMENT OF THE PROMISSORY NOTE; AND OTHER MATTERS RELATING THERETO. Adopted June 21, 2018

6 BE IT RESOLVED BY THE FRIPP ISLAND PUBLIC SERVICE DISTRICT COMMISSION, THE GOVERNING BODY OF THE FRIPP ISLAND PUBLIC SERVICE DISTRICT, SOUTH CAROLINA, IN MEETING DULY ASSEMBLED: ARTICLE I FINDINGS OF FACT SECTION 1.1. Findings of Fact. As an incident to the adoption of this resolution (this Resolution ), the Fripp Island Public Service District Commission (the Commission ), the governing body of the Fripp Island Public Service District, South Carolina (the District ) has made the following findings: (a) The District is a special purpose district created pursuant to the laws of the State of South Carolina and empowered by the provisions of Title 48, Chapter 5, Code of Laws of South Carolina 1976, as amended (the Act ) (i) to undertake a drinking water supply and distribution project as defined and approved pursuant to the Federal Safe Drinking Water Act, 42 U.S.C.A. Section 300f et seq.; (ii) to make application for and to receive assistance; (iii) to comply with regulations relating to the receipt and disposition of money of the State Drinking Water Revolving Loan Fund created by the Act; (iv) to apply for and receive state grants; (v) to enter into loan agreements; and (vi) to comply with all terms and conditions of any loan agreement. (b) Title 6, Chapter 11 of the Code of Laws of South Carolina 1976 as amended (the Enabling Act ), permits the incurrence of general obligation debt for any corporate and public purpose which includes the financing of facilities for the furnishing of water supply/distribution services. (c) The primary conduit for drinking water to the District will be destroyed in connection with the replacement of what is known as the Harbor River bridge, which extends from St. Helena Island to Harbor Island over the Harbor River and to which is currently affixed the District s water transmission line connecting the District s Waterworks and Sewer System (the System ) with its wholesale provider of drinking water. In order to preserve a source of drinking water for the District, the District seeks to undertake the relocating and replacing of certain water transmission and related infrastructure in connection with the replacement of the Harbor River Bridge (the Project ). The Project will be part of System. (d) In accordance with the Enabling Act, the Commission adopted a resolution on April 11, 2017, pursuant to the provisions of which the Commission petitioned the County Council of Beaufort County (the County Council ), the governing body of Beaufort County, South Carolina (the County ), to order a public hearing on the question of the issuance of not to exceed $5,500,000 of general obligation bonds for the purpose of defraying the costs of the Project and the costs of issuance of the bonds, subject to a referendum of the electors of the District. (e) On April 24, 2017, County Council adopted a resolution calling for a public hearing on the question of the issuance of the bonds, and, in accordance with the Enabling Act, notice of the public hearing was published once a week for three successive weeks in The Beaufort Gazette, on

7 May 3, 2017, May 10, 2017, and May 17, The public hearing was held by the County Council on May 22, (f) Pursuant to the Enabling Act, the County Council thereafter enacted ordinance number 2017/14 on June 12, 2017, approving the issuance of $5,500,000 of general obligation bonds subject to the approval of the electors of the District at a referendum to be held August 15, 2017, and so ordered such referendum by resolution 2017/16 of County Council, adopted on June 12, (g) The referendum was held on August 15, 2017, with 211 voting in favor of the question, and 12 against (the Referendum ). The County Council declared the result of such Referendum by resolution dated 2017/22 of County Council, adopted on August 28, (h) The Commission thereafter adopted a bond resolution entitled A RESOLUTION TO PROVIDE FOR THE ISSUANCE AND SALE OF NOT EXCEEDING FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000) OF GENERAL OBLIGATION BONDS, OF THE FRIPP ISLAND PUBLIC SERVICE DISTRICT, SOUTH CAROLINA, TO PRESCRIBE THE PURPOSES FOR WHICH THE PROCEEDS SHALL BE EXPENDED, TO PROVIDE FOR THE PAYMENT THEREOF, AND OTHER MATTERS RELATING THERETO dated September 19, 2017 (the 2017 Bond Resolution ). The 2017 Bond Resolution authorized the issuance of general obligation bonds both for the Project and for certain improvements to a revetment in the District (the 2017 Revetment Project ). (i) Pursuant to the 2017 Bond Resolution, the District issued $2,300,000 of general obligation bonds, dated October 18, 2017 for the purposes of defraying the costs of the 2017 Revetment Project and paying the costs of issuance thereof (the Series 2017 Bond ). (j) On November 14, 2017, the Commission adopted a resolution authorizing application to the South Carolina Water Quality Revolving Fund Authority (the Authority ) for a loan from the State Drinking Water Revolving Loan Fund created by the Act (the Loan ), to provide for the financing of the Project. (k) On May 22, 2018, the Authority upon review of the District s loan application conditionally approved the Loan. (l) The funds are to be loaned and secured pursuant to a loan agreement (the Loan Agreement ) between the District and the Authority, and a promissory note executed and delivered by the District registered in the name of the Authority (the Note ). Pursuant to the Loan Agreement, the District will agree to use the Loan proceeds only to pay the actual eligible costs of the Project, and the District will agree to pay to the Authority such amounts as shall be required to provide for the payment of all amounts due with respect to the repayment of the Loan. To secure its obligations, the District will pledge its full faith, credit and taxing power. Upon any failure of the District to make any payments to the Authority pursuant to the Loan Agreement or the Note, the Authority shall require the State Treasurer to pay to the Authority, subject to the provisions of the Act, such amount from state appropriations to which the District may be or become entitled as may be necessary to provide for the payment of all amounts due with respect to the Note.

8 (m) The Commission is adopting this Resolution in order to: (i) authorize the execution and delivery on behalf of the District of the Loan Agreement and the Note; (ii) evidence the approval of the Project and the Loan by the District; (iii) provide for the payment of amounts to be paid by the District pursuant to the Loan Agreement and the Note; (iv) authorize the execution and delivery by, and on behalf of, the District of such other agreements and certificates and the taking of such other action by the District and its officers as shall be necessary or desirable in connection with the financing of the Project in order to carry out the intent of this Resolution; and (v) close the authorization to issue any further general obligation bonds pursuant to the 2017 Bond Resolution, limit the applicability of the 2017 Bond Resolution to the Series 2017 Bond, and to authorize the issuance of the balance of $3,200,000 of general obligation bonds approved at the Referendum pursuant to this Resolution and without regard to the terms and conditions of the 2017 Bond Resolution, which shall not apply to the Note, the Loan Agreement, or the Project in any manner whatsoever. ARTICLE II THE LOAN SECTION 2.1. Authorization of Loan. The Commission hereby authorizes the District s acceptance of the Loan from the Authority of not exceeding $3,200,000, pursuant to and in accordance with, the provisions of the Loan Agreement. ARTICLE III LOAN AGREEMENT AND NOTE; SECURITY SECTION 3.1. Authorization of Loan Agreement and the Note. The Loan Agreement and the Note in substantially the forms attached hereto as Exhibit A, with such changes as the executing officers shall approve (their execution to be conclusive evidence of such approval) are hereby approved and the execution and delivery of the Loan Agreement and the Note, on behalf of the District, are hereby authorized and directed, unless a more attractive offer is submitted pursuant to Section 4.1 hereof. The Loan Agreement and the Note shall be executed on behalf of the District by the Chairman of the Commission (the Chairman ) and attested by the Secretary to the Commission (the Secretary ). SECTION 3.2. Order of Tax Levy for Payment of Note. For the payment of the principal of and interest on the Note as the same shall become due and payable and for the creation of such

9 sinking fund as may be necessary therefor, the full faith, credit and taxing power of the District are hereby irrevocably pledged, and there shall be levied annually by the County Auditor of Beaufort County, South Carolina (the County Auditor ), and collected by the County Treasurer of Beaufort County, South Carolina (the County Treasurer ), in the same manner as County taxes are levied and collected, a tax without limit on all taxable property in the District, sufficient to pay the principal of and interest on the Note as the same shall become due and payable, and to create such sinking fund as may be necessary therefor. SECTION 3.3. Notice to Levy Tax. The County Auditor and County Treasurer shall be notified of the issuance of the Note and directed to levy and collect, or cause to be levied and collected, respectively, upon all taxable property in the District an annual tax sufficient to meet the payment of the principal of and interest on the Note, as the same shall become due and payable, and to create such sinking fund as may be necessary therefor. ARTICLE IV MISCELLANEOUS SECTION 4.1. Public Sale Requirements. Pursuant to Section of the Code of Laws of South Carolina 1976, as amended, the Commission hereby orders the Chairman to cause the publication of a notice of sale in substantially the form set forth at Exhibit B hereof in a newspaper of general circulation in the State of South Carolina soliciting bids to purchase not to exceed $3,200,000 of general obligation bonds for the purpose of defraying the costs of the Project and the costs of issuance of the bonds in order to determine whether a more advantageous financing may be available than that offered by the Authority. The Commission hereby ratifies all actions of District employees and agents regarding such notice. In the event a response to the notice is received stating an interest rate more favorable than that provided by the Authority in the Loan Agreement and Note, the Chairman is hereby directed to present such bid to the Commission at its next regular meeting or to call a special-called meeting, if practicable, to allow the Commission to consider such bid. SECTION 4.2. Other Instruments and Actions. In order to implement the Loan pursuant to the Loan Agreement and Note and to give full effect to the intent and meaning of this Resolution and the agreements and actions herein authorized, the Chairman and Secretary are hereby authorized to execute and deliver such certificates, showings, instruments and agreements and to take such further action as the District shall deem necessary or desirable. SECTION 4.3. Resolution a Contract. This Resolution shall be a contract between the District and the Authority, and shall be enforceable as such against the District. SECTION 4.4. Effective Date. This Resolution shall become effective upon adoption by the Commission.

11 EXHIBIT A LOAN AGREEMENT

47 EXHIBIT B FORM OF NOTICE OF SALE NOTICE OF SALE Bids will be received by Fripp Island Public Service District, South Carolina (the District ), at 11:00 a.m. (Eastern Time) on Wednesday, June 20, 2018, with respect to the sale of a not exceeding $3,200,000 General Obligation Bond, Series 2018 of the District (the Bond ). The District is presently in receipt of an offer to purchase the Bond from the South Carolina Water Quality Revolving Fund Authority, at an interest rate of 2.1%, final maturity of 20 years, and level debt service payments, payable quarterly. The District will entertain bids at the time and date listed above. Bids must be submitted by and should be transmitted to Angie Hughes, District Manager (telephone: (843) ; angiehughes@fipsd.org) with a copy to Gary T. Pope, Jr., Pope Flynn, LLC, Bond Counsel to the District (telephone: (803) ; gpope@popeflynn.com). The District is not responsible for any bid that is not received and will confirm receipt of bids upon request.

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