HomeMy WebLinkAboutAgenda - 03-16-2010 - 7bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 16, 2010
Action Agenda
Item No. 7b
SUBJECT: Piedmont Food & Agricultural Processing Center: Inter-local Agreement
DEPARTMENT: Economic Development PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Inter-local Cooperative Agreement
INFORMATION CONTACT:
Noah Ranells 245-2330
Brad Broadwell 245-2325
John Roberts 245-2318
PURPOSE: To consider approval of the Inter-local Cooperation Agreement governing startup
management of the Piedmont Food & Agricultural Processing Center.
BACKGROUND: At the Board's January 21, 2010 regular meeting, staff provided an update on
the drafting of the Inter-local Agreement to govern management of the Piedmont Food &
Agricultural Processing Center. The Inter-local Agreement has been revised based on the legal
review by participating counties (Alamance, Chatham, & Durham).
The Inter-local Agreement establishes a `project partnership' based upon the following
premises:
A. The term of the agreement will be until June 30, 2015 unless terminated or extended by
the four partner counties.
B. Orange County will be responsible for legal, day-to-day oversight, accounting, and
personnel support for those non-permanent employee(s) that manage the project until it
becomes anon-profit corporation.
C. Orange County will be the lead grant recipient and administrator for grant funds
including accounting and reporting requirements.
D. Except in the case of revenue shortfall, financial aspects of the Center will not impact
the Orange County budget. In case of revenue shortfall, 40% of the revenue shortfall,
not to exceed $60,000 per year, will be charged to Orange County. Approval of the
Inter-local Agreement by Alamance, Chatham, and Durham counties will result in 60%
of any revenue shortfall, not to exceed $90,000, be divided among the partner counties.
These figures are based on a maximum operating budget of $150,000.
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E. Any of the four partner counties can withdraw from the agreement with one year
advance notice. If more than one partner county withdraws, the agreement shall
terminate.
FINANCIAL IMPACT:
1. Based on the 2007 Feasibility Report for Piedmont Food & Agricultural Processing
Center, the Center is projected to be self-sufficient in the second or third year of
operation.
2. Grant funds from the Tobacco Trust Fund provide for a full year of operational costs
($122,000). An estimated 143 hours of facility rental will yield $156,000, which would be
sufficient revenue to operate the Center. Revenues from Year 1 can create a reserve
fund for subsequent years.
3. If revenues do not meet the operating expenses, the Inter-local Agreement indicates
that upon justification of revenue shortfall, 40% of the revenue shortfall, not to exceed
$60,000 per year, will be charged to Orange County. This figure is based on a
maximum operating budget of $150,000.
RECOMMENDATION(S): The Manager recommends the Board approve the Inter-local
Agreement and authorize the Chair to sign on behalf of the Board.
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INTERLOCAL COOPERATION AGREEMENT
FOR THE PIEDMONT FOOD & AGRICULTURAL PROCESSING CENTER
BY AND AMONG
THE COUNTY OF ALAMANCE, THE COUNTY OF CHATHAM, THE COUNTY OF
DURHAM, and THE COUNTY OF ORANGE
THIS INTERLOCAL COOPERATION AGREEMENT is made and entered into this the
day of , 2010, by and among the COUNTY of ALAMANCE, a political
subdivision of the State of North Carolina (hereinafter referred to as "Alamance County"), the
COUNTY of CHATHAM, a political subdivision of the State of North Carolina, (hereinafter
referred to as "Chatham County"), the COUNTY of DURHAM, a political subdivision of the
State of North Carolina, (hereinafter referred to as "Durham County"), and the COUNTY of
ORANGE, a political subdivision of the State of North Carolina, (hereinafter referred to as
"Orange County"); (each county may be referred to herCin as a "Party" and collectively
"Parties".) This Agreement is made as an Interlocal ~ oopcration Agreement pursuant to Part I,
Article 20 of Chapter 160A of the General Statutes of North ('~n-c~lina.
WITNESSETH:
WHEREAS, Alamance County, Chatham County, Durh~». County, and Orange County
jointly funded a feasibility study for a regional value-added, shared-use, food and agricultural
processing center which was completed in November 2007; and
WHEREAS, the Boards of County Commissioners of the Parties agreed by respective
county resolutions to authorize Orange County to act as fiscal agent and engage in grant
development for a regional ~ al ue.-added, shared-use, food and agricultural processing center,
referred to as the Piedmont l=oud algid Agricultural Processing Center, (hereinafter referred to as
"Center"); and
WHEREAS, Orange County agreed to dedicate the facility at 500 Valley Forge Road to
the Center, with compensation to be mutually agreed upon by the Parties prior to its opening for
operation; and
WHEREAS, grants totaling $1.098 million have been committed to this project as of
August 11, 2009 by the NC Agricultural Development and Farmland Preservation Trust Fund
(NCADFP), the Golden Leaf Foundation, the Tobacco Trust Fund, and the US Housing and
Urban Development Economic Development Initiative; and
WHEREAS, pursuant to NCGS 158-7.1 the Parties hereto are authorized to make
appropriations for the purpose of increasing the agricultural industries of any city or county; and
WHEREAS, pursuant to NCGS 158-7.4 and Article 20 of Chapter 160A of the General
Statutes of North Carolina, the Parties hereto are authorized to enter into this Interlocal
Agreement for economic development purposes. This Agreement shall set forth their respective
participation, obligations, and rights related to the development and operation of the Center,
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which shall be operated for purposes of encouraging and aiding agricultural industries and
business prospects for the participating jurisdictions.
NOW, THEREFORE, for and in consideration of their mutual promises, Alamance
County, Chatham County, Durham County, and Orange County hereby agree as follows:
1. Purpose
The purpose of this Agreement is to set forth the undertakings of the Parties hereto with
regard to their respective contributions, obligations, and participation i n. the multi jurisdictional
operation of the Center.
2. Piedmont Food and Agricultural Processing Centel-
The Center. will be a regional value-added, shared-use, food and agricultural processing
center. This project will build capacity for local farmers to meet the increasing ``consumer
demand for retail and wholesale marketing of locally grown farm products in the Piedmont
Region of North Carolina. The Center will accommodate a range of processing needs and allow
for future expansion. Business development support and education, especially training for new
food-based businesses, developing busi ess .plans, and meeting food safety requirements will
allow the center to engage rural farm communities with the opportunities offered by the Center.
Revenue projections from user fees that prop ide ulc~ntives for sourcing locally grown farm
products is approximately $150,000 by year 3 of operation. «~ith gross income for clients using
the facility estimated at $2,651,000 per year.
This Center will have the potential to sew e farmers on 16,214 farms in 22 counties within
a 75-mile radius of Hillsborough, North Carolina, representing almost 30% of farms statewide.
Farmers and their rural communities as well as to~~acco processing and marketing communities
can benefit from participating in training and education programs, adding value to and marketing
local farm product: Within the 22-county area, this Center can enhance the capacity to process
local farm products for the 3.3 million individuals who are potential customers for the products
createcj at the Center.
The short-term goal c>f the project is to open a regional value-added shared use food and
agricultural prucessing Center in July of 2010 with a range of programs and equipment. The
success of the short term bowl will be measured by client use and revenues generated by the
Center, as well as training and assistance to fanners and other food entrepreneurs. The long term
goal is to become fin:~~cially independent by 2013. This will be accomplished by building the
capacity to process and market North Carolina agricultural products, thereby increasing the
number and diversity of farm operations that help to sustain the Piedmont Region.
3. Steering Committee
The Boards of County Commissioners of the Parties shall appoint a Steering Committee
to assist Orange County in successfully launching the Center. All members of the Steering
Committee shall be appointed by the Boards of County Commissioners of the Parties and shall
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consist of one County Commissioner and the County Manager or his or her designee, the
Cooperative Extension Director of each of the Parties, and a local farmer from each county.
This Steering Committee shall provide general guidance to Orange County in the launch and
operation of the Center. Upon the expiration or termination of this Agreement the Steering
Committee shall automatically dissolve.
4. Management and Operation of the Center
The Parties hereby agree that Orange County will own, maintain and operate the Center
for the purposes stated in this Agreement. Orange County will enforce the rules and
regulations, approved by the County Manager of Orange County, with the advice of the Steering
Committee governing the reasonable use of the Center, operate the Center in an efficient and
economical manner, and maintain the properties constituting the Center in good repair and sound
operating condition. Each Party to this Agreement shall have the opportunity to review and
comment on the proposed rules and regulations prior tip the Center opening and any substantive
changes made to said rules and regulations for the "1'ern~ ~~i this Agreement.
5. Insurance
Orange County shall maintain, during the term o f th i s Agreement, all applicable
insurance coverage as is currently maintained for other Ur~ul~c .County-owned facilities
including, but not limited to, Fire and Casualty Insurance, Work er' S Compensation Insurance,
Comprehensive General Liability Insurance covering claims arising out of or relating to bodily
injury, including bodily injure„ sickness, disease or death and damage to real and personal
property including loss of use resulting thereof.
6. Financial Support
A. The Piedmont rocid aid A`~ricuhura7 Processing Center Feasibility Study (hereinafter
"Feasibility Study") indicated a positive cash flow by year three of operations and
this fiscal forecast did not include the $120,000 in grant funds awarded for year one
operations. However, there is still a need to provide a mechanism of fiscal support of
the Center in the event of revenue shortfall during the .term of this Agreement. The
Parties agree that they shall allocate sufficient budgetary funds to support the Center
as provided in this section 6. The Parties agree that should the Center experience
revenue shortfall in excess of that amount stated in this section 6B the governing
Boards of the Parties may, but are not required to, authorize the expenditure of
additional funds to cover such shortfall.
B. Pursuant to N.C.G.S. 158-7.4, the Parties are authorized to provide resources to
support the Center in order to maintain its operations. To that end, each party agrees
to provide funds to Orange County for the operation of the Center upon notice and
justification of revenue shortfall up to a maximum amount of one hundred and fifty
thousand dollars ($150,000) per fiscal year, as follows:
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40% of the revenue shortfall (not to exceed $60,000 per fiscal year) will be charged to
Orange County.
60% of the revenue shortfall (not to exceed $90,000 per fiscal year) will be split
proportionally among the remaining Parties as follows:
33 1/3 % to Alamance County
33 1/3 % to Chatham County, and
33 1/3 % to Durham County.
It is anticipated that the Parties shall not contribute funds to the Center during Fiscal Year
2010-11. Notice of a revenue shortfall shall be provided by Orange County to the Parties no
later than February in any given fiscal year. Orange County shall provide additional information
as deemed necessary by any party in order to make a determination of need for financial
assistance in the event of a revenue shortfall. The notice cif shortfall shall provide the projected
amount each Party is responsible for under this Sectic,n (;. Notice of the actual amount of any
revenue shortfall shall be provided to the Parties by June 0'h of any given fiscal year. Funding
for expected revenue shortfalls shall be due by July 1 _> of the tolluwing fiscal year. The failure
of all Parties to agree on the revenue shortfall and fund the Center inn accordance with the terms
of this Agreement shall be grounds for terminating this Agreement. All Parties agree to
cooperate in good faith to sustain the operations of the Center t~~r the term of this Agreement.
In the event additional parties are added to this Agreement, i}.~e additional party shall be
added to the. formula above and share equally in the 60% share of the shortfall.
7. Term
The term of this Abrecme.nt shall commence on the date first written above and shall
exist and continue until June , U_ ? O 15, t~.nless otherwise terminated as herein provided or
extended upon mutual agreement of all Parties, which agreement shall be made in writing and
executed with the same formality as this :4~reement.
8. Appointment of Personnel
Each Party's respective Manager shall designate the persons to carry out the obligations
of that Party under this Agreement.
The Orange County Manager shall appoint the Executive Director of the Center with the
advice of the Steering Committee. The Executive Director shall be an Orange County employee
solely accountable to the Orange County Manager and responsible for carrying out the Center's
goals and objectives, the day-to-day management of the Center, and the overall operations of the
Center. The Executive Director shall have the full authority and freedom to make all necessary
operational decisions and take all necessary actions except those reserved to the Manager.
Acting within this authority, the Executive Director shall not perform any act, or allow or cause
to be performed any act, that is unlawful, insufficient to meet commonly accepted business and
professional standards and the prudent person test, in violation of contractual standards or
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requirements set forth by funding sources or regulatory bodies, or contrary to explicit restraints.
The Boards of Commissioners of the Parties and the Steering Committee shall have the right to
request information and comment on the performance of the Center's Executive Director. If
such a request or comment is received the Orange County Manager shall respond accordingly.
9. Reporting
The Executive Director shall provide an annual report to the Boards of Commissioners of
the Parties. The annual report shall set forth a complete operating and financial statement
covering the operation of the Center during such year, and shall be dui onr before June 30th of
each year. The Executive Director shall provide a quarterlS financial report to the county
managers of each of the parties. The Executive Director shall also pros ide a monthly operational
report to the Steering Committee. All requirements under this section shall end upon the
termination of this Agreement.
10. Termination
Any party may withdraw from this Agreement at the end of any fiscal year upon not less
than one (1) year's advance notice of withdrawal to the other Parties. Upon the withdrawal from
this Agreement by any Party, cost and funding responsibilities shall be redistributed among the
remaining Parties as follows: 40% to Orange County and 60% to be distributed equally among
the Remaining Parties; provided however, that if Orange County or more than one (1) of the
other Parties withdraws this Agreement shall terminate. II' any Party attempts to withdraw
without providing the required one (1) year's advance notice, such Party shall remain liable for
its share of the cost and funding responsibilities through the Cnd of the next fiscal year. Upon a
Party's withdrawal from this Agreement, the Center shall charge the residents of the withdrawing
party an additional fee for use of the Center and i~uilities. The amount of additional fee shall be
determined by the remaining Parties by mutual agreement after consultation with the Executive
Director of the Center and the Steering Committee.
11. G--aut Funds
The Parties acknowledge that grant funding has been and may be awarded to Orange
County for the development of the Piedmont Food and Agricultural Processing Center. Orange
County administers said grants and shall continue to do so for the benefit of the Center. Upon
termination of this rl~recment by any Party or upon its natural expiration, should such grant
funds remain undisu-ibutcd, Orange County shall continue to manage said grant funds for the
benefit of the Center in accordance with the Grant and this Agreement.
12. Determination of Policy
Orange County shall, with the advice of the Steering Committee, have the ongoing
responsibility in its discretion (1) to administer and operate the Center in accordance with this
Agreement and (2) to determine and modify the rules and regulations governing the operation of
the facility, as may be necessary, from time to time.
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13. .General Provisions
A. Relationship of Parties. Nothing contained in this Agreement shall be construed to
create or form a partnership or joint-venture between the Parties or render either
Parry liable for the debts or obligations of the other.
B. Assignments. This Agreement is not assignable by any Parry without the written
consent of all other Parties.
C. Notices. All notices provided for in this Agreement shall be in writing, addressed
to the respective County Manager.
D. Good Faith. The Parties mutually agree to deal in good faith with the other in all
respects in performing their duties under this Agreement.
E. Governing Law. This Agreement shall b~ ~~~~~~zried by and in accordance with the
laws of the State of North Carolina.
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14. Real Property
The Parties acknowledge that Orange County has dedicated the building located at 500
Valley Forge Road to the location and operation of the Center. tit all times during the term of
this Agreement the building and facilities located at 500 Valley Forge Road shall remain the
property of Orange Count<~. Upon the expiration of this Agreement said property shall remain
the property of Orange Count~~.
15. Personal P~rupcrh~
The personal propem:. contained wlt~in the building and facilities located at 500 Valley
Forge Road, and which are dveaicatcd to the use of the Center, shall at all times during the term of
this Agreement and upon its expiration, remain the property of .the respective parties in the
percentage as set forth in Section 6 (Firjancial Support)
16. Compliance with the Law
Orange County shall comply with all applicable laws, statutes, rules and regulations of
any governmental authority as it may relate to the Center. Nothing in this Agreement shall
prohibit Orange County from contesting in good faith the applicability or validity of any such
law or regulation so long as Orange County's failure to comply with such law or regulation will
not materially impair the operation of the Center.
17. Rates, Fees and Charges
The Parties agree that the long term success of the Center is the goal of this Agreement
and requires that the Parties remain committed partners. The Parties also acknowledge that
another goal of this Agreement is to create a successful operation at the Center, which may be
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eventually transferred to a nonprofit corporation at some future date. The Parties agree that
Orange County is ultimately responsible for grant administration and reporting and must retain
broad authority with respect operating the facility. Therefore, Orange County may seek the
advice of the Steering Committee in implementing and adjusting the initial rates, fees and
charges. The citizens of the Parties shall pay the same rates, fees and charges. Any revenues
generated by the Center shall be used only for operation and maintenance of the Center.
18. Reservation of Rights
Not withstanding any other provision of this Agreement or of any related policies to the
contrary, Orange County will in all events be entitled to operate and maintain the Center and all
its facilities, and may adjust any and all rates, fees and charges, as it may in its reasonable
discretion deem reasonably necessary to (1) comply with the requirements of any applicable law
or regulation or court order, administrative decree or siniilaiorder of any judicial or regulatory
authority or (2) to comply with any contracts, instnunents, or other agreements at any time
securing outstanding Center debt. All Parties shall he notified ~ days in advance of any changes
to the Center's rates, fees and charges throughout the "henn of this t~greement.
19. Amendments
This Agreement may be amended at any time by execution b~- all Parties of a written
agreement.
20. Entire Agreement
This Agreement shad cortistitute the entire understanding between the Parties and shall
supersede all prior h.ui~lerstan~3in~rs and agreements relating to the subject matter hereof and may
beamended only b}~ ~~~rittcn mutual ab cement of the Parties.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the day
and year first written above.
ATTEST: FOR ALAMANCE COUNTY
By:
Clerk to the Board Chair, Board of Commissioners
ATTEST: FOR CHATIAM COT ~)TY
By: _
Clerk to the Board Chair, Board of Commissioners
ATTEST: FUR DURHAM COUNTY
~ y:
Clerk to the Board Chair, Board of Commissioners
ATTEST: FOR ORANGE COUNTY
By:
Clerk to the Roard Chair, Board of Commissioners
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This instrument has been pre-audited in the manner required by the Local Government Budget
and Fiscal Control Act.
Alamance County Finance Director
This instrument has been pre-audited in the manner required by the Local Government Budget
and Fiscal Control Act.
Chatham County Finance Director
This instrument has been pre-audited in the manner required by the Local Government Budget
and Fiscal Control Act.
s.
Orange County Finance Director
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