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HomeMy WebLinkAboutAgenda - 06-05-1997 - 2 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 5, 1997 Action Agenda Item No. SUBJECT: Solid Waste Reorganization DEPARTMENT: Public Works PUBLIC HEARING: (Y/1) BUDGET AMENDMENT: (Y/1) ATTACHMENT(S): INFORMATION CONTACT: 4/11/97 Draft of Interlocal Agreement Wilbert McAdoo, ext 2625 4/25/97 Attorney Memo w/Draft Revisions to Article V TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 227-2031 PURPOSE: To discuss potential changes to the governance structure of solid waste management activities in Orange County. BACKGROUND: For several years, Orange County and its municipalities have been discussing the need to reorganize the structure by which landfill operations and other solid waste management activities in Orange County are governed. At the April 17, 1997 meeting of the Assembly of Governments, elected officials from all four jurisdictions received a report from the work group that was tasked to refine a proposed governance structure following two "Solid Waste Summits"in September and November 1996. Bob Jessup, an attorney retained by the Landfill Owners' Group to develop an interlocal agreement that would address governance of solid waste management activities, also responded to questions about the fourth draft of that interlocal agreement, which had been circulated to Board members and staff. A copy of that draft is included for reference as Attachment 1. One outcome of the April 17 Assembly of Governments meeting was that the small work group of elected officials would meet one more time to review comments made at the April 17 meeting, and to finalize recommendations on the governance structure that would then be forwarded to all four governing boards for consideration. The meeting of that work group is scheduled for Monday, June 23. Discussion of this item at the Board's June 5 work session will provide the opportunity to provide feedback from the Orange County Commissioners to that work group for consideration at their final meeting. Also included as Attachment 2 to this abstract is a memo from Mr. Jessup, which accompanies a revised Article V to the draft interlocal agreement. Additional revisions to the interlocal agreement 2 may be made prior to June 23, but at any rate, the Board of Commissioners can expect to receive a complete revision after the work group meets on June 23. RECOMMENDATION(S): The Manager recommends that the Board discuss the current draft of the interlocal agreement and provide any comments or direction that should be conveyed to the work group for their June 23 meeting. Fourth draft, dated April 11, 1997 3 Marked to show changes from the draft ofApril4(which was the first draft distributed to the elected official subcommittee) INTERLOCAL AGREEMENT C,toh� (D P.Ctvadry CONCERNING SOLID WASTE (f am MANAGEMENT MATTERS 0 /j'e s.. 10. 1 fie s&- Dated as of July 1, 1997 �(An a9Q S,fe. Among ORANGE COUNTY, NORTH CAROLINA TOWN OF CARRBORO, NORTH CAROLINA TOWN OF CHAPEL HILL,NORTH CAROLINA TOWN OF HILLSBOROUGH, NORTH CAROLINA 4 INTERLOCAL AGREEMENT CONCERNING SOLID WASTE MANAGEMENT MAT ERS This Interlocal Agreement Concerning Solid Waste Management Matters is dated as of July 1, 1997, and is by and among ORANGE COUNTY, NORTH CAROLINA, the TOWN OF CARRBORO, NORTH CAROLINA, the TOWN OF CHAPEL HILL, NORTH CAROLINA, and the TOWN OF HILLSBOROUGH, NORTH CAROLINA. WHEREAS, the parties have worked together over a period of years to develop an effective, comprehensive approach to the solid waste management issues facingAthe residents of Orange County and the towns therein, and have reached this Agreement to address those issues; THEREFORE, the parties agree as follows: ARTICLE I Purpose of Agreement; Conditions to Effectiveness 1.01. Purpose The purpose of this Agreement is to set forth the Parties' agreement to transfer operational control to the County, of the solid waste management system servingNresidents of the County and the Towns, and to establish the terms for the management of such so'M waste management system under which the Towns will participate in formulating solid waste management policy for their own residents and for Orange County as a whole. 1.02. Conditions. Notwithstanding any other provision of this Agreement, (a) no provision of this Agreement, other than the requirement to bargain as described in Section 1.03, shall become effective until the Parties have adopted the initial Solid Waste Management Plan as described in Article IV; 2 5 (b) no provision of this Agreement, other than the requirement to bargain as described in Section 1.03, shall become effective until the Parties have selected the New Solid Waste Management Site and finished developing the processes described in Sections 3.02(a) and 3.02(b); and (c) the asset and liability transfer contemplated by Article II, and the transfer of operational control contemplated by Article V_ , shall not take place until Carrboro, Chapel Hill and the County haveAexecuted and delivered the Transfer Agreement, as contemplated by Sections 2.01 and 2.06. The adoption of the Solid Waste Management Plan, the selection of the New Solid Waste Management Site, the completion of the development of the row cesses described in Sections 3.02(a) and 3.02 and the completion of the Transfer are referred to in this Agreement as the"Open Matters." 1.03. Diligent. Good Faith Bargaining, The Parties shall bargain in good faith and with all due diligence, and shall use their respective best efforts, to reach final agreement on the Open Matters. 1.04. Deadline for-Negotiations (a) This Agreement shall automatically terminate on January 1, 1998, unless each Governing Board has adopted an appropriate resolution referencing this Agreement and stating that the Open Matters have been resolved to such Party's satisfaction. (b) Notwithstanding the provisions of subsection (a), if the Governing Board of Hillsborough is the only Governing Board that does not adopt such an approving resolution by January 1, 1998, then (i) this Agreement shall be of no further effect as to Hillsborough after January 1, 1998, and (ii) this Agreement shall automatically terminate on February 1, 1998, unless each of the other three Governing Boards has adopted a subsequent appropriate resolution determining to allow this Agreement to continue in effect as among such other three Parties. ARTICLE II Coun , 's Acquisition of Existing Solid Waste System 2.01. County's Acquisition; Consideration. In consideration for the transfer of assets described in Section 2.02, and in consideration for the other undertakings of the Towns in this Agreement (including the undertakings set forth in Section 2.04), but without additional monetary compensation, the County agrees to assume the liabilities described in Section 2.03 and to undertake the other obligations imposed on it by this Agreement. The Transfer will be consummated pursuant to a separate transfer agreement (the "Transfer Agreement') to be negotiated among the 3 6 County, Carrboro and Chapel Hill, which agreement shall be subject to approval by the respective Governing Boards of those three Parties. 2.02. Assets. (a) Under the Transfer Agreement, Carrboro and Chapel Hill shall transfer alMo{`�ieir respective right, title and interest in and to all of the Existing System Assets to the County. (b) The Parties agree that the Greene Tract does not constitute any part of the Existing Tystem Assets for any purpose of this Agreement. The Parties further agree that they do not intend, by the Transfer, to revive any easement across the Greene Tract fbF the benefit of the property known as the "Neville Tract." 2.03. Liabilities, (a) Under the Transfer Agreement, the County shall assume all liabilities, including environmental liabilities, related to the ownership of the Solid Waste System, including, to the extent permitted by law, all liabilities related to the ownership of Existing System Assets which may have accrued prior to the Closing. (b) Under the Transfer Agreement, the Parties shall retain their individual liability, if any, under environmental laws and otherwise, related to their respective use of the Solid Waste System both before and after the Closing (as, for example, any liability arising from their delivering, or causing to be delivered, Solid Waste to System Management Facilities). (c) The Parties acknowledge that the County's assumption of certain liabilities pursuant to the Transfer Agreement, as described in subsection (a) above, will not limit, and is not intended to limit, the ability of any governmental authority to impose, or to seek to impose, environmental or other liability directly on a Party (as, for example, any liability accruing to the current owners of the Existing System Assets as a result of their status as owners prior to the Closing). (d) The County shall not assume any indebtedness of Carrboro or Chapel Hill. 2.04. pelivery of Solid Waste and Recyclables. As additional consideration for the Parties' respective and mutual undertakings under this Agreement and the Transfer Agreement, the County and the Towns all agree to deliver, or cause to be delivered, to System Management Facilities for disposal or processing, respectively, all Solid Waste and County Recyclables under their respective control, including (without limitation) all Solid Waste and County Recyclables collected by any Party's employees, solid waste collection contractors, solid waste collection licensees or solid waste collection franchisees; provided, however, that there shall be no such obligation to deliver Other Recyclables to System Management Facilities. 2.05. Treatment of Solid Waste System Employees. (a) All of the System Employees will be transferred to the County and become County employees 4 subject to the supervision of the County Manager in the same fashion as other County employees. (b) The Parties acknowledge that it is an important objective of this Agreement that the current total compensation package for System Employees be maintained at a substantially equivalent level through the Transfer, although the combination of salary and benefits for any employee may change. The Parties recognize that all components of compensation to System Employees after the Transfer will be subject to changes in salaries and benefits in the same fashion as other County employees. The County and Chapel Hill shall develop a detailed schedule comparing the total pre-Transfer and post-Transfer compensation for each System Employee in connection with the Transfer Agreement. 2.06. Closing Procedure. (a) The Transfer Agreement shall provide for the appropriate parties to execute and deliver at the Closing the documents and instruments listed on Exhibit C to carry out the Transfer, all of which documents and instruments shall be in form and substance reasonably acceptable to the County, Carrboro and Chapel Hill. (b) The Transfer Agreement shall transfer all Existing System Assets on an as-is, where-is basis, without warranty of title, condition or any other kind; provided, however, (i) that real property shall be transferred pursuant to general warranty deed as described in subsection (a) of Exhibit C, (ii) that vehicles subject to State motor vehicle titling requirements shall be transferred by endorsement and delivery of title certificates as described in subsection (b) of Exhibit C, and (iii) that Chapel Hill shall provide such evidence of title to all other transferring equipment as it may have reasonably available in its business records. (c) In the Transfer Agreement, the County, Carrboro and Chapel Hill shall make appropriate representations and warranties with respect to (i) their respective authority to enter into the Transfer Agreement and consummate the Transfer and (ii) the absence of conflicts with agreements and applicable laws. ARTICLE III Selection of New Solid Waste Management Site and Related Matters 3.01. Selection of New Solid Waste Management Site, The Parties shall work together to select a New Solid Waste Management Site within Orange County. 3.02. Benefits to Communities. (a) The Parties shall work together to develop a process to address issues related to providing reasonable public benefits to the community of owners and residents of property abutting the New Solid Waste Management Site, in recognition of the effects that operation of a landfill may be 5 . 8 perceived to have on the community of adjoining property owners and residents. These public benefits are to be considered as separate and distinct from any compensation determined to be owed for any "taking" of an interest in property, as determined under applicable State or federal law. The Parties agree that this process should include participation by persons in the community of owners and residents of property abutting the New Solid Waste Management Site. To the extent permitted by law, by this Agreement and by generally accepted accounting principles, and to the extent determined by the Parties, the costs of providing reasonable public benefits as described in this subsection may be treated as an expense of the Solid Waste System and may be paid from System Revenues. (b) The Parties shall work together to develop a process to address issues related to providing reasonable public benefits to the community of owners and residents of property abutting the site of the existing landfill These public benefits are to be considered as separate and distinct from any compensation determined to be owed for any "taking" of an interest in property,as determined under applicable State or federal law. ARTICLE IV Solid Waste Management Plan 4.01. Agreement To Develop; Purpose. The Parties shall work together to develop and adopt the Solid Waste Management Plan to provide a comprehensive framework for coordinated solid waste management�for residents of Orange County and the Towns. `r 4.02. Provisions. (a) The Solid Waste Management Plan shall include definitive agreements among the Parties concerning solid waste management issues, including the following: (i) a determination of which materials will be excluded from disposal at System Management Facilities (and which will therefore be excluded from the definition of "Solid Waste" for the purposes of this Agreement) and which materials will be processed by the County for recycling (and which will therefore constitute "County Recyclables" for purposes of this Agreement); (ii) a determination of which constituent components of Solid Waste may not be delivered to System Management Facilities in mixture with other components; (iii) an approach to the delivery of construction and demolition waste to System Management Facilities, and as to the disposition of such waste; and (iv) an approach to materials recovery processing. 6 9 (b) The Solid Waste Management Plan shall also set forth the base level of service that the County intends to provide through the Solid Waste System, including (without limitation) such items as collection of Recyclables and core operating hours of disposal facilities. The Solid Waste Management Plan shall also explicitly provide for the rights of parties to contract with one another or with other entities to provide levels of service above the base level of service; provided, however, that the Parties shall in all events be required to comply with the provisions of Section 2.04. (c) The Solid Waste Management Plan shalltreserve to the County discretion, within the framework of the Solid Waste Management Plan, over operational and admnnstrative matters related to the Solid Waste System, as provided in Article V. The Solid Waste Management Plan shall reserve to the Parties the right to determine their own systems and procedures for the collection of Solid Waste and related matters, provided that such systems and procedures are reasonably designed to be consistent and compatible with(i) the provisions of the Solid Waste Management Plan concerning Solid Waste disposal and processing of County Recyclables and(ii)the County's administrative and operational policies as to such matters. ARTICLE V County's Operation of the Solid Waste System 5.01. In General, The County shall operate the Solid Waste System in a manner reasonably consistent with the Solid Waste Management Plan. Wi framework of the Solid Waste Management Plan, the County shall have discretion to carry out operational and administrative matters related to the Solid Waste System in such manner as in its discretion it deems most appropriate.A 5.02. Solid Waste Sy,tem Operation. (a) The County shall establish and enforce reasonable rules and regulations governing the operation and use of the Solid Waste System, operate the Solid Waste System in an efficient and economical manner, and maintain the properties constituting the Solid Waste System in good repair and in sound operating condition for so long as the same are necessary for the operation of the Solid Waste System. (b) As part of its responsibilities to operate the Solid Waste System, the County shall provide System Management Facilities suitable for the County, the Towns and Aresidents of the County and the Towns to dispose of Solid Waste. The County shall have the right to refuse to accept for disposal at System Management Facilities any material or substance which the County reasonably determines is barred from such disposal by the Solid Waste Management Plan or any applicable law or regulation. 7 ., 10 5.03. Compliance with Law, The County shall comply or cause there to be compliance with all applicable laws, orders, rules, regulations and requirements of any governmental authority relating to the construction, use and operation of the Solid Waste System. Nothing in this Agreement, however, shall prevent the County from contesting in good faith the applicability or validity of any such law or other requirement, so long as the County's failure to comply with the same during the period of such contest will not materially impair the operation or revenue-producing capability of the Solid Waste System. 5.04. Budget, The County shall annually adopt a separate budget for the Solid Waste System in accordance with the County's usual budgetary process. 5.05. Records.Accounts and Audits; Other Reports. (a) The County shall segregate for accounting purposes all the accounts, moneys and investments of the Solid Waste System. (b) The County shall keep accurate records and accounts of all items of costs and of all expenditures relating to the Solid Waste System, and of the System Revenues collected and the application of System Revenues. Such records and accounts shall be open to any Party's inspection at any reasonable time upon reasonable notice. The County shall provide for the assets, liabilities and results of operations of the Solid Waste System to be presented in the County's annual audit as a separate enterprise fund, in accordance with generally accepting accounting principles. (c) The County shall make, or cause to be made, any additional reports or audits relating to the Solid Waste System as may be required by law. The County, as often as may reasonably be requested, shall furnish such other information as the County may have reasonably available concerning the Solid Waste System or its operation as the Commission or any Party may reasonably request. 5.06. Rates.Fees and Charges. The County shall fix and revise from time to time a system of rates, fees and charges for the use of, and for the services provided by, the Solid Waste System which is reasonably designed to pay in full all the costs (and only Lthe costs) of carrying out the County's responsibilities under this Agreement and the Solid Waste Management Plan] including (a) to the extent the County is so authorized under the Solid Waste Management Plan, costs of collecting Recyclables, and (b) costs of solid waste reduction activities. XThe County may revise any rates, fees and charges at any time, and shall not be limited in the number of times in any Fiscal Year that it changes the schedule of rates, fees and charges. 5.07. Mixed Solid Waste Tipping Fee. f4a The County may increase the Mixed o 1 Waste Tipping Fee from time to time in its discretion with at least 30 days' notice of the increase to all other Parties. The County may not, however, increase the Mixed Solid Waste Tipping Fee during or at the beginning of any Fiscal Year to a fee that exceeds the Mixed Solid Waste Tipping Fee in effect at the end of the preceding Fiscal 8 11 Year by more than 10%, without the prior consent of all the other Parties. Further, the Parties intend and agree that the County shall endeavor to adjust the Mixed Solid Waste Tipping Fee only annually, with changes becoming effective only at the beginning of a Fiscal Year. (b) The County may decrease the Mixed Solid Waste Tipping Fee from time to time in its discretion, without prior notice to or action by any other Party. The County shall promptly notify the other Parties of any decrease in the Mixed Solid Waste Tipping Fee. 5.08. Other Fees. If the County determines that it is or may be advisable to create, increase or decrease any other rate, fee or charge, including any s es charge en the County shall give at least 30 days' notice of the proposed change to the other Parties, and the County shall request that the Commission consider the proposed change. If the Commission recommends that the change be approved, then the change may take effect if it is subsequently approved by the County. If the Commission recommends that the change not be approved, then the change may take effect only if the change is subsequently approved by the County and at least two other Parties (except that approval by any two Parties shall be required at any time there are less than four Parties to this Agreement). A change shall take effect at the end of the notice period or, if later, the date of the last Governing Body action necessary for it to take effect. A 5.09.. Use of Syitem Revenues and County General Fundc. (a) The County shall use System Revenues solely to carry out the Solid Waste Management Plan and for the benefit of the Solid Waste System including (i) to the extent the County is so authorized under the Solid Waste Management Plan�Ato pay costs of collecting Recyclables„and 0 to pay costs of solid waste reduction activities. The County shall not use System Revenues to pay costs of collecting Solid Waste in unincorporated areas of the County. (b) The County shall in no event be required to use assets or funds other than those of the Solid Waste System to fulfill its obligations under this Agreement, including its obligations under Section 2.03(a)but excluding its obligations under Section 2.04. A 5.10. Risk Management. The County covenants that it will maintain a practical program of insurance and risk management, with reasonable terms, conditions, provisions and costs, which the County determines (a) will afford the County adequate protection against loss caused by damage to or destruction of the Solid Waste System or any part thereof and (b) will provide reasonable liability protection for bodily injury and property damage resulting from the construction or operation of the Solid Waste System. 'Any such insurance policies contracted by the County to provide for the risk coverages required by this Section shall be carried with one or more responsible insurance companies authorized and qualified to assume the risks thereof. The County shall have the right to provide for the risk coverages required by this Section, in whole or 9 12 in part, by means of a reasonable and prudent program of self-insurance, pooled risk coverages or other alternative means of risk management All insurance polices and other risk coverages provided for in this Section shall be for the County's benefit, and the County shall have the exclusive right to receive any amounts recoverable under such coverages. The County shall apply any amounts recovered under such coverages (net of any expenses of collection) in its discretion for the benefit of the Solid Waste System. K 5.11 Miscellaneous, The County and the Towns shall cooperate in preparing and submitting any reports that a Party may be required to file with governmental authorities, such as the State's Division of Waste Management. The County shall also be generally responsible for solid waste reporting, planning, regulatory compliance and similar matters. n 5.12. Reservation of County's Rights. Notwithstanding any provision of the Solid ante Management Plan or this Agreement to the contrary, the County shall in all events be entitled to operate the Solid Waste System and all its facilities, and may adjust any and all rates, fees and charges, as it may in its reasonable discretion deem reasonably necessary (a) to comply with any requirements of any applicable law or regulation or any • court order, administrative decree or similar order of any judicial or regulatory authority, (b) to comply with the requirements of any contracts, instruments or other agreements at any time securing Outstanding System Debt, (c) to pay unfinanceable costs related to the acquisition of the New Solid Waste Management Site, or (d) to pay costs of remediating any adverse environmental conditions at any time existing with respect to the Solid Waste System. -r ARTICLE VI ,Solid Waste Commission 6.01. Establishment. There is hereby established the "Orange County Solid Waste Management Commission." 6.02. Commission's Responsibilities. The Commission shall advise the County's Governing Board on matters related to the Solid Waste System and the Solid Waste Management Plan. The Commission's responsibilitie3include the following: (a) To recommend programs, policies, expansions and reductions of services, and other matters related to the operation of the Solid Waste System; (b) To suggest amendments to the Solid Waste Management Plan; 10 13 (c) To provide advice to the County Manager for use in the County Manager's developing the proposed annual budget for the Solid Waste System, to review the budget for the Solid Waste System as proposed by the County Manager to the County's Governing Board, and to provide recommendations to the County's Governing Board for the approval or amendment of the proposed budget; (d) To receive and interpret public input concerning the Solid Waste System and the Solid Waste Management Plan; (e) To further such mission and goals for the Solid Waste System as the Governing Boards may together adopt from time to time (a copy of the current version of the mission statement and goals appears as Exhibit D); (f) To advise the County Manager on the hiring of any subsequent department head for the Solid Waste System; (g) To provide promptly to the County's Governing Body a recommendation concerning any proposal for a change to rates, fees and charges forwarded to the Commission pursuant to Section 5.08; and K2) Such other matters as the Commission may deem appropriate or which may be requested by any Governing Board or the County Manager. 6.03 Appointment of Members; Terms (a) Each Governing Board shall appoint two members to the Commission. All appointments shall be made within 45 days of the Parties' reaching final agreement on the Open Matters, and each Party shall notify all the other Parties of its appointments within 10 days of making such appointments. (b) Commission members shall serve staggered three-year terms. To provide for the staggered terms of the members, the initial appointments by the Parties shall be for the following terms: County: Member A. 3 years Member B. 2 years Carrboro: Member A. 2 years Member B. 3 years Chapel Hill: Member A. 3 years Member B. 1 year Hillsborough: Member A. 1 year Member B. 2 years 11 14 (c) The first year of the term of each initial member of the Commission shall be deemed to expire on December 31, 1998. Thereafter, each year of the term of an Commission member shall run from January 1 through the subsequent December.31, but each member shall continue to serve until such member's successor has been duly appointed and qualified for office. (d) Each Party may establish its own rules and procedures for selecting and appointing Commission members„except that no staff member of a Party may be appointed as a Commission member. AThis Agreement in no way requires that any member be arkelected official of the appointing Parry. Any elected official of a Party appointed to the Commission shall be deemed to be serving on the Commission as a part of the individual's duties of office, and shall not be considered to be serving in a separate office. Any^elected official of a Party appointed to the Commission shall cease to be a member of the Commission upon such individual's cessation of service as agvlected official of such Party. Each member of the Commission serves at the pleasure of the appointing Party, and may be removed at any time by the appointing Party, with or without cause. (e) Any vacancy on the Commission shall be filled by the Governing Board that appointed the person who vacated the Commission seat. In the case of a vacancy created during the term of a member, the appointment to fill the vacancy shall be made for the remaining portion of the term in order to preserve the staggered-term pattern. 6.04. Commission's procedures. The Commission may adopt its own rules of procedure not inconsistent with the provisions of this Agreement, but the Commission's procedures shall include the following provisions: (a) Each member of the Commission shall have one vote, except that in the event of the absence of a member, the other member appointed by the same Party as the absent member shall be entitled to cast two votes. (b) A number of affirmative votes equal to a majority of the authorized number of Commission members shall be necessary to take any action. (c) The Commission's presiding officer shall vote as a member of the Commission,but shall have no additional or tie-breaking vote. (d) Representatives of a Party that has given notice of withdrawal as provided in Section 7.02 shall have no vote on any matters that will affect the Solid Waste System beyond the effective date of such Party's withdrawal, and such members shall not be deemed to be within the authorized number of Commission members for the purposes of subsection(b) above. 12 15 ARTICLE VII Term of Agreement; Withdrawal 7.01. Term, This Agreement (a) shall take effect immediately upon its execution and delivery by all the Parties, and (b) shall continue in effect so long as there are at least two Parties to the Agreement, in each case subject to the provisions of Section 1.02. 7.02. Withdrawal of a Party. (a) Any Party may withdraw from this Agreement (and thereby cease to be a Party to this Agreement) upon notice given to all the other Parties and subject to the other provisions of this Section. (b) A withdrawal may be effective only upon the beginning of a Fiscal Year. A Town may withdraw only with at least one year's notice. The County may withdraw only with at least two years' notice. (c) No withdrawal shall relieve a Party of its obligations under Section 2.04 so long as there is System Debt Outstanding; provided, however, that System Debt first issued or contracted after the date a Party gives notice of withdrawal shall be disregarded for the purposes of this subsection. (d) No withdrawal shall relieve any Party of its individual liability, if any, under environmental laws or otherwise, related to its respective use or ownership of the Solid Waste System which may accrue or have accrued prior to the effective date of such Party's withdrawal. ARTICLE VIII Parties' Representations and Warranties The Parties hereby represent and warrant, one to each other, but each only as to itself, as follows: (a) Valid Existence; Due Authorization The Party is a public body validly organized and existing under State law, has full power to enter into this Agreement and has duly authorized, executed and delivered this Agreement. (b) Valid Obligation. This Agreement, when executed and delivered by the Party and assuming its due authorization, execution and delivery by each other Party, will be the legal, valid and binding obligation of the Party, enforceable in accordance with its terms, except to the extent the same may be limited by the application of insolvency and similar general laws and by the application of equitable principles. 13 16 ' (c) No Breach of Law or Contract. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, (i) to the best of the Party's knowledge, constitutes a violation of any provision of law, rule or regulation governing the Party, or (ii) results in a breach of the terms, conditions or provisions of any contract, lease or other agreement or any order, decree or judgment to which the Party is a party or by which the Party is bound. (d) No Litigation. There is no litigation or any governmental administrative proceeding to which the Party (or any official thereof in an official capacity) is a party that is pending or, to the best of the Party's knowledge after reasonable investigation, threatened with respect to (i) the Party's organization or existence, (ii) its authority to execute and deliver this Agreement or to comply with the terms of this Agreement, (iii) the validity or enforceability of this Agreement or the transactions contemplated hereby, (iv) the title of the Party officers who executed this Agreement, (v) any proceedings relating to the Party's authorization, execution, delivery or performance of this Agreement, or (vi) the undertaking of the transactions contemplated by this Agreement. To the best of the Party's knowledge, there is no reasonable basis existing for any such litigation. (e) No Misrepresentation. No representation, covenant or warranty by the Party in this Agreement is false or misleading in any material respect. ARTICLE IX Miscellaneous 9.01. Amendments. This Agreement may not be modified or amended unless such amendment is approved by all Parties, is in writing and is signed on behalf of all the Parties. 9.02. Definitions-. Rules of C'onstraction. All capitalized terms used in this Agreement and not otherwise defined shall have the meanings ascribed thereto in Exhibit A. This Agreement and its terms shall be construed using the rules of construction set forth in Exhibit B. 9.03. Notices. (a) Any notice or other communication required or permitted by this Agreement must be in writing. (b) Any notice or other communication shall be deemed given (i) on the date delivered by hand or (ii) on the date it is received by mail, as evidenced by the 14 17 date shown on a United States mail registered mail receipt, in any case addressed as follows: (A) If to the County, as follows: Orange County Attn: County Manager 200 South Cameron St. Hillsborough,NC 27278 (B) If to Carrboro, as follows: Town of Carrboro Attn: Town Manager 301 West Main St. Carrboro, NC 27510 (C) If to Chapel Hill, as follows: Town of Chapel Hill Attn: Town Manager 306 North Columbia St. Chapel Hill,NC 27516 (D) If to Hillsborough, as follows: Town of Hillsborough Attn: Town Manager 137 North Churton St. Hillsborough,NC 27278 When this Agreement requires that notice be given to more than one Party, the effective date of the notice shall be the last date on which notice is deemed given to any required Party. (c) Any Party may designate a different address for communications by notice given under this Section to each other Party. (d) A Party may also designate, by notice to each other Party under this Section, additional addresses to which copies of required notices shall be given. Each Party shall make a good faith effort to send required notices to such additional addressees,but no failure to deliver any such additional notices shall affect the validity of notices properly given to the address designated in subsection(a) or its successor address. 15 18 (e) Whenever in this Agreement the giving of notice is required, the giving of such notice may be waived in writing by the Party entitled to receive such notice, and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 9.04. Further Instruments. Upon any Party's request, the Parties shall execute, acknowledge and deliver such further instruments as may be reasonably desired by any Party to carry out more effectively the purposes and intents of this Agreement. 9.05. Limitation of Rights Nothing expressed or implied in this Agreement shall give any person other than the Parties any rights to enforce any provision of this Agreement. There are no intended third-party beneficiaries of this Agreement. 9.06. Non-Business Days. When any action is provided in this Agreement to be done on a designated day or within a designated time period, and the designated day or the last day of the designated period is not a Business Day, the action may be done on the next Business Day,with the same effect as if done on the designated day. 9.07. Survival of Covenants and Representations. All covenants, representations and warranties made by the Parties in this Agreement shall survive the delivery of this Agreement. 9.08. Severability. If any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Agreement; provided, however, that upon the election of any Party, this Agreement shall immediately become void and of no further effect upon such election (except that the provisions of Section 2.04 and Section 7.02(c) shall continue in effect, unless either such Section is among the Sections held unenforceable) if any provisions of Section 2.02, Section 2.03, Section 2.04, Section 5.07 or Article VII are among those held unenforceable. 9.09. Governing Law. The parties intend that this Agreement and all rights and obligations provided for in this Agreement, including matters of construction, validity and performance, shall be governed by North Carolina law. 9.10. Entire Contract. This Agreement, including the Exhibits, constitutes the entire agreement between the Parties with respect to its subject matter. 9.11. Counterparts. This Agreement may be signed in several counterparts, including separate counterparts. Each shall be an original, but all of them together constitute the same instrument. [The remainder of this page has been left blank intentionally.] 16 19 IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed in its corporate name by its duly authorized officers, all as of the date first above written. ORANGE COUNTY,NORTH CAROLINA (SEAL) By: Chair,Board of Commissioners ATTEST: Clerk,Board of Commissioners TOWN OF CARRBORO,NORTH CAROLINA (SEAL) By: Mayor ATTEST: Town Clerk TOWN OF CHAPEL HILL, NORTH CAROLINA (SEAL) By: Mayor ATTEST: Town Clerk TOWN OF HII.LSBOROUGH, NORTH CAROLINA (SEAL) By: Mayor ATTEST: Town Clerk 17 20 EXHIBIT A DEFINITIONS For all purposes of this Agreement, the following terms have the following meanings, unless the context clearly indicates otherwise. "Agreement" means this Interlocal Agreement Concerning Solid Waste Management Matters, as it may be duly amended and supplemented from time to time. "Business Day" means any day (a) other than a day on which national banks are required or authorized to close and (b) on which the New York Stock Exchange is not closed. "Carrboro"means the Town of Carrboro,North Carolina. "Chapel Hill"means the Town of Chapel Hill, North Carolina. "Closing"means the consummation of the Transfer by the execution and delivery of the Transfer Agreement. "Commission"means the Orange County Solid Waste Management Commission created pursuant to Article VI. "County"means Orange County, North Carolina. "County Manager"means the County's chief administrative officer. "County Recyclables"means all materials processed by the County for recycling and not disposed of at System Management Facilities, as the same shall be established and amended from time to time under the Solid Waste Management Plan. "Existing System Assets"means all assets of the Solid Waste System existing as of the Closing, including, without limitation, the existing landfill, all other land and buildings, all equipment, including rolling stock, all license, permits and other governmental authorizations, all contracts, all customer records, all bank and other business records, and all cash and investments, including the capital reserve account currently maintained by Chapel Hill on behalf of the Landfill Owners' Group, but expressly excluding any interest in the Greene Tract. "Fiscal Year" means the County's fiscal year beginning July 1, or such other fiscal year as the County may lawfully establish. 1-8 ., 21 "Governing Board"means, for any Party, its governing board of elected officials. "Greene Tract" means the parcel of land comprising approximately 169 acres lying south of Eubanks Road described in Plat Book 14, Page 143 and Plat Book 15, Page 138, Orange County Registry. "Hillsborough"means the Town of Hillsborough, North Carolina. "Mixed Solid Waste Tipping Fee" means the fee of that name assessed for disposing mixed solid waste at the existing landfill, or any successor to that fee. "New Solid Waste Management Site"means the location of the landfill which is expected to be needed to serve the solid waste disposal needs of Le residents of Orange County and the towns therein. `— "Open Matters"has the meaning assigned in Section 1.02. "Other Recyclables" means materials which would otherwise constitute Solid Waste, but which are to be delivered to some other entity and processed for recycling. For any material to constitute Other Recyclables, however, the entity to which the material is to be delivered must represent that such materials are intended to be processed for use in new products. Material will not constitute Other Recyclables, for example, if the entity to which it is to be delivered intends to re-deliver the material to some other disposal facility (such as a landfill or incinerator), whether or not such material is intended to be subject to further processing before disposal. "Parties"means, collectively, the County and the Towns, and "Party"means any one of them individually. "Solid Waste"means all materials accepted by the County for disposal at System Management Facilities, as the same shall be established and amended from time to time under the Solid Waste Management Plan (subject to the provisions of Section 5.02(b)), which therefore does not include County Recyclables. "Solid Waste Management Plan" means the plan initially to be developed and adopted by all the Parties in accordance with Article IV, as it may be amended and supplemented from time to time in accordance with its terms. "Solid Waste System"means all assets, including both real and personal property, used from time to time in the conduct of the functions of collecting and processing Recyclables, reducing solid waste, disposing of Solid Waste and mulching, composting and reusing Solid Waste, and includes both (a) the Existing System Assets and (b) all moneys and investments related to such functions. "State"means the State of North Carolina. 19 22 "System Debt" means all obligations incurred or assumed by the County in connection with the ownership or operation of the System for payments of principal and interest with respect to borrowed money, without regard to the form of the transaction, and specifically including leases or similar financing agreements which are required to be capitalized in accordance with generally accepted accounting principles. System Debt is "Outstanding"at all times after it is issued or contracted until it is paid. "System Employees" means employees of Chapel Hill directly engaged in carrying out the business of the Solid Waste System (but expressly not including , employees of Chapel Hill's sanitation department). "System Management Facilities" means those assets of the Solid Waste System used to provide final disposal of solid waste, such as landfills. "System Revenues" means all amounts derived by the County from the imposition of rates, fees and charges for the use of, and for the services furnished by, the Solid Waste System. "Towns"means, collectively, Carrboro, Chapel Hill and Hillsborough. "Transfer" means the conveyance of the Existing System Assets to the County pursuant to the Transfer Agreement in accordance with Article IL "Transfer Agreement"has the meaning assigned in Section 2.01. 20 23 EXHIBIT B RULES OF CONSTRUCTI(1N For all purposes of this Agreement, unless the context clearly requires otherwise, (a) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles; (b) references to Articles and Sections are to the Articles and Sections of this Agreement; (c) words importing the singular shall include the plural and vice versa; (d) the headings in this Agreement are solely for convenience of reference; the headings shall not constitute a part of this Agreement,'nor shall they affect its meanings,construction or effect; (e) all references- to any Party shall be deemed to include any successor to the general functions,powers and properties of such Party; and (fl any references to approvals or other actions by any Party shall be deemed to be references to actions taken by the Party's Governing Board or taken pursuant to express, specific direction given by the Party's Governing Board. 21 24 EXHIBIT C DOCUMENTS ,ND INSTRUMENTS FOR TRANSFER (a) General warranty deed for the transfer of Carrboro's and Chapel Hill's real property interests in Existing System Assets; (b) Titles to vehicles that are subject to State titling laws, properly endorsed for transfer, (c) Bills of Sale to convey all ownership rights in all other personal property constituting any portion of Existing System Assets; (d) An Assignment and Assumption Agreement, transferring to the County all rights under existing contracts that constitute any portion of the Existing System Assets; (e) All instruments necessary and appropriate to transfer to the County all permits, licenses and other governmental authorizations now being utilized in connection with the operation of the System; (fl A detailed listing of the assets being transferred; and (g) Such other documents and instruments as any Party may reasonably request. 22 25 EXHIBIT D MISSION STATEMENT AND GOALS 23 _ 26 Robert M. Jessup Jr. APR 2 9 Attorney at Law t Received April 25, 1997 APR 2 81997 To the persons on the Managers Office accompanying distribution list Landfill Reorganization Agreement— Revised Article V Gentlemen and Ms. Loewenthal: Here is a revised draft of Article V of the agreement for your review. This draft reflects only a few changes that I have made in response to the discussion at the AOG meeting on April 17,but at least one change is substantial, and I thought circulating these changes would help keep things moving along. Once we have determined the next step in this process, I will circulate a new complete draft of the agreement. The changes to Section 5.06 are intended to clarify that the express fee limitations in other sections are limitations on the County's general powers as to rates, fees and charges set forth in Section 5.06. There is a new Section 5.08, entitled "Governmental Recycling Fee." At the end of the AOG meeting, the Managers asked me to add a provision to the draft agreement that treated any general recycling fees on a basis substantially similar to increases in the mixed solid waste tipping fee. Section 5.08 is my response. You will see that Section 5.08 applies only to fees imposed directly against governments, as opposed to charges imposed against users or property owners. This approach protects the governments from changes that directly impact their budgets, thereby providing protection of the type afforded by Section 5.07 (with respect to the Mixed Solid Waste Tipping Fee). This draft provides for recycling fees imposed on users or property owners, including general availability fees, to be handled as "Other Fees" under Section 5.09 (formerly Section 5.08). This framework generates(at least)the following questions: 100 Europa Drive Europa Center Suite 380 Chapel Hill,NC 27514 Phone:919/932-8790 Fax:919/967-4149 E-mail:Bob)essup @aol.com Robert M.Jessup Jr. 27 Landfill Reorganization Working Group April 25, 1997 Page 2 1) Is it appropriate for three out of four governments to put a Governmental Recycling Fee into effect, or should such a step require unanimous approval? It struck me that a "three out of four" rule was consistent with the provisions for creating new fees in Section 5.09, which is the most closely parallel provision in the draft agreement. 2) Is the 10% increase level still appropriate? Because a Governmental Recycling Fee would most likely be imposed to allow a decrease in the tipping fee, or at least to relieve pressure for an increase in the tipping fee, it seemed to me that the same level of increase was appropriate. 3) Should a new Governmental Recycling Fee have to take effect only at the beginning of a Fiscal Year? Because of the likely relationship between the tipping fee and the Governmental Recycling Fee, I saw no need for such a restriction. As always, I would be happy to hear your questions and comments on any aspect of the agreement. Because the new Section 5.08 is so substantial, I would especially appreciate feedback on that Section before we re-circulate tp elected officials. Very truly yours, Robert M. Jessup Jr. 28 Landfill Reorganization Agreement-- Revised Article V Special Draft of April 25, 1997-- Marked to show changes from Foruth Dr4a Qf pril 11, 1997 ARTICLE V County's Operation of the Solid Waste System 5.01. In General, The County shall operate the Solid Waste System in a manner reasonably consistent with the Solid Waste Management Plan. Within the framework of the Solid Waste Management Plan, the County shall have discretion to carry out operational and administrative matters related to the Solid Waste System in such manner as in its discretion it deems most appropriate. 5.02. Solid Waste System Operation. (a) The County shall establish and enforce reasonable rules and regulations governing the operation and use of the Solid Waste System, operate the Solid Waste System in an efficient and economical manner, and maintain the properties constituting the Solid Waste System in good repair and in sound operating condition for so long as the same are necessary for the operation of the Solid Waste System. (b) As part of its responsibilities to operate the Solid Waste System, the County shall provide System Management Facilities suitable for the County, the Towns and all residents of the County and the Towns to dispose of Solid Waste. The County shall have the right to refuse to accept for disposal at System Management Facilities any material or substance which the County reasonably determines is barred from such disposal by the Solid Waste Management Plan or any applicable law or regulation. 5.03. Compliance with Law. The County shall comply or cause there to be compliance with all applicable laws, orders, rules, regulations and requirements of any governmental authority relating to the construction, use and operation of the Solid Waste System. Nothing in this Agreement, however, shall prevent the County from contesting in good faith the applicability or validity of any such law or other requirement, so long as the County's failure to comply with the same during the period of such contest will not materially impair the operation or revenue-producing capability of the Solid Waste System. 5.04. Budget The County shall annually adopt a separate budget for the Solid Waste System in accordance with the County's usual budgetary process. � Y. • 29 5.05. Records, Accounts and Audits; Other Reports. (a) The County shall segregate for accounting purposes all the accounts, moneys and investments of the Solid Waste System. (b) The County shall keep accurate records and accounts of all items of costs and of all expenditures relating to the Solid Waste System, and of the System Revenues collected and the application of System Revenues. Such records and accounts shall be open to any Party's inspection at any reasonable time upon reasonable notice. The County shall provide for the assets, liabilities and results of operations of the Solid Waste System to be presented in the County's annual audit as a separate enterprise fund, in accordance with generally accepting accounting principles. (c) The County shall make, or cause to be made, any additional reports or audits relating to the Solid Waste System as may be required by law. The County, as often as may reasonably be requested, shall furnish such other information as the County may have reasonably available concerning the Solid Waste System or its operation as the Commission or any Party may reasonably request. 5.06. Rates, Fees and !'harges. (a) The County shalVestablish and maintain a system of rates, fees and charges for the use o, and d for the services provided by, the Solid Waste System which is reasonably designed to pay in full all the costs (and only the costs) of carrying out the County's responsibilities under this Agreement and the Solid Waste Management Plan, includin&(i) to the extent the County is so authorized under the Solid Waste Management Plan, costs of collecting Recyclables, ano,ii costs of solid waste reduction activities. (b) Subject to the limitations of Sections 5.07, 5.08 and 5.09, the County may revise any rates, fees and charges at any time ,,and as often as it shall deem appropriate, and shall not be limited in the number of times in any Fiscal Year that it change rats, fee or charge% 5.07. Mixed Solid Waste Tipping Fee. (a) The.County may increase the Mixed Solid Waste Tipping Fee from time to time in its discretion with at least 30 days' notice of the increase to all other Parties. The County may not, however, increase the Mixed Solid Waste Tipping Fee during or at the beginning of any Fiscal Year to a fee that exceeds the Mixed Solid Waste Tipping Fee in effect at the end of the preceding Fiscal Year by more than 10%, without the prior consent of all the other Parties. Further, the Parties intend and agree that the County shall endeavor to adjust the Mixed Solid Waste Tipping Fee only annually, with changes becoming effective only at the beginning of a Fiscal Year. (b) The County may decrease the Mixed Solid Waste Tipping Fee from time to time in its discretion, without prior notice to or action by any other Party. The County shall promptly notify the other Parties of any decrease in the Mixed Solid Waste Tipping Fee. 5.08. Governmental Recycling,Fee. (a) For the purposes of this Agreement, a "Governmental Recycling Fee" shall mean any fee related to the collection, processing or disposal of Recyclables that is imposed directly on the Parties themselves. 30 (b) If the County determines that it is or may be advisable to create and impose any Governmental Recycling Fee, then the County shall give at least 30 days' notice of the proposed Governmental Recycling Fee to the other Parties. A Governmental Recycling Fee may then be imposed only if the creation and imposition of such Governmental Recycling Fee is subsequently approved by the County and at least two other Parties (except that approval by any two Parties shall be required at any time there are less than four Parties to this Agreement). A new Governmental Recycling Fee shall take effect at the end of the notice period or, if later, the date of the last Governing Body action necessary for it to take effect. (c) If a Governmental Recycling Fee has been imposed, then the County may increase the Governmental Recycling Fee from time to time in its discretion with at least 30 days' notice of the increase to all other Parties. The County may not, however, increase any Governmental Recycling Fee during or at the beginning of any Fiscal Year to a fee that exceeds the fee in effect at the end of the preceding Fiscal Year by more than 10%, without the prior consent of all the other Parties. The Parties intend and agree that the County shall endeavor to adjust any Governmental Recycling Fee only annually, with changes becoming effective only at the beginning of a Fiscal Year. (d) The County may decrease any Governmental Recycling Fee from time to time in its discretion, without prior notice to or action by any other Party. The County shall promptly notify the other Parties of any decrease in any Governmental Recycling Fee. (e) The provisions of Section 5.09 shall govern the imposition or adjustment of any other fee related to the collection, processing or disposal of Recyclables (that is, other than a Governmental Recycling Fee), including(but not limited to) the imposition or adjustment of any general availability or use fee imposed or to be imposed against residents or residential properties. A_5.09_ Other Fees. If the County determines that it is or may be advisable to create, increase or decrease any other rate, fee or charge, including any sales charge, then the County shall give at least 30 days' notice of the proposed change to the other Parties, and the County shall request that the Commission consider the proposed change. If the Commission recommends that the change be approved, then the change may take effect if it is subsequently approved by the County. If the Commission recommends that the change not be approved, then the change may take effect only if the change is subsequently approved by the County and at least two other Parties (except that approval by any two Parties shall be required at any time there are less than four Parties to this Agreement). A change shall take effect at the end of the notice period or, if later, the date of the last Governing Body approval necessary for it to take effect. A5.10_ Use of System Revenues and County General Funds. (a) The County shall use System Revenues solely to carry out the Solid Waste Management Plan and for the benefit of the Solid Waste System, including (i) to the extent the County is so authorized under the Solid Waste Management Plan, to pay costs of collecting Recyclables, and(ii) to pay costs of 31 solid waste reduction activities. The County shall not use System Revenues to pay costs of collecting Solid Waste in unincorporated areas of the County. (b) The County shall in no event be required to use assets or funds other than those of the Solid Waste System to fulfill its obligations under this Agreement, including its obligations under Section 2.03(a)but excluding its obligations under Section 2.04. A_5.11. Risk Management The County covenants that it will maintain a practical program of insurance and risk management, with reasonable terms, conditions, provisions and costs, which the County determines (a) will afford the County adequate protection against loss caused by damage to or destruction of the Solid Waste System or any part thereof and (b) will provide reasonable liability protection for bodily injury and property damage resulting from the construction or operation of the Solid Waste System. Any such insurance policies contracted by the County to provide for the risk coverages required by this Section shall be carried with one or more responsible insurance companies authorized and qualified to assume the risks thereof. The County shall have the right to provide for the risk coverages required by this Section, in whole or in part, by means of a reasonable and prudent program of self-insurance, pooled risk coverages or other alternative means of risk management All insurance polices and other risk coverages provided for in this Section shall be for the County's benefit, and the County shall have the exclusive right to receive any amounts recoverable under such coverages. The County shall apply any amounts recovered under such coverages (net of any expenses of collection) in its discretion for the benefit of the Solid Waste System. 5.12. Miscellaneous, The County and the Towns shall cooperate in preparing and submitting any reports that a Party may be required to file with governmental authorities, such as the State's Division of Waste Management. The County shall also be generally responsible for solid waste reporting,planning, regulatory compliance and similar matters. / 5.13_ Reservation of County's Rights. Notwithstanding any provision of the Solid Waste Management Plan or this Agreement to the contrary, the County shall in all events be entitled to operate the Solid Waste System and all its facilities, and may adjust any and all rates, fees and charges, as it may in its reasonable discretion deem reasonably necessary (a) to comply with any requirements of any applicable law or regulation or any court order, administrative decree or similar order of any judicial or regulatory authority, (b) to comply with the requirements of any contracts, instruments or other agreements at any time securing Outstanding System Debt, (c) to pay unfinanceable costs related to the acquisition of the New Solid Waste Management Site, or(d)to pay costs of remediating any adverse environmental conditions at any time existing with respect to the Solid Waste System.