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HomeMy WebLinkAboutAgenda - 05-17-1994-IX-D 1 O R A N G E C O U N T Y BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 17, 1994 Action Agenda Item # --r (-D SUBJECT: Piney Mountain subdivision utility service extension agreements DEPARTMENT: County Manager PUBLIC HEARING: Yes S No ATTACHMENT(S) : INFORMATION CONTACT: County Attorney (919) 732-2196 Attachment "A" Agreement County Engineer Ext. 2300 Attachment "B" Agreement Attachment "C" Agreement TELEPHONE NUMBERS: Hillsborough - 732-8181 Durham - 688-7331 Mebane - 227-2031 Chapel Hill - 967-9251/968-4501 PURPOSE: To provide the BOCC - for its review and approval - the three agreements or contracts listed above that are related to the extension of sewer service to the Piney Mountain subdivision and that are necessary to satisfy local planning/utility extension concerns, state high unit cost construction grant requirements and construction administration/short term construction financing requirements. BACKGROUND: The Piney Mountain subdivision, located in the Rural Buffer area of east-central Orange County, has been afflicted by a failing waste treatment system. Problems with the Piney Mountain treatment system have been well documented through formal and informal reports to the BOCC and through news media articles. The BOCC, as well as the boards of Carrboro, Chapel Hill and OWASA, have agreed to allow the provision of sewer service to the Piney Mountain subdivision. All of the governing boards have agreed that OWASA own and operate the system, which is to be connected to the Durham sewer system. The BOCC and the OWASA board have also directed staff to provide assistance to the home owners in the Piney Mountain subdivision in an effort to seek grant funding for new system construction and repairs to portions of the existing sewer collection system. The assistance provided has involved developing and submitting a grant application to the NC Division of Environmental Management (DEM) High Unit Cost Grant program and developing various local agreements necessitated by grant requirements. 2 In addition to agreements necessitated by the grant funding process, another agreement allowing the extension of sewer service into the Rural Buffer had to be developed. The final goal of this series of agreements has been to a) ensure that the proposed sewer system does not serve to stimulate growth within the Rural Buffer; b) address grant funding requirements related to near-term system ownership; c) provide an administrative mechanism to oversee system construction and operation; and d) ensure the availability of funds - independent of and prior to grant reimbursement of expenditures - for administrative, design and construction costs; and e) provide for ultimate ownership and responsibility for the treatment system. The first of these agreements is entitled "Agreement Approving Extension of and Restrictions Regarding Connections to a Public Sewer Line to be Constructed to Provide Public Sewer Collection Service Solely to Piney Mountain Subdivision" (see attachment "A" ) . The purpose of this agreement is to bind all parties to terms which limit the use of the Piney Mountain waste treatment system to the existing residences and permitted building sites within the Piney Mountain subdivision. The agreement is intended to provide reassurance to all parties to the Orange County - Chapel Hill - Carrboro Joint Planning Agreement that the sole purpose of the Piney Mountain utility extension is to address a public health situation in accordance with the planning agreements and the County' s Water and Sewer Policy. The second agreement, between Orange County and OWASA, is entitled "Agreement for Providing Administrative and Technical Services and Assistance to Orange County by Orange Water and Sewer Authority for the Design, Permitting, Construction, Administration, Operation and Maintenance of the Piney Mountain Subdivision Wastewater System" (see attachment "B" ) . Its purpose is to satisfy requirements related to system ownership and operation in DEM' s High Unit Cost grant. DEM has indicated that the County is the only agency within Orange County that is eligible for grant funding for the Piney Mountain project. Orange County must own the proposed sewer system for development costs to be eligible for the grant. However, it was never the County' s intention to be the owner and operator of this particular sewer system, as it does not have staff resources necessary to fulfill this role. The County must contract with OWASA, by means of an interlocal agreement, to provide the resources necessary to perform all activities related to developing and operating the proposed wastewater system. A plan whereby OWASA will provide all necessary operational and administrative services has been incorporated into the agreement. This agreement, or a BOCC-approved draft thereof, must be submitted to DEM, as a part of the grant application, on 3 May 18. This draft will have been submitted to the OWASA board for approval on May 12, and a revised draft may be provided for the Commissioners' review prior to its May 17 meeting. This agreement will become void, and the County will remove itself from direct participation in the ownership, development and operation of the Piney Mountain wastewater system in the event that grant funding is not provided for this project. If DEM does provide grant funding for the Piney Mountain wastewater system, those funds will be available on a reimbursement basis only. Requests for payments for legal, engineering, administrative, construction, etc. , services will be presented to the County from OWASA or various consultants. Payments will be made by the County, which will then submit to DEM requests for grant-funded reimbursements. The BOCC has generally indicated is reluctance to accept financial responsibility for the effort to develop the Piney Mountain wastewater system. If the County is to avoid undertaking a significant level of financial responsibility, the Piney Mountain property owners will have to provide the funds, in advance, necessary to cover all costs associated with developing the wastewater system. The property owners would be reimbursed with the proceeds of the grant funds. A third agreement entitled "Agreement Providing for the Ownership, Construction and operation of the Piney Mountain Subdivision Wastewater System" (see attachment "C" ) , outlines the process, terms and requirements for payments and reimbursements. This agreement also provides for the ultimate transfer of ownership of the Piney Mountain wastewater system from the County to OWASA. RECOIrONDATION: The administration recommends that the Board: a) approve each of the three agreements as submitted; b) authorize the Chair to sign the agreements when finalized; and c) authorize the Chair, County Manager and County Attorney to devise modifications to the agreements as necessary to secure accord among the other parties to the agreements, with the proviso that the intent of the agreements will not be modified without the approval of the BOCC. ATTACHMENT A Document #5 4 Draft: 5/11/94 NORTH CAROLINA ORANGE COUNTY AGREEMENT APPROVING EXTENSION OF AND RESTRICTIONS REGARDING CONNECTIONS TO A PUBLIC SEWER LINE TO BE CONSTRUCTED TO PROVIDE PUBLIC SEWER COLLECTION SERVICE SOLELY TO PINEY MOUNTAIN SUBDIVISION THIS AGREEMENT is made and entered into this the 17th day of May, 1994, by and between Orange Water and Sewer Authority, a public body politic and corporate, organized and existing under the provisions of Chapter 162A of the North Carolina General Statutes , with its principal office in Carrboro, North Carolina, Orange County, a body politic and corporate and a political subdivision of the State of North Carolina and the Piney Mountain Homeowners Association, a North Carolina not for profit corporation (being duly authorized to act and acting for and on behalf of the owners of lots in that subdivision, their grantees, successors and assigns ) . W I T N E S S E T H WHEREAS, the on-site sanitary sewer collection system serving lots in the Piney Mountain Subdivision in Orange County has failed; repairs or construction of a replacement on-site system are not possible because of unsuitable soils in more than sixty-five percent of the area available for use as wastewater drainfield; and therefore, a public health emergency as defined in the Orange County Water and Sewer Policy exists ; and WHEREAS, the Piney Mountain Homeowners Association, representing owners of lots and homes in the Piney Mountain Subdivision, has petitioned Orange County, the Towns of Chapel Hill 1 S and Carrboro, the City of Durham, and Orange Water and Sewer Authority to allow the extension of a public sewer collector main, and the construction and operation of related facilities, all as may be necessary to collect and transport wastewater from homes constructed or to be constructed in the Piney Mountain Subdivision to the Durham County line where it will be connected to and the wastewater thence transported through City of Durham mains for treatment in the wastewater treatment system operated by the City of Durham; and WHEREAS, the Towns of Chapel Hill and Carrboro and Orange County entered into a Joint Planning Agreement in 1987 which identifies an area known as the Rural Buffer in which the Piney Mountain Subdivision is located and which provides for residential development only limited to a density of no more than one residence per two acres; pursuant to that Agreement, the Towns of Chapel Hill and Carrboro and Orange County have adopted a Joint Planning Area Land Use Plan which contains significant limitations on public water and sewer extensions into the Rural Buffer and significant policy preferences against these extensions; and, WHEREAS, Piney Mountain Subdivision is located within an area subject to the planning and zoning jurisdiction of Orange County, within the Rural Buffer, and is zoned Rural Buffer (RB) ; and, WHEREAS, Orange County has adopted a Water and Sewer Policy, in part, to implement the Joint Planning Area Land Use Plan limitations on the extension of public water and sewer system 2 6 extensions into the Rural Buffer; that Policy states, in pertinent part, as follows : "Public water and sewer facilities should be extended in accordance with the Land Use Element of the Orange County Comprehensive Plan. Such facilities will be encouraged, where they are available, in the Plan's Urban and Transition areas , and will be discouraged in Rural and Agricultural areas , except where their provision will enhance the rural character and provide for open space by allowing clustered development . " and, "Outside of Transition Areas, extension of water or sewer systems will only occur to provide service to an essential public facility, such as a school, or to remedy a public health emergency not otherwise correctable, such as a failing septic tank or failing package treatment plant( . ) ; " and, WHEREAS, the parties and the Towns of Chapel Hill and Carrboro have agreed that the Piney Mountain Subdivision petition ought to be allowed, notwithstanding the limitations and policy preferences against public sewer extensions contained in the Joint Planning Area Land Use Plan, as specifically contemplated under the Orange County Water and Sewer Policy, as necessary to alleviate a public health emergency, but without thereby intending or effecting any modification or other limitation to the continuing effect of the Joint Planning Area Land Use Plan's restrictions on public sewer extensions or connections within the Rural Buffer; and 3 7 WHEREAS, Orange Water and Sewer Authority has adopted a Mains Extension Policy which, consistent with the Joint Planning Agreement, Joint Planning Area Land Use Plan, and the Orange County Water and Sewer Policy, prohibits the extension of public water and sewer lines into the area designated as Rural Buffer, except as necessary to alleviate a public health emergency; and WHEREAS, the Town of Chapel Hill and the City of Durham have agreed to an annexation boundary to the west of which Durham will not seek to annex properties into its city limits, and to the east of which Chapel Hill has agreed not to annex properties into its town limits, and the Piney Mountain Subdivision is to the west of that annexation boundary line; and WHEREAS, Orange Water and Sewer Authority and the City of Durham have entered into a Service Area Boundary Agreement which provides that Orange Water and Sewer Authority will serve those properties lying west of the annexation boundary agreement between Chapel Hill and Durham, and thus the Piney Mountain Subdivision is within the area where the City of Durham has agreed not to extend water or sewer lines or service; however, notwithstanding that agreement, and without intending to effect any modification to that agreement as it may apply to any property other than the present Piney Mountain Subdivision lots, or to any improvements not constructed within that subdivision as of the date of this Agreement, the parties wish to authorize the connection of a line to be constructed from Piney Mountain Subdivision to a receiving main owned by the City of Durham at the Durham County line, for the 4 8 sole purpose of receiving wastewater from homes constructed and to be constructed on the fifty-nine lots which now constitute the Piney Mountain Subdivision; and WHEREAS, a Memorandum of Understanding entered into in 1989 by and among Orange Water and Sewer Authority, Orange County, the Town of Chapel Hill and the Town of Carrboro provides that the parties will communicate regularly about matters of mutual concern, specifically including water and sewer extension policies and development requests that would require water and/or sewer service extensions into areas not developed to urban densities , and the parties acknowledge by this Agreement their agreement to cooperate together to serve their respective and mutual interests , one of which is providing for prompt action to alleviate the existing public health emergency at Piney Mountain Subdivision, while at the same time preserving the nature and effect of the mutual undertaking of the parties and the Towns of Chapel Hill and Carrboro not to provide sewer service extensions or otherwise to provide public sewer service in the Rural Buffer except as provided in the Orange County Water and Sewer Policy as may be necessary to alleviate a public health emergency; and WHEREAS, Orange County, the Towns of Chapel Hill and Carrboro, the City of Durham and OWASA have all, by resolution of their governing boards and by collateral agreements between and among some of them, approved the connection of the Piney Mountain Subdivision to the public sewer system of the City of Durham to 5 9 correct the public health emergency created by the failed septic system serving the Piney Mountain Subdivision; and WHEREAS, the County, the Towns , the City and the Authority are particularly concerned that their determination to approve the Piney Mountain Subdivision line, to alleviate the public health emergency, shall not effect any abrogation either of their zoning and subdivision regulations , or their water and sewer policies, or their cooperative agreements, or their respective commitments and efforts to preserve open space and the character of the Rural Buffer, and to make adequate provision for public educational facilities, and watershed and natural drainage preservation; and WHEREAS, the parties have therefore determined that the sewer main and related facilities to be constructed and/or operated hereunder to alleviate the existing public health emergency at Piney Mountain Subdivision shall be restricted for use solely for that purpose, and that further connections thereto will not be allowed to serve either any new development, or any existing development in the absence of a public health emergency not otherwise correctable as defined in the Orange County Water and Sewer Policy. NOW, THEREFORE, the parties have agreed for themselves and for their successors and assigns : 1 . In order to alleviate the existing public health emergency, a sewer force main and appropriate pumps and facilities ( sized and constructed in accordance with the specifications and requirements of the Orange Water and Sewer Authority, as necessary 6 10 to collect and convey wastewater from the existing improvements in the Piney Mountain Subdivision to the Durham County line, where the same shall be connected with sewer main facilities operated by the City of Durham) , shall be constructed by and at the sole expense of the Piney Mountain Homeowners Association, and/or its members or designate, as acceptable to Orange Water and Sewer Authority. And, in consideration of the conditions, restrictions, and undertakings herein recited among the parties, the Piney Mountain Homeowners Association has agreed to convey and shall convey the said system facilities , when so completed, to Orange Water and Sewer Authority or its designee, which shall thereafter operate and maintain the same in accordance with the terms, conditions, restrictions and undertakings herein recited. 2 . The area that may be connected to the sewer main and related facilities constructed in accordance with this Agreement is the Piney Mountain Subdivision only, a subdivision of approximately 120 acres located within Chapel Hill Township approximately one mile west of the Orange/Durham County line on the north side of Mount Sinai Road (SR 1718) . It encompasses fifty-nine platted residential single family lots described as Piney Mountain Subdivision Phase I, Lots 1-24 and Phase 2 , Lots 25-59 , as recorded in Plat Book 49 , Pages 85 & 86 , Plat Book 52 , Page 183 , and Plat Book 58 , Pages 129 & 130 . 3 . The sewer main and related facilities constructed in accordance with this Agreement to serve the Piney Mountain Subdivision, and originally connected to the City of Durham main at 7 li the county line, will be connected to OWASA mains when the same may be constructed in the area proximate to Piney Mountain Subdivision, and the cost of construction of facilities and connections to join this line to future OWASA lines shall be paid on a pro-rata basis by the owners of lots within the Piney Mountain Subdivision. Likewise, if for any reason OWASA is unable to or determines not to continue its agreement with the City of Durham providing for the City of Durham to receive and treat waste from Piney Mountain Subdivision through the line to be constructed hereunder, the owners of lots in Piney Mountain Subdivision shall be responsible for and shall pay to OWASA the cost of an appropriate line and connection to the OWASA sewer collection system as may be necessary to connect the Piney Mountain system to OWASA collector mains leading to OWASA's wastewater treatment facilities . Any such connection to OWASA's wastewater collector mains and wastewater treatment facilities shall be in accordance with the terms, conditions , restrictions and undertakings herein recited. 4 . In consideration of acceptance, operation and maintenance of the sewer main and related system facilities by Orange Water and Sewer Authority, the owners of properties to be connected to the sewer main to be constructed have agreed to pay and shall pay to Orange Water and Sewer Authority rates, fees and charges calculated by the Authority as those necessary to recover the costs of the services provided, including reasonable reserves for maintenance and replacement of the facilities necessary to provide the service to the Piney Mountain Subdivision, and a reasonable charge 8 12 representing recovery of a share of the cost of OWASA' s existing capital plant and facilities . The rates and charges may be different from those charged customers of OWASA's existing sewer system, and shall include provisions for recovery of such costs as may be incurred and paid to the City of Durham for its acceptance and treatment of the wastewater from the Piney Mountain Subdivision. 5 . The main and facilities constructed hereunder shall be used solely to provide service to the homes constructed and to be constructed on the lots which now constitute the Piney Mountain Subdivision as described in paragraph 2 of this Agreement. Orange Water and Sewer Authority shall not permit, nor shall any of the other parties to this Agreement request or attempt to permit, or approve any development which would require, other connections to this line to serve properties outside the Piney Mountain Subdivision, except as may be necessary to alleviate a public health emergency, except by and with the consent of the parties hereto and the Towns of Chapel Hill and Carrboro. 6 . Orange Water and Sewer Authority and the City of Durham will execute a separate Agreement for Collection and Treatment of Wastewater from Piney Mountain Subdivision, substantially in the form as that attached as Exhibit A, and hereby incorporated. 7 . The parties hereto agree that this Agreement is entered into solely to recognize and provide the means for alleviating an existing public health emergency in the Piney Mountain Subdivision and its environs in Orange County, and that nothing herein shall be 9 13 deemed or construed so as to modify or diminish the commitment of the parties , as expressed in the various intergovernmental agreements, policies, subdivision, and zoning documents referenced above, not to provide public water and sewer service extensions in areas identified by the parties , understandings, policies and understandings as not suitable for development at urban densities . Nor shall this agreement be construed, deemed, or urged by any party to amend the Joint Planning Agreement, the Joint Planning Land Use Plan, the Orange County Water and Sewer Policy, the Annexation Boundary Agreement executed by and between the City of Durham and the Town of Chapel Hill, or the Service Area Boundary Agreement executed by and between Orange Water and Sewer Authority and the City of Durham, except as and for the specific, limited purposes for which it is entered. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed for and in their place and stead by their duly authorized undersigned officers and agents, to be effective from and after the date first above written. ORANGE COUNTY ATTEST: By: COUNTY CLERK ORANGE WATER AND SEWER AUTHORITY ATTEST: By: ASSISTANT SECRETARY 10 14 PINEY MOUNTAIN HOMEOWNERS ASSOCIATION ATTEST: By: SECRETARY 11 ATTACHMENT B Document #3 15 ' D NORTH CAROLINA raft: 5/11/94 ORANGE COUNTY AGREEMENT FOR PROVIDING ADMINISTRATIVE AND TECHNICAL SERVICES AND ASSISTANCE TO ORANGE COUNTY BY ORANGE WATER AND SEWER AUTHORITY FOR THE DESIGN, PERMITTING, CONSTRUCTION, ADMINISTRATION, OPERATION AND MAINTENANCE OF THE PINEY MOUNTAIN SUBDIVISION WASTEWATER SYSTEM THIS AGREEMENT is made and entered into this the 17th day of May, 1994 , by and between Orange Water and Sewer Authority, a public body politic and corporate, organized and existing under the provisions of Chapter 162A of the North Carolina General Statutes, with its principal office in Carrboro, North Carolina, hereinafter referred to as "OWASA, " and Orange County, a body politic and corporate and a political subdivision of the State of North Carolina, hereinafter referred to as the "COUNTY. " WHEREAS, OWASA provides wastewater collection, pumping, treatment and disposal services for the Chapel Hill-Carrboro community and surrounding area; and WHEREAS, the COUNTY has applied for High Unit Cost grant funding from the State of North Carolina for the design, construction and payment of fees associated with repair of the existing Piney Mountain Subdivision wastewater force main collection system, including individual home so-called STEP systems, and the development of a new wastewater pumping facility and force main connecting the Subdivision collection system (hereafter all together referred to as "the Subdivision wastewater system" ) with the wastewater collection system owned and operated by the City of Durham; and 1 16 WHEREAS, the COUNTY, under the conditions of the High Unit Cost grant, must own the Subdivision wastewater system; and WHEREAS, the COUNTY, under the conditions of the High Unit Cost grant, must provide for the design, permitting, construction, administration, operation and maintenance of the Subdivision wastewater system; and WHEREAS, the COUNTY and OWASA are authorized under North Carolina law to enter into agreements for the provision of wastewater facilities and services and to enter into a so-called Interlocal Agreement under Article 20 of Chapter 160A of the North Carolina General Statutes to share or allocate responsibilities of each in order to provide wastewater facilities and services to the Subdivision; and WHEREAS, the COUNTY has requested that OWASA provide all of the administrative and technical services and assistance necessary to design, permit, construct, administer, operate and maintain the Subdivision wastewater system; and WHEREAS, OWASA is willing to provide these requested services to the COUNTY and the residents of the Subdivision under the terms set out herein. NOW, THEREFORE, the governing bodies of the parties hereto have determined that the public health and welfare will be served and benefited by their cooperation, mutual undertakings and agreement as hereinafter set out; and in consideration of the benefits, assistance and mutual obligations to be received and performed by the parties hereunder, the COUNTY and OWASA, for 2 17 themselves, their successors and assigns , do mutually agree as follows : 1 . OWASA shall provide administrative and technical services and assistance as regards to the design, permitting, construction, administration and operation and maintenance of the Subdivision wastewater system. 2 . OWASA shall charge the COUNTY and the residents of the Subdivision for its services under this Agreement, which charge shall be, with respect to the design, permitting and construction of the wastewater system, OWASA's actual direct and indirect costs of providing such service including, but not limited to, consultants ' fees, legal and administrative costs , capital facilities fees and construction contract costs . OWASA operation services (hereafter referred to as "utility services" ) shall be billed directly to the residents of the Subdivision and shall be rates, fees and charges calculated by OWASA as those necessary to recover the costs of the services provided, including reasonable reserves for maintenance and replacement of the facilities necessary to provide the services to the Subdivision, and a reasonable charge representing recovery of a share of the cost of OWASA's existing capital plant and facilities . The rates and charges may be different from those charged customers of OWASA's existing sewer system, and shall include provisions for recovery of such costs as may be incurred and paid to the City of Durham for its acceptance and treatment of the wastewater from the Subdivision. 3 L8 3 . Through the completion of construction and the formal acceptance by the County of the Subdivision wastewater system as complete, OWASA shall render a bill by monthly invoice to the COUNTY as service is provided by OWASA and shall provide to the COUNTY bills as frequently as required by the payment schedule specified under construction and consulting service contracts for services other than those provided by OWASA. The COUNTY shall make payment to OWASA after construction contract and other invoices are provided to it. Utility service billings will be made directly to the residents of the Subdivision and shall contain such terms and conditions as are customary and as are deemed fiscally prudent by OWASA. The parties agree that the Subdivision wastewater system will not be accepted by the COUNTY until such times as it and each of its component parts has been approved and permitted, whichever is applicable, by the following: OWASA; each agency or division of the State of North Carolina with a permitting or financial interest in the system; the County; the Orange County Health Department. 4 . This Agreement shall terminate upon the happening of one or more of the following events : ( i) OWASA' s sewer system is extended to the Subdivision; or ( ii) the COUNTY's Clean Water grant application is denied; or (iii) a minimum of one ( 1) year has elapsed following the closeout of the Clean Water grant project and the final approval of the grant project by the State . Within a reasonable amount of 4 19 time following the happening of the first of the events described in ( i) , ( ii) and (iii) above, the COUNTY agrees to convey to OWASA and OWASA agrees to accept from the COUNTY all of the COUNTY's right, title and interest to the Subdivision wastewater system, including the STEP systems . This Agreement may be amended by agreement of the parties . 5 . Any litigation arising out of this Agreement shall be determined in Orange County District or Superior Court. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed for and in their place and stead by their duly authorized undersigned officers and agents, to be effective from and after the date first above written. ORANGE COUNTY ATTEST: By: COUNTY CLERK ORANGE WATER AND SEWER AUTHORITY ATTEST: By: ASSISTANT SECRETARY 5 ATTACHMENT C Document #4 20 Draft: 5/11/94 a NORTH CAROLINA ORANGE COUNTY AGREEMENT PROVIDING FOR THE OWNERSHIP, CONSTRUCTION AND OPERATION OF THE PINEY MOUNTAIN SUBDIVISION WASTEWATER SYSTEM THIS AGREEMENT is made and entered into this the 17th day of May, 1994 , by and between Orange Water and Sewer Authority, a public body politic and corporate, organized and existing under the provisions of Chapter 162A of the North Carolina General Statutes , with its principal office in Carrboro, North Carolina, hereinafter referred to as "OWASA, " Orange County, a body politic and corporate and a political subdivision of the State of North Carolina, hereinafter referred to as the "COUNTY" and the Piney Mountain Homeowners Association, a North Carolina not for profit corporation (being duly authorized to act and acting for and on behalf of the owners of lots in that subdivision, their grantees , successors and assigns ) hereinafter referred to as the "ASSOCIATION. " W I T N E S S E T H WHEREAS, on this date the parties to this Agreement have entered into an agreement which, in order to correct the failed wastewater collection and treatment system serving the Piney Mountain Subdivision (hereafter "the Subdivision" ) , authorizes the connection of the Subdivision wastewater system to the public sewer system of the City of Durham for purposes of treatment of the wastewater generated at the Subdivision; and 1 21 r WHEREAS, OWASA and the City of Durham have entered into a written agreement in which the City of Durham has agreed to the connection of the Subdivision wastewater system to its public sewer system and in which, as between the City of Durham and OWASA, provides for OWASA owning, operating and maintaining the Subdivision wastewater system; and WHEREAS, on this date the COUNTY and OWASA have entered into an agreement which provides for the design, construction and operation of the Subdivision wastewater system in the event the Subdivision wastewater system is in whole or in part constructed with grant funds provided to the COUNTY through the North Carolina Clean Water Revolving Loan and Grant Act of 1987 ; and WHEREAS, by Resolution adopted on March 28, 1994 , the COUNTY authorized an application to the State of North Carolina for Clean Water grant funds, which application has been filed, received by the State and is now undergoing State staff review before being considered for approval by the State; and WHEREAS, there are certain matters related to the ownership, design, construction and operation of the Subdivision wastewater system and related to the Clean Water grant funding process not addressed in the agreements itemized above but which are essential to the undertaking by the parties of the wastewater system project contemplated herein. NOW, THEREFORE, the parties have agreed for themselves and for their successors and assigns : 2 2 1 . The ASSOCIATION covenants that it has authority to enter into this contract for itself and for the owners of each lot in the Subdivision, their grantees, successors and assigns . As used in this agreement hereafter, the term "ASSOCIATION" refers to the Piney Mountain Homeowners Association and the owners of each and every lot in the Subdivision. 2 . The ASSOCIATION covenants that it will pay to the COUNTY and to OWASA: ( 1) all costs and expenses , including the value of administrative and professional time expended by each, in the application for, administration of and the closeout of the Clean Water grant applied for by the COUNTY; (2 ) all costs and expenses not covered by ( 1) expended by each in the design, bidding and contract award, construction, regulatory approval and permitting of the Subdivision wastewater system. The costs and expenses described in ( 1) and (2 ) are hereafter referred to collectively and sometimes individually as "the project expense" or "project expenses . " In order to facilitate the covenant contained in this paragraph, the ASSOCIATION has deposited, or will upon demand by the COUNTY, deposit the sum of $ with the COUNTY for the payment of the costs and expenses described here. The parties acknowledge that the deposit amount is equal to the total project expense determined by estimates made in good faith. The ASSOCIATION further acknowledges its obligation to the COUNTY and OWASA for project expense that exceeds the estimate and to make further advances upon demand by the COUNTY to cover project expense that exceeds the estimate. The ASSOCIATION further acknowledges 3 23 and agrees that its obligation to pay the project expense is absolute and not dependent on any other source of funds available to the COUNTY or OWASA to pay the project expense. 2 . The COUNTY agrees that it will maintain the money deposited with it in a designated project fund and will draw money from that fund payable to itself, OWASA and others as provided in this Agreement for project expenses . The COUNTY agrees to account to the ASSOCIATION for the funds deposited and agrees to apply grant funds received by it, in the event it is awarded a State Clean Water grant, to all grant eligible expenses of the project. The COUNTY further agrees to refund to the ASSOCIATION such sums as it has received from the ASSOCIATION that exceed the project expense after it has first applied grant funds received by it to grant eligible project expenses . 3 . The COUNTY shall be the owner of: ( 1) the Subdivision wastewater system, including the pump station and force main that convey wastewater from the Subdivision to the wastewater collection system of the City of Durham; and (2) the individual home so-called STEP systems , including tanks , pumps and associated controls . The ASSOCIATION agrees to obtain and provide to the County on demand such indicia of ownership of the Subdivision wastewater system and the STEP systems as requested by the COUNTY in the form of deeds, release deeds , subordination agreements, encroachment agreements, dedications , easements and bills of sale as determined reasonably necessary by the COUNTY. Provided, however, the COUNTY will own each of the STEP systems now existing in the Subdivision and those 4 24 hereafter constructed only upon the repair, replacement, construction and approval of each by the North Carolina Division of Environmental Management, the Orange County Health Department and OWASA. The COUNTY shall own the Subdivision wastewater system and the STEP systems until: (i) OWASA's sewer system is extended to the Subdivision; or (ii) the COUNTY's Clean Water grant application is denied; or (iii) a minimum of one ( 1) year has elapsed following the closeout of the Clean Water grant project and the final approval of the grant project by the State. Within a reasonable amount of time following the happening of the first of the events described in ( i) , (ii) and (iii) above, the COUNTY agrees to convey to OWASA and OWASA agrees to accept from the COUNTY all of the COUNTY's right, title and interest to the Subdivision wastewater system, including the STEP systems . 4 . The parties agree that the Subdivision wastewater system can only be properly repaired if repairs are made to some or all of the STEP systems in the Subdivision and that those repairs are a part of the project and the cost of those repairs is part of the project expense. Each existing STEP system shall be inspected by OWASA, the Orange County Health Department and the Subdivision wastewater system engineer (hereafter defined) . Repairs to each, if any, shall be specified by the Subdivision wastewater system engineer, approved by OWASA and the Orange County Health Department and completed as part of the Subdivision wastewater system project. 5 l 25 5 . The ASSOCIATION has or will contract with Colonial Engineering, Inc . (hereafter "Colonial" ) to be the Subdivision wastewater system engineer for: ( 1) professional services incident to the construction of the Subdivision wastewater system, including STEP system design and repairs; and, (2 ) by contract amendment or addendum or by separate contract, for the application by the COUNTY for a Clean Water grant. The ASSOCIATION hereby assigns to OWASA its contract( s ) with Colonial and covenants and warrants to OWASA that that contract or those contracts are assignable to OWASA and that Colonial in all and every respect agrees to this assignment. 6 . The parties acknowledge that upon connection of the Subdivision wastewater system to the sewer system of the City of Durham, the portions of the Subdivision wastewater system related to treatment of wastewater, for example, the community septic system drainfield areas and drainfield reserve areas, will no longer be part of or necessary for the Subdivision wastewater system. The ASSOCIATION covenants and agrees that it will, as soon as is reasonably practical, take title to the land that is now dedicated to these system components not now owned by the COUNTY or dedicated to the public for open space or recreation, free of all encumbrances save current property taxes, and that it will dedicate this land for the use and enjoyment of the residents in the Subdivision as permanent open space . All instruments of dedication and evidence of title shall be in form and substance approved by the COUNTY. 6 26 7 . The ASSOCIATION covenants and agrees to indemnify and hold harmless the COUNTY and OWASA, their board members, officials and employees, from any claim against either arising out of or related to the design and construction of the Subdivision wastewater system. This indemnity includes responsibility, on the part of the ASSOCIATION, to pay the reasonable attorneys fees of the attorney selected by the COUNTY and OWASA to represent each in the event of litigation or threatened litigation wherein the COUNTY and OWASA or either of them are named or threatened and the responsibility to pay such reasonable litigation expenses incurred by the COUNTY and OWASA in the defense of litigation or threatened litigation. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed for and in their place and stead by their duly authorized undersigned officers and agents , to be effective from and after the date first above written. ORANGE COUNTY ATTEST: By: COUNTY CLERK ORANGE WATER AND SEWER AUTHORITY ATTEST: By: ASSISTANT SECRETARY PINEY MOUNTAIN HOMEOWNERS ASSOCIATION ATTEST: By: SECRETARY 7