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HomeMy WebLinkAboutAgenda - 12-13-2005-9dORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 13, 2005 Action Agenda Item No. ~~ SUBJECT: School Sales Tax Reimbursements -Interlocal Agreements DEPARTMENT: Manager/Finance/Attorney PUBLIC HEARING: (Y/N) No ATTACHMENT(S): 11/28/05 LGC Staff Memo Draft Interlocal Agreement INFORMATION CONTACT: Rod Visser, (919) 245-2308 Ken Chavious, (919) 245-2453 Geof Gledhill, (919) 732-296 Bob Jessup, (919) 755-1800 PURPOSE: To review, comment upon, and consider approving interlocal agreements between the County and each school system that will allow the County to pursue reimbursement for state and local sales taxes paid to contractors on major school capital projects. BACKGROUND: At the September 26, 2005 joint meeting of the Board of Commissioners and the two Boards of Education, a suggestion was raised to explore ways to overcome a recent legislative change that will prevent North Carolina school systems from claiming sales tax reimbursements after FY 2005-06. County and school staffs have further discussed the desirability of creating arrangements under which the County might "own" major school capital projects so that the County will be eligible to file for the sales tax reimbursements. At the November 15, 2005 meeting, the Board directed County staff and attorneys to coordinate with school staffs and attorneys regarding options for developing appropriate interlocal agreements and other documents that will result in the savings of sales tax reimbursements, as outlined by County's bond counsel in documents then presented. County and School staffs met on November 22, 2005 and agreed to recommend to the respective governing boards that each entity should take the steps necessary for the adoption of an interlocal agreement to resolve the sales tax reimbursement issue. Since that time, North Carolina Local Government Commission staff issued the accompanying November 28, 2005 memo that clarified how under certain conditions, a county may assume responsibility for the construction of school facilities and the purchase of supplies and materials, and thereby be eligible for reimbursement of sales tax thereon. County staff have worked with Orange County Bond Counsel to draft such an agreement, which in essence, provides - 1) for the conveyance of property by the School Board to the County; 2) for the immediate leasing of conveyed property back to the School Board, so that the property can continue to be used for school purposes; 3) for the school board to undertake the contemplated projects as the County's agent, including entering into design and construction contracts; 4) for the County to administer the payment of funds to contractors; and 5) for the re-conveyance of property back to the school board once the project is complete. The attached agreement is a draft version between the County and the Orange County Board of Education. The proposal contemplates a substantially identical agreement between the County and the Chapel Hill -Carrboro Board of Education. Staff recommend that the Board discuss the draft agreement, provide direction to the County Attorney and Bond Counsel regarding any desired changes, and approve separate agreements with the Orange County Board of Education and Chapel Hill-Carrboro Board of Education, in substantially the form of the attached agreement (as may be modified by the BOCC at this meeting). County staff and attorneys would then coordinate with school staff and attorneys so that the resulting agreements could be addressed by the two school boards at their respective meetings in January 2006. FINANCIAL IMPACT: This effort could save hundreds of thousands of dollars per year from school capital project sales tax reimbursements that would otherwise be retained by the State. For example, the Orange County Schools have budgeted $300,000 in sales tax refunds to help fund the Gravelly Hill Middle School #3 project. Likewise, the Chapel Hill-Carrboro City Schools are relying on $450,000 in budgeted sales tax reimbursements to help fund the High School #3 project, RECOMMENDATION(S): The Manager recommends that the Board review, discuss, and approve interlocal agreements with both school systems in substantially the attached form (as may be modified by the BOCC), subject to final review by County staff, County Attorney, and band counsel; and authorize the Chair to sign them. ~~'~+R"s"~~, State of North Carolina ~,~ ~~~~~ ~,.y~;;,•• Department of State Treasurer ttIDnnan tt. naooRS SC¢te ¢rtid Local Government P'iia¢nce Division 'rt2cnsuRCa wad the Local Gouerrrment Conromission November 28, 2005 TO: County and School Board Officials and Certified Public Accountants FROM: T. Vance Hollomatr, Director Fiscal Management Section SUBJECT: Sales Tax Refunds and Motor Vehicle Property Taxes Sales Tax Refunds 3 During the 2005 legislative session, the General Assembly tools action to amend G.S. 164.4{c) to delete local school administrative units (LhAs) from those governmental entities eligible to receive a sales tax refund. This change is effective dui°ing the current fiscal year, so L1;As may claim a refund of sales taxes paid during the fiscal year ended June 30, 2005,. However, as G.S. 164 4(c) is currently written, L);As can not claim a refund for subsequent years. Action was also taken to require the Department of Revenue to deposit to the State Public School Pund each quarter an amount equal to the one-fourth of the prior year refund of sales taxes paid to LhAs 1ffective July 1, 200G, that amount will be equal to the refunds paid for the 2005 fiscal year adjusted by increases or decreases in State sales tax collections. These funds will be distributed to L1JAs on the basis of average daily membership. We are aware of speculation that G.S. 1644(c) may be amended to permit L);As to claim refunds for local sales taxes paid. If this change does occur we will inform local officials. The LGC issued Memorandum No, 859 on October 16, 1997 which addresses the circumstances under which sales taxes paid for the construction of school facilities, as well as for the purchase of tangible property, by a county for a L);A are eligible for a refund of sales tax under G. S 105-164.14(c), At the time that Memorandum was issued L1/As were not among the governmental units that could claim a sales tax refund.. Memorandum No. 859 stated that render the provisions of G S. 115C-521 and 522 LJ;As are responsible for the construction of school facilities and the purchase of supplies and materials. The fact that a county might issue a check in payment to a vendor° for the construction of school Facilities or the purchase of tangible property for the L);A does not result in the county assuming responsibility for those tasks. Two provisions of the General Statutes make it possible for a county to assume this responsibility for a local board of education. The fixst is the authorization under G, S 153A-158.1 for counties to acquire property for use by a Li•;A. The second way in which a county can assume this responsibility for a LRA is through an inter-local cooperation agreement between the Memorandum # 1045 November 28, 2005 Page 2 county and the LJ;A under the provisions of G.S. 160A-460. The inter-local cooperation agreement should state that the county will contract for the construction of school facilities and will purchase tangible school property. fi7 either case the county must have title to the asset at the time the construction or purchase takes place and payments are made. Title to school facilities may pass fiom the county to the L);A once construction is complete and all payments under the contract have been made, Ownership of tangible property may pass fiom the county to the LhA once the purchase has been completed. Since the issuance of Memorandum No. 859, schools become eligible for sales tax refunds under G.S. 164.4(c) and have recently lost that eligibility. The North Carolina Department of Revenue has reconfirmed to us that these two options are still valid provisions under which a county may claim a sales tax refund for school capital expenditures. Unless a county undertakes to make contracts for construction of school facilities or for purchase of tangible property under one of the two methods described in the preceding paragraph, a county should not claim a sales tax refund for taxes paid. At the time Memorandum No. 859 was issued, not all counties were authorized to use the provisions of G. S. 153A-1.58.1. Other counties had to use inter-local cooperation agreements to become eligible for sales tax refunds for school expenditures, All 100 counties are now eligible to use G.S.. 153A-158,1. Interest on Unpaid Motor Vehicle Property Taxes The General Assembly enacted House Bill 1779 which provides for the creation of a combined motor vehicle registration renewal and property tax collection system.. The Bill calls for an increase in the first months interest on uncollected property taxes on registered motor vehicles. This will apply to all property taxes levied on the registered motor vehicle: those levied by the county, any municipality and any special districts. The additional interest collected will be remitted to the Department of State Treasurer to be used by the Division of Motor Vehicles to create the combined registration and collection system, A memorandum providing greater detail about the provisions of House Bill 1779 will be issued by the Department. Counties should be aware that effective January 1, 2006, the interest rate charged for the first month that registered motor vehicles taxes are delinquent will increase from the current rate of 2% to 5%. The interest rate for subsequent months will remain at three-fourths of a percent (3/4%). The additional interest collected and remitted to the State should be accounted for in an agency fund, similar to the motor vehicle property taxes collected for municipalities and special districts. The additional interest would not be included in the county's budget. If you have questions or continents regarding this memorandum, please contact Vance Holloman at (919) 807-2380. 5 SHLF draft of December 7 2005 INTERLOCAL AGREEMENT CONCERNING CAPITAL PROJECTS FOR PUBLIC SCHOOLS This Interlocal Agreement is dated as of .January 1, 2006, and is by and between ORANGE COUNTY, NORTH CAROLINA (the "County"), and THE ORANGE COUNTY BOARD OF EDUCATION (the "School Board"), and provides as follows: The Corurty and the School Board have agreed on an arrangement to facilitate their cooperation in certain projects for additions, improvements, renovations and repairs to School Board property. Under this arrangement, the School Board will transfer property to the County, The School Board will then lease the property hack from the County, The School Board, on the County's behalf, will arrange for contracts for the contemplated projects, The County will disburse fiords to conhactors, This arrangement is intended to be flexible and to include a wide range of capital projects for public schools operated by the School Board, Capitalized tenvs used in this Agreement and not otherwise defined have the meanings set forth in Exhibit A, Now, therefore, for and in consideration of the mutual promises in this Agreement, the parties agree as follows: 1. The School Board will convey Contract Piroperty to the County Whenever the School Board determines that it would be in the School Board's interest in carrying out a Project for some of the School Board's property to become Conriact Property subject to the terns of this Agreement, the School Board will convey such proper°ty to the County pursuant to the following provisions: a) The School Board will publish a notice of public hearing, in substantially the fonlr of Exhibit B, at least ten days prior to the hearing date, As ~~aaz~i shown in Exhibit B, the notice will describe, in brief and general terms, the proper°ty to be conveyed and the Project to be undertaken with respect to that property, b) After conducting a public hearing as provided in the notice, the School Board will adopt a resolution, substantially in the form of Exhibit C, (i) designating the pr°operty to be conveyed, (ii) describing the contemplated Project, and (iii) requesting the County to accept conveyance of the property and to treat the same as Contract Property under this Agreement, c) The School Board will provide a certified copy of the resolution contemplated in (b) above to the Coruzty, The County will then provide for the County Board promptly to consider the School Board's request, d) If the County determines to accept the conveyance, then the School Board will prepare, execute, deliver and record an appropriate deed to fire County providing for the conveyance, The deed must be acceptable to the County in form and substance. tlpon the recording of the deed, the property described therein autormatically becomes Contract Property under this Agreement, without the need for firrther action by any party, 2. The County will lease all Contract Property to the School Board. a) Demise. The County hereby leases each portion of the Contract Property to the School Board, and the School Board hereby leases the Contract Property from the Coruity, in accordance with the provisions of this Agreement, to have and to hold for the Lease Term. The Lease Term convnences automatically upon the recording of the deed constituting the property as Contact Property, without the need for° further action by any party, The School Board must prepare and record a Memorandum of Lease, substantially in the fora of Exhibit D, with respect to each element of the Contact Property promptly upon the conmlencement of the Lease Tenn, b) Termination. The Lease Tenn terrr~inates with respect to any portion of Contact Property upon the reconveyance of that property to the School Board pursuant to Section 4, c) Quiet Enjoyment. The County covena~lts that the School Board will during the Lease Term peaceably and quietly have and hold and enjoy the Contact 9443?vl ~ 7 Property without suit, trouble or hinch-ante from the Cow1ty, except as expressly required or permitted by this Agreement. The County will not interfere with the School Board's quiet use and enjo}nnent of the Contact Property during the Lease Tenn. The County will, at the School Board's request and the County's cost, join and cooperate fully in any legal action iii which the School Board asserts its right to such possession and eiijoyinent, oi° which involves the imposition of any taxes or othei° governmental charges on or in coimection with the Contact Property. In addition, the School Board may at its own expense join in arty legal action affecting its possession and eizjoyment of the Contact Property and will be joined (to the extent legally possible, and at the School Board's expense) in any action affecting its liabilities under this Agreement. d) Consideration. 111 partial consideration for its acquisition of rights to use the Contact Property during the Lease Terin, the School Board agrees to use the Contact Property for public education in fiilfillment of its obligation, shared by the County, to provide for educational services in the County. In addition, in consideration of its rights under this Agreement, the School Board undertakes the obligations imposed on it under this Lease, including those imposed by Section 2(e), e) Care and Maintenance. The School Board shall have all responsibilities for the maintenance, care, security and safekeeping of the Contact Pi°operty, including (without limitation) the following: Eraviroizme~etal matters - to maintain the Contract Property in compliance with all federal, State and local environmental laws and i°egulations, and to notify the County in the event of any change in the environmental condition of the Contact Property, or the receipt of any notice fi°om any regulatory or achiunistative body conceriung environmental matters related to flze Contract Property, Taxes antl Ot/aer Govenzrreental Claa~ges - to pay when due the frill amount of all taxes, assessments and other governmental charges lawfully made by any governmental body during the teen of this Agreement related to any Contract Property. brsasrance - to acquire, carry and maintain, at its own expense, (i) broad-form extended coverage property damage insurance with respect to all Improvements in an amount equal to the estimated replacement cost of such Improvements, with such property damage insurance to include the County as a loss payee, (ii) comprehensive general liability insurance in an amount not less ~~a3z~i 3 U than $1,000,000 for per°sonal injury or death and $1,000,000 for property damage, and (iii) workers' compensation insurance issued by a responsible carrier authorized under State law to instue the School Boai-d against liability for compensation under applicable State law as in effect from time to time. All insurance shall be maintained with generally recognized responsible insurers and may carry reasonable deductible or risk-retention amounts. No School Board agent or employee shall have the power to adjust or settle airy property damage loss greater than $50,000 with respect to the Contract Property, whether or not covered by insurance, without the County's prior written consent. The County shall not be responsible for the sufficiency or adequacy of any regt.iired insurance and shall be fully protected in accepting payment on account of such insurance or any adjustment, compr°onuse or settlement of any loss agreed to by the County. Coezpliance with Requirements - to cause any Improvements to be designed and constricted in compliance with all applicable legal requii°ements, including subdivision, building and zoning regulation, and to observe and comply promptly with all crux-ent and fuhu~e requirements relating to the Contract Property's use or° condition imposed by (i) any judicial, govennnental or regulatory body having ,jurisdiction over the Contract Pi°operty or any portion thereof or (ii) any insurance company writing a policy covern7g the Contract Property or any portion thereof, whether or not any such requirement shall necessitate stucttiu-al changes or improvemez~rts or interfere with the use or enjoyment of the Contact Property. The School Board shall in no event use the Contract Property or any part thereof, nor allow the same to be used, for any unlawful purpose, or suffer any act to be done or any condition to exist with respect to the Contract Property or any part thereof, nor any article to be brought thereon, which maybe dangerous, unless safeguarded as required by law, or° which may, in law, constihite a nuisance, public or private, or which may make void or voidable any insurance then in force with respect thereto, Maizztezzance mztl Repairs - to keep the Contact Property in good order and repair (reasonable wear and tear excepted) and in good operating condition, to prevent any waste oi° any other occurrence whereby the value or usefulness of the Contact Property might be impaired, arzd from time to time to make all necessary or appropriate repairs, replacements and renewals. Security - to take all reasonable steps necessary to safeguard the Contact Property, including all personal property i°elated thereto. ~~asz~i 4 Utilities - to pay all charges for utility services fiunished to or used on or in connection with the Conri-act Proper°ty. No E~zetivab~•ance, Mortgage or Pledge -not to directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien (including mechanics' and materialmen's liens), charge, encumbrance or other claim in the nature of a lien on or with respect to the Cont°act Property. Notice of Damage and Destrnctioa - to notify the County promptly if (i) the Contract Property or any portion thereof is stolen or is destroyed or damaged by fire or other° casualty, (ii) a material defect in the construction of any Improvements shall become apparent, or (iii) title to or the lrse of all or any por°tion of the Conhact Property shall be lost by reason of a defect in title, Each notice shall describe generally the natru°e and extent of such damage, deshuction or• taking f) Disclaimei° of Warranties. THE COUNTY MAKES NO WAI2IZANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR A PARTICULAR USE OF THE CONTRACT PROPERTY OR ANY PART THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE CONTRACT PROPERTY OR ANY PART THEREOF. In no event will the Cormty be liable for atiy direct or indirect, incidental, special or consequential damage in cormection with or arising out of this Agreement or the existence, funzishing, functioning or use by any of them of any item, product or service provided for herein. The School Board aclrnowledges that the County has not designed any improvements on the Contract Property (the "Improvements"), that the County has not supplied any plans or° specifications with respect thereto and that the County (a) is not a manufacturer of, nor a dealer in, any of the component parts of the Improvements or similar Contract Property, (b) has not made arry reconnnendation, given any advice nor taken any other action with respect to (i) the choice of any supplier, vendor or designer of, or any other conh•actor with respect to, the Improvements or any component part thereof or any property or rights relating thereto, or (ii) any action taken or to be taken with respect to the Improvements or any component part thereof or any property or rights relating thereto at any stage of the construction thereof, (c) has not at any time had plrysical possession of the Improvements or° any component part thereof or made any inspection thereof or any property or rights relating thereto, and (d) has not made any warranty or other ~aa3z~~ 5 io representation, express or implied, that the Improvements or any component part thereof or any property or r°ights relating thereto (i) will not result nl or cause injru-y or damage to persons or property, (ii) have been or will be properly designed, or will accomplish the results which the School Board intends therefor, or' (iii) are safe in arty manner or respect. g) Permits and Other Authorizations. The School Board covenants and represents to the County that the School Board has obtained all pernuts, consents, approvals or authorizations of all governmental entities and regulatory bodies required as a condition to the use of C.onri-act Propel°ty for public school purposes. The School Board fiuther covenants and warrants to maintain through the duration of this Agreement all such pernuts, consents, approval or authorizations necessary to use the Conri-act Property for public school purposes. h) Property owned by County. Except for personal property purchased by the School Board at its own expense, title to the Conriact Property and any and all additions and modifications to or replacements of arty portion of the Conri°act Property will be held in the Cotimty's name rurtil re-conveyed as provided in Section The School Board has no right, title or° interest in the Conri-act Property or any additions and modifications to or replacements of arty portion of the Contract Property during the Lease Tenn, except as expressly set forth in this Agreement. i) School Board's Subleasing and Assignment. (i) Except as provided. in subsection (ii), the School Board may not sublease the Conri•act Property, in whole or in part, enter into other agi°eements for the use of any part of the Conh~act Property or assign airy of its rights or obligations under this Agreement, without the County's prior written consent. (ii) The School Board may enter uito agreements for the use of portions of the Contract Property with state and local (init not federal) government entities, and may allow for the occasional use of portions of the Conri°act Property by non- government entities, in each case without the necessity of obtaining the County's prior consent. The School Board must make air amnral report to the County of all such agreements so that the County may monitor such use to protect its rights to the Contract Property and to assure compliance with any separate covenants made by the County with respect to such Conn°act Property. The School Board must make this report by September 15 of each year for the School Board's then most recently- completed fiscal year. 94432v1 (~ j) Indemnification. To the extent permitted by law, the School Board will indemnify and save the C,ormty harmless against and fi-om all claims, by or on behalf of any person, f rrn, corporation or other legal entity, arising from the operation or management of the Contract Property during the Lease Term, including any arising from: (i) any condition of the Contract Property; or (ii) any negligent act of the School Board or° of any of its agents, contractors or employees or any violation of law by the School Board or breach of any covenant or warranty by the School Board under this Agreement, The School Board will, upon notice from the County, defend or pay the cost of defending the County in any action or proceeding brought in connection with any claims arising out of circumstances described in (i) or (ii) above, 3. The School Board will carry out all Projects as the County's agent a) The County appoints the School Boar°d as its agent to carry out all phases of the Projects, The School Board, as the County's agent, assumes all the County's rights, duties and responsibilities regarding such matters, except as limited in this Agreement. The School Board will appoint no fiirther agent to assume such rights or carry out such duties and responsibilities without the County's prior written consent, b) The Sclrool Board, with the County's approval, may enter into any purchase order or conh~act with respect to a Project in the School Board's name, Alternatively, the County may require that any such purchase orders or conh~acts be entered into by the County in its own name or be entered into by the County and the School Board jointly, All contracts nnist comply with the public procurement laws and any other State laws applicable to either the School Board or the County, as appropriate, with regar°d to entering into such contracts. The School Boar°d nnist provide that contractors provide bonds and insurance coverages that comply with the requirements of North Carolina law. c) The School Board, as the County's agent, will be responsible for carrying out each Project, and the School Board will have all rights to supervise each Project, The Cowzty and its representatives and agents will have the right to enter upon the Project sites and inspect the Project work from time to time during 9aa3z~~ ~ is construction and after the completion of construction, and the School Board will cause any vendor, contractoa° or sub-contactor to cooperate with the Coamty and its representatives and agents during such inspections. No light of inspection or approval granted in this Section will be deemed to impose upon the Coamty any duty or obligation whatsoever to undertake any inspection or to make any approvah No inspection made or approval given by the County will be deemed to impose upon the County any duty or obligation whatsoever to identify or correct any defects in the School or to notify any person with respect thereto, and no liability will be imposed upon the County, and no warranties (either express or implied) are made by the County as to the quality or fatless of airy improvement, any sarch inspection and approval being made solely for the County's benefit, d) For so long as the School Board is not in default of any of the provisions of this Agreement, the School Board will have the right to enforce in its own name or in the County's name purchase orders or contacts entered in the County's name or the School Board's name for the Project; provided however, that if the School Board is in default of any provisions of this Agreement for a period of thirty days after being notified by the County of such default without cure, the County will have the right to assume all the School Board's responsibilities for the Project, In the event of such a termination, the School Board will assign ally and all right, title and interest to any and all contacts relating to the Project, inchtding but not limited to any architect agreements, any and all engineering agreements, any and all constuction agreements, and any and all plans, specifications and othea° di°awings or documents prepared or to be prepared for the Project. The School Board agrees to reimburse to the County for any and all costs, expenses, and damages incurred by the County ui the assumption of the rights and responsibilities of the School Board due to such event of default without cure, and to indemnify and hold the County harmless for any and all claims for damages by others related to such event of default without cure. e) The School Board will request funds foa• the payment of Project Costs from the County, and will provide the Cotimty with the necessary information supporting a requisition, The County will have the right to obtain such additional evidence as it deems appropriate to determine the accuracy of the repa°esentations set forth in the form of regLUSition and the propriety of payanent, The School Board will provide the County with such information in the School Board's possession as the County may request. The County will pay all invoices to the third parties to which money is owed. 94432v1 $ 13 f) Notwithstanding any pi°ovision of this Agreement, the County retains the sole power to control and direct the application and distribution of pi°oceeds of casualty insurance applicable to any Contract Property. 4. The County will reconvey property to the School Board when a Project is complete Upon the completion of any Project, the County will reconvey the subject Contract Property to the School Board at the School Board's request. The School Board shall make this request by the adoption of an appropriate resolution. The School Board will delivei° a certified copy of the resohtion to the County. The School Board will provide the County with an appropriate form of deed for execution and delivery by the County to the School Board. Notwithstanding the foregoing, the parties shall provide for all property conveyed to the County pursuant to this Agreement to be reconveyed to the School Board not later than December 31, 2025. All provisions of this Agreement relating to the lease of Contract Property shall terminate inm7ediately with respect to particulal° Conhact Property upon the i°econveyance of such Contract Property to the School Board, without the need for further action by any party. 5. Administrative and Miscellaneous P--ovisions a) Representations, Covenants and Warranties, The County and the School Board each represents, covenants and wan-ailts for the other's benefit as follows: (i) Neither the execution acid delivery of this Agreement, nor the fiilfi11me3~rt of or compliance with its terms and conditions, nor the consunvnation of the t°ansactions contemplated by this Agreement, results in a breach of the terms, conditions and provisions of any agreement or instrument to which either is now a party or by which either is bound, or constitites a default under any of the foregoing. (ii) To the lmowledge of each party, there is no litigation or other court or adminish•ative proceeding pending or tlu-eatened against such party (or against any other person) affecting such party's rights to execute or deliver this Agreement or to comply with its obligations timder this Agreement, Neither such party's execution and delivery of this Agreement, nor its compliance with its obligations timder this 94432vt C~ /4~ Agreement, requires the approval of any regulatory body or any other entity the approval of which has not been obtained. b) Notices. All notices, certificates or other corrununications under this Agreement will be sufficiently given and will be deemed given when delivered or mailed by registered mail, postage prepaid, addressed as follows: (i) If intended for the Cotmty Projects, to County Manager, Orange County, Attention: Notice tinder 2006 h7terlocal Agreement for School Pr°gjeats, 200 South Cameron Str°eet, Hillsborough, North Carolina .27278 ; or (ii) Tf intended for the School Board, to Superintendent, The Orange County Board of Education, Attention: Notice under 2006 Interlocal Agreement for School Projects, 200 East King St,, Hillsborough, North Carolina 27278. c) Binding Effect. Tlus Agreement will irnu~e to the benefit of and shall be binding upon the School Board and the County, and their respective successors and assigns. d) Amendments, Changes and Modifications. This Agreement may be amended only in writing signed by both parties. e) Severability. If any provision of this Agreement, other than the requirement of the County to provide quiet enjoyment of the Contract Property, is held invalid or unenforceable by any cotiu-t of competent jurisdiction, such holding will not invalidate or render unenforceable ally other provision hereof, f) Execution in Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which will be an original and all of which will constitute but one and the same inst°ument. g) Applicable Law. The parties intend that this Agreement will be govenied by and construed in accordance with State law. h) School Board and County Representatives. Whenever under the provisions hereof the appr°oval of the School Board or the County is required to take some action at the request of the other, unless otherwise provided, such approval or' such request must be given (i) for the County by the County Manager, acid (ii) for ~~~3z~i 10 l5 the School Board by its Super7ntendent, or (iii) in either case by anyone designated by the respective governing body to perform any act (or any specified act) under this Agreement, and in any such case the School Board and the County will be authorized to cat on any such approval or request. i) Not exclusive. This Agreement is not intended as the exclusive method for the County and the School Board to cooperate with respect to capital projects for public schools operated by the School Board. The parties may proceed with respect to such projects in a variety of methods, These methods may include separate but similar leasing an•angement for designated Contract Property, j) Further Assurances; Corrective Instruments. The School Board and the County agree that they will, frrom time to time, execute, acknowledge and deliver, or cause to be executed, aclalowledged and delivered, such supplements hereto acid such further instuments as may reasonably be required for carrying out the intention of this Agreement. Ic) Retroactive. The parties intend that, to the extent pernutted by law, this Agreement should be deemed to be retroactive with respect to Projects that may have been in progress at any time on or after July 1, ?005, The parties will cooperate as may be reasonably necessary to provide for° the application of this Agreement to such Projects. Exhibits - A Definitions B Form of notice of public hearing C Form of resolution from School Board D Form of memorandum of lease JTlte remraiaader of t/Zis page laps been left blank ir:tentionnllJ~.J ~aaaz~~ 11 /~ IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their corporate names by their duly author°ized officers, all as of the date first above written. [SEAL] ATTEST: [Name] Clerk, Board of Cormnissioners [SEAL] ATTEST: [Name] Secretary ORANGE COUNTY, NORTH CAROLINA Bv: [Name] Chair, Board of Conunissioners THE ORANGE COUNTY BOARD OF EDUCATION By: _ [Name] Chair [Interlocal Agreement dated as of.Tanuary 1, 2006] 94432v1 I2. /7 STATE OF NORTH CAROLINA; ORANGE COUNTY I, , a Notary Public of said State and County, do hereby certify that [name] and [name] personally came befor°e me this day and aclrnowledged that they ar-e the Chair° and Clerlc, respectively, of the Board of Commissioners of Orange County, North Carolina, and that by authority duly given and as the act of such County, the foregoing instrument was signed in the Cotimty's name by such Chair, sealed with its corpoi°ate seal and attested by such Clerlc. Wihless my hand and official seal this day of January, 2006, Notary Public My commission expires: STATE OF NORTH CAROLINA; ORANGE COUNTY I, , a Notary Public of said State and County, do hereby certify that ,with whom I am personally acquainted, and who being by me duly sworn, says that she is the Secretary of The Orange County Board of Education and that is the Chair of such Board of Education, the Board described in and which executed the foregoing inst°ument; that she lrnows the common seal of said Board; that the seal affixed to the foregoing instrument is said connnon seal, and the name of the Board was subscribed thereto by the said Chair°, and that said Chair and Secretary subscribed their names thereto, and said common seal was affixed, all by order of the Board and that the said instument is the act amid deed of said Board, Witness my hand and official seal this day of .January, 2006. Notary Public My commission expires: 94432vt 1 ~ l~ Exhibit A -Definitions Unless the context clearly requires otherwise, capitalized terms used in this Agreement and not otherwise defned shall have the following meanings: "Contract Property" means all property tansfen-ed to the County from the School Board pursuant to the teens of this Agreement. "County Board" means flee County's governing board as from time to time constituted. "Improvements" means all real property and fixtures related to the real estate of Contract Property. "Lease Term," for airy particular parcel of Contract Property, means the period of time during which such property is leased to the School Board in accordance with section 2, as deternuned pursuant to sections 2(a) (for the connnencement of the Lease Terris) and 2(b) (for the termination of the Lease Term). "Project," for any particular parcel of Contact Property, means the process of carrying out contemplated capital improvements on that property, as generally described in the r°esolution of the School Board calling for the conveyance of such property to the County, as described in section 1(b). "Project Cost" means all costs of a particular Prgjeet, including costs of the design, planning, constucting, acquiring, installing and. equipping of improvements to Contact Property, inchiding sums required to reimburse the County or the School Board for advances made for any such costs, 94432v1 tG} /9 Exhibit S -Form of Notice of Public Hearin Notice of Public Hearing by Orange County Board of Education -- Property Conveyance to Orange County Please take notice that The Orange County Board of Education will hold a public hearing on [day] [month/date/year], at [time] p.m, (or as soon thereafter as the matter may be heard), The purpose of the hearing will be to take public comment concerning a proposal for the Board to transfer the property described below to Orange County, to facilitate capital improvements to the property. The property to be hansferred may be briefly described as follows: The project to be undertaken with respect to this property may be briefly described as follows: The County will lease the property back to the School Board for' its continued use for school purposes, The County and the School Boas°d expect that the pi°operty will be transferred back to the School Board once the project is complete. The hearing will be held [where]. A11 interested persons will be heard. The Board's plans are sul?ject to change based on the continents received at the public hearing and the Board's subsequent discussion and consideration. Persons wishing to make written conntinents in advance of the hearing or wishing more information concerning the subject of the hearn~g may contact [who; address/phone number.] 94432v l t 5 ~d Exhibit C -Form of School Boa-•d resolution Resolution authorizing conveyance of property to Orange County to facilitate a capital project WHEREAS.• The Orange County Board of Education (the "School Board") has previously determined to cooperate with Orange County, North Carolina (the "County"), to undertake capital projects for the schools operated by the School Board. To carry out the agreed-upon plan of cooperation, the County and the School Board have entered into an Interlocal Agreement dated as of January 1, ?006, providing fo-° the conveyance of property to the County, followed by the leasing of the property back to the School Boai°d, The Interlocal Agreement also provides for the School Board to mldertake the capital projects on the County's behalf; and for the eventual re-conveyance of the property to the School Board. BE IT THEREFORE RESOLVED by The Orange County Board of Education, as follows: 1. The School Board requests that the County acquire the following property for the purposes contemplated by the Interlocal Agreement: 2. The Project to be can•ied oLit with respect to the transferred property maybe briefly described as follows: 3. The Board, under the authority of Section 153A-1.58.1 of the General Stahrtes, authorizes the conveyance of the Board's interest in such property to the County for the purposes described in the Interlocal Agreement, without fiu~ther~ consideration. The Board's Chair is authorized and directed to execute and deliver an appropriate deed or deeds (the "Deed") to carry out such conveyance. The Deed will he in such form as the Chair may approve, The description. of the property conveyed in the Deed shall be such as the Board's Chair may approve in consultation with the Board's attorney. 4. All Board officers and employees are author°ized and directed to take all such ft-rther action as they may consider necessary o1° desirable in com~ection with the furtherance of the purposes of this resolution. ~aasz~i 16 ai Exhibit D -form of memorandum of lease Return After Recording To; Geoffrey E. Gledhill, Esq. Orange County Attorney Post Office Drawer 1529 Hillsborough, NC 27278 MEMORANDUM OF LEASE STATE OF NORTH CAROLINA ) ORANGE COUNTY ) ORANGE COUNTY, NORTH CAROLINA, a political subdivision of the State of North Carolina, as lessor, having an address of 200 South Cameron Street, Hillsborough, NC 27278, hereby leases to THE ORANGE COUNTY BOARD OF EDUCATION, as lessee, having an address of 200 East King St., Hillsborough, North Carolina 27278, for a term beginning ,and continuing for a maximum period ending December 31, 2025, the real property described in Exhibit A, The provisions set forth in a written agreement between the parties dated as of January 1, 2006, are hereby incorporated in this memorandum. [Signature blocks to be added; property description to be attached] 9d432v I t ~