HomeMy WebLinkAboutAgenda - 08-16-2005-9bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: August 16, 2005
Action Agenda
Item No. ~~
SUBJECT: Actions Related to Planned Acquisition of Triangle SportsPlex Property
DEPARTMENT: Manager/Attorney/Finance/
Purchasing
PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
CRZ Design Proposal
LGC Financing Timeline
Highlighted Financial Review Language
from Purchase Contract
Blackman & Sloop Draft Engagement
Letter
INFORMATION CONTACT:
Rod Visser, ext 2300
Geof Gledhill, 732-2196
Ken Chavious, ext 2453
Pam Jones, ext 2652
TELEPHONE NUMBERS:
Hillsborough 732-8181
Article on Agreed Upon Procedures Chapel Hill 968-4501
LEDAHF Project Management Agreement Durham 688-7331
SportsPlex Acquisition/Expansion Mebane 336-227-2031
Project Cost Table
PURPOSE: To review, discuss, approve, and/or provide direction regarding several elements
of the Board's decision to acquire the Triangle SportsPlex property.
BACKGROUND: During 2004 and 2005, at the direction of the Board of Commissioners, staff
and consultants performed due diligence analysis regarding the County's potential interest in
acquiring the Triangle SportsPlex property. The County s interests relate not only to recreation
opportunities, but also to a proposal to construct the new Central Orange Senior Center in
conjunction with an expansion of the SportsPlex. The SportsPlex is an 82,000 square foot
facility in the Meadowlands Business Park in Hillsborough that provides a regulation ice rink,
three swimming pools, fitness equipment, and other recreation amenities. The County operates
a small senior center in rented space on property immediately adjacent to the SportsPlex
property.
Following reports on the due diligence analysis and negotiations with the current owners of the
SportsPlex, the Board, on June 23, 2005, approved a contract to acquire the SportsPlex
property. The contract includes a number of contingencies that protect the County's interests
through an anticipated closing in late Fall 2005. One of those provisions is a so-called "free
look period" of 60 days dtaring which the County may perform additional due diligence review
and determine, without sanction, not to consummate the agreement. The 60-day period runs
from July 14, 2005, when the contract was executed by the owner's representative, through
September 12. As previously discussed with the Board, staff plan to conduct additional due
diligence review with help from consultants, where necessary and appropriate, and to report
back to the Board with findings prior to the end of the 60-day period.
z
There are several aspects of the SportsPlex acquisition that the Manager recommends the
Board discuss, endorse, and/or approve at this August 16 meeting. Each aspect is described in
a following subsection of this abstract, and staff, consultants, and/or the County Attorney will
address each topic during presentation of this information to the Board at the August 16
meeting.
Architect Selection
The architectural firm of Corley Redfoot Zack (CRZ) has completed several elements of work in
the assessment of this facility over the past several years. Most recently, it has assisted the
County in preparation of evaluations necessary to exercise due diligence in the acquisition. It is
recommended that the County exempt itself from the architect selection process as allowed in
G.S. 143-64-32 and retain the firm for the design of the Central Orange Senior Center, as well
as the renovations associated with the development of the approximately 15,600 square foot
Center. This recommendation is prompted by three significant factors:
1. The County's known experience with the capabilities of the firm would indicate
that it is able to carry aut the work in a manner that will be satisfactory to the
County; and
2. The firm has developed a significant body of knowledge over the course of
several years as various assessment documents have been prepared, thereby
providing it an excellent base from which to begin the design process;
3. The purchase contract contains provisions that the closing of the purchase
contract is contingent upon certain regulatory approvals being obtained. The
project architect is responsible for the necessary submittals, which would
prompt the County to move forward expeditiously with hiring a design firm.
CRZ has submitted a cost proposal for the complete design of the new construction, as well as
the renovation of that portion of the existing structure that will be part of the Senior Center. The
cost proposal in the amount of $139,500 includes $11,900 associated with the Town of
Hillsborough Board of Adjustment process and $127,600 that covers the design of the building,
as well as the subconsultants responsible for structural and HVAC design.
CRZ will commence work immediately upon approval by the County Commissioners and move
forward with the Hillsborough Board of Adjustment process. The submittal for the Board of
Adjustment is due by September 19, 2005 in preparation for its meeting on October 12, 2005.
The SportsPlex acquisition agreement includes a provision that makes the deal contingent on
Hillsborough granting zoning and land use approval of the addition of a senior center and
community and recreational facility to the SportsPlex.
Pursuant to timelines published earlier in the SportsPlex deliberations, the senior center should
be brought on line in the fall/winter 2006.
Local Government Commission Review
County staff, consultant, and bond counsel met with staff of the North Carolina Local
Government Commission (LGC) in mid-July to discuss the County's plans to acquire and
finance the acquisition of the SportsPlex through indebtedness to be repaid from an enterprise
fund that will be established to account for SportsPlex operations and assets. The LGC has
statutory responsibility to review and approve most transactions involving assumption of
significant indebtedness by North Carolina local governments. The SportsPlex acquisition
agreement includes a provision that makes the deal contingent on approval by the LGC. The
County's plans received a generally favorable reaction from LGC staff. In light of guidance
received from the LGC staff, County staff anticipate submitting all necessary documentation to
the LGC ahead of the Commission's scheduled meeting an November 1, 2005, Approval at
that time by the LGC (assuming all other necessary conditions are met) would permit closing on
the property later in November 2005. The County's bond counsel has prepared an attached
timeline for the LGC approval process.
Development Review Process
Staff and consultants met with Town of Hillsborough staff in mid-July to discuss the timeline and
supporting documentation that will be required for the special use permit (SUP) application the
County will submit to the Town for the planned Senior Center expansion to the existing
SportsPlex facility, If the BOCC approves the Manager's recommendation outlined above to
retain Corley Redfoot Zack (CRZ) to provide design services for the Senior Center expansion,
CRZ will develop the necessary documentation for submission to the Town in mid-to late
September with the intent of receiving Hillsborough Board of Adjustment (the decision making
entity for the SUP) review and consideration at that Board's scheduled meeting in October
2005.
Audit of SportsPlex Financials
The Board has previously discussed the desirability of having audited figures related to
SportsPlex operations, At the March 15, 2005 meeting, the Board received a financial analysis
from Blackman & Sloop, a local certified public accounting (CPA) firm, but that review did not
rise to the level of scrutiny entailed in an audit. The Board instructed staff to pursue an
additional engagement with Blackman & Sloop to conduct an audit of the SportsPlex's financial
records and condition, to the extent that the current owners are willing to make available all
documents and background necessary for the firm to issue an auditor's opinion, The current
owners of the SportsPlex facility and operation have not agreed to make the management
representations necessary for a CPA firm to produce an audit. Although the agreement
between Orange County and R.T, Holdings commits the SportsPlex owners cooperation in an
audit performed on behalf of the County, it expressly excludes the required management
representations from its cooperation commitment as noted in the attached excerpt from the
Purchase Contract. Blackman & Sloop will not, in today's post "Worldcom and Enron
environment," perform an audit of R.T, Holdings without these management representations.
Blackman & Sloop will, however, perform "agreed-upon procedures" for afee - in the range of
$10,000 to $15,000 -and will provide a draft report far the BOCC to review prior to the Board's
September 7, 2005 meeting, A draft engagement letter outlining the proposed "agreed upon
procedures" is attached, and, in addition, an article from a recent certified public accountant's
magazine that discusses "agreed upon procedures" as an alternative to an audit is also
attached,
Contract for Project Management Services
As the Board is aware, ,Jeff Thompson, through the Linked Economic Development Affordable
Housing Foundation, Inc. (LEDAHF), has provided strong assistance and facilitation throughout
the SportsPlex acquisition and the associated senior center development process. At the
County's request, LEDAHF has submitted a project management agreement to continue the
work through the construction period, The attached agreement lists the specific areas of
involvement, but, in summary, LEDAHF would shepherd the project through all phases from
regulatory approval through the certificate of occupancy, including construction supervision..
LEDAHF and county staff are researching the possibility that the project could be delivered by
LEDAHF as the Construction Manager at Risk (CM at Risk), which is now available to local
governments as a contracting method. As a CM at Risk, LEDAHF would work with the County
4
and the project designer toward an agreed upon program on which the project budget would be
based. At such time agreement was reached and the Board has approved the project budget,
the CM at Risk is in a position to guarantee that the project will be delivered at the agreed upon
price. Additional information regarding this contracting method and agreement that may be
struck with LEDAHF to provide the CM at Risk services will be presented to the Board on
September 7, if the approach proves to be viable,
The cost proposal is based on a flat fee of $4,000 per month during pre-closing and pre-
construction periods and then the greater of $4,000 or 4.75% of the total hard and soft costs
drawn for the month against the project, These fees shall not exceed a total of $85,000,
Expenses, such as mileage, mailing costs, etc. would be handled as a reimbursable expense
similar to other professional services for which the County contracts. The combined
design/project management costs will total approximately $224,500, which is approximately
11 % of the overall project total and is substantially the same as the amount presented to the
Board in the March 15, 2005 presentation,
Planning Committee
The Board indicated its intention to replicate the successful Southern Orange Senior Center
process of appointing and soliciting advice from a citizen planning committee comprised
primarily of constituents who will use the new Central Orange Senior Center. The Clerk's staff
have solicited applications from citizens interested in service on this planning committee, and
have received 23 applications as of August 10, 2005, Staff plan to bring back to the Board's
September 7 meeting recommendations regarding the committee charge and membership,
Senior Center Operations
The County's Department on Aging will be responsible for the operations related to programs of
the senior center.
Operations Management Contract(s)
During the next several weeks, staff plan to initiate discussions with one or more entities that
could contract with the County for a pilot period of perhaps two years to operate one or more
elements of the overall SportsPlex operation:
• overall physical plant, to include building, equipment, and grounds;
• skating, hockey, and other ice rink programming;
• swimming pools and aquatics programming;
• fitness programming;
• food concessions;
• atterschool and other recreational programming
In the interests of time and having well-qualified outside management in place prior to closing
on the 5portsPlex facility, staff recommend that the County NOT solicit a broad array of
proposals for managing the overall SportsPlex operation or subsets of its activities, Rather,
staff propose to negotiate agreements with one or more entities with demonstrated successful
track records in managing the types of amenities available at the SportsPlex. As part of the
pilot effort, staff would evaluate the degree of success of the management entity or entities, and
make recommendations to the Board regarding the advisability of renewing management
agreements at the end of the pilot period or soliciting new management proposals.
FINANCIAL IMPACT: As approved by the Board at the June 23 meeting, the net cost to the
County for the SportsPlex acquisition is expected to be ± $5,565 million. Funding for the
acquisition would come through third party financing that will be subject to approval by the North
Carolina focal Government Commission.
The proposed cost of design services far the Senior Center expansion and reconfiguration of
existing undenatilized space is an amount not to exceed $127,600. In addition to the design
services, $11,900 is the estimated expenditure related to the Town of Hillsborough Board of
Adjustment review process, The proposed cost of project management services is an amount
not to exceed $85,000. Both of these amounts would be funded from the Central Orange
Senior Center project budget which is estimated at $1,963,463. Project funding will consist of a
combination of alternative financing and November 2001 voter-approved bonds, A table
outlining the major elements of the SportsPlex acquisition and expansion project is attached far
reference. It is important to note that the current estimated project budget is within $2,100 of
the amount presented to the Board on March 15, 2005.
RECOMMENDATION(S): The Manager recommends that the Board:
1) Pursuant to G,S, 143-64.32(b), exempt the project from the architect selection process
for the reasons cited herein; and accept the accompanying design services proposal and
approve the subsequent contract, subject to final review by staff and the County
Attorney, and authorize the Chair to sign it;
2) Approve the accompanying project management contract, subject to final review by staff
and the County Attorney, and authorize the Chair to sign it;
3) Approve an agreement, subject to final review by staff and the County Attorney, between
Orange County and Blackman & Sloop for Blackman & Sloop to perform the financial
procedures described herein, and authorize the Chair to sign it; and
4) Provide direction to the Manager, staff and Attorney regarding due diligence activities
related to the purchase of the facility, and any other information the Board may wish to
consider at its September 7 meeting prior to the end of the 60-day "free look" period,
1 ~ ~ CORLEY IZEDFOOT ZACK ~,~.
ARCHITECTS ENGINEER 5 • PLANNER S
August 1, 2005
County of Orange
Gl LNN D. CORLEY, AlA
President, CEO De aTtment of Purchasn~ and Central Services
p g
Post Office Bax 8181
KENNEIN E. RL'DFOOr, AiA
vice President
Hillsborough, NC 27278
ATTN: Ms, Pamela K. Jones, Director
MARK ZACK, AlA
Vice President
~~ Proposal for Professional Design Services for
MICHAErL. xAMMEnsLEY, rE
Prirtcipai Senior Center Addition to Sportsplex
LAURENCE W, RUNCH, AfA Hillsborough, NC
Associate
ANDREW R-CRU[CKSHANK, AIA Dear Ms. Jones:
Associate
cHnRLRNEE.xnNLEY,ntn Corley Redfoot Zack, Inc., is pleased to submit to you our fee proposal to
Assoriate provide design services for the Senior Center addition to the existing Sportsplex
nnvro M. rAYtoR, nIn building, as you requested. We look forward to working with you on this
Associate exciting project for Orange County.
fiAl2RY M. )ENSEN
Associate This proposal is based on our understanding of the scope of work outlined in
KENNErx E.sMIrH the preliminary plan entitled "Triangle Sportsplex -Proposed Senior Center
Associnte Addition and Renovations, Hillsborough, NC;' dated March 15, 2005, in
combination with information gathered at a July 12, 2005, meeting regarding
Town of Hillsborough approvals, That meeting, hosted by Margaret Hauth,
Hillsborough's PlaruLing Director, was attended by Rod Vissor, Craig Benedict,
Karla Thames of the Orange Cotulty staff, along with Jeff Thompson of Ledahf,
Inc.
The proposal has been broken down into distinct components of work to clearly
PO Box 2368 respond to the services required for this project.
Chapel Mill, NC 27515-2365
zz2 Closter court A, Town of Hillsborough Board of Adjustment process:
Chapel Hill, NC 27514-2212
The project must be submitted to the Town of Hillsborough's Board of
Adjustment Linder their Site Plan Review process. {Ms. Haixth provided
CRZ wifll the Site Plan Review application forms and checklists). The
production of all the materials required for the submittal package and
the presentation of the information to the Board of Adjustment are
included in this portion of the work.
t r The schedule for the work is as follows: submittal date of September '19,
2005, for Board of Adjustment meeting on October 12, 2005. We will
work with you to meet this date. Immediately upon your acceptance of
(919} 401-8586 Telephone this proposal, we will contact you regarding Owner-provided
(919) 493-7306 Pax information and application fees for the Site Plan Review process, The
www.corleyredfootzack. com
fee for this work is 11 400.OD,
0
Ms. Pamela K. Jones August 1, 2005
RE: Senior Center Addition to Sportsplex page 2
B. Architectural and Engineering design services for one-story addition of approximately 10,675
SF and a renovated area of approximately 2,555 SF,
The Basic Services for this portion of the work include the following:
- Architectural design
- Civil Engineering design
- Security design
- Structural Engineering design
- HVAC/Electrical/Plumbing/Fire Protection Systems/Technology design
- Landscape design
- Cost Estimating
- Construction Administration (Basic Services provides one visit per week to the project
during the construction period (anticipated 8-month construction period). Additional site
visits are considered Additional Services..
Basic Services consist of the following phases and are broken down by percentages for your
information:
Schematic Design Phase: 15%
Design Development Phase: 20%
Construction Document Phase: 35%
Biddu1g or Negotiation Phase: 5%
Construction Administration Phase: 25%
100%
The fee for Basic Services has been calculated to be $128,700; however, in March of this year,
Corley Redfoot Zack worked with Jeff Thompson of Ledahf, Inc., to draw a sketch plan for
this project (see attached drawing), This plan was presented to the BOCC for their
information, The $1,100,00 fee paid for those services is duectly re]ated to the project az1d is
offered as a Credit to the overall fee; therefore, we propose a fee of 127 600 for the Basic
Services,
The Structural Engineering consultant for the project will be Lasater•Hopkins{'hazig. Theh•
fee is X19,000 (included in Basic Services fee above),
The Mechanical, Electrical, az1d Phunbing Engineering consultants for the project will be
Reece, Noland, & McEkath, Their fee is $32,200 (included in Basic Services fee above),
Corley Redfoot Zack, Ina, will be prepared to execute the AIA Standard Porm of Agreement
Between Owner and Arclutecl as our formal agreement with the County at your request,
~`\"\"
~ r t CORLL•Y REDPOOT ZACK
~J
Ms. Pamela K. Jones August 1, 2005
RE: Senior Center Addition to Sportsplex page 3
REIMBLTRSABLES:
Reimbursable expenses will be billed at direct cost on
the monthly statement and 'include the cost of such items as the following:
1. Printing and copying costs/postage/shipping for project.
2 Property survey required for the Site Plan Review submittal will be charged as a
reimbursable expense.
3. On Augixst 1, 2005, Jeff Thompson requested CRTs involvement with the serviceability
inspections of the existing equipment (fitness equipment, kitchen equipment, pool equipment
[not related to the pool system], etc.), as well as prioritization of maintenance budget issues,
We are pleased to assist in this work and propose to perform on an hourly basis, since the
full scope of services camlot be determined at this time.
Corley Redfoot Zadc's hourly rates axe as follows:
Principal's time: $110/hour
Architect's time: $ 80/hour
Engiteer's time: $ 95/hour
CADD/Drafting: $ 60/hour
Construction Admin,: $ 70/hour
Other employees at rate of 2.75 times di~ect hourly wage.
We will bill this work on a monthly basis,
SERVICES NOT INCLUDED:
- Design work related to existing building other than the scope outlined in Basic Services.
- Legal fees
- Geotechnical investigation
- Town permitting or approval process fees
- Renderings or models
- Construction Administration beyond Basic Services
- Interiors and funtiture selection
- Traffic Consultant
- Wetlands delineation
- Flood Plain mapping
- NCDOT permittitg
- Testing of materials during construction period
- Asbestos survey or Iead paint. removal from existing building
- Coordination with Construction Manager
- LEED certification process, or similar High-Performance Builduig certification process.
- Impact/Facilities/Utility fees
U`\\,\\`
~ ~ ~ CORLEY REDFOOT ZACK rt+c.
1VTs, Pamela K Jones
I2E: Senior Center Addition to Sportsplex
August l., 2005
page 4
Please call me if you have any questions or comments on the above proposal. We are looking
forward to this important project az1d will dedicate our expertise to meet the expectatlorvs of Orange
County and its citizeau-y.
Sincerely,
eth E. edfoot, AIr~ A' ~~
ice President
KL•R:esw/0501-pro
Enttosures
cr. Glenn D. Coley, Allf
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~ ~ ~ CORLEY I'rEDFOOT ZACK ~~
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Orange County Sportsplex Financing -Schedule
);vent Timin
County Board determines to [Done]
pursue acquisition
County staff provides update [Done - 7/13]
report to LGC
County Board adopts preliminary BOCC meeting of 9/20
authorization resolution and
reimbursement resolution (if
necessary); formally calls for
public hearing
County sends out bank loan RFP By 9/2.3
County determines all sale By 10/4
conditions met, incl. land use
approvals
County's preliminary application By 10/4
due to LGC
Publish notice of County public By 10/7
hearing
Bank proposals due back to the By 10/7
COUTity
County BOard approves a tentative BOCC meeting of 10/18
plan for facility and program
management
County Board holds public BOCC meeting of 10/18
hearing; adopts resolution
approving financing
County sends remaining 10/19
application
materials to LGC
LGC approval 11/1
First available closing date 11/8
Taylor, P A. in Raleigh, North Carolina In the event Buyer, despite diligent effods, is unable by November I,
2005, to satisfy one or mote of the conditions for Closing set forth in Section 7(a)(v), relating fo the L.GC Approval
(as hereinafter defined) and financing, Section 7(a)(vii), relating Yo the Expansion Zoning Approvals (as hereinafrer
defined), or Section 7(a)(viii), relating to a regulatory moratorium, and Buyer reasonably believes that such
condition or conditions may be satisfied by December 1, 2005, Buyer may extend the date for Closing tluough and
including December 1, 2005, by giving a written notice to Seller on or before October 25, 2005. At Closing, title to
the Property shall be delivered to Buyer. Buyer and Seller agree to work diligently in good faith to close as early as
possible following the satisfaction of the financing and land use contingencies referred to in Sections 6(h), 6(j),
7(a)(v), 7(a)(vii) and 7(a)(viii) below.
1. DELIVERY OF DOCUMENTATION: Seller shall provide to Buyer as soon as reasonably possible,
and in any event within twenty (20) days of execution by Buyer and Seller of this Agreement, copies of the
following (the "Due Diligence Information"):
a) A list of all tangible personal property owned by Seller and used in connection with the operation
of the Property;
b) A list of all contracts, leases, and commitments between Seller and third parties entered into in
connection with the operation of the Property, and a list of employees and independent contractors, their
compensation levels, and their benefits, if any;
c) A list of all amounts received from users of the Property with respect to use of the Property after
the date hereof, including amounts paid for memberships, for activities or programs, for events or leagues, and for
any other activities, pro-rated by month to indicate the amounts applicable to future months (the "Advance Payment
Amounts"); and
d) Copies of such information as Buyer may reasonably request in writing in connection with
Buyer's obtaining of title insurance commitments or otherwise with respect to the Property.
2. ACTIONS PENDING CLOSING:
a) Investigation Period: As of the date hereof through the date which is sixty (60) days after
execution by Buyer and Seller of this Agreement ("Investigation Period") and nevertheless subject to the terms and
conditions of this Agreement, Buyer and Buyer's authorized representatives shall be entitled to make such
investigations and other inquiries, tests and evaluations regarding this Property (collectively, the "Investigations") as
Buyer deems reasonably necessary. If the results of any such Investigations are unacceptable to Buyer, in Buyer's
sole and absolute discretion, then Buyer shall have the right, exercised not later than the expiration of the
Investigation Period, to terminate this Agreement by giving written notice thereof to Seller, in which event the
parties hereto shall have no further rights, obligations or liabilities with respect to each other under this Agreement.
make available all books and records reasonablyrequested and shall also make available Seller's personnel and
outside accountant• provided however that Seller shall not be required to enter into any engagement letter
r~resentation letter or other undertaking to such outside accounting firm or Buver in connection with such audit.
The results of such audit shall be satisfactory to Buver in its sole discretion and shall be considered part of the
Investigations. Buver may ternnate this Agreement as set forth. above if the results of such audit are not
satisfactory, in Buyer's sole discretion
b) Access to Property: Seller shall give Buyer and its agents, engineers and other representatives,
access to the Property from the date hereof through Closing, at reasonable times after reasonable notice to Seller, for
the purpose of conducting inspections and examinations of the Property and of monitoring activities at the Property.
Buyer shall also have the right to review and inspect all leases, contracts or other agreements related directly to the
FNL~LICn\45A765 6
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~ CERTIFIED PUtl41C ACCOUNT AH TS
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Gurlu G Daniel
Anpust 10, 200
Mr Moses Carey, Jr..
Board of Gotlnty Cotmnissioners
Oc~ulge Coulrty
POkiox81S1
Hillsborough, North Carolina 27278
Dear Mt. Carey:
i-63i P 02/03 F-437
391=3tBFP5:
:lmcria,n tns[im
tauficd Puhlic Accountants
:4orlh Carnltna :associnnen of
Certified Rtblic Accoununts
tie are pleased to confirm. our understanding of the nature and liniitatio_re of :he
services we are to provide for Ch~a.•lge Colmty..
We will apply the. agreed-upon procedures which Orange C;eunty has specified,
listed in the attached schedule, to evaluate dle reascilab.leness of property, plant and
equipment, membership revenue. program revenues and expenses and the financial terms
of eoutracts and agreements of R. T, Holdin`s, LLC, LIBA Trittmgie SportsPlex, fez the
period ended May 31, 20Q5. This engagement is solely to assist (hBrae County in
assessing the reasonableness of the financial information presented by k l~ Holdin.gs,
LLC. Our engagement ro apply agreed-upon procedures :vill be cunducte;l in accordance
'With attestation standards established by the Atncrican hlstiatte of Certified Public
Accountants. The sufficiency of the procedures is solely the responsibility of those
patties specified in the report, Consequently, we nlalce no representation regarding the
sufficiency of the procedures described ht the artached schedule either ft+r the purpose iar
which this report has been requested or for any other purpose. 1f,fo*'tury reason,~i~e are
unable to complete the procedures, we fh-ill describe any restrictions on the. perDrmatn.e
of the procedures in our report, or will not issue a report as a resuh of this engagement.
Becat>ve the agreed-upon procedures listed in dle attached schedule do not
constitute an e>;arnination, we will not express an opinion on the reasonableness of the
financial inforration of the SportsPlex in addition, tic hav[; no obligation tD perform
any procedures beyond those listed in the attached schedule, R',ny additinnai procedtiras
requested by Orange County will require an addendum to this abreelnent prior to any
work being performed.
We will submit a report listing Lhe procedures perTbnned and nor findings, This
report is int[;nded solely for the use of Orange County, and should not bz used by those
v<ho did nut agree to the procedures and take the responsibiiity fur the sufficiency o_' (he
sl.uuP, era>, PA
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Auwii-09 07:40am Frem-BLACYM4N d SlAOP, CPA.S, P 4 +910968476F T-6°r P 03/03 F°43
h'Ir. i`4oses Carey, .ir
Board County Commissioners
Orange i'i,unty /-,
August 10, 2005 J~
Pace 2
procedures far Chair purposes.. Qur report will contain a paragraplt indicatist.g that had the
perfa:'med additional procedures, other matters might have comp to oust attention that
would have been reported to you
\Ve plart t'o begin our procedures on approximately <`,ugust 5, 2O1i~ and, unless
unforeseeable problems are encountered, the enlagetncnt should be completed by
September 1=l, ?005. A draft of the report will he available oy 5epternber 1, 200,
provided all infounation necessary to complete the engagcrnent is made available to us in
a timely manner..
we estimate thaC our fees for the agreed-upon prc~:xdures as listed in the attached
schedtile will range between Slt),t)OO and 4+15,000. fhe fee estimate is based on
anticipated cooperation from IZ T. I-Iokiings. L,LC persotme! and the asstunption that
unexpected circtunstances will not be encountered during the enga,emenC. If'signifioazit
additional titre is necessary ar Orange C'ourty n:quests additional procedures to be
perfamred, we will discuss it with you and arrive at a new fee estimate to he included in
an addendum to this agre;etnent before we incur the additional costs.. ilur im~aices Tor
these gees vv;l! be rendered each month as work progras>as and are pa)'able on
presentation- In accord~trtce with our Tirm policies, work may be suspended if your
account becoux~s avardua aztd will not be resumed until your account is paid in i'ull if wa
alert to terminate uur set~~ices fbr nonpayment, am en;agement will be deemed to have
been completed even if we hav'c not completed our report. You will be obligated to
rvmpensate us for all time expended and to reimburse us for all out-of-poekct
expendi'tutas through the date of tanninativn
We appreciate the oppartuttity to assist you and believe this letter accuratel+,•
summarizes the significartt terms of our ergagetnert. If you ha:~e any questions, please
let us know. If van agree vrith the tarrns of our engagement as dcs~ribed is Cris latter,
please sign the enclosed copy and return it to us If the need fbr additional scrvires arises,
our agn:entent with you will Hued to he r::vised. tt is eustomar,~ Tor us m cnumt~rate these
revisions in an addendum m this letter. if additional specified parties of the repon are
added, we will require that they acknowledge: in writing their res;?onsibilit~- for the
stfficiency of procedures
Vary nuIy yours,
BL:~CKMAN ~i. 51.OC)P, CPAs, P A
/~
ltobir. H ~lci7uf`he. C:YA
Aua-I6-D'o 12:5'dum Frcm-B!ACY,MAN & SLOOP, CFAS, P p +810965-0766
13o.~rd uotutty Commissioners
(~ran.ge 'ounty
Aug~.zst 10, ?005
Page 3
This Iztter correctly SrtS iurrh the unclzrstazading of'(Orsngi; Cowity
By:
Title:
T-531 P 64/J6 F-d2.
fJ
C7ate:
Aue-1D-O6 12:59pm Frem~~BLACI;MA4N & S100P, CPAS~ P 4
lvfr b4oses Carey, .tr.
Board CoYmty Commissioners
Orange County
F1lYgtist 10, 7005
Page 4
+919968476E t-631 P 95!93 F-427
r'
Listzd belevti~ are the agreed upon procedures which t~~iti 17e perfbrmed to evaluate
the reasonableness of praperry; plant and equipment, memhership revzrue, program
revenues and expenses and the Financial renns of contracts and agreements for the period
ended May;~l, 2005 of~..T. Holdings, l.1.<', Df3A TriattgL: SponsPiex.
Verify t1Ye existencz of property, plant artd zquipmztrt by i~bnuning from the
SporisPlex's management a listing oFthe fixed a.set detail and tracintr significant
assets tv the actual ]ovation on the property, Recxiculate the cun•ent depreciation
expeusz for significant assets from invoice copies obtained frnrr, the SpartsPlzY's
management to zvaluate the proper valuation of asszis.
2. Verify the existence and proper valuation of contracts and agreemen?s as of May
31, 2005 by obtaining Prom the SportsPle?i's- Ynsutagemcnt copies of all conuac:,
agreements, licenses and permits in effect at .May 31, 20fj5. The financiat tenr:s
of the agr~ntents [vill be agreed to tP,c financial iYttbrmatien presented by f: T'.
Holdings, LL:C.
~. Verify the accuracy and proper presa;itation of membershiprers and prepaid
memberships by obtaining from the SponsPlcx's managen:en[ a listing of al]
membership fees as of May 31, 200 including the; type, cost and effective date ef'
rash mznYbership. Recalcuiate the rnetnbzrship revenue and prepaid tnzmberships
as of May .il, 2005. Judgrnental:y select merrrbeahips aril trace t•., supporting
documentation obtained from the SpottsPla;e's ranaement- Petfurm analytical
procedures to verify the reasoti<lbleness of the membership revem:e presented by
R T. Holdings, LLC'.
4, Verify the reasonableness of progrsnl revenues using dacuntentatian nb[ained
from the SpartsPlex's accounting dz?artment and program direcioY,.
5. Perform tests of expenses m determine that they uc properly classified and
supported by proper documentation as ob*.ained from t}Ye SportsI'lex's
management
C. Revie~i the basis of the a(]ocation of o~ zrhead expenses among the progratns f~,r
reasonableness.
!7
Smith ~ Gesteland Article
Agreed-Upon Procedures - An Alternative to an Audit
Keith Baumgartner, CPA, Director of Assurance Services
Does your banker, secured creditor, or some other interested party require your
business to have an audit? Agreed-upon procedures in conjunction with a review
or compilation could be a money- and time-saving alternative to a complete
financial statement audit,
Agreed-upon procedures applied to specified elements, accounts, or other items
of a financial statement provide specific findings regarding important account
balances. Examples of potential users of these reports could include financial
institutions lending funds under a line of credit agreement secured by trade
receivables, purchasers of specific groups of assets, or lessors whose lease
income is dependent on lessee sales, If your business is required to have an
audit to verify certain account balances an your financial statements, you should
discuss the agreed-upon procedure option with the interested parties,
To perform agreed-upon procedures, all parties involved obtain a clear
understanding of the specific elements, accounts, or items to which the
procedures will be applied. The primary accounts tested may include cash,
accounts receivable, investments, inventory, fixed assets, accounts payable,
sales, etc, The parties then determine the appropriate procedures to be applied.
These procedures may include clerical testing, confirmations, observations,
analytical review, cutoff testing, costing methods, and reconciliations among
others, The procedures are then performed, and the specific findings identified
are communicated in a report to the parties involved, These reports will give
interested parties a measure of assurance on specific areas of importance
without the cast of a complete audit,
Sportsplex Agreement: Orange County/LEDAHF {$
Agreement for Project Management Services [Draft]
This Agreement for Project Management Services is made and effective August 16th, 2005, by and
Orange County, North Carolina (the "Client") and the Linked Economic Development and Affordable
Housing Foundation, Inc, ("Project Manager', or "LEDAHF"),
1. Purpose. Orange County retains LEDAHF as its Project Manager for the acquisition,
development, construction, and operations of the Triangle Sportsplex and Northern Orange Senior
Center ("Sportsplex", or "Project"), LEDAHF agrees to provide such services in the proper manner
and represent the Client's interests to the best of its abilities, all according to the terms of this
Agreement
2. Subject Matter. LEDAHF will act as Orange County's Agent and complete the following
described services:
a) Supervise and manage the full process of acquiring, constructing and establishing operations
of the Sportsplex to include but not be limited to:
1, Facilitation assistance for the County Staff;
2, Contract preparation and negotiation;
3, Due Diligence organization and supervision;
4. Financing structure planning and assistance;
5, Facilitation and supervision of the pre-construction, design and construction process;
6. Supervision of selected vendors and professional firms throughout this process tc
include assistance to County Staff on financial controls through development and
construction;
7. Scheduling and critical path management;
8. Communications to Staff and its Board of County Commissioners ("BOCC");
9. Facilitation and supervision of the transition operations period;
b) Provide documentation of the full process;
c) Attend all meetings and be reasonably available at all times for the County Staff and the
BOCC;
d) Execute any instructions as directed by County Staff.
3. Other Matters. This Agreement contemplates that the Project Manager will represent the
Client only with respect to the matters described above, Any other matters, except those incidental to
and necessarily related to the covered matters, shall not be performed by LEDAHF without the prior
written authorization and agreement with Orange County.
4. Fees. Client agrees to pay LEDAHF a fixed monthly fee ("Fee") in the amount of Four
Thousand Dollars ($4,000) for the services provided pursuant to this Agreement during the pre-
clasing and pre-construction periods. During construction, the Fee will be the greater of $4,000 or
Sportsplex Agreement: Orange Oounty/LEDAHF (R
4..75% of the total hard and soft casts of the Project drawn far that month. Hard costs are defined as
contracted construction costs for the project, Soft costs are defined as all engineering, design, and
related non-construction casts that inure to the project, Hard and Soft costs will be approved by the
Orange County Staff. A concept budget of these costs framing this Agreement presented at the
3/15/05 BOCC meeting are attached to this Agreement as Appendix A. The total compensation to
LEDAHF shall equal 4,75% of the total hard and soft costs of the Project, The total compensation
shall not exceed $85,000 far the scope of services outlined in this Agreement. Any significant change
in the scope of services required by the County that warrant an increase in this total compensation
amount will be addressed in an addendum to this Agreement agreed to by both the Client and the
Project Manager.
5. Costs and Expenses. Client shall reimburse the Project Manager for its direct costs
incurred to only include reproduction expenses, presentation expenses, and mileage at the rate of
$,31 per mile. Telephone expenses will be the responsibility of the Project Manager, All
reimbursement expense reports must by approved by County Staff. Orange County will provide office
space and support when LEDAHF working in Orange County on the Project,
6. Termination of Services. This Agreement can be terminated at such time that Orange
County decides not to pursue the acquisition of the Sportsplex, The Client or Project Manager may
terminate this Agreement if either party is in breach of any of its obligations, Orange County may
terminate this Agreement at any time subject to Client's obligation to pay Project Manager for
services rendered (to the date of termination) pursuant to this Agreement,
7, Notices. Any notice under this Agreement shall be effectively given upon deposit in the
United States mail, postage prepaid, by facsimile, or by recognized overnight delivery service
addressed as follows:
Client: Orange County
C/O Pam Jones, Director of Purchasing
200 South Cameron Street
PO Box 8181
Hillsborough, NC 27278
(919) 245-2652
(919) 644-3001 (fax)
Project Manager: LEDAHF, Inc,
C/O Jeff Thompson
123 North Main Street
Belmont, NC 28012
(704)825-8868
(704) 825-8869 (fax)
8. No Assi nq ment. Client and Project Manager agree that neither party may assign or transfer
any rights and obligations under this Agreement, directly or indirectly except upon the prior written
consent of the other party, Subject to the foregoing, this Agreement shall be binding upon and inure
to the benefit of the parties hereto, their successors and assigns.
Sportspiex Agreement: Qrange County/LEDAHF
~0
9. Final Agreement. This Agreement includes the entire understanding and agreement
between Client and Firm on the subject matter hereof. This Agreement may be modified only in
writing signed by both parties.
In witness whereof, the parties hereto have caused this Agreement to be executed as of the date first
above written.
For LEDAHF, Inc.
For Orange County
.Jeff Thompson
Executive Director
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