HomeMy WebLinkAboutAgenda 02-03-2026; 6-a - Approval of the School Construction Interlocal Agreement 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 3, 2026
Action Agenda
Item No. 6-a
SUBJECT: Approval of the School Construction Interlocal Agreement
DEPARTMENT: County Manager, County Attorney
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1. Draft Proposed School Kirk Vaughn, (919) 245-2153
Construction ILA - John Roberts, (919) 245-2318
Redline
Attachment 2. Draft Proposed School
Construction ILA—
County Final Draft
Attachment 3. ILA School Edit
Requests
Attachment 4. Presentation
PURPOSE: To discuss and approve the School Construction Interlocal Agreement (ILA) with
both School Districts and create an associated County position to facilitate its implementation.
BACKGROUND: During the 2024 bond process, the Board of County Commissioners reviewed
its policies and procedures around school capital funding, updating the School Capital Funding
Policy and the Major Project Planning Addendum. The Board requested staff review and propose
an ILA to strengthen accountability and transparency for upcoming school construction and
renovation projects. Staff reviewed similar arrangements in other counties with active school
construction, including an ILA from Wake County. The attached draft ILA codifies a joint school
construction Core Team comprised of staff from all three entities. This Core Team will have
assigned roles, meet quarterly and more often as needed, and report back to the Joint Meeting
of the Board of Commissioners and School Boards at least once per year. Additionally, there are
provisions in the agreement that school staff report on the alignment with County policies, that
the Team maintain information for public consumption, and that that each party identifies a liaison
for its respective governing board.
Subsequent to the initial review of the ILA and upon discussions at the October 21, 2025 Board
of County Commissioners' Business meeting, staff amended the ILA. The major revisions are
highlighted below:
• Maintaining one ILA between all three boards but allows the ILA to remain in force if one
party terminates the agreement.
• Establishing that the ILA applies to all projects that utilize 2024 GO Bond Projects.
• Article IV is amended to standardize requirements with the School Capital Funding Policy
as adopted by the Board of County Commissioners.
2
This draft was provided to members of the Board of County Commissioners and staff of both
school districts. The school district staff have requested three additional changes to the ILA, for
the Board of Commissioners' consideration. Those changes are:
• 4.01 i d & e - Amending the approval to appropriation. This is meant to clarify that by the
Board of County Commissioners approving funding for projects in the budget, they are
approving the projects.
• 4.01 iii - Changing the design payment timing as design is paid at milestones, not all at
once.
• 4.01 v - Removing the requirement for Construction Manager at Risk (CMAR), changing
it to a recommendation. School staff have identified that there would be projects that use
bond funds that are not new construction, such as HVAC and Roof replacements, where
CMAR would not be a reasonable procurement method. The attorney for both school
districts additionally contends that General Statute 143-128.1(e) does not permit any
public entity to delegate the determination of appropriate construction method.
As design funds have been authorized by the Board of County Commissioners, both school
districts have proceeded with design of their first school construction project. County staff have
met with school staff in December as a precursor to the formal CORE team. School staff have
committed to following the structure of the School Capital Funding Policy and have already
committed to using CMAR as the construction method for both first elementary school builds.
Both districts will be releasing requests for proposals (RFPs) to select a construction manager
at risk in the spring.
Along with the ILA, the County reviewed options in managing this process, and determined that
it would be preferable to have staff provide oversight and communication during the project
construction, rather than hiring a project management firm. The Manager recommends adding a
1.0 FTE (full time equivalent) School Capital and Financial Analyst to coordinate the meetings of
the CORE Team, report back to the Board on school construction, and manage all public
communications, including maintenance of a dashboard and all non-online materials. This
position would also consolidate other school related tasks that currently reside in different
departments, such as the coordination of the Schools Adequate Public Facilities Ordinance
Technical Advisory Committee (SAPFOTAC) and the reporting of capital expenditures for
financing and reimbursement. This proposed position would be funded from Pay-Go funds set
aside for Project Management. Funds totaling $500,000 were budgeted in FY 2026, and
$1,000,000 is planned annually for future years. The County would retain approximately $36,000
for a position starting on February 3, 2026 for FY 2026, and retain approximately $90,000
annually in future years from that pool to fund the position. The remaining funds will be allocated
to the School Districts for project and program management expenses. These funds were set
aside from school project budgets to ensure that the districts would adequately invest in project
and program management functions. The Manager recommends that the position be approved
by the Board with approval to proceed with the ILA.
FINANCIAL IMPACT: There is no financial impact associated with discussion of the Interlocal
Agreement. The School Capital and Financial Analyst position would utilize funds already
budgeted in the FY 2025-26 budget.
ALIGNMENT WITH STRATEGIC PLAN: This item supports:
• GOAL 5: PUBLIC EDUCATION/LEARNING COMMUNITY
3
OBJECTIVE 1. Foster collaborative relationships with formal and informal educational
organizations and agencies to provide opportunities for community members to meet,
connect, and learn together.
OBJECTIVE 2. Improve school readiness and educational outcomes by providing access,
training, tools, technology, and other resources needed to thrive.
OBJECTIVE 4. Improve learning environments by investing in facilities over a 10-year
period that address repair, renovation, and educational adequacy needs.
RECOMMENDATION(S): The Manager recommends the Board:
1) discuss and amend the ILA as needed;
2) approve and authorize the Chair to sign the ILA;
3) authorize the Manager to forward the ILA to both school boards for approval; and
4) approve the establishment of the related School Construction and Financial Analyst
position.
DRAFT Attachment 1 4
AGREEMENT FOR THE
CONSTRUCTION AND RENOVATION
OF VARIOUS SCHOOL PROJECTS
This INTERLOCAL AGREEMENT ("Agreement") is hereby made and entered into this the
day of , 2025, by and between ORANGE COUNTY, hereinafter referred to
as ("County"), and the ORANGE COUNTY SCHOOLS BOARD OF EDUCATION, and the
CHAPEL HILL-CARRBORO CITY SCHOOLS BOARD OF EDUCATION hereinafter referred to
as ("School Districts") pursuant to N.C. Gen. Statute §115C et seq.
WITNESSETH:
WHEREAS, pursuant to N.C.G.S. §115C-521, §115C-249(c), §115C-522(c), and §115C-
524, the building of all new School District facilities and the repairing of all School District facilities
shall be under the control and direction of the School Districts; and
WHEREAS, N.C.G.S. § 153A-158.1 authorizes the County to assume responsibility for
various aspects of the construction, equipping, expanding and improvement of School Districts
facilities; and
WHEREAS, it is the law of the State of North Carolina that certain facilities for a public
education system will be funded by county governments in accordance with specific expenditure
items set forth in N.C.G.S. Chapter 115C; and
WHEREAS, the County and School Districts desire to promote the excellence and viability
of both Districts and to address the ongoing need for acquisition, construction, and renovation of
property to be used for School District purposes and to the greatest extent practical align such
acquisition, construction, and renovation with the principles of the Woolpert School Facility and
Optimization Plan (the "Woolpert Report"); and
WHEREAS, it is the parties desire to continue the collaborative approach for site
acquisition, design, and construction to be completed in a cost-effective manner, within available
funding and, to create School District facilities that maximize instructional opportunities for
students and ensure efficient operations; and
WHEREAS, collaboration between School Districts and County staff benefits the taxpayers
of Orange County by ensuring that projects are timely completed, within budget, and to facilitate
the implementation of an orderly and effective capital improvement plan.
NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
PURPOSE
1.01 The purposes of this Agreement are to; 1) continue the existing collaborative, consultative
processes for the acquisition, design, construction, and renovation of School District facilities and
the development and execution of the School Districts capital improvement plan, and 2)provide
for the management and oversight of all construction and renovation projects having a dellar value
5
of at least $250 000to be funded by the 2024 Orange County General Obligation Bond
("Project[s]"). The parties recognize that a continuing cooperative working relationship between
the School Districts and the County will promote efficiency, collaboration, and transparency and
completion of projects on time and within budget.
ARTICLE II
TERM AND TERMINATION
2.01 -Term. The term of this Agreement shall begin on the date reflected in the first
paragraph of the Agreement and expire June 30, 2033, unless otherwise extended by mutual
agreement of the parties.
2.02 Termination. The parties shall each have the right to terminate this Agreement with or
without cause upon giving sixty (60) days written notice to the other partiesy in writing, including
the reason for termination. Any such termination by one party shall not affect the rights and
obligations of the remaining parties to this Agreement.
2.03 Effect of Termination. The roles and responsibilities of eaehany withdrawing _party shall
terminate sixty (60) days after notice is given by the withdrawing party unless otherwise agreed
by written consent of the Bother parties executed with the same formality as the foregoing
document. Any termination under this Section shall not terminate or otherwise affect properly
authorized resolutions entered pursuant to this Agreement, the provisions of N.C.G.S. 153A-158.1
for the transfer to the County of responsibility for construction, improvement, ownership, and
acquisition of School District property, any ongoing Project, any sales tax recapture agreement
entered into between the parties, or any construction or acquisition agreement entered into
between the parties.
ARTICLE III
JOINT SCHOOL FACILITIES CORE TEAM
3.01 -Core Team. The County and the School Districts hereby create the committee known
as the Joint School Facilities Core Team ("Core Team").
3.02 Purpose. The Core Team shall promote regular, informed, and interactive communications
between the County and the School Districts concerning research, investigation, evaluation,
funding, and implementation of the School District's capital improvement plan and Projects,
without limiting the statutory rights or duties of either party.
3.03. Membership.The Core Team will consist solely of professional staff of the three Parties.Each Party
shall appoint staff members to the Core Team necessary to efficiently carry out the purposes set
forth in this Agreement. These staff members should represent the County's Budget and Finance
functions, as well as the School Districts Finance and Operations functions. County members
shall be appointed by the County Manager, and School District members shall be appointed by
their respective Superintendents.
3.04 Liaison Designee. From the membership of the Core Team, each party shall designate
representatives to communicate information regarding the implementation of this Agreement to
the party's governing board.
3.05 Collaboration Process. The Core Team will implement the collaboration process through a
6
series of written documents and work plans that guide their scope of work. These written
documents may include, but not be limited to, defining roles and responsibilities of the Core Team
membership as well as roles and responsibilities of County and School District staff that support
the purpose of the Core Team. Any written processes or work plans shall be reviewed by Core
Team members at least every two years. The Core Team should meet at least quarterly to review
proposed Projects, and meet more frequently as needed.
3.06 Regular Communication between Boards. The Core Team shall present to the joint
meeting between the boards of each of the Parties at least once annually to discuss School
District needs, including the implementation of this Agreement and the collaboration of the Parties
as set forth herein. Following each quarterly meeting, the designated liaison from each party may
present an information update at a business meeting of their respective governing board.
3.07 Adherence to School Construction Planning Policies. Representatives from the School
Districts shall communicate through the Core Team the alignment of new construction with the
School Major Project Planning Addendum as passed by the Board of County Commissioners on
January 21, 2025 (the "Addendum").
3.08 Regular Communication to the Public. The County will create and manage a website that
tracks pProject progress and spending. The School Districts will provide information to update
the website at least quarterly. County staff shall communicate at least quarterly with the public in
manner designed to broadly and efficiently inform the public of Project progress and spending.
3.09 Recommendations. The Core Team shall make recommendations to the County and
School Districts only as provided herein.
ARTICLE IV
PROJECT DESIGN CONSTRUCTION AND RENOVATION
4.01 The parties will cooperate for the acquisition, construction, design, equipping, financing,
and taking all other action necessary to place in service the Projects. The above recitals are fully
incorporated herein.
(i) The parties mutually intend to engage in the design, construction, and renovation
of the Projects utilizing funds designated for school construction and renovation projects.
The County will administer its Capital Investment Plan process as described in the School
Capital Funding Policy as adopted January 21, 2025 (the "Policy").
(ii) Project selection shall occur as follows:
(a) The School Districts shall propose specific Projects for consideration and shall
submit the proposed Projects, together with a description of how the Projects
fit within the principles established by the Woolpert Report and the expected
design and construction budgets to the Core Team for reyio.eias provided in
the- °ddmPolicy.
(b) The Sore TeamCounty shall review and discuss each proposed Project-ate
7
the reasoning for-eaEh. Upon GOOrnplle ion review the Coro Team shall
"��. Upon ��vrcT rn-vrTclrr
subrnot h and may present their discussions on each proposed Project to
the County Manager together with an opinion of whether the proposed Rroiec+
fits within the priorities established by the Weelnert Report nrinGinles and the
most appropriate nror�it ment methed fer each RreleGt with rrmstn Untinn
rrr ��-prvcarenTcn�rrrcmva-rvr-cacn-r-rvJccr-vvrm cvrrnrcrccror-r
manager at risk being the default preourement method
(c) The County Manager shall present the cnheel District's proposal and the Core
Team's reGOmmenda s to the Roam of �m�? neFSf�
T rrro�rc rrnTrc-rracr �v�rr�. ""`"��`J
Gonsideration proposed Projects in compliance with the Adder4umPolicy.
(d) The- Board of County Commissioners
shall consider each proposed Project, the reasoning for each, the expected
budget, and make a determination of whether and how a Project may proceed.
(e) Upon Project approval by the Board of Commissioners the County Manager
shall notify the School Districts of such approval and cooperate with the School
Districts to commence each approved Project.
(iii) The School Districts shall be responsible for Project design and shall contract
directly with the designer to develop all necessary designs, plans, drawings, and
specifications for each Project. Drier to exeoi Mien of any S Gh design nontraot the cnheel
DostroGts shall submmt the Gentract to the G06IRty fOF its review and approval of the terms
and total GOSt of the design GentraGt. During negotiation of any design GentraGt the SGh -
DiStriGtS shall to the greatest extent praGt!Gal OnGOrperate value -. . - -and
contraGt priGe te exGeed the OFigiRal appreved tetal cost shall be submitted to the Cow*
for approval. Should the County fail to approve 66IGh amendment the SGh()ol DiStriGts shall
re Regetiaate S Gh amendment in ,room faith to sent ire appre.,al. Project design contracts
will be paid upon completion of design work and will be paid utilizing general obligation
bond funds.
(iv) The School Districts shall secure any and all necessary and required approvals of
the State Board of Education for each Project.
(v) The School Districts shall be responsible for Project construction and shall contract
directly with the contractor. Procurement for all approved Projects shall occur through the
construction manager at risk method URIeSS the County determines another method
appropriate. Any amendment er nhanoe puler to a nenstri intion nontrant that nai ices the
for approval. Should the GOURty fail to approve SUGh amendment OF Ghange order t
Project construction contracts will be paid as provided in the construction contract
8
documents approved by the County and will be paid utilizing general obligation bond
funds.
ARTICLE V
AMENDMENT
5.01 Any amendment to this Agreement to be effective must be in writing, signed by all Parties,
and executed with the same formality and approvals as the foregoing Agreement.
ARTICLE VI
RELATIONSHIP OF PARTIES
6.01 Orange County, Orange County Schools, and Chapel Hill Carrboro City Schools are
separate legal entities existing in accordance with the laws of the State of North Carolina. Except
as specifically stated in a written agreement between the parties, no party shall be deemed a
partner, agent, or legal representative of the other party, and no party shall have any responsibility
whatsoever with respect to services provided or contractual obligations or liabilities assumed by
the other party hereto, whether accrued, absolute, contingent, or otherwise, or whether due or to
become due. No liability or benefits, such as workers compensation, pension rights or liabilities, or
other provisions or liabilities shall accrue the other party's employees to either party because of
this Agreement. This Agreement is intended to set forth an understanding as to how the parties
shall interact in performing their statutory duties. Except as specifically stated in this Agreement,
nothing herein should be construed in any manner to create a partnership or venture between
the parties. Except as specifically stated herein or in any written agreements between the parties,
nothing in this Agreement is intended to abridge or transfer the County's statutory rights and
responsibilities as defined in N.C.G.S. Chapter 153A et seq or the School Districts' statutory
rights and responsibilities as defined in N.C.G.S. Chapter 115C et seq. or as otherwise set
forth by law. Each party agrees that it will obey all State and Federal statutes, rules and
regulations which are applicable to activities described herein.
ARTICLE VI
MISCELLANEOUS
7.01 Except as provided herein, no party shall assign any portion of this Agreement or the rights
and responsibilities hereunder to another person or entity who is not a party to this Agreement
without the prior written consent of the other party to this Agreement.
7.02 This Agreement is not intended for the benefit of any third party. The rights and obligations
contained herein belong exclusively to the parties hereto and shall not confer any rights or
remedies upon any person or entity other than the parties hereto.
7.03 If any provision of this Agreement shall be determined to be unenforceable by a court of
competent jurisdiction, such determination will not affect any other provision of this Agreement,
and the parties will negotiate in good faith to modify the remaining provisions of the Agreement
to effectuate its purposes, as needed.
7.04 This Agreement may be executed in several counterparts, each of which shall be deemed
an original.
9
7.05 —Any P`/IYYIM11RiGatiOR notice provided for in this Agreement must be in writing (not
including facsimile transmission or electronic mail). Any communication will be deemed given on
the delivery date shown on a certified mail receipt, or a delivery receipt (or similar evidence)from
a national commercial package delivery service, if addressed as follows:
If intended for the County:
Orange County
Attn: County Manager
If intended for the School Districts:
Chapel Hill Carrboro City Schools
Attn: Superintendent
Orange County Schools
Attn: Superintendent
Any addressee may designate a different address for communications by notice given under this
subsection to the other.
7.06 This Agreement is executed as to form only until mall parties have fully signed and
executed the same. The effective date of this Agreement shall be the date upon which both all
parties have fully signed and executed this Agreement. When the last party fully signs and
executes this Agreement, that party shall add the date of his signature to the very first paragraph
of this Agreement and such date shall become the effective date of the Agreement.
7.07 The parties shall, to the greatest extent possible, fully cooperate to develop and approve
an agreement and means of sales tax recapture. The process for sales tax recapture may be
accomplished in any lawful manner. No Project may proceed until a sales tax recapture
agreement is adopted for the specific Project or for all Protects inclusively.
ARTICLE VIII
DEFAULTS REMEDIES COSTS AND PERSONAL LIABILITY
8.01 A party is in default under this Agreement (i) if it fails to observe and perform any covenant,
condition or agreement on its part to be observed or performed for a period of 30 days after notice
specifying the failure and requesting that it be remedied has been given by the other party, or(ii) if
any representation or warranty provided in this Agreement is found to be incorrect or incomplete in
any material respect as of the Effective Date.
8.02 Whenever any default is continuing, the non-defaulting party may take any or all of the
following remedial steps:
10
(i) At its option, cure the default by paying money or taking any other appropriate
action, in which case the defaulting party must reimburse the non-defaulting party for
all costs and expenses reasonably incurred in curing the default, including legal costs.
(ii) Take whatever action at law or in equity may appear necessary or desirable to
collect the amounts then due and thereafter to become due, or to enforce performance
and observance of any obligation, agreement or covenant of a party under this
Agreement.
(iii) Where the default is a failure to eenvey property or eRter into thhe—Sc"
Leaseenter into a sales tax recapture agreement, each party is entitled to the remedy
of specific performance.
8.03 No remedy conferred or reserved in this Agreement is intended to be exclusive, but instead
is intended to be cumulative. No delay or omission to exercise any right or power accruing upon
any default constitutes a waiver of that right or power. A waiver of any default is limited to the
default so waived and does not waive any other default. If a party incurs legal or other costs and
expenses to collect any payments due under this Agreement, or to enforce the performance or
observance of any obligation or covenant under this Agreement, then to the extent permitted by
law each party promises to reimburse a non-defaulting party for all reasonable legal and other
fees and costs incurred in any successful collection or enforcement action.
8.04 In the event of a dispute between the parties concerning the terms or performance of this
Agreement, the parties will take the following steps prior to commencing any proceeding before
a court or administrative body:
(i) Any party noting a dispute under this Agreement will notify the other party of the
nature of the dispute and the first party's proposed resolution. Within ten days after the
effective date of the notice, the other party must respond in writing as to its view of the
dispute and its position on the proposed resolution.
(ii) After the first step and upon notice from any party, the parties will promptly hold a
meeting attended by representatives with appropriate authority to resolve the dispute. At
this meeting, the parties will attempt in good faith to negotiate a resolution of the dispute.
(iii) If the dispute remains unsettled by negotiation, the parties will engage the services of
a professional mediator agreed upon by the parties. The parties will then attempt in good
faith to resolve the dispute through mediation in accordance with the North Carolina Rules
For Mediated Settlement Conferences and Other Settlement Procedures in Superior Court
Civil Actions. Each party will each pay one-half of the mediator's fees and expenses and
each party will pay all its own legal fees and other expenses related to the mediation. Each
party must be represented at the mediation by a representative with appropriate authority
to resolve the matters in dispute. Only after mediation may a party initiate legal or
administrative proceedings.
11
8.05 Each party will bear its own costs of the fees and expenses of its counsel, except to the
extent specified herein, and consultants, and of the studies or surveys required under this
Agreement or that it otherwise commissions or obtains for its use under this Agreement or in
relation to any Project. The County may utilize bond revenues to pay for such costs incurred on
its behalf to the fullest extent permitted by law.
8.06 No officer, agent, or employee of the County or the School Districts will be subject to any
personal liability or accountability because of the execution of this Agreement, or any other
documents related to the transactions contemplated by this Agreement. Those officers, agents or
employees will be deemed to execute such documents in their official capacities only, and not in
their individual capacities. This provision does not relieve any officer, agent or employee from the
performance of any official duty provided by law.
IN WITNESS WHEREOF, ORANGE COUNTY, ORANGE COUNTY SCHOOLS, CHAPEL HILL-
CARRBORO CITY SCHOOLS through their authorized officers and by their own hands have
hereunto set forth their hands and seals of the day and year first above written.
The Chapel Hill Carrboro City Schools Board of Education
By:
Chair
The Orange County Schools Board of Education
By:
Chair
Orange County, North Carolina
By:
Chair
DRAFT Attachment 2 12
AGREEMENT FOR THE
CONSTRUCTION AND RENOVATION
OF VARIOUS SCHOOL PROJECTS
This INTERLOCAL AGREEMENT ("Agreement") is hereby made and entered into this the
day of , 2025, by and between ORANGE COUNTY, hereinafter referred to
as ("County"), and the ORANGE COUNTY SCHOOLS BOARD OF EDUCATION, and the
CHAPEL HILL-CARRBORO CITY SCHOOLS BOARD OF EDUCATION hereinafter referred to
as ("School Districts") pursuant to N.C. Gen. Statute §115C et seq.
WITNESSETH:
WHEREAS, pursuant to N.C.G.S. §115C-521, §115C-249(c), §115C-522(c), and §115C-
524, the building of all new School District facilities and the repairing of all School District facilities
shall be under the control and direction of the School Districts; and
WHEREAS, N.C.G.S. § 153A-158.1 authorizes the County to assume responsibility for
various aspects of the construction, equipping, expanding and improvement of School Districts
facilities; and
WHEREAS, it is the law of the State of North Carolina that certain facilities for a public
education system will be funded by county governments in accordance with specific expenditure
items set forth in N.C.G.S. Chapter 115C; and
WHEREAS, the County and School Districts desire to promote the excellence and viability
of both Districts and to address the ongoing need for acquisition, construction, and renovation of
property to be used for School District purposes and to the greatest extent practical align such
acquisition, construction, and renovation with the principles of the Woolpert School Facility and
Optimization Plan (the "Woolpert Report'); and
WHEREAS, it is the parties desire to continue the collaborative approach for site
acquisition, design, and construction to be completed in a cost-effective manner, within available
funding and, to create School District facilities that maximize instructional opportunities for
students and ensure efficient operations; and
WHEREAS, collaboration between School Districts and County staff benefits the taxpayers
of Orange County by ensuring that projects are timely completed, within budget, and to facilitate
the implementation of an orderly and effective capital improvement plan.
NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
PURPOSE
1.01 The purposes of this Agreement are to; 1) continue the existing collaborative, consultative
processes for the acquisition, design, construction, and renovation of School District facilities and
the development and execution of the School Districts capital improvement plan, and 2) provide
for the management and oversight of all construction and renovation projects to be funded by the
13
2024 Orange County General Obligation Bond ("Project[s]"). The parties recognize that a
continuing cooperative working relationship between the School Districts and the County will
promote efficiency, collaboration, and transparency and completion of projects on time and within
budget.
ARTICLE II
TERM AND TERMINATION
2.01 Term. The term of this Agreement shall begin on the date reflected in the first
paragraph of the Agreement and expire June 30, 2033, unless otherwise extended by mutual
agreement of the parties.
2.02 Termination. The parties shall each have the right to terminate this Agreement with or
without cause upon giving sixty(60)days written notice to the other parties in writing, including the
reason for termination.Any such termination by one party shall not affect the rights and obligations
of the remaining parties to this Agreement.
2.03 Effect of Termination. The roles and responsibilities of any withdrawing party shall
terminate sixty (60) days after notice is given by the withdrawing party unless otherwise agreed
by written consent of the other parties executed with the same formality as the foregoing
document. Any termination under this Section shall not terminate or otherwise affect properly
authorized resolutions entered pursuant to this Agreement, the provisions of N.C.G.S. 153A-158.1
for the transfer to the County of responsibility for construction, improvement, ownership, and
acquisition of School District property, any ongoing Project, any sales tax recapture agreement
entered into between the parties, or any construction or acquisition agreement entered into
between the parties.
ARTICLE III
JOINT SCHOOL FACILITIES CORE TEAM
3.01 Core Team. The County and the School Districts hereby create the committee known as
the Joint School Facilities Core Team ("Core Team").
3.02 Purpose. The Core Team shall promote regular, informed, and interactive communications
between the County and the School Districts concerning research, investigation, evaluation,
funding, and implementation of the School District's capital improvement plan and Projects,
without limiting the statutory rights or duties of either party.
3.03. Membership.The Core Team will consist solely of professional staff of the three Parties.Each Party
shall appoint staff members to the Core Team necessary to efficiently carry out the purposes set
forth in this Agreement. These staff members should represent the County's Budget and Finance
functions, as well as the School Districts Finance and Operations functions. County members
shall be appointed by the County Manager, and School District members shall be appointed by
their respective Superintendents.
3.04 Liaison Designee. From the membership of the Core Team, each party shall designate
representatives to communicate information regarding the implementation of this Agreement to
the party's governing board.
3.05 Collaboration Process. The Core Team will implement the collaboration process through a
14
series of written documents and work plans that guide their scope of work. These written
documents may include, but not be limited to, defining roles and responsibilities of the Core Team
membership as well as roles and responsibilities of County and School District staff that support
the purpose of the Core Team. Any written processes or work plans shall be reviewed by Core
Team members at least every two years. The Core Team should meet at least quarterly to review
proposed Projects, and meet more frequently as needed.
3.06 Regular Communication between Boards. The Core Team shall present to the joint
meeting between the boards of each of the Parties at least once annually to discuss School
District needs, including the implementation of this Agreement and the collaboration of the Parties
as set forth herein. Following each quarterly meeting, the designated liaison from each party may
present an information update at a business meeting of their respective governing board.
3.07 Adherence to School Construction Planning Policies. Representatives from the School
Districts shall communicate through the Core Team the alignment of new construction with the
School Major Project Planning Addendum as passed by the Board of County Commissioners on
January 21, 2025 (the "Addendum").
3.08 Regular Communication to the Public. The County will create and manage a website that
tracks Project progress and spending. The School Districts will provide information to update the
website at least quarterly. County staff shall communicate at least quarterly with the public in
manner designed to broadly and efficiently inform the public of Project progress and spending.
3.09 Recommendations. The Core Team shall make recommendations to the County and
School Districts only as provided herein.
ARTICLE IV
PROJECT DESIGN CONSTRUCTION AND RENOVATION
4.01 The parties will cooperate for the acquisition, construction, design, equipping, financing,
and taking all other action necessary to place in service the Projects. The above recitals are fully
incorporated herein.
(i) The parties mutually intend to engage in the design, construction, and renovation
of the Projects utilizing funds designated for school construction and renovation projects.
The County will administer its Capital Investment Plan process as described in the School
Capital Funding Policy as adopted January 21, 2025 (the "Policy").
(ii) Project selection shall occur as follows:
(a) The School Districts shall propose specific Projects for consideration and shall
submit the proposed Projects, together with a description of how the Projects
fit within the principles established by the Woolpert Report and the expected
design and construction budgets as provided in the Policy.
(b) The County shall review and discuss each proposed Project and may present
their discussions on each proposed Project to the County Manager.
15
(c) The County Manager shall present proposed Projects in compliance with the
Policy.
(d) As provided in the Policy, the Board of County Commissioners shall consider
each proposed Project, the reasoning for each, the expected budget, and make
a determination of whether and how a Project may proceed.
(e) Upon Project approval by the Board of Commissioners the County Manager
shall notify the School Districts of such approval and cooperate with the School
Districts to commence each approved Project.
(iii) The School Districts shall be responsible for Project design and shall contract
directly with the designer to develop all necessary designs, plans, drawings, and
specifications for each Project. Project design contracts will be paid upon completion of
design work and will be paid utilizing general obligation bond funds.
(iv) The School Districts shall secure any and all necessary and required approvals of
the State Board of Education for each Project.
(v) The School Districts shall be responsible for Project construction and shall contract
directly with the contractor. Procurement for all approved Projects shall occur through the
construction manager at risk method. Project construction contracts will be paid as
provided in the construction contract documents approved by the County and will be paid
utilizing general obligation bond funds.
ARTICLE V
AMENDMENT
5.01 Any amendment to this Agreement to be effective must be in writing, signed by all Parties,
and executed with the same formality and approvals as the foregoing Agreement.
ARTICLE VI
RELATIONSHIP OF PARTIES
6.01 Orange County, Orange County Schools, and Chapel Hill Carrboro City Schools are
separate legal entities existing in accordance with the laws of the State of North Carolina. Except
as specifically stated in a written agreement between the parties, no party shall be deemed a
partner, agent, or legal representative of the other party, and no party shall have any responsibility
whatsoever with respect to services provided or contractual obligations or liabilities assumed by
the other party hereto, whether accrued, absolute, contingent, or otherwise, or whether due or to
become due. No liability or benefits, such as workers compensation, pension rights or liabilities, or
other provisions or liabilities shall accrue the other party's employees to either party because of
this Agreement. This Agreement is intended to set forth an understanding as to how the parties
shall interact in performing their statutory duties. Except as specifically stated in this Agreement,
nothing herein should be construed in any manner to create a partnership or venture between
the parties. Except as specifically stated herein or in any written agreements between the parties,
16
nothing in this Agreement is intended to abridge or transfer the County's statutory rights and
responsibilities as defined in N.C.G.S. Chapter 153A et seq or the School Districts' statutory
rights and responsibilities as defined in N.C.G.S. Chapter 115C et seq. or as otherwise set
forth by law. Each party agrees that it will obey all State and Federal statutes, rules and
regulations which are applicable to activities described herein.
ARTICLE VI
MISCELLANEOUS
7.01 Except as provided herein, no party shall assign any portion of this Agreement or the rights
and responsibilities hereunder to another person or entity who is not a party to this Agreement
without the prior written consent of the other party to this Agreement.
7.02 This Agreement is not intended for the benefit of any third party. The rights and obligations
contained herein belong exclusively to the parties hereto and shall not confer any rights or
remedies upon any person or entity other than the parties hereto.
7.03 If any provision of this Agreement shall be determined to be unenforceable by a court of
competent jurisdiction, such determination will not affect any other provision of this Agreement,
and the parties will negotiate in good faith to modify the remaining provisions of the Agreement
to effectuate its purposes, as needed.
7.04 This Agreement may be executed in several counterparts, each of which shall be deemed
an original.
7.05 Any notice provided for in this Agreement must be in writing (not including facsimile
transmission or electronic mail). Any communication will be deemed given on the delivery date
shown on a certified mail receipt, or a delivery receipt (or similar evidence) from a national
commercial package delivery service, if addressed as follows:
If intended for the County:
Orange County
Attn: County Manager
If intended for the School Districts:
Chapel Hill Carrboro City Schools
Attn: Superintendent
Orange County Schools
Attn: Superintendent
Any addressee may designate a different address for communications by notice given under this
17
subsection to the other.
7.06 This Agreement is executed as to form only until all parties have fully signed and executed
the same. The effective date of this Agreement shall be the date upon which all parties have fully
signed and executed this Agreement. When the last party fully signs and executes this
Agreement, that party shall add the date of his signature to the very first paragraph of this
Agreement and such date shall become the effective date of the Agreement.
7.07 The parties shall, to the greatest extent possible, fully cooperate to develop and approve
an agreement and means of sales tax recapture. The process for sales tax recapture may be
accomplished in any lawful manner. No Project may proceed until a sales tax recapture
agreement is adopted for the specific Project or for all Projects inclusively.
ARTICLE VIII
DEFAULTS REMEDIES COSTS AND PERSONAL LIABILITY
8.01 A party is in default under this Agreement (i) if it fails to observe and perform any covenant,
condition or agreement on its part to be observed or performed for a period of 30 days after notice
specifying the failure and requesting that it be remedied has been given by the other party, or(ii) if
any representation or warranty provided in this Agreement is found to be incorrect or incomplete in
any material respect as of the Effective Date.
8.02 Whenever any default is continuing, the non-defaulting party may take any or all of the
following remedial steps:
(i) At its option, cure the default by paying money or taking any other appropriate
action, in which case the defaulting party must reimburse the non-defaulting party for
all costs and expenses reasonably incurred in curing the default, including legal costs.
(ii) Take whatever action at law or in equity may appear necessary or desirable to
collect the amounts then due and thereafter to become due, or to enforce performance
and observance of any obligation, agreement or covenant of a party under this
Agreement.
(iii) Where the default is a failure to enter into a sales tax recapture agreement,
each party is entitled to the remedy of specific performance.
8.03 No remedy conferred or reserved in this Agreement is intended to be exclusive, but instead
is intended to be cumulative. No delay or omission to exercise any right or power accruing upon
any default constitutes a waiver of that right or power. A waiver of any default is limited to the
default so waived and does not waive any other default. If a party incurs legal or other costs and
expenses to collect any payments due under this Agreement, or to enforce the performance or
observance of any obligation or covenant under this Agreement, then to the extent permitted by
law each party promises to reimburse a non-defaulting party for all reasonable legal and other
fees and costs incurred in any successful collection or enforcement action.
18
8.04 In the event of a dispute between the parties concerning the terms or performance of this
Agreement, the parties will take the following steps prior to commencing any proceeding before
a court or administrative body:
(i) Any party noting a dispute under this Agreement will notify the other party of the
nature of the dispute and the first party's proposed resolution. Within ten days after the
effective date of the notice, the other party must respond in writing as to its view of the
dispute and its position on the proposed resolution.
(ii) After the first step and upon notice from any party, the parties will promptly hold a
meeting attended by representatives with appropriate authority to resolve the dispute. At
this meeting, the parties will attempt in good faith to negotiate a resolution of the dispute.
(iii) If the dispute remains unsettled by negotiation, the parties will engage the services of
a professional mediator agreed upon by the parties. The parties will then attempt in good
faith to resolve the dispute through mediation in accordance with the North Carolina Rules
For Mediated Settlement Conferences and Other Settlement Procedures in Superior Court
Civil Actions. Each party will each pay one-half of the mediator's fees and expenses and
each party will pay all its own legal fees and other expenses related to the mediation. Each
party must be represented at the mediation by a representative with appropriate authority
to resolve the matters in dispute. Only after mediation may a party initiate legal or
administrative proceedings.
8.05 Each party will bear its own costs of the fees and expenses of its counsel, except to the
extent specified herein, and consultants, and of the studies or surveys required under this
Agreement or that it otherwise commissions or obtains for its use under this Agreement or in
relation to any Project. The County may utilize bond revenues to pay for such costs incurred on
its behalf to the fullest extent permitted by law.
8.06 No officer, agent, or employee of the County or the School Districts will be subject to any
personal liability or accountability because of the execution of this Agreement, or any other
documents related to the transactions contemplated by this Agreement. Those officers, agents or
employees will be deemed to execute such documents in their official capacities only, and not in
their individual capacities. This provision does not relieve any officer, agent or employee from the
performance of any official duty provided by law.
IN WITNESS WHEREOF, ORANGE COUNTY, ORANGE COUNTY SCHOOLS, CHAPEL HILL-
CARRBORO CITY SCHOOLS through their authorized officers and by their own hands have
hereunto set forth their hands and seals of the day and year first above written.
The Chapel Hill Carrboro City Schools Board of Education
By:
Chair
19
The Orange County Schools Board of Education
By:
Chair
Orange County, North Carolina
By:
Chair
Attachment 3 20
ARTICLE IV
PROJECT DESIGN CONSTRUCTION AND RENOVATION
4.01 The parties will cooperate for the acquisition, construction, design, equipping, financing,
and taking all other action necessary to place in service the Projects. The above recitals are fully
incorporated herein.
(i) The parties mutually intend to engage in the design, construction, and renovation
of the Projects utilizing funds designated for school construction and renovation projects.
The County will administer its Capital Investment Plan process as described in the School
Capital Funding Policy as adopted January 21, 2025 (the "Policy").
(ii) Project selection shall occur as follows:
(a) The School Districts shall propose specific Projects for consideration and shall
submit the proposed Projects, together with a description of how the Projects
fit within the principles established by the Woolpert Report and the expected
design and construction budgets as provided in the Policy
(b) The County shall review and discuss each proposed Project and may present
their discussions on each proposed Project to the County Manager.
(c) The County Manager shall present proposed Projects in compliance with the
Policy.
(d) As provided in the Policy, the Board of County Commissioners shall consider
each proposed Project, the reasoning for each,the expected budget, and make
a determination of whether and how a Project appropriation may proceed.
(e) Upon Project appropriation by the Board of Commissioners the County
Manager shall notify the School Districts of such approval and cooperate with
the School Districts to commence each approved Project.
(iii) The School Districts shall be responsible for Project design and shall contract
directly with the designer to develop all necessary designs, plans, drawings, and
specifications for each Project. Project design contracts will be paid as stipulated in the
contract between the school district and the designer, and will be paid utilizing general
obligation bond funds.
(iv) The School Districts shall secure any and all necessary and required approvals of
the State Board of Education for each Project.
(v) The School Districts shall be responsible for Project construction and shall contract
directly with the contractor. It is recommended that the procurement for all approved
21
Projects use the construction manager at risk method unless another method is
determined to be in the best interest of the project in accordance with G.S. 143-128(a1).
Project construction contracts will be paid as provided in the construction contract
documents approved by the County and will be paid utilizing general obligation bond
funds.
w-
22
llq%��W-MMOMM.
r�
ORANGE COUNTY
NORTH GAROLINA
Interlocal Agr eement Draft
February 3rd, 2026
Board of County Commissioners
PURPOSE OF ILA 23
ILA is intended to act as part of larger web of
School Construction Policy improvements .
• School Capital Funding Policy — Sets rules on how projects are funded:
Sets allocation between districts, how funds can be reallocated, how to
account for budget overruns, and ensures projects are in alignment with
Woolpert Report principals. Enforceable without school agreement.
• Major Project Planning Addendum — Sets board priorities on new
construction: Equitable between districts, educationally adequate,
sustainable, built flexibly for future use. Not Enforceable without school
agreement.
• Interlocal Agreement — Set standards for communications once funding
is appropriated, additionally requires school districts to communicate
alignment to Major Project Planning Addendum.
• Staff Oversight — Approval of School Construction and Financial Analyst
to ensure adequacy of school materials provided at CORE Team,
maintain all public communication. When unanticipated expenses occur,
will assist districts in reworking system wide funding plans and give BoCC
early notice. ORANGE COUNTY
NORTH CAROLINA
PROVISIONS OF ILA 24
• Each organization assigns staff to team ,
representing Budget, Finance and Operations
functions
• Team will regularly communicate on the
progress of the Districts' capital plans .
— Staff plan to meet at least quarterly, with increased
frequency when multiple projects are underway.
• Team will assign roles and workplans to guide
work of CORE team and review every two
years.
ORANGE COUNTY
NORTH CAROLINA
CHANGES FROM 10/21 DRAFT 25
Subsequent to 10/21 Meeting , staff have
submitted updated version and provided to Board
members and school staff.
• Scope of ILA set to all projects that utilize Bond
funds.
• Aligns Article 4 with School Capital Funding
Policy.
• Remains one ILA between the county and both
districts but remains in force with either district
if the other terminates the agreement.
ORANGE COUNTY
NORTH CAROLINA
SCHOOL STAFF SUGGESTED AMENDMENTS
• Article 4 i sections d & e — Change language
from "approval" to "appropriation" to clarify that
budgetary approval for projects constitutes
board approval .
• Article 4 iii — Change payment timing to as
agreed by School Board , as design contract
are paid at milestones, not all at once.
• Article 4 v — Change requirement for CMAR to
recommendation . Bond projects can include
smaller projects that don't use CMAR, and
School attorney contends not statutorily
allowed to delegate approval to County.
VRANGECOUNTY
NORTH CAROLINA
SCHOOL STAFF SUGGESTED AMENDMENTS
GS 143- 128 . 1 (e)
Construction management at risk services may be used
by the public entity only after the public entity has
concluded that construction management at risk
services is in the best interest of the project, and the
public entity has compared the advantages and
disadvantages of using the construction management
at risk method for a given project in lieu of the
delivery methods identified in G. S. 143- 128(al )( 1 )
through G. S. 143- 128(al )(3). The public entity may
not delegate this determination. (2001 -496, s. 2;
2013-401 , s. 5 ; 2014-42, s. 2.)
ORANGE COUNTY
NORTH CAROLINA
STAFF COMMUNICATIONS 28
• In December, county staff met with school
construction leadership.
• School staff committed to using School Capital
Funding Policy while awaiting ILA negotiations .
• Both districts have committed to using CIVIAR
for initial elementary school builds and will be
releasing RFPs in the spring .
• School staff discussed standardizing
sustainability policies between districts in new
construction , possibly using County policy as
template.
ORANGE COUNTY
NORTH CAROLINA
NEXT STEPS 29
• Board to discuss the adequacy of the current
draft ILA, alignment to Board priorities
• Board to approve ILA, with or without School
staff suggested amendments.
• Staff to work with School Staff to put signed ILA
before both BoEs .
• Approve School Construction and Financial
Analyst to build county capacity to operate
CORE Team . Will use Pay-Go funds , not
General Fund .
ORANGE COUNTY
NORTH CAROLINA