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established by the Department. The fair market value of Project equipment and supplies shall <br />be the value immediately before the occurrence prompting the withdrawal of the equipment or <br />supplies from appropriate use. In the case of Project equipment or supplies lost or damaged <br />by fire, casualty, or natural disaster, the fair market value shall be calculated on the-basis of <br />the condition of that equipment or supplies immediately before the fire, casualty, or natural <br />disaster, or the amount of insurance coverage, whichever is greater. <br />2. Real Propertv. The Contractor agrees that the fair market <br />value of real property financed under the Project shall be determined by FTA either on the <br />basis. of competent appraisal based on an appropriate date approved by FTA, as provided by <br />49 C.F.R. Part 24, or by straight line depreciation of improvements to real property coupled <br />with the value of the land as determined by FTA on the basis of appraisal, or other Federal law <br />or regulations that may be applicable. <br />3. Exceptional Circumstances. The Contractor agrees that <br />the Department may require the use of another method to determine the fair market value of <br />Project property. In unusual circumstances, the Contractor may request that another <br />reasonable valuation method be used including, but not limited to, accelerated depreciation, <br />comparable sales, or established market values. In determining whether to approve such a <br />request, the Department may consider any action taken, omission made, or unfortunate <br />occurrence suffered by the Contractor with respect to the preservation of Project property <br />withdrawn from appropriate use. <br />(c) Financial Obligations to the Federal/State Government. The <br />Contractor agrees to remit to the Department the Federal and State interest in the fair market <br />value of any Project property prematurely withdrawn from appropriate use. In turn, .the <br />Department shall be responsible to remit the Federal interest to the FTA. In the case of fire, <br />casualty, or natural disaster, the Contractor may fulfill its obligations to remit the Federal and <br />State interest by either: <br />1. Investing an amount equal to the remaining Federal and <br />State interest in like-kind property that is eligible for <br />assistance within the scope of the Project that provided <br />Federal/State assistance for. the Project property <br />prematurely withdrawn from use; or <br />2. Returning to the Department an amount equal to the <br />remaining Federal and State interest in the withdrawn <br />Project property. <br />j. Insurance Proceeds. If the Contractor receives insurance proceeds as a <br />result of damage or destruction to the Project property, the. Contractor agrees to: <br />(1) Apply those insurance proceeds to the cost of replacing the <br />damaged or destroyed Project property taken out of service, or <br />(2) Return to the Department an amount equal to the remaining Federal <br />and State interest in the damaged or destroyed Project property. <br />k. Transportation -Hazardous Materials. The Contractor agrees to comply with <br />applicable requirements of 'U.S. Pipeline and Hazardous Materials Safety Administration <br />regulations, "Shippers -General Requirements for Shipments and Packaging's," 49 C.F.R. <br />Part 173, in connection with the transportation of any hazardous materials. <br />I. Misused or Damaged Project Propertv. If any damage to Project property <br />results from abuse or misuse occurring with the Contractor 's knowledge and consent, the <br />Contractor agrees to restore the Project property to its original condition or refund the value of <br />the Federal and State interest in that property, as the Department may require. <br />m. Responsibilities after Project Closeout. The Contractor agrees that Project <br />closeout by the Department will not change the Contractor's Project property management <br />Updated 07/26/10 26 <br />