ORD-2023-025-Public Hearing Regarding Proposed Performance Agreement Between Orange County, North Carolina and Terra Equity, Inc., and Approval of Budget Amendment #10-A

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4 for Phase 1 to be $4.4 million. However, if the total costs for Phase 1 are less than $4.4 million, the County's contribution will be less than $2.2 million. If the total costs are more than $4.4 million, the County's contribution is capped at $2.2 million regardless of the actual costs incurred by Terra Equity, Inc. Phase 2 — This phase is specific to the offsite public water line loop that will connect the public water mains located within the EDD to the existing dead-end public water main located at the end of New Grady Brown School Road. For this phase, the County will reimburse Terra Equity, Inc. the actual costs of Phase 2, up to $950,000. If the actual costs for Phase 2 are lower than $950,000, then the County will pay the lower amount. If the actual costs for Phase 2 exceed $950,000, then Terra Equity, Inc. will be responsible for those additional costs. The total potential County commitment under the proposed Performance Agreement is $3.15 million. The County will retain ten percent (10%) of the total potential County commitment ($315,000) until fifty percent (50%) of Phase 2 is completed. Thereafter, the amount retained will decrease to five percent (5%) of the total County commitment ($157,500) for both phases. An engineer will verify these milestones, and final completion is dependent on the Town of Hillsborough accepting the new infrastructure into the Town's public water and sewer systems. FINANCIAL IMPACT: Performance Agreement: The attached Performance Agreement contract between Orange County and Terra Equity, Inc. outlines a total financial impact of: a) TWO MILLION TWO HUNDRED THOUSAND DOLLARS ($2,200,000), plus, b) 100% of the Qualifying Expenditures for Phase 2 of the project up to and not to exceed NINE HUNDRED FIFTY THOUSAND DOLLARS ($950,000) for a total not to exceed amount and total County commitment of up to THREE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS ($3,150,000). Not more frequently than monthly, Terra Equity, Inc. shall submit to the County a draw request (a "Draw Request") which shall include a certification of Qualifying Expenditures, the percentage of completion of the Project and each Phase thereof, and a description of the work performed. The County shall remit payment to Terra Equity, Inc. within thirty (30) days following the receipt of each Draw Request in an amount equal to the County's share of the Qualifying Expenditures summarized in each such Draw Request, provided, however County's remittance of funds for any draw (or portion thereof) pertaining to Phase 1 of the Project shall be fifty percent (50%) of the amount specified in the Draw Request (or portion thereof pertaining to Phase 1), it being the intent that (i) the County and Terra Equity, Inc. each bear responsibility for fifty percent (50%) of the Qualifying Expenditures for Phase 1 of the Project, until such time that the County has advanced a maximum of $2,200,000 for Phase 1 of the Project; and (ii) the County bear responsibility for the Qualifying Expenditures for Phase 2 of the Project, up to but not exceeding $950,000. Expenditures are recommended to be funded with $2,345,857 unspent, available funds in the Hillsborough EDD project and $804,143 in the Eno EDD project. Budget Amendment #10-A repurposes funds from these two EDD projects and amends those ordinances, and will create the following RTLP EDD Capital Project Ordinance in the County Capital Fund: