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Agreement text:

JOINT ECONOMIC DEVELOPMENT AND GROWTH SHARING AGREEMENT

This Agreement, made and entered into this 9th day of February, 1998 by and between BEDFORD COUNTY, VIRGINIA (the "County"), party of the first part; and THE CITY OF BEDFORD, VIRGINIA (herein referred to as the "City"), party of the second part.

RECITALS

1. The County and the City historically have provided many public services for their respective citizens through joint contracts and other cooperative arrangements, such jointly provided services including the Court and Commonwealth Attorney's services, welfare, health, public schools, and regional libraries.

2. The Board of Supervisors of Bedford County (the "Board") and the City Council for the City of Bedford (the "City Council") are aware that the economic vitality of the City of Bedford and the immediately adjoining areas of Bedford County are tied together and that economic and industrial expansion in either the City or the adjoining areas of the County provides increased employment opportunities and economic vitality for the citizens of both jurisdictions.

3. The availability of public water and public sewer services is a particularly critical factor in the commercial and industrial development of an area, and the Board and the City Council both perceive that the unavailability of these services in the central area of the County surrounding the City may have restricted development which would otherwise have occurred in the area of the County which adjoins the City.

4. The Board and the City Council have determined that desirable commercial and industrial development in the City and the immediate surrounding areas of the County can only be accomplished successfully through joint efforts to develop industrial parks and other economic development projects, through coordination and joint efforts to provide utility services for such projects, and through the sharing between the two jurisdictions of taxes and revenues generated by such projects.

5. As a result of discussions between the Board and the City Council, the County and the City have agreed jointly to develop and promote for industrial and commercial growth certain designated areas which consist of (i) an Industrial Park site on property within the City near Independence Boulevard and (ii) four areas of the County immediately outside the City limits. These "Economic Development Areas" are described specifically in "Attachment A." which includes maps of each area.

Now, therefore, in consideration of the recitals herein and mutual covenants, policies and agreements herein contained, and for the purpose of joint economic development and distributing equitably the revenues produced from such projects, the parties agree as follows:

ARTICLE I

PUBLIC WATER AND SEWER UTILITIES

Section 1.01. Water and Sewer Development. The City and County covenant and agree to begin immediate negotiations for the formulation of a strategic long range plan for future water and sewer development in the City and the central area of Bedford County. The City and County agree that the Bedford County Public Service Authority shall participate in all such negotiations.

Section 1.02. Agreement to Extend Sewer and Water Lines. The City has a moratorium on additional connections to its water and sewer systems outside the City limits, and the City agrees agrees to modify its moratorium in order to provide sewer and water connections for commercial and industrial development in the economic development areas located within the County in accordance with the provisions set forth hereinbelow.

The City represents to the best of its knowledge its water treatment plant has capacity to

provide anticipated water needs within the economic development areas, and the City represents that it is proceeding at a cost of approximately $4.5 million to upgrade its existing sewage treatment plant in order to provide an additional capacity of 500,000 gallons per day.

The City agrees to extend water and sewer utility services into the Economic Development areas of the County by extending existing trunklines into the County as funds are available and by allowing connections under the following terms and conditions:

(A) Connections to City water and sewer systems. As soon as the parties have obtained Statutory approval of this agreement as set forth in Article IV, upon application by owners of property within the economic development areas the City shall allow immediate sewer and water connections for any industrial or commercial developments within those areas provided; (I) lines are available to provide service to the site or the application includes provisions for making such service available to the property (ii) the City has capacity to serve the projected use; and (iii) such connection is made in accordance with other City policies, including payment of fees and such other terms as would be required for utility connections to properties within the City.

(B) Extension of City Sewer and Water Pipelines. The parties agree that the existing City Water and Sewer Pipelines shall be extended in order to provide water and sewer services within the four County Economic Development areas by extending trunk lines from existing facilities into each respective development area.

The priorities and schedules for truckline extensions will be determined jointly by the City Council and Board of Supervisors and may be amended from time to time based upon the need for utilities for commercial and industrial development within the specific areas and based upon the projected tax revenues to be shared from such development. The parties in setting priorities for truckline extensions shall give due consideration to engineering studies and recommendations. Construction shall commence as funds are available, it being anticipated that funds for construction will be accumulated only as long as necessary to provide for efficient construction of trunk lines.

The parties agree that the first priority for truckline extension shall be from the City limits east along U. S. Route 460 in order to provide service as far as the Virginia Department of Transportation (VDOT) offices. In order to fund the costs of expanding the City water and sewer systems and to provide truckline service into the four economic development areas, the City agrees to set aside and to expend for such development costs 50% of the tax revenues derived by the City from the Economic Development Areas located in the County which are paid pursuant to the provisions of this Agreement (until one main truckline has been completed to serve each area). The City’s financial obligation to provide for extension of its services into the Economic Development Areas of the County shall be limited to funding from the shared tax revenues and to contributions designated for such purpose from other non-City sources, including, but not limited to, private developers. The costs of extension of services shall include the cost of engineering and feasibility studies as well as actual costs of construction in installation and new equipment within and without the City limits, including the installation of pump stations, the laying of new pipes, and the replacement of existing pipes, and such other expenses as may be required in order to provide required trunk lines and services.

The parties contemplate that there will be an initial engineering study determining the requirements and costs in order to extend the water and sewer lines along the Route 460 corridor eastwardly to the VDOT office building. The parties contemplate that additional engineering studies and feasibility reports will be required in order to set priorities and to schedule extensions into the other Economic Development Areas.

(C) Limited Residential Connections. Notwithstanding the above limitation of additional sewer and water connections outside the City limits to commercial and industrial developments only, the City agrees to use its best efforts to provide connections to residential buildings located within the County Economic Development Areas which are existing as of the date of this Agreement should there be a failure of the private sewer or water systems serving the specific residence and if City connections are available under existing City policies..

(D) City Policies . All extensions of sewer and water utilities hereunder shall be in accordance with the City of Bedford policies and specifications for providing of such services within the City limits as such policies may be amended from time to time. (This includes all industrial waste water pretreatment requirements.) All pipelines shall become part of the City utility systems, and the City will be responsible for collection of fees and charges and for the maintenance and repair of the lines. Requested utility connections shall be subject to availability of capacity and subject to terms of any City, County, State or Federal regulations.

The City’s obligation to extend water and sewer services and to continue to provide such services shall be conditioned upon enactment by the County of ordinances and regulations necessary to implement in the County the City’s water and sewer policies. (Construction specifications shall be submitted for review and shall be approved by the City before construction commences.)

ARTICLE II

REVENUE SHARING OF ECONOMIC DEVELOPMENT AND INDUSTRIAL PARK PROJECTS

Section 2.01. Sharing of Tax Revenues. The County subject to annual appropriation and the City agree in perpetuity to share equally all local taxes on real estate, personal property and machinery and tools, merchant's capital, sales and use taxes, and all business, professional and occupational taxation and any other taxes now and hereafter imposed or generated in respect to properties and activities within the Economic Development Areas (including the Industrial Park site located within the City and the four designated areas located within the County.) Such shared taxes shall not include those taxes which pursuant to State or Federal Statutes are dedicated for a specific use or for which a specific use is prescribed (e.g., 911 tax). Shared taxes shall be transmitted by the collecting jurisdiction within 90 days of the due date or of the time of collection, whichever occurs later.

If the County fails to pay to the City an amount equal to one-half of such taxes collected within 90 days of collection and such default continues for a period of 90 days after notice by the City, then the City may incorporate within its boundaries any portions of the Economic Development Area for which the City is providing water and sewer services, which right shall be exercised by the adoption of an ordinance by the City providing for a change of boundaries. Incorporation of the affected Economic Development Area shall take effect immediately upon the date specified in the ordinance without any further action by either jurisdiction. (This provision is to assure the sharing of tax revenues should the Board of Supervisors not appropriate sufficient funds to result in such tax sharing, it being understood that the sharing of tax revenues by the County is subject to appropriation by the Board of Supervisors under State law. ) It is understood that revenues within any such area which may become incorporated within the City limits under any statute or agreement thereafter shall be shared by the City with the County under the provisions of this Section.

The parties agree that no tax incentives shall be provided within an area of shared revenues unless both parties agree.

Section 2.02. Sharing of Other Revenues. The City agrees that for so long as the Joint Industrial Development Authority created in Article III is in existence to transfer to the Joint Industrial Development Authority one half of the net income to the City electric department from electric sales generated from the Economic Development Areas.. The City agrees specifically to pay to the Joint Industrial Development Authority at the end of each fiscal year one half of its net income derived from commercial and industrial electric sales within the economic development areas based upon the electric sales within said areas. The methodology for computation of sharing the net income from electric sales is shown on "Attachment B."

Section 2.03. The parties agree that existing taxes which they contemplate sharing under this Agreement are set forth as follows:

Taxes Collected by the City to be Shared with the County:

Real Estate Taxes

Business Personal Property Taxes

Machinery and Tool Tax (if applicable)

Personal Property Taxes (Vehicle)

Motor Vehicle Licenses

Sales Tax

Business License

Contracting

Retail Sales

Professional

Repairs/Personal Business

Wholesale

Bank Franchise Tax

Meals Tax

Lodging Tax

Taxes Collected by the County to be Shared with the City:

Real Estate Taxes

Business Personal Property Taxes

Machinery and Tool Tax (if applicable)

Merchant’s Capital Tax (if applicable)

Personal Property Taxes (Vehicle)

Motor Vehicle Licenses

Sales Tax

Bank Franchise Tax

Lodging Tax

The parties specifically agree to share the proceeds of any new taxes which shall be collected by either

jurisdiction in respect to the Economic Development Areas.

Section 2.04. Sharing of all revenues and taxes shall commence on the first day of the month following the effective date of statutory approval under Section 4.01. Where taxes are attributable in part to time periods prior to the effective date, the tax payments will be pro rated accordingly.

ARTICLE III

JOINT INDUSTRIAL DEVELOPMENT AUTHORITY

Section 3.01. Creation of Authority. The City Council and the Board agree to the creation of a joint industrial authority pursuant to the authority of Section 15.1-1387 of the Code of Virginia, 1950, as amended. The Joint Industrial Authority shall be created by a joint resolution which shall be adopted by the governing bodies and shall be in substantially the same form as the proposed ordinance which is attached as "Attachment C."

Section 3.02. Budgets and Operating Expenses. The City and the County shall equally contribute to the operations of the Joint Industrial Authority. (The one half of the electric department revenues to be paid by the City to the Industrial Development Authority under Section 2.02 shall not be considered as part of the City’s contribution toward the operations of the Joint Industrial Development Authority under Section 3.02.)

Each year, on or before the 15th of January, the Board of Directors of the Joint Industrial Authority shall prepare and submit to the City and County a capital improvement budget for their approval, modification or rejection. Capital expenditures shall not include day-to-day maintenance and repair of buildings and facilities. The capital improvements budget shall include proposed economic development projects for the upcoming year.

Each year, on or before the 15th of January, the Board of Directors of the Joint Industrial Authority shall present to the City and to the County for their approval an operating budget for the next fiscal year.

The respective budgets shall be determined by the lesser amount approved by either of the governing bodies.

Each year the Joint Industrial Authority shall be audited by an independent auditing service paid for by its Board of Directors, and copies of the audit shall be furnished to both the City and County at their first regular meetings after the close of the fiscal year or thereafter as is reasonably expedient.

Section 3.03. Powers of Authority. Except as limited by this Agreement, the Joint Industrial Authority shall have all the powers granted to such an authority by Chapter 33 of Title 15.1 of the Code of Virginia, 1950 as amended.

Section 3.04. Area of Operation. The Joint Industrial Development Authority shall promote economic and industrial development within such areas of the City specifically designated by the parties and within the Economic Development Areas of the County described in this agreement.

Section 3.05. Transfer of Properties Within City Industrial Site. Upon obtaining the necessary statutory approvals described in Article IV herein , the City of Bedford agrees to transfer to the Joint Industrial Development Authority title to all properties and options upon properties located within the proposed City Industrial Park and the Joint Industrial Development Authority shall assume all obligations of the City in respect to such properties.

ARTICLE IV

STATUTORY APPROVALS

Section 4.01. The parties recognize that the provisions of Section 2.01 which provide for sharing of taxes and for boundary line adjustments if the County fails to share revenue in respect to specified projects under the provisions of Section 15.1-21.2 and Section 15.1-1167.1 are subject to submission and review by the Commission on Local Government as provided in Paragraph 4 of Section 15.1-945.3. In view of the fact that the City's agreements in Article I to provide public water and sewer utilities for such Development Areas is based upon the tax sharing of Economic Development/Industrial Park Projects found in Article II of this Agreement, the parties agree that the provisions of Article I and of Article II shall be contingent upon review of the provisions by the Commission on Local Government, upon enactment of required ordinances by the governing bodies, upon adoption of a traditional zoning ordinance by the Bedford County Board of Supervisors covering the economic development areas in the County and upon affirming the provisions of the voluntary agreement by the three judge court as required under Section 15.1-1167.1.

Section 4.02. Interim Development of Industrial Park in the City of Bedford and Extension of Services into Economic Development Area East of the City of Bedford. The parties agree that it is in the best interests of the jurisdictions to proceed with the development of the industrial park within the limits of the City of Bedford and with the immediate extension of services to certain properties located within the Economic Development Area along the U. S. Route 460 corridor east of the City limits prior to the statutory approval of the provisions for sharing of revenues and taxes as set forth in Section 4.01.

Accordingly, the Board of Supervisors upon execution of this Agreement and prior to obtaining Statutory approval shall advance to the City an amount equal to the sums actually expended by the City for development of the Industrial Park site within the City up to the date of the Agreement and shall share equally with the City the costs of further development of the Industrial Park site through FY 97-98. Such advances by the County shall not exceed the sum of $425,000. Upon obtaining the statutory approval of this Agreement as referred to above, the Industrial Park property shall be conveyed to the Joint Industrial Development Authority pursuant to the provisions of Section 3.05 and all prior expenditures with respect to the Industrial Park site shall be treated as contributions by the County and by the City respectively to the Joint Industrial Development Authority. If Statutory approvals have not been obtained by December 31, 1998, then such advances by the County shall be treated as loans to the City, without interest, and shall be repaid by the City in quarterly installments over a period of not more than five (5) years or according to such other schedule of repayment as the parties may agree.

A projected budget for the development expenses of the Industrial Park site located within the limits of the City of Bedford for FY 97-98 is attached as "Attachment D."

Prior to obtaining the Statutory approvals described above and immediately upon execution of this Agreement, the City agrees to modify its moratorium upon additional connections to the water and sewer systems outside the City limits by allowing additional sewer and water connections within the following properties:

(A) The entire existing WalMart complex described on the County Tax Maps as Insert 130B;

(B) A 4.97 acre tract, a part of Tax Parcel No. 130-A-9, shown as Tract 9A on a Plat of Survey prepared by Donnie W. Slusher, dated October 21, 1996, Commission No. 8911 (Andrew M. Ulmer).

(C) Tract 130-A-16B.

The obligation to provide such connections shall be conditioned upon availability of lines and upon the City’s capacity to provide services, and such connections shall be subject to all existing City policies and without cost to the City.

As soon as the statutory approval have been obtained, the provisions for additional utility extensions into the county areas under Article I and for the sharing of revenues under Article II shall go into effect immediately.

ARTICLE V

Section 5.01. This Agreement shall be binding upon and inure to the benefit of the future governing bodies of the jurisdiction and upon any successors to the City or County. Such binding effect shall be (a) subject to statutory approvals described in Section 4.01 and (b) subject to appropriate equitable adjustment in the case of reversion by the City to town status or to some other form of government similarly structured as a constituent element of Bedford County. The parties intend that the basic concepts of cooperative development of the Economic Development Areas will survive a reversion by the City to town status or to some other form of government similarly structured as a constituent element of Bedford County without creating a significant financial advantage to either party. In case of such governmental restructuring, the parties shall submit to the applicable court an amendment approved by both parties or either party may request an equitable adjustment by the Court convened under Section 15.1-965.16 c, 3 or such laws as shall have been made and provided and in effect at such time in order to accomplishy the objective stated herein.

Section 5.02. This Agreement may be amended, modified or supplemented, in whole or in part, by mutual consent of the City and the County in a written document of equal formality and dignity, executed by duly authorized representatives of each jurisdiction; provided, however, that changes affecting tax and revenue sharing and additions to the designated Development Areas shall be subject to any additional review and approval by state agencies and courts as may be required by the statutes of Virginia as amended from time to time.

Section 5.03. Severability. In the event that any section, paragraph or provision of this Agreement shall be declared illegal or invalid or unconstitutional by final judgment of any court of competent jurisdiction, such judgment of invalidity shall not invalidate any other section, paragraph or provision hereof, and all parts of this Agreement not expressly held invalid shall remain in full force and effect, and it is agreed and understood that this Agreement would have been entered into by the parties without such invalid provision.

 

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