STAFF REPORT

Operations Committee, March 1, 2007

Budget Adjustment for NCDOT Funding and Chatham County Use Agreement (PR07-23)
Consideration of a Budget Adjustment to recognize an NCDOT SAFETEA-LU Cost Reimbursement award and Chatham County Use Agreement for the construction of a segment of the American Tobacco Trail
Speaker: Ms. Mary Henderson

From: Mary Henderson, PRCR Director
Prepared by: Doug McRainey, Parks Planning Manager
Approved by: William B. Coleman, Jr., Town Manager
Approved by: Benjamin T. Shivar, Assistant Town Manager

This staff report is regarding the request by NCDOT for the Town of Cary to assist in the construction of the American Tobacco Trail (ATT) through Chatham County (map).

Since 2005, PRCR staff has been meeting regularly with staff from DOT, Wake County, Chatham County and the Town of Apex regarding issues related to the development of the ATT. The ATT is a recreational rail-trail located on an abandoned railroad corridor of the Norfolk Southern Railroad. When completed, the ATT will be a 23 mile long, multi-use trail which will traverse urban, suburban, and rural landscapes in route from downtown Durham, at the site of the Durham Bulls Athletic Park, to New Hill Road in western Wake County.

To date, Durham has completed 9 miles of the ATT. The Durham segment of the ATT is paved and 10’ in width. It will ultimately extend from the Durham Bulls Stadium to the Durham/Chatham Co. line, a distance of 12 miles in length. Wake County has completed its entire 6.5 mile section of the ATT including 3 trailheads, which extends from the Wake/Chatham County line south to New-Hill Olive Chapel Road. The Wake County trail segment is 10’ in width but consists of screenings and is unpaved so as to provide access for bridle trail users along with pedestrians and cyclists.

The remaining segment to be completed is the 4.68 mile central segment of the ATT, located entirely in Chatham County. To assist Chatham County, in 2005 the Bicycle and Pedestrian Division within DOT initiated the design of this final segment of the ATT. The trail is to extend from the Durham/Chatham County line south to the Wake/Chatham county line. As designed by DOT, the corridor will include a 10 foot-wide asphalt trail as well as a 6 foot-wide adjacent compacted granite screenings trail. There will also be an approximate 2-4 foot wide grass shoulder cleared on both sides when practical. Grading to achieve this width would be very gradual. As few trees as practical would be cut. This dual trail is recommended to extend from the Durham/Chatham County line south to New Hope Church Road. From this point the trail will be constructed as a 10-12 foot wide compacted granite screenings trail south of New Hope Church Road so as to link with Wake County’s section of gravel trail. Construction of this 4.68-mile segment of the trail, including bridges and drainage structures, is expected to take 12 months to complete. NCDOT has approximately $2 million designated through SAFETEA-LU Transportation funds for the construction of the portion of the ATT that runs through Chatham County.

NCDOT has requested the Town’s assistance with the administration of the construction of the trail, as well as maintenance of the trail upon its completion. The NCDOT Division of Bicycle and Pedestrian Transportation can do everything leading up to bidding and overseeing construction, but lacks staff to oversee actual construction. It traditionally works in partnership with local communities. It is generally the locality that bids and oversees construction. Unlike Wake County and Durham, Chatham County has indicated that they do not have the capability to oversee a $2 million trail construction project. NCDOT is seeking Cary's assistance with construction administration because the Town has demonstrated a capability to oversee large-scale construction projects that must be built per approved plans and specifications. If approved, PRCR would utilize staff time to administer the construction of the trail project.

While the 4.68 mile segment of the ATT discussed in this staff report will not lie within the Cary’s jurisdictional limits, assisting in its completion and maintenance benefits Town of Cary residents. The Town’s greenway system plan is designed to make several connections to the ATT. The Greenway Committee and the PRCR Advisory Board recommended connectivity to the ATT as a high priority. The ATT actually runs through the future Town park at Weldon Ridge and is adjacent to the Town’s parkland at Amberly.

The 117-acre Raftery Tract jointly purchased by the Town and Wake County includes a trailhead for the ATT. The Raftery trailhead plans were approved by both the Town and Wake County, and Wake County constructed the parking and restroom facilities. Upon completion of Town of Cary Project PR1095 (the Amberly Trailhead Park), Town of Cary residents will have a second direct access to the ATT. More importantly, the Chatham County section of the ATT will directly link with the Wake County section and, as the Durham section of the ATT moves south, will provide the link between the Wake County and Durham sections to be one step closer to being completed. With this access, residents will have the ability to travel all 23 miles of the American Tobacco Trail.

In terms of historical significance, the ATT corridor was originally constructed by the Durham and South Carolina RR (D&SC) in 1905. This rail corridor was principally used to bring tobacco from North Carolina and South Carolina into the American Tobacco factory, which once was among the largest suppliers of cigarettes in the world, including the popular Lucky Strike brand. In 2004, the Department of Interior announced the designation of the American Tobacco Trail a part of the National Recreation Trails System. The National Trails Program, administered jointly by Department of Interior and USDA Forest Service, recognizes trails that provide opportunities for all Americans to enjoy the out-of-doors and improve the quality of life of our communities.

Wake County maintains the Wake County section of the ATT. Public Works has reviewed maintenance costs for the Chatham County section of the ATT and estimates the costs to be approximately $60,000 per year. Staff recommends that discussion be held during the construction of the project with representatives of Triangle Rails to Trails, a volunteer group, to develop plans for volunteer support that would help defray the annual maintenance costs to the Town.

Following a number of meetings and discussions with officials from DOT and Chatham County, staff recommends the following:

· Town of Cary will provide construction administration for the 4.68 mile trail project through Chatham County.

· The Town of Cary will maintain this section of the ATT for a five year period. Specifically, the Town will maintain from Scott King Road (near Durham/Chatham Co. line) to E. Ferrell Road (near Chatham/Wake Co. line). Upon completion of the five year period, the Town and Chatham County will review the issue of maintenance of the ATT.

· Chatham County will provide the Town of Cary with $60,000 in funding to be used towards development of the Town’s Amberly Trailhead Park (PR1095) proposed for a 12 acre site located off New Hope Church Road and adjacent to the ATT.

· In terms of funding, DOT will provide up to $2,191,960 in reimbursement funding to the Town for the construction of this project. Since this funding from DOT is tied to a SAFETEA-LU Agreement, authorization will also be necessary for the adoption of a resolution approving the Municipal Agreement between the Town of Cary and the Department of Transportation. The Municipal Agreement and the corresponding resolution are attached.

Funding: Per the attached agreement, NCDOT will reimburse the Town of Cary $2,191,960 for construction of the described 4.68 mile segment of the American Tobacco Trail. The Town will not be responsible for additional capital funding. The Town will contribute staff time for management of the project.

The Town of Cary will receive a one-time payment of $60,000 from Chatham County to be directed toward the Town’s PR1095 Amberly Trailhead Park project. To date, a total of $275,000 has been appropriated to PR1095. No funds have been encumbered/expended to date. Approval of this staff report and its related agreements would bring PR1095 total appropriations-to-date to $335,000.

Operating Impacts: The agreements detailed within this staff report do have operating impacts. Upon completion of the project in approximately two years, the cost of maintenance of the ATT segment through Chatham County is estimated by Public Works to cost $60,000 per year. Staff is recommending that the Town agree to maintain the trail for a period of five years, at which time the Town and Chatham County would re-evaluate the maintenance plan. Staff would also work directly with Triangle Rails to Trail to attempt to develop a plan for volunteer support to help defray the maintenance costs.

1. Council approval of staff’s recommendation that the Town manage the construction of the ATT through Chatham County with reimbursement funding provided by the NC Department of Transportation which requires the following:

b. Recognition of $2,191,960 in reimbursement funding to be placed for expenditure in a new capital project account.

2. Council authorize staff to enter into an agreement with Chatham County with the general terms as listed below:

a. That the Town agrees to maintain the 4.68 mile segment of the ATT through Chatham County for a period of five years. At the end of the 5 year period representatives from Cary and Chatham County will jointly develop a new maintenance plan.

b. That Chatham County provides the Town with $60,000 in one-time funding to be used towards development of the Amberly Trailhead Park (PR1095) proposed for a 12 acre site located off New Hope Church Road. Council recognizes the $60,000 contribution to be placed n the construction account of PR1095 for expenditure.

c. That joint use language for use of the Amberly Trail Head Park facilities between Town residents and Chatham County residents is agreed upon by staff.

THIS SAFETEA-LU AGREEMENT is made and entered into on the last date executed below, by and between the North Carolina Department of Transportation, an agency of the State of North Carolina, hereinafter referred to as the “Department” and the Town of Cary, hereinafter referred to as the “Municipality”.

WHEREAS, the Federal Highway Administration, in accordance with Section 117 of the Consolidated Appropriations Act - 2006, requires that federal funds be available for certain specified transportation and pedestrian activities; and,

WHEREAS, the Municipality has requested federal funding assistance for Phase F of the American Tobacco Trail Project in Chatham County; and,

WHEREAS, subject to the availability of federal funds, the Consolidated Appropriations Act – 2006, in accordance with Section 117, has designated the Municipality to receive one hundred percent (100%) of the funds allocated to the Department by FHWA up to and not to exceed the maximum federal award amount of $491,964 for the American Tobacco Trail Project in Chatham County; and,

WHEREAS, the Department has agreed to administer the disbursement of said funds on behalf of FHWA to the Municipality for the American Tobacco Trail Project in accordance with the project scope of work and in accordance with the provisions set out in this Agreement; and,

WHEREAS, the Department’s Transportation Improvement Program 2006-2012 has been amended to include the programming of the American Tobacco Trail Project under the current TIP No. E-2921 F; and,

WHEREAS, the Municipality has approved the construction of said project in accordance with the plans and specifications to be prepared by the NCDOT Bicycle and Pedestrian Division and has agreed to participate in certain costs thereof in the manner and to the extent as hereinafter set out and has further agreed to the establishment and maintenance of certain traffic operating controls as hereinafter set out.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. This Project consists of the construction of a 4.68-mile long multi-use trail with two typical sections as follows: beginning at the Wake-Chatham County line and continuing to the south side of New Hope Church Road, the first section of the trail shall consist of a 12-foot wide granite screenings surface; the second section of the trail shall consist of a 10-foot wide asphalt surface and an adjacent 6-foot wide crushed stone surface from the north side of New Hope Church Road to the terminus of the project at the Chatham-Durham County line.

2. Upon execution of this Agreement by the Department, the Department will notify the Municipality, in writing, that project funds have been authorized and can be expended. The Municipality shall not contract for any work prior to receipt of written authorization from the Department to proceed. Any work performed, or contracts executed, prior to receipt of written authorization to proceed will be deemed ineligible for reimbursement.

3. If the Municipality causes professional engineering services required by this Agreement to be performed by contracting with a private engineering firm and seeks reimbursement for said services under this Agreement, it is agreed as follows:

(A) The Municipality shall ensure that an engineering firm is obtained through an equitable selection process and that prescribed work is properly accomplished in a timely manner, at a just and reasonable cost.

services, must adhere to Title 23 of the Code of Federal Regulations (CFR), Part 172. The Municipality shall comply with the policies and standards for negotiated contracts as contained in the Federal-Aid Policy Guide, Part 172; said policies and standards being incorporated in this Agreement by reference, and currently available at http://www.fhwa.dot.gov/legsregs/directives/fapgtoc.htm.

(C) The Municipality shall submit all professional services contract proposals to the Department’s Bicycle and Pedestrian Division for review and approval prior to execution of the professional services contract by the Municipality. In the event that the professional services contract proposal (engineering) exceeds $30,000, a pre-negotiation audit must be requested from the Department’s External Audit Branch.

(D) Reimbursement for construction administration costs cannot exceed fifteen percent (15%) of the actual construction contract cost of the Project. This applies to private engineering firms and/or work performed by the Municipality and/or the Department. The Municipality, and/or its agent, shall perform project administration in compliance with applicable City, State and Federal regulations, including the American Association of State Highway and Transportation Officials' Guide for Development of New Bicycle Facilities, August 1999 and the North Carolina Bicycle Facilities Planning and Design Guidelines, January 1994.

4. The Bicycle and Pedestrian Division shall be responsible for conducting any needed public hearing meetings to collect public comments from all interested parties and securing an encroachment agreement, if necessary, from the Division for any project work adjacent or intersecting the State Highway System prior to finalizing design plans.

5. The Municipality shall be responsible for obtaining any erosion control plans needed to construct the project.

6. The Municipality shall be responsible for certifying, in writing, to the Department that all work was accomplished in compliance with applicable City, State and Federal regulations, including the American Association of State Highway and Transportation Officials' Guide for Development of New Bicycle Facilities, August 1999 and the North Carolina Bicycle Facilities Planning and Design Guidelines, January 1994 prior to any payment being made to the Municipality. Changes in the approved plans and specifications are subject to the review and approval by the Bicycle and Pedestrian Division prior to the Municipality proceeding with the proposed changed work.

7. If necessary, the Municipality shall submit a letter of request to the Department’s Bicycle and Pedestrian Division to authorize and set up utility adjustment funding. The Department will notify the Municipality, in writing, once project funds have been authorized and can be expended for utilities. If necessary, the Municipality, and/or its agent, shall relocate, adjust, relay, change or repair all utilities in conflict with the project. Said work shall be performed in a manner satisfactory to and in compliance with applicable City, State and Federal regulations, including the American Association of State Highway and Transportation Officials' Guide for Development of New Bicycle Facilities, August 1999 and the North Carolina Bicycle Facilities Planning and Design Guidelines, January 1994. The Municipality shall make all necessary adjustments to services lying within the construction limits of the project.

8. The Municipality shall be responsible for all utility and clearance verification, sign distance confirmation and responding to the Department's field inspection review comments.

9. The Department shall acquire any needed right of way and/or construction easements required for the project and shall remove from said rights of way all encroachments of any kind with the exception that the Department shall secure an encroachment agreement for any utilities which shall remain or are to be installed within the right of way.

10. The Municipality shall follow all State and Federal Highway Administration regulations pertaining to bid procedures in the award of the contract. Said Federal Highway Administration regulations are contained in Federal-Aid Policy Guide, 23 CFR Part 633, Subpart A and 23 CFR Part 635, Subpart A; said policy being incorporated in this Agreement by reference as fully as if herein set out, and currently available at http://www.fhwa.dot.gov/legsregs/directives/fapgtoc.htm.

11. The Department’s Bicycle and Pedestrian Division will request construction authorization from the Federal Highway Administration. Upon receipt of written construction authorization from the Department, the Municipality may advertise the project. The Municipality shall review the bids and recommend, through resolution of the City Council, a qualified low bidder. Any contract for which bids are received in excess of two million two hundred thousand dollars ($2,200,000) will be reviewed by the Department’s State Contract Officer and must be approved by the Board of Transportation. Bids received, along with documentation of the City Council’s recommendation of the qualified low bidder, shall be submitted to the Department’s Bicycle and Pedestrian Division prior to the contract being awarded by the Municipality. The Department will review all bids and the City Council’s recommendation of the qualified low bidder, and the Board of Transportation may approve or reject the City Council’s recommendation. After approval of a qualified low bidder by the Board of Transportation, the Municipality may award the contract. All work shall be performed in accordance with Departmental standards and specifications. Letting of contracts for construction and purchases shall be in accordance with Federal Aid Policy Guide, 23 CFR Part 635 and the North Carolina General Statute 143-129.

12. The Municipality shall construct, or cause to be constructed, the project in accordance with the plans and specifications of the project as provided by the Department and in compliance with applicable City, State and Federal regulations. The Municipality shall enter into and shall administer the construction contract for said project and the procedures set out herein below shall be followed:

(A) The Municipality, and/or its agent, shall cause to be performed, or will perform, all work required with its own forces or a qualified contractor.

(B) Construction shall include, but not be limited to, mobilization, erosion control, site preparation, clearing, grading, paving, signing, concrete work, and finish carpentry.

(C) The Municipality shall be responsible for ensuring that all site layout, construction work, and project documentation are in compliance with applicable City, State and Federal regulations.

(D) The Municipality shall perform or cause to be performed the necessary construction engineering, sampling and testing, and supervision required during construction of the Project.

(E) The Municipality shall sample and test all materials in reasonable close conformity with the Department's Guide for Process Control and Acceptance Sampling and Testing. The Municipality shall certify to the Department that said compliance was accomplished in compliance with applicable City, State and Federal regulations.

(F) The Department and/or a representative of the Federal Highway Administration shall have the right to inspect, sample or test, and approve or reject, any portion of the Project during construction.

(G) The Department, at its discretion, may assign a district and/or resident engineer to the project who shall have the right to inspect any portion of the work being performed by the Municipality or the Municipality's contractor to ensure compliance with the provisions of this Agreement. The district and/or resident engineer will be the Department's representative on the project. The district and/or resident engineer will furnish the Municipality with any forms that may be needed in order to follow standard Department practices and procedures in the administration of the contract.

(H) During construction of the project, if any changes in the plans exceed the amount of $10,000, such changes must be approved by the Department prior to the work being performed.

(I) Upon completion of any portion of the project for which application for reimbursement is being made, the Municipality shall notify the Department so that an inspection can be made. Any deficiencies found during the inspection must be corrected prior to payment being made by the Department to the Municipality. Prior to final approval and payment by the Department, the Department and/or a representative of the Federal Highway Administration will be given the opportunity to make a final inspection of the completed work.

(J) The Municipality will be responsible for ensuring that the contractor complies with all of the terms of the contract and any instructions issued by the Department and/or the Federal Highway Administration as a result of any review or inspection.

(K) Upon completion of the Project, the Municipality will furnish or cause to be furnished to the Department, a certification that contract administration has been accomplished in compliance with applicable City, State and Federal regulations. The Municipality shall also furnish certification that materials used in the construction meet the requirements as set forth in this Agreement.

(L) Upon completion of the project, the Municipality will furnish the Department with two (2) complete sets of "Plan of Record" plans.

(M) The Municipality shall maintain records to document quantities for which the contractor is paid during any monthly estimate period.

(N) The Municipality shall maintain all records that establish final documentation of quantities incorporated into the Project in accordance with established federal procedures.

(O) All Project records developed by the Municipality that are not submitted to the Department shall be retained by the Municipality for a period of five (5) years after the final voucher is paid by the Federal Highway Administration.

(P) During construction of the Project, the Municipality shall provide and maintain adequate barricades, signs, signal lights, flagmen, and other warning devices for the protection of traffic in conformance with the traffic control plan for the Project and with the current edition of the Manual on Uniform Traffic Control Devices for Streets an Highways, or any subsequent revision of the same, published by the Federal Highway Administration.

(Q) Failure on the part of the Municipality to comply with any of these provisions will be grounds for the Department to withdraw participation on any or all of the items of work involved.

13. The Municipality shall complete said work by two years from the date of execution of this Agreement. The Municipality is responsible for submitting to the Department’s Bicycle and Pedestrian Division, quarterly project evaluation reports that assess the progress and potential benefits realized for the project.

14. If in the opinion of the Department and/or FHWA, satisfactory progress has not been made to complete the project per the terms of this Agreement, the Department and/or FHWA reserves the right to de-obligate said funding.

15. The Municipality shall install bicycle route and related bicycle warning signs on and near the bicycle path as indicated by the project signing plans. The locations of the signs and orientation of directional arrows shall be in accordance with the project plans approved by the Department’s Bicycle and Pedestrian Division.

16. The Municipality shall provide sign installation, labor and materials, including posts, mounting hardware, and any related materials.

17. Activities eligible for funding reimbursement for this project shall include environmental documentation and mitigation, design and plan preparation, right of way acquisition, utilities, contract administration, construction, testing and inspection. The Department shall reimburse the Municipality for one hundred percent (100%) of the approved eligible costs. The Municipality shall be responsible for funding any ineligible project costs not reimbursed by the FHWA. Reimbursement to the Municipality shall be subject to the policies and procedures contained in Federal-Aid Policy Guide, 23 CFR Part 140, which is being incorporated into this Agreement by reference, and is currently available at (http://www.fhwa.dot.gov/legsregs/directives/fapgtoc.htm).

The Municipality may bill the Department for actual costs as herein stated by submitting an invoice along with proper supporting documentation to the Department’s Bicycle and Pedestrian Division. The Department’s Bicycle and Pedestrian Division and the Financial Management Division will reimburse the Municipality upon approval of said invoice. The project must progress in a satisfactory manner in the opinion of the Department and the Municipality must invoice the Department for work accomplished at least once every six (6) months to keep the project funds active and available. If the project does not remain active, the Department and/or FHWA reserves the right to de-obligate said funding.

(B) Prior approval is required from FHWA if the Municipality desires to perform any work by force account. Force account work is only allowed when there is a finding of cost effectiveness for the work to be performed by some method other than contract awarded by competitive bidding process. Said Federal Highway Administration regulations are contained in Federal-Aid Policy Guide, 23 CFR Part 635.201, Subpart B; said policy being incorporated in this Agreement by reference; and currently available at www.access.gpo.gov/nara/cfr/waisidx_03/23cfr635_03.html as fully as if herein set out. Said invoices for force account work shall show a summary of labor, labor additives, equipment, materials and other qualifying costs in conformance with the standards for allowability of costs set forth in Office of Management and Budget (OMB) Circular A-87. Reimbursement shall be based on actual cost incurred with the exception of equipment owned by the Municipality or its project partners. Reimbursement for rates of equipment owned by the Municipality or its project partners cannot exceed the Department's rates in effect for the time period in which the work is performed. If a contractor performs the work, said invoices shall show the contract cost.

(C) In accordance with OMB Circular A-133, “Audits of States, Local Governments and Non-Profit Organizations”; and currently available at (www.whitehouse.gov/omb/circulars/a133/a133.html) dated June 27, 2003 and the Federal Single Audit Act Amendments of 1996, the Municipality shall arrange for an independent financial and compliance audit of its fiscal operations. The Municipality shall furnish the Department with a copy of the independent audit report within thirty -(30) days of completion of the report, but not later than nine (9) months after the Municipality’s fiscal year ends.

(D) Any costs incurred by the Municipality prior to written notification by the Department of federal authorization to proceed with the work shall not be eligible for reimbursement. Execution of an encroachment agreement when required does not constitute a “Notice to Proceed”.

(E) A final itemized invoice listing all costs shall be submitted to the Department’s Bicycle and Pedestrian Division. Upon completion of the work, the Municipality must submit an invoice that is clearly stamped or marked “Final Invoice” for reimbursement of any remaining costs to be paid under the terms of this Agreement. Upon receipt of the “Final Invoice”, the Department will de-obligate any remaining funds and close the project subject to final review and audit.

(F) The Municipality agrees that it shall bear all costs for which it is unable to substantiate actual costs, or any costs, which have been deemed unallowable by the Federal Highway Administration and/or the Department's Financial Management Division. In the event funding is withdrawn by FHWA, project reimbursement shall be subject to the availability of any remaining federal funds.

(G) Failure on the part of the Municipality to comply with any of these provisions will be grounds for the Department and/or FHWA to terminate participation in the costs of the work.

(H) All invoices must be submitted within six (6) months of completion and acceptance of the work by the Department and FHWA or said invoices will be considered ineligible items for payment.

(I) The Municipality agrees that, if the Federal Highway Administration does not participate in certain costs because of noncompliance with federal regulations by the Municipality, the Municipality will reimburse the Department for such costs. All costs not reimbursed to the Department by the FHWA for noncompliance by the Municipality shall be borne by the Municipality.

(J) The Department reserves the right to deduct monies from the Municipality’s Powell Bill Fund if monies paid to the Municipality from the project funds are determined by the Department and/or FHWA, either by audit and/or inspection of books, documents, papers, accounting records, and such other evidence as may be appropriate to substantiate costs, not to be in compliance with the terms of this agreement.

18. In the event any monies are due to the Department as referenced in this Agreement, said funds shall be submitted within sixty (60) days of invoicing by the Department. The Department shall charge a late payment penalty and interest on any unpaid balance due in accordance with G.S. 147-86.23.

19. In the event the Municipality fails for any reason to pay the Department in accordance with the provisions for payment hereinabove provided, North Carolina General Statute 136-41.3 authorizes the Department to withhold so much of the Municipality’s share of funds allocated to said Municipality by the General Statutes of North Carolina, Section 136-41.1 (Powell Bill Fund), until such time as the Department has received payment in full.

20. The Municipality shall maintain all books, documents, papers, accounting records, and such other evidence as may be appropriate to substantiate costs incurred under this Agreement. Further, the Municipality shall make such materials available at its office at all reasonable times during the contract period, and for five (5) years from the date of final payment under this Agreement, for inspection and audit by the Department’s Financial Management Section.

21. The Municipality, and/or its agent, shall comply with the following federal policies: (a) Conflict of Interest; (b) Equal Employment Opportunity; and (c) Title VI – Civil Rights Act of 1964.

22. The goal for participation by Disadvantaged Business Enterprise (DBE) is established for the construction contract portion of this agreement at ten percent (%). The Municipality, and/or its agent, shall also comply with the following federal policy: Disadvantaged Business Enterprises (DBE) as defined in 49 CFR Part 26.

It is the policy of the North Carolina Department of Transportation that Disadvantaged Business Enterprises shall have the opportunity to participate in the performance of contracts financed in whole or in part by Federal Funds in order to create a level playing field.

The Contractor is also encouraged to give every opportunity to allow DBE participation in Supplemental Agreements.

The Contractor, subcontractor, and sub-recipient shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR Part 26 in the award and administration of federally assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy, as the Department deems necessary.

A. The following goal for participation by Disadvantaged Business Enterprise (DBE) is established for this contract (see exception noted in (B) below):

Disadvantaged Business Enterprises FILLIN \* MERGEFORMAT FILLIN \* MERGEFORMAT %

B. DBE goals have not been established for the scope of work identified in paragraphs 2 through 10 of this agreement. For those items of work, the Municipality shall report the anticipated utilization of DBE’s during the completion of this work as defined in the LISTING OF DBE SUBCONTRACTORS below.

Except as noted in (B) above, the Municipality shall exercise all necessary and reasonable steps to ensure that Disadvantaged Business Enterprises participate in at least the percent of the contract as set forth above as goals for this contract.

All bidders, at the time the bid proposal is submitted for the construction contract portion of this agreement, must also submit a listing of DBE participation on the appropriate form (or facsimile thereof) in order for the bid to be considered responsive. Bidders must indicate the total dollar value of DBE participation for the contract. In the event the bidder has no DBE participation, he is still required to indicate this on the forms by entering the word or number zero. Blank forms will not be deemed to represent zero participation. BIDS SUBMITTED WHICH DO NOT HAVE DBE PARTICIPATION INDICATED ON THE APPROPRIATE FORM WILL NOT BE READ PUBLICLY DURING THE OPENING OF BIDS. The Department will not consider these bids for award and they will be returned to the bidder. Bidders have the option of submitting their DBE participation in an abbreviated format as required in Paragraph A below, or the bidder may submit their DBE participation in the additional detail required by Paragraph B below. In the event the bidder elects to submit DBE participation in accordance with Paragraph A and is determined to be the apparent lowest responsive bidder, that bidder must deliver to the Department no later than 12:00 noon of the sixth day following the opening of bids, a detailed DBE submittal as required by Paragraph B below.

Only those DBE firms with current certification by the Department will be considered acceptable for listing in the bidder submittal of DBE participation.

A. The Contractor shall indicate on the form for listing of DBE subcontractors the following required information:

(1) The names and addresses of DBE firms committed to participate in the contract

(3) The total dollar amount to be paid to each DBE based on agreed upon unit prices.

Failure to indicate the required information on the specified form will cause the bid to be considered nonresponsive and it may be rejected.

B. In lieu of submitting the information required by (A) above, the bidder may submit the detailed information required below along with the bid proposal form.

(1) The names and addresses of DBE firms committed to participate in the contract

(2) The Contract Item Numbers and Contract Item Descriptions and agreed upon unit prices of work to be performed by each DBE firm; and

(3) The total dollar amount to be paid to each DBE based on agreed upon unit prices.

Failure to indicate the required information on the specified form will cause the bid to be considered nonresponsive and it may be rejected.

The bidder is required to submit written documentation of the bidder/offeror’s commitment to use a DBE subcontractor whose participation it submits to meet a contract goal and written confirmation from each DBE, listed in the proposal form, indicating their participation in the contract.

The Department will not allow any substitutions, deletions, or other alterations to the listing of firms committed for DBE participation and/or the respective listed contract item numbers after opening of bids. The Department will not allow adjustments to total dollar amount of DBE participation after the opening of bids that would result in the DBE participation being less than the contract goal. The only exceptions to the requirements of this paragraph will be: (1) to allow for replacement of a DBE firm that had been decertified after opening of bids, and (2) to allow alteration of the listed contract item numbers subject to the Bidder submitting sufficient documentation to verify an obvious error in the initial submittal.

C. If the DBE participation submitted in the bid by the apparent lowest responsive bidder in response to Paragraph A/B does not meet or exceed the DBE contract goal, the apparent lowest responsive bidder must submit information to satisfy the North Carolina Department of Transportation that sufficient Good Faith efforts have been made to meet the contract goals. One complete set and nine (9) copies of this information must be received in the office of the State Contractual Services Engineer no later than 12:00 noon of the sixth day following opening of bids. Where the information submitted includes repetitious solicitation letters it will be acceptable to submit a sample representative letter along with a distribution list of the firms being solicited. Documentation of DBE quotations shall be a part of the good faith effort submittal as necessary to demonstrate compliance with the factors listed below which the Department considers in judging good faith efforts. This documentation may include written subcontractor quotations, telephone log notations of verbal quotations, or other types of quotation documentation.

Where the bidder fails to provide this information by the deadline, the Department may impose one or more of the following sanctions: (1) disqualify the contractor and any affiliated companies from further bidding for a period of time of no more than 90 days from the date of disqualification as established in notification by certified mail, (2) disqualify the Contractor and any affiliated companies for award of all contracts for which bids have been received and opened, (3) disqualify the Contractor from the contract in question.

The following factors are what the Department will consider in judging whether or not the bidder has made adequate good faith effort:

(1) Whether the bidder attended any pre‑bid meetings that were scheduled by the Department to inform DBEs of subcontracting opportunities.

(2) Whether the bidder provided solicitations through all reasonable and available means (e.g. advertising in newspapers owned and targeted to the Disadvantaged) at least 10 days prior to bid opening. Whether the bidder provided written notice to all DBEs listed in the NCDOT DBE directory, within the Divisions and surrounding Divisions where the project is located, that specialize in the areas of work (as noted in the DBE Directory) that the bidder will be subcontracting.

(3) Whether the bidder followed up initial solicitations of interests by contacting DBEs to determine with certainty whether they were interested. If a reasonable amount of DBEs within the targeted Divisions do not provide an intent to quote or no DBEs specialize in the subcontracted areas, the bidder must notify DBEs outside of the targeted Divisions that specialize in the subcontracted areas, as well as call the project Compliance Officer in the Office of Civil Rights to give notification of the bidder inability to get DBE quotes.

(4) Whether the bidder selected portions of the work to be performed by DBEs in order to increase the likelihood of meeting the contract goals. This includes, where appropriate, breaking out contract work items into economically feasible units to facilitate DBE participation, even when the prime contractor might otherwise perform these work items with its own forces.

(5) Whether the bidder provided interested DBEs with adequate and timely information about the plans, specifications and requirements of the contract

(6) Whether the bidder negotiated in good faith with interested DBEs not rejecting them as unqualified without sound reasons based on a thorough investigation of their capabilities. Any rejection should be so noted in writing with a description as to why an agreement could not be reached.

(7) Whether quotations were received from interested DBE firms but rejected as unacceptable without sound reasons why the quotations were considered unacceptable. The fact that the DBE firms quotation for the work is not the lowest quotation received will not in itself be considered as a sound reason for rejecting the quotation as unacceptable. The fact that the bidder has the ability and/or desire to perform the contract work with its own forces will not be considered as sound reason for rejecting a DBE quote. Nothing in this provision shall be construed to require the Contractor to accept unreasonable quotes in order to satisfy contract goals.

(8) Whether the bidder specifically negotiated with subcontractors to assume part of the responsibility to meet the contract DBE goal when the work to be sublet includes potential for DBE participation.

(9) Whether the bidder made any efforts and/or offered assistance to interested DBEs in obtaining the necessary equipment, supplies, materials, insurance, and/or bonding to satisfy the work requirements in the bid proposal.

(10) Any other evidence that the bidder submits which show that the bidder has made reasonable Good Faith efforts to include DBE participation.

In the event one bidder is the apparent low bidder on more that one project within the same letting located in the same geographic area of the state, as a part of the good faith effort the Department will consider allowing the bidder to combine the DBE participation as long as the overall goal value of all projects is achieved.

Where the apparent lowest responsive bidder fails to submit sufficient participation by DBE firms to meet the contract goal and upon a determination by the Goal Compliance Committee based upon the information submitted that the apparent lowest responsive bidder failed to make sufficient reasonable efforts to meet the contract goal, the bidder will be offered the opportunity to meet in person for administrative reconsideration. A committee appointed by the Department will hear administrative reconsideration. Members of this committee will be officials who did not take part in the original determination by the Goal Compliance Committee. The bidder will have the opportunity to present written documentation or argument concerning the issue of whether it met the goal or made an adequate good faith effort. The bidder will receive a written decision on the reconsideration explaining the basis for finding that the bidder did or did not meet the goal or made adequate Good Faith efforts to do so. The result of the reconsideration process is not administratively appealable to the Department.

In the event that the Department does not award the contract to the apparent lowest responsive bidder, the Department reserves the right to award the contract to the next lowest responsive bidder that can satisfy the Department that the contract goal can be met or that adequate good faith efforts have been made to meet the goal.

Firms can access a list of Disadvantaged Business Enterprises (DBE) which have been certified as such by the North Carolina Department of Transportation by clicking on the following http://apps.dot.state.nc.us/vendor/directory/. Only those DBE firms with current certification may be listed in the proposal form.

The listing of an individual firm in the Department’s directory shall not be construed as an endorsement of the firms’ capability to perform certain work.

If any DBE Subcontractor submitted on the form for listing of DBE Subcontractors, is terminated or fails to complete its work on the contract for any reason, the Contractor shall take all necessary, reasonable steps to replace the DBE Subcontractor with another DBE Subcontractor to perform at least the same amount of work of the contract as the DBE that was terminated.

To demonstrate necessary, reasonable Good Faith efforts, the Contractor shall document the steps he has taken to replace any DBE Subcontractor who is unable to perform successfully with another DBE Subcontractor. Such documentation shall include but not be limited to the following:

(a) Copies of written notification to DBEs that their interest is solicited in subcontracting the work defaulted by the previous DBE subcontractor or in subcontracting other items of work in the contract.

(b) Efforts to negotiate with DBEs for specific subbids including, at a minimum:

(2) A description of the information provided to DBEs regarding the plans and specifications for portions of the work to be performed; and

(d) Efforts made to assist the DBEs contacted, if needed, in obtaining bonding or insurance required by the Contractor.

The contractor will not terminate a DBE subcontractor listed in the proposal form for convenience or to perform the work with its own forces or those of an affiliate without the written approval of the Engineer. If the Contractor fails to demonstrate reasonable efforts to replace a DBE firm that does not perform as intended or completes the work with its own forces without the Engineer’s approval, the Contractor will be disqualified from further bidding for a period of up to 6 months after notification by certified mail.

1. If a Prime Contractor has listed a DBE firm in his low bid submitted and that DBE Subcontractor is subsequently decertified by the Department after a Request for Subcontract has been approved, then the Department will not require the Prime Contractor to solicit replacement DBE participation equal to the remaining work to be performed by the decertified firm. The participation equal to the remaining work performed by the decertified firm will count toward the contract goal but may not be counted toward the overall program goal.

2. If a Prime Contractor has listed a DBE firm in his low bid submittal and the DBE firm is decertified prior to the Department approving a Request for Subcontract for the named DBE firm, the Prime Contractor shall take all necessary and reasonable steps to replace the DBE subcontractor with another DBE subcontractor to perform at least the same amount of work to meet the contract goal or demonstrate that it has made a Good Faith effort to do so.

(1) Socially and economically disadvantaged individuals means a person who has a net worth of $750,000.00 or less and is a citizen or lawful permanent resident of the United States and who is:

(g) Members of other groups, or other individuals found to be economically and socially disadvantaged by the Small Business Administration under Section 8(d) of the Small Business Act, as amended (15 U.S.C. 637(d)).

(h) Members of other groups, or other individuals found to be economically and socially disadvantaged by the N. C. Department of Transportation under the Criteria for Disadvantaged Business Enterprises as published by the Department.

(2) Disadvantaged Business Enterprise (DBE) means a for-profit small business concern.

(a) That is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the case of a corporation in which 51 percent of the stock is owned by one or more such individuals; and

(b) Whose management and daily business operation are controlled by one or more of the socially and economically disadvantaged individuals who own it,

(1) If a firm is determined to be an eligible DBE firm and certified by the Department, the total dollar value of the participation by the DBE will be counted toward the goal. The total dollar value of participation by a certified DBE will be based upon the value of work actually performed by the DBE and the actual payments to DBE firms by the contractor.

(2) When a DBE performs as a participant in a joint venture, the contractor may count toward its DBE goal a portion of the total value of participation with the DBE in the joint venture, that portion of the total dollar value being a distinct clearly defined portion of work that the DBE performs with its forces.

(3) (a) The Contractor may count toward its DBE goal only expenditures to DBEs that perform a commercially useful function in the work of a contract. A DBE is considered to perform a commercially useful function when it is responsible for execution of a distinct element of the work of a contract and carrying out its responsibilities by actually performing, managing, and supervising the work involved. To determine whether a DBE is performing a commercially useful function, the Department will evaluate the amount of work subcontracted, industry practices, whether the amount the firm is to be paid under the contract is commensurate with the work it is actually performing and the DBE credit claimed for its performance of the work, and other relevant factors.

(b) Consistent with normal industry practices, a DBE may enter into subcontracts. Work that a DBE subcontracts to another DBE firm may be counted toward the contract goal. Work that a DBE subcontracts to a non-DBE firm does not count toward the contract goal. If a DBE Contractor or Subcontractor subcontracts a significantly greater portion of the work of the contract than would be expected on the basis of normal industry practices, the DBE shall be presumed not to be performing a commercially useful function. The Departments decision on the rebuttal of this presumption is subject to review by the Federal Highway Administration but is not administratively appealable to USDOT.

(1) The DBE firm must be responsible for the management and supervision of entire trucking operation

(2) The DBE must itself own and operate at least one fully licensed, insured and operational truck

(3) The DBE will receive full credit for all trucks it owns, insures, operates, and employs drivers

(4) The DBE will receive full credit for all trucks leased from a certified DBE firm

(5) The DBE will only receive credit for the fees or commission for trucks leased from a non-DBE firm

(6) Others may use trucks during the term of the lease so long as the lease gives priority to the DBE for the use of the truck(s).

The DBE may present evidence to rebut this presumption to the Department for commercially useful functions.

(4) A Contractor may count toward its DBE goal 60 percent of its expenditures for materials and supplies required to complete the contract and obtained from DBE regular dealer and 100 percent of such expenditures to a DBE manufacturer.

(a) For purposes of this provision, a manufacturer is a firm that operates or maintains a factory or establishment that produces on the premises the materials or supplies obtained by the Contractor.

(b) For purposes of this provision, a regular dealer is a firm that owns, operates, or maintains a store, warehouse, or other establishment in which the materials or supplies required for the performance of the contract are bought, kept in stock, and regularly sold to the public in the usual course of business. To be a regular dealer, the firm must engage in, as its principal business and in its own name, the purchase and sale of the products in question. A regular dealer in such bulk items as steel, cement, gravel, stone, and petroleum products need not keep such products in stock, if it owns or operates distribution equipment. Brokers and packagers shall not be regarded as manufacturers or regular dealers within the meaning of this section.

(5) A contractor may count toward its DBE goal the following expenditures to DBE firms that are not manufacturers or regular dealers:

(a) The fees or commissions charged by a DBE firm for providing a bona fide service, such as professional, technical, consultant, or managerial services, or for providing bonds or insurance specifically required for the performance of a DOT-assisted contract, toward DBE goal, provided the fees or commissions are determined to be reasonable and not excessive as compared with fees and commissions customarily allowed for similar services.

(b) The fees or commissions charged for assistance in the procurement of the materials and supplies, or for transportation charges for the delivery of materials or supplies required on a job site (but not the cost of the materials and supplies themselves), toward DBE goals, provided the fees are not from a manufacturer or regular dealer and provided the fees are determined to be reasonable and not excessive as compared with fees customarily allowed for similar services.

All requests for subcontracts involving DBE subcontractors shall be accompanied by a certification executed by both the Prime Contractor and the DBE subcontractor attesting to the agreed upon unit prices and extensions for the affected contract items. This document shall be on the Department’s Form RS‑1‑D, or in lieu of using the Department’s Form, copies of the actual executed agreement between the Prime Contractor and the DBE subcontractor may be submitted. In any event, the Department reserves the right to require copies of actual subcontract agreements involving DBE Subcontractors.

The RS‑1‑D certification forms may be obtained from the Department’s Resident Engineer.

These certifications shall be considered a part of the project records, and consequently will be subject to penalties under Federal Law associated with falsifications of records related to projects.

REPORTING DISADVANTAGED BUSINESS ENTERPRISE PARTICIPATION

When payments are made to Disadvantaged Business Enterprise firms, including material suppliers, contractors at all levels (prime, subcontractor, or second tier subcontractor) shall provide the Engineer with an accounting of said payments. This accounting shall be furnished the Engineer for any given month by the end of the following month. Failure to submit this information accordingly may result in (1) withholding of money due in the next partial pay estimate; or (2) removal of an approved Contractor from the prequalified bidders list or the removal of other entities from the approved subcontractors list. The accounting shall list for each payment made to a Disadvantaged Business Enterprise firm the following:

Payer Contractor Name and Federal Taxpayer ID

Amount of Payment

This document shall be on the Department’s DBE Subcontractor Payment Information Form

A responsible fiscal officer of the payee contractor, subcontractor, or second tier subcontractor who can attest to the date and amounts of the payments shall certify that the accounting is correct. A copy of an acceptable report may be obtained from the Engineer.

23. It is the policy of the Department not to enter into any agreement with another party that has been debarred by any government agency (Federal or State). The Municipality certifies, by signature of this agreement, that neither it nor its agents or contractors are presently debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in this transaction by any Federal or State Department or Agency and that it will not enter into agreements with any entity that is debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in this transaction.

24. The Municipality shall certify to the Department compliance with all applicable Federal environmental laws and regulations and ordinances and shall indemnify the Department against any fines, assessments or other penalties resulting from noncompliance by the Municipality or any entity performing work under contract with the Municipality.

25. The Municipality is solely responsible for all agreements, contracts, and work orders entered into or issued by the Municipality for this project. The Department shall not be held liable, by the Municipality, for any expenses or obligations incurred for the project except those specifically eligible for the federal funds and obligations as approved by the Department under the terms of this Agreement. The Department shall not reimburse the Municipality any costs that exceed the total federal funding at any time.

26. The Municipality will indemnify and hold harmless the Department, FHWA and the State of North Carolina, their respective officers, directors, principals, employees, agents, successors, and assigns from and against any and all claims for damage and/or liability in connection with the project activities performed pursuant to this Agreement, including construction of the Project. The Department shall not be responsible for any damages or claims for damages, which may be initiated by third parties.

27. The Municipality, at no expense to the Department, shall be responsible for all costs incurred for any additional construction outside the scope of this project, specifically costs associated with "spur" or "connector" paths not included as part of the main multi-use path alignment.

28. The Municipality will complete the project in accordance with the plans and specifications adopted therefore, or as altered or amended by the Department.

29. Upon completion of the project, the Municipality, at no cost or liability whatsoever to the Department, shall assume all maintenance responsibilities for the Phase F of the American Tobacco Trail Project in Wake County unless said improvements are within the state maintained highway system.

30. All terms and conditions of this Agreement are dependent upon, and, subject to the allocation of funds for the purpose set forth in the Agreement and the Agreement shall automatically terminate if funds cease to be available.

IT IS UNDERSTOOD AND AGREED that the approval of the Project by the Department is subject to the conditions of this Agreement, and that no expenditures of funds on the part of the Department will be made until the terms of this Agreement have been complied with on the part of the Municipality.

IN WITNESS WHEREOF, this Agreement has been executed, in duplicate, the day and year heretofore set out, on the part of the Department and the Municipality by authority duly given, as evidenced by the attached certified copy of resolution, ordinance or charter provision, as the case may be.