AMENDMENT NO. 1

2006 INTERLOCAL AGREEMENT

INTERLOCAL SOLID WASTE MANAGEMENT SYSTEM

This Amendment No. 1 to the 2006 Interlocal Agreement is dated as of ___________, 2008, among Apex, North Carolina ("Apex"); Cary, North Arolina ("Cary"); Fuquay Varina, North Carolina ("Fuquay-Varina"); Garner, North Carolina ("Gamer"); Knightdale, North Carolina ("Knightdale"); Morrisville, North Carolina ("Morrisville"); Raleigh, North Carolina ("Raleigh"); Rolesville, North Carolina ("Rolesville"); Wake Forest, North Carolina ("Wake Forest"); Wendell, North Carolina ("Wendell"); Zebulon, North Carolina ("Zebulon"); all of the above being municipal corporations and public bodies politics of the State of North Carolina; and Wake County, North Carolina (the "County" or "Wake"), being a public body politic and corporate of the State of North Carolina.

RECITALS:

WHEREAS, the Parties to this Amendment No. 1 have previously entered into an Interlocal Agreement dated September 5, 2006 (the “2006 Interlocal Agreement”) that established a joint undertaking of the Interlocal Solid Waste Management System (System); and

WHEREAS the Parties to the 2006 Interlocal Agreement (the “Partners”) agreed to share the economic benefits and responsibilities involved in securing an economical 25-year public landfill solution to their Municipal Solid Waste (MSW) disposal needs; and

WHEREAS, Article 6 of the 2006 Interlocal Agreement contemplated that Raleigh would construct a municipal solid waste transfer facility (the “East Wake Transfer Facility” or “Transfer Facility”) to serve both Partners and Non-Partners; and

WHEREAS, Raleigh has constructed the East Wake Transfer Facility on property owned by Raleigh, and NCDENR has established Raleigh as the permit holder for the transfer facility, and

WHEREAS, the Partners agreed that to the extent that a transfer facility could enhance the financial and operational features of the System, then a transfer facility could be added to the System after reaching agreement on costs, ownership and financing; and

WHEREAS, the Partners agree to add the East Wake Transfer Facility to the System, and desire to have that agreement memorialized in this Amendment No. 1 to the 2006 Interlocal Agreement, and

WHEREAS, the Partners desire to have Wake County assume responsibility for the operation, maintenance, management and financial administration of the East Wake Transfer Facility as part of the Interlocal Solid Waste Management System, and

WHEREAS, the County is willing to assume responsibility for the operation, maintenance, management and financial administration of the East Wake Transfer Facility as part of the Interlocal Solid Waste Management System; and

WHEREAS, the Partners desire to enter into this Amendment No. 1 pursuant to the statute authorizing interlocal agreements, N.C.G.S. §§160A-460 to 160A-464, in order to pursue the above-stated goal.

NOW THEREFORE, for and in consideration of the mutual promises and covenants contained in this Amendment, the sufficiency of which is hereby acknowledged, the Partners agree the 2006 Interlocal Agreement shall be amended as follows:

ARTICLE I

Purpose

Article III, § 3.03 of the 2006 Interlocal Agreement provided that the Partners may include additional operations costs for the Interlocal Solid Waste Management System (“System”) if the addition provides for an overall benefit to the System and the Partners.

The greater the tonnage of commercial solid waste received at the South Wake Landfill, the greater the profit generation potential at the South Wake Landfill, and the greater the net-revenues available for sharing amongst the Partners. Therefore, the Partners acknowledge that it is beneficial to incorporate the transfer facility into the System to serve northern and eastern Wake County and maximize the capture of commercial solid waste at the South Wake Landfill.

The purpose of this Amendment is to establish the mechanism by which Wake County will assume responsibility for financial accounting, management and administration of the East Wake Transfer Facility for the overall financial benefit of the System and the Partners.

For the purposes of the Amendment, the City of Raleigh will remain the permit holder and will retain ownership of the real property and the managed assets associated with the transfer facility.  The City of Raleigh will not seek reimbursement for funds the City has expended to purchase land or obtain permits for the East Wake Transfer Facility.

ARTICLE II

Transfer Facility Fee

Wake County will set a per-ton Transfer Facility Fee for the East Wake Transfer Facility.  The Transfer Facility Fee will be established at a level that is consistent and competitive with market conditions for solid waste collection, hauling and disposal services available in Wake County.  The Transfer Facility Fee established for the East Wake Transfer Facility will consist of two components.

1)              Component A of the Transfer Facility Fee will be the same as the tipping fee charged at the South Wake Landfill.

2)              Component B of the Transfer Facility Fee will be an incremental addition above the South Wake Landfill tipping fee to recover all, or a portion of, the Transfer Facility Operating Costs.

Component A revenue from the Transfer Facility Fee will be applied directly to the South Wake Landfill Fund in order to be available for revenue sharing by the Partners.  Component B revenue from the Transfer Facility Fee will be credited toward the Transfer Facility Operating Costs for individual transfer facility users.

ARTICLE III

Transfer Facility Operating Costs

The Transfer Facility Operating Costs for the East Wake Transfer Facility will be comprised of five categories of costs, each of which will be reported to the Partners through the Solid Waste Advisory Committee annually, or more frequently if requested.  The five cost categories are as follows:

1)              Fixed personnel costs are costs related to the salaries and benefits of the Wake County employees assigned to work at the Transfer Facility scale house, as well as additional indirect personnel costs for supervision, technical support and administration.  These costs will be allocated proportionately to Transfer Facility Users (both Partners and Non-Partners).

2)              Fixed Operating & Maintenance costs are costs related to the utilities, equipment, materials and supplies necessary for the proper operation and maintenance of the Transfer Facility.  These costs will be allocated proportionately to Transfer Facility Users (both Partners and Non-Partners).

3)              Fixed debt service costs are costs related to the debt service payments due and payable to the City of Raleigh for financing the design and construction of the Transfer Facility.  These costs will be allocated proportionately to Transfer Facility Users (both Partners and Non-Partners).  When the debt service is retired, these costs will cease to be required.

4)              Fixed capital replacement costs are costs related to specific projects planned for the Transfer Facility to repair and replace fixed assets that will wear and deteriorate under normal operating conditions.  The costs will be allocated to a designated capital reserve fund, and the reserve fund balance will be reported to the Partners on an annual basis.  These costs will be allocated proportionately to Transfer Facility Users (both Partners and Non-Partners).

5)              Variable-operating costs are costs related to the charges that will be assessed by the Contractor selected to operate the Transfer Facility and haul solid waste to the South Wake Landfill.  These costs will be allocated proportionately to transfer Facility Users (Partners and Non-Partners), as well as Direct-Haul Partners.

ARTICLE IV

Transfer Facility Cost Allocations

Similar to the South Wake Landfill, the East Wake Transfer Facility will be open to receive both Partner and Non-Partner municipal solid waste for disposal at the South Wake Landfill.  However, unlike the South Wake Landfill, the East Wake Transfer Facility will not be operated as a profit center for the System.  It is the expectation of the Partners that Wake County will implement financial management and accounting systems to recover 100-percent (100%) of the Transfer Facility Operating Costs, and allocate costs proportionately to both Partners and Non-Partners.

Transfer Facility Partner Allocations.  Partners that use the East Wake Transfer Facility (Transfer Facility Partners) will be required to pay the Transfer Facility Fee.  Component A of the Transfer Facility Fee will be applied directly to the South Wake Landfill Fund to be available for revenue sharing amongst the Partners.  If Component B of the Transfer Facility Fee is insufficient to recover the full amount of the Transfer Facility Operating Costs for individual Transfer Facility Partners, then Wake County will recover the balance due from individual Transfer Facility Partners by retaining revenue sharing funds from the South Wake Landfill Fund, submitting a separate request for payment (i.e. separate invoice or bill for service), or both as may be necessary.

Non-Partner Allocations.  Non-Partners that use the East Wake Transfer Facility will be required to pay the Transfer Facility Fee.  Component A of the Transfer Facility Fee will be applied directly to the South Wake Landfill Fund to be available for revenue sharing amongst the Partners.  If Component B of the Transfer Facility Fee is insufficient to recover the full amount of the Transfer Facility Operating Costs for Non-Partners, then Wake County will recover the balance due from both Transfer Facility Partners and Direct Haul Partners using a mutually agreed upon cost allocation methodology.  Wake County will recover the balance due from individual Partners by retaining revenue sharing funds from the South Wake Landfill Fund, submitting a separate request for payment (i.e. separate invoice or bill for service), or both as may be necessary.

Direct Haul Partner Allocations.  Partners that do not use the East Wake Transfer Facility (Direct Haul Partners) will not be required to pay the Transfer Facility Fee.  However, if Component B of the Transfer Facility Fee is insufficient to recover the full amount of the Transfer Facility Operating Costs for Non-Partners, then Direct Haul Partners will be required to pay a proportionate share of the variable operating cost category of Transfer Facility Operating Costs.  Direct Haul Partner’s proportionate share of the Transfer Facility Operating Costs for Non-Partners will be limited to the variable operating cost category only.

ARTICLE V

Miscellaneous

1)              The Partners agree that the East Wake Transfer Facility will remain available to all Partners for as long as the Transfer Facility is usable.

2)              The Partners agree to work together to evaluate options for conveying ownership of the real property and managed assets associated with the transfer facility, as well as the NC DENR operating permit, to the System.  Upon reaching agreement on costs, ownership, and permitting, the Partners will execute a separate amendment memorializing the agreed upon instrument for conveying property ownership and NC DENR operating permits.

3)              All other terms and conditions of the 2006 Interlocal Agreement remain in full effect, and are not intended to be altered or amended in any manner with this Amendment.

IN WITNESS WHEREOF, the Partners have caused this Amendment No. 1 to be ratified by resolution of their governing Boards or Councils as evidenced by the minutes of their governing Boards or Councils, and executed by their duly authorized officers as of the date first above written.