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Item Title: Update on the Sales Tax Agreement with
Wake County Board of Education Regarding Construction of New Schools and Major
Renovation of Existing Schools
Specific
Action Requested:
That the Board of Commissioners receives an update on the implementation of the sales tax agreement approved by the Commissioners and the Board of Education in March 2007.
Item Summary:
Currently public schools in North Carolina, unlike County
governments, are not eligible for a rebate of sales taxes paid by or on behalf
of the entity. In March 2007, the Board
of Commissioners and the Board of Education approved an agreement that provides
for the County to reclaim sales and use tax paid to the State for construction
of new schools and major renovation of existing schools. The sales tax saved through this arrangement
will be used for school capital purposes.
The agreement works as follows: The Board of Education will
convey ownership of the site to be constructed or renovated to Wake
County. The County will then enter into
a contract or contracts developed by the Board of Education for the
construction or repair work. The Board
of Education is appointed by the County to be the County’s agent for purposes
of administering the construction and/or repair contracts. In administering the contracts, the Board of
Education may authorize any change orders or project changes that are within
the project budget approved by the Board of Commissioners. At the conclusion of the repair or
construction contract, when the project is “closed out” the Board of Education
may request that the property be reconveyed to the Board of Education. The County is obligated to reconvey the property
within 60 days of receipt of such request.
At the time the two boards approved this agreement, there
were various administrative matters still to be worked out in detail in order
to implement the program. As of
mid-July 2007, the agreement had not been implemented due primarily to a
disagreement over which type of deed to use in conveying the properties. Although the agreement specifically called
for special warranty deeds due to the magnitude of the projects, the WCPSS real
estate services staff and private attorney felt strongly that quitclaim deeds
were sufficient and much simpler to administer.
The two staffs have recently resolved this issue by agreeing
to use special warranty deeds to convey the properties. On July 30, 2007, the County Manager
received a letter from the Superintendent detailing the properties to be
conveyed to the County and an approximate schedule for their transfer. The property transfers are now on track to
begin on August 31, 2007.
Attachments:
1. March 2007 Agreement with Board of Education