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07-20-2021 Finance Committee Meeting Agenda Packet CALL TO ORDER ROLL CALL AGENDA ITEMS TO BE ADDED APPROVAL OF AGENDA NEW BUSINESS a. Tax Options (Staff Contact: Kimberly G. Van Der Hyde) b. Internal Auditor (Staff Contact: David M. Smitherman) c. General Employment Conditions (Staff Contact: Kimberly G. Van Der Hyde) d. Economic Development Grading Obligation (Staff Contact: Kim Van Der Hyde) MATTERS FROM COMMMITTEE MEMBERS ADJOURNMENT FINANCE COMMITTEE MEETING Tuesday, July 20, 2021 – 3:30 PM Elections and Training Center 18 Depot Street, Chatham, Virginia 24531 AGENDA 1. 2. 3. 4. 5. 6. 7. Finance Committee EXECUTIVE SUMMARY ACTION ITEM Agenda Title: Tax Options (Staff Contact: Kimberly G. Van Der Hyde) Staff Contact(s): Kimberly G. Van Der Hyde Agenda Date: July 20, 2021 Item Number: 5.a Attachment(s): Public Hearing-07-20-2021 Transient Occupancy Tax TransientOccupancyCode Public Hearing-07-20-2021 PCC 6-21 Meals Tax mealstax Code Revision Cigerette Tax Marijuana Tax Reviewed By: SUMMARY: At its June Meeting, the Finance Committee reviewed several untapped County revenue options. For the Committee’s review, attached are tax options the Committee/Board was interested in Staff County researching further. The first two (2) options will be voted on at tonight’s Business Meeting: 1.) Transient Occupancy Tax (4%); 2.) County Food and Beverage Tax (increasing from 4% to 6%); 3.) Cigarette Tax; 4.) Marijuana Tax; and 5.) Fire Tax. FINANCIAL IMPACT AND FUNDING SOURCE: Revenue estimates for some of these options will be presented and discussed at the Finance Committee Meeting. RECOMMENDATION: For the Committee’s consideration. MOTION: For the Committee’s consideration. 5.a Packet Pg. 2 PUBLIC HEARING NOTICE The Pittsylvania County Board of Supervisors will hold a Public Hearing at 7:00 p.m. on Tuesday, July 20, 2021, at the Board Meeting Room, 39 Bank Street, Chatham, Virginia 24531, to receive citizen input on proposed revisions to Pittsylvania County Code (“PCC”), Chapter 6, Finance and Taxation, to include the creation of a new Article IV, Transient Occupancy Tax, at a proposed rate of 4 percent (4 %). A complete copy of the proposed revisions is available at the Pittsylvania County Administrator’s Office, 1 Center Street, Chatham, Virginia 24531, Monday through Friday, 8:00 a.m. to 5:00 p.m., as well as on the County’s website at www.pittsylvaniacountyva.gov. 5.a.a Packet Pg. 3 Attachment: Public Hearing-07-20-2021 Transient Occupancy Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) PITTSYLVANIA COUNTY CODE CHAPTER 6 (FINANCE AND TAXATION) ARTICLE IV. TRANSIENT OCCUPANCY TAX SEC. 6-38. DEFINITIONS. In addition to the words/terms defined in § 58.1-3818.8, Code of Virginia, 1950, as amended, as used in this Article, unless the context clearly indicates otherwise, the following words have the following meaning: Commissioner of the Revenue means the Commissioner of the Revenue of Pittsylvania County. Lodging includes, but is not limited to, any space, spot, or room furnished to any transient. Occupancy means the use or possession, or the right to the use or possession of any space, spot, room or rooms or portion thereof, in any hotel, motel, boarding house, or travel campground and other facilities offering guest rooms rented out for continuous occupancy for fewer than thirty (30) consecutive days for dwelling, lodging, or sleeping purposes. Person includes, but is not limited to, any individual, firm, partnership, association, corporation, person acting in a representative capacity, or any group of individuals acting as a unit. Rent means the consideration charged, whether or not received, for the occupancy of space or spot in a hotel, motel, boarding house, or travel campground and other facilities offering guest rooms rented out for continuous occupancy for fewer than thirty (30) consecutive days valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and service of any kind or nature, without any deduction therefrom whatsoever. Room rental means the total charge, exclusive of any tax imposed on such charge, made by any hotel, motel, boarding house, or travel campground and other facilities offering guest rooms rented out for continuous occupancy for fewer than thirty (30) consecutive days for lodging furnished to any transient. If the charge made by the hotel, motel, boarding house or travel campground and other facilities offering guest rooms rented out for continuous occupancy for fewer than thirty (30) consecutive days to a transient includes charge for services or accommodations in addition to that of lodging and/or use of space, then such portion of the total charge representing only lodging and/or space rental shall be distinctly set out and billed to such transient by such hotel, motel, boarding house or travel campground and other facilities offering guest rooms rented out for continuous occupancy for fewer than thirty (30) consecutive days as a separate item. Transient means any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license, or other agreement for a period of less than thirty (30) consecutive calendar days, counting portions of calendar days as full days. Any such person so occupying space in a hotel, motel, boarding house, or travel campground, and other facilities offering guest rooms rented out for continuous occupancy for fewer than thirty (30) consecutive 5.a.b Packet Pg. 4 Attachment: TransientOccupancyCode (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) days shall be deemed to be a transient until the period of twenty-nine (29) days has expired, unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy, or the occupant has paid in advance for over twenty-nine (29) days occupancy. In determining whether a person is a transient, uninterrupted periods of time extending both prior and after the effective date of this Article may be considered. Travel campground means any area, site, spot, lot, field, or tract of land offering spaces for recreational vehicles or campsites for transient dwelling purposes, or temporary dwelling during travel, or recreational or vacation uses. Treasurer means the Treasurer of Pittsylvania County. SEC. 6-39. IMPOSED; AMOUNT. Pursuant to the provisions of Code of Virginia, Title 58.1 (Taxation), Chapter 38 (Miscellaneous Taxes), 1950, as amended, there is hereby imposed and levied by the County on each transient an occupancy tax in the amount of four percent (4%) of the charge made for each room or space rented to such transient. Such tax shall be collected from such transient at the time rooms or spaces are rented in accordance with this Article. The tax imposed hereby shall apply to all hotels, motels, boarding houses, and travel campgrounds and other facilities offering guest rooms or spots rented out for continuous occupancy for fewer than thirty (30) consecutive days, except that the tax imposed hereunder shall not apply to rooms or spaces rented for continuous occupancy by the same individual or group for thirty (30) or more days in hotels, motels, boarding houses, or travel campgrounds, and other facilities offering guest rooms or spots rented out for continuous occupancy for fewer than thirty (30) consecutive days. SEC. 6-40. COLLECTION. Every person, firm, or corporation receiving any payment for occupancy with respect to which a tax is levied under this Article shall collect the amount of such tax so imposed from the transient on whom such tax is levied or from the person paying for such occupancy at the time payment for such occupancy is made. The tax required to be collected under this Section shall be deemed to be held in trust by the person, firm, or corporation required to collect such taxes as provided in this Article. SEC. 6-41. REPORTING; PAYMENT. The person, firm, or corporation collecting any tax as provided in this Article shall make out a report thereof on such forms and setting forth such information as the Commissioner of the Revenue may prescribe and require, showing the amount of occupancy charges collected, and the taxes required to be collected; and shall sign and deliver such report to the Commissioner of the Revenue with remittance of the taxes collected on or before the twentieth (20th) day of the month following the month in which the taxes are collected. SEC. 6-42. PENALTIES FOR LATE PAYMENT. 5.a.b Packet Pg. 5 Attachment: TransientOccupancyCode (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) If any person shall fail or refuse to remit to the Commissioner of the Revenue the tax required to be collected and paid under this Article within the time and in the amount specified there shall be added to such tax by the County Treasurer a penalty in the amount of ten percent (10%) thereof and interest on the principal amount thereon at the rate of ten percent (10%) per annum which shall be computed upon the taxes and penalty from the first day of the month next following the month in which such taxes are due and payable. SEC. 6-43. FAILURE TO COLLECT TAXES OR MAKE REPORTS. It shall be unlawful for any person, firm, or corporation to fail, or refuse, to collect the taxes imposed under this Article and to make reports and remittance as required. The Commissioner of the Revenue shall have the power to examine pertinent records for the purpose of administering or enforcing the provisions of this Article. SEC. 6-44. RECORDS REQUIRED. It shall be the duty of every person, firm, or corporation liable for the collection and payment to the County of any tax imposed by this Article to keep and preserve for a period of four (4) years such suitable records as may be necessary to determine the amount of tax due to have been collected and paid to the County. The Commissioner of the Revenue may inspect such records at all reasonable times. SEC. 6-45. PENALTY FOR VIOLATIONS OF ARTICLE. Any person, firm, or corporation convicted of violating the provisions of this Article shall be subject to a fine of not more than one hundred dollars ($100.00); and each failure, refusal, neglect, or violation and each day's continuance thereof, shall constitute a separate offense. This penalty shall be deemed to be in addition to and not in lieu of the penalties set forth in Section 6-42 of this Article. SEC. 6-46. EFFECTIVE DATE OF ARTICLE. The effective date of this Article shall be September 1, 2021. 5.a.b Packet Pg. 6 Attachment: TransientOccupancyCode (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) PUBLIC HEARING NOTICE The Pittsylvania County Board of Supervisors will hold a Public Hearing at 7:00 p.m. on Tuesday, July 20, 2021, at the Board Meeting Room, 39 Bank Street, Chatham, Virginia 24531, to receive citizen input on proposed revisions to Pittsylvania County Code § 6-21; Meals Tax; to increase the County meals tax from four percent (4%) to six percent (6%). A complete copy of the proposed revisions is available at the Pittsylvania County Administrator’s Office, 1 Center Street, Chatham, Virginia 24531, Monday through Friday, 8:00 a.m. to 5:00 p.m., as well as on the County’s website at www.pittsylvaniacountyva.gov. 5.a.c Packet Pg. 7 Attachment: Public Hearing-07-20-2021 PCC 6-21 Meals Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) PITTSYLVANIA COUNTY CODE SEC. 6-21. LEVY OF TAX; AMOUNT. In addition to all other taxes and fees of any kind now or hereafter imposed by law, there is hereby levied and imposed by the County on each purchaser a tax on the amount paid for food and beverages purchased from any food establishment, whether prepared in such food establishment or not, and whether consumed on the premises or not. The rate of this tax shall be sixfour (64) percent of the amount paid for such food and beverages, which amount paid for such food and beverages shall not be deemed to include the sales tax paid thereon when computing the tax hereby imposed. In the computation of this tax, any fraction of one-half cent or more shall be treated as one cent ($0.01). 5.a.d Packet Pg. 8 Attachment: mealstax Code Revision (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) 5.a.e Packet Pg. 9 Attachment: Cigerette Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) 5.a.e Packet Pg. 10 Attachment: Cigerette Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) 5.a.e Packet Pg. 11 Attachment: Cigerette Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) Virginia Becomes First Southern State and 16th in the U.S. To Legalize Adult Recreational Cannabis On April 7, 2021, a majority of both houses of the Virginia legislature voted to legalize adult recreational use of cannabis. The approval made Virginia the 16th U.S. state – and the third state this year – to legalize adult recreational use of cannabis. Under the new law, home cultivation and personal possession of cannabis will become legal July 1, 2021, but retail sales will not begin until January 1, 2024. Virginia Senate Bill 1406/House Bill 2312 legalizes the retail sale of cannabis products to adults over the age of 21 and establishes the Virginia Cannabis Control Authority to oversee the cultivation, manufacture, wholesale, and retail sale of cannabis and cannabis products. The bill also permits private cultivation of up to four cannabis plants for personal use and enables individuals to petition for suspended or modified sentences for past marijuana convictions or for sealing of past marijuana conviction records. Possession of more than a pound of cannabis in a public place, unless permitted by license, remains a felony, while public possession of an amount between an ounce and a pound will be subject to a fine of $25. Retail cannabis sales will be taxed at 21% statewide, and localities will be able to impose an additional sales tax of up to 3% on top of preexisting state sales tax rates. Proceeds of the cannabis tax will be put towards pre-K programs for at-risk youth, substance abuse programs, and a newly established Cannabis Equity Reinvestment Fund (the “Fund”), among other uses. The Fund shall be used to support persons, families, and communities historically and disproportionately targeted and affected by drug enforcement, through scholarships and vocational resources, grants and business loans supporting workforce development and job training, and contribution to the Virginia Indigent Defense Commission. Regulatory specifics will be determined by the Board of Directors of the Virginia Cannabis Control Authority, contingent on approval by the Cannabis Oversight Commission. The Virginia Cannabis Control Authority will begin accepting applications for licensure under the statute on July 1, 2023, and retail sales, as noted above, will first be permitted on January 1, 2024. Any city, town, or county within Virginia may, by referendum, prohibit the retail sale of cannabis within its jurisdiction, but no local body may prohibit possession or personal cultivation and use of cannabis. The legislative process that ended with an affirmative vote for legalization this month began in November 2020 when Governor Northam (D) announced that he would introduce and support legislation aimed at legalizing adult-use cannabis. Not coincidentally, Governor Northam’s announcement came the same day that the Virginia Marijuana Legalization Work Group released a legislative report estimating that Virginia’s potential tax revenues from the commercial sale of cannabis would be between $154 million and $308 million. 5.a.f Packet Pg. 12 Attachment: Marijuana Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) Both the Senate and House of Delegates originated bills to legalize recreational cannabis, with House Bill 2312 and Senate Bill 1406 both passing in their originating chambers on February 5, 2021 and receiving approval by the opposite chamber on February 16. Following approval, the two bills headed into concurrence, and a reconciled version of S.B. 1406 was passed by both chambers on February 27, 2021, just before the end of the State Legislature’s 2021 Special Session. Prior to signing the bill, Governor Ralph Northam added amendments that accelerated the effective date of legalization for home cultivation, and personal possession from January 1, 2024 to July 1, 2021. Governor Northam’s amendments also provided protections for cannabis company employees who wish to unionize and accelerated the timeline for the sealing of records and expungement of cannabis-related criminal offenses. The bill, with Northam’s amendments, went back to both chambers and was approved on April 7, 2021, with Lt. Gov. Justin Fairfax (D) breaking a 20-20 tie along partisan lines in Virginia’s Senate to pass the bill. 5.a.f Packet Pg. 13 Attachment: Marijuana Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) 5.a.f Packet Pg. 14 Attachment: Marijuana Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) 5.a.f Packet Pg. 15 Attachment: Marijuana Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) 5.a.f Packet Pg. 16 Attachment: Marijuana Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) 5.a.f Packet Pg. 17 Attachment: Marijuana Tax (2654 : Tax Options (Staff Contact: Kim Van Der Hyde)) Finance Committee EXECUTIVE SUMMARY ACTION ITEM Agenda Title: Internal Auditor (Staff Contact: David M. Smitherman) Staff Contact(s): David M. Smitherman Agenda Date: July 20, 2021 Item Number: 5.b Attachment(s): Reviewed By: SUMMARY: Since the June 15, 2021, the Finance Committee has been informed about the possible employment of an internal County auditor. Monies exist in the FY22 County Contingency Budget to cover the cost of the Jail Medical Billing Compliance Analyst. Chairman Warren and Sheriff Taylor have had discussions about the use of this employee to not only continue the work with the Jail, but to also serve as an internal County auditor. This auditor could assure, in all areas, that the County’s financial operations are accurate, efficient, and transparent. FINANCIAL IMPACT AND FUNDING SOURCE: A total of $56,875 is currently in the FY22 County Contingency Budget for the Jail Medical Billing Compliance Analyst that could be used for the internal County auditor. RECOMMENDATION: For the Finance Committee’s consideration. MOTION: For the Finance Committee’s consideration. 5.b Packet Pg. 18 Finance Committee EXECUTIVE SUMMARY ACTION ITEM Agenda Title: General Employment Conditions (Staff Contact: Kimberly G. Van Der Hyde) Staff Contact(s): Kimberly G. Van Der Hyde Agenda Date: July 20, 2021 Item Number: 5.c Attachment(s): Minimum Wage Law Virginia Overtime Wage Law Act DOLIVOWA analysis Reviewed By: SUMMARY: Recent developments concerning general employment conditions will greatly impact the FY22 County Budget, as well as future annual County Budgets. For the Board’s review, related documentation is attached. Employment conditions to be discussed include: 1.) Hiring/Recruitment Incentive Program; 2.) Update on the General Assembly changes to the Minimum Wage Rate; and 3.) Virginia Overtime Wage Law Change (Effective July 1, 2021). FINANCIAL IMPACT AND FUNDING SOURCE: To be discussed. RECOMMENDATION: Not applicable. MOTION: Not applicable. 5.c Packet Pg. 19 Code of Virginia Title 40.1. Labor and Employment Chapter 3. Protection of Employees Article 1.1. Virginia Minimum Wage Act § 40.1-28.10. Minimum wages A. 1. Prior to May 1, 2021, every employer shall pay to each of its employees wages at a rate not less than the federal minimum wage. 2. Beginning May 1, 2021, every employer shall pay to each of his employees at a rate not less than the federal minimum wage or 75 percent of the Virginia minimum wage provided for in this section, whichever is greater. For the purposes of this subdivision "employee" means any person or individual who is enrolled in an established employer on-the-job or other training program for a period not to exceed 90 days which meets standards set by regulations adopted by the Commissioner. B. From May 1, 2021, until January 1, 2022, every employer shall pay to each of its employees wages at a rate not less than the greater of (i) $9.50 per hour or (ii) the federal minimum wage. C. From January 1, 2022, until January 1, 2023, every employer shall pay to each of its employees wages at a rate not less than the greater of (i) $11.00 per hour or (ii) the federal minimum wage. D. From January 1, 2023, until January 1, 2025, every employer shall pay to each of its employees wages at a rate not less than the greater of (i) $12.00 per hour or (ii) the federal minimum wage. E. (For effective date, see Acts 2020, cc. 1204 and 1242) From January 1, 2025, until January 1, 2026, every employer shall pay to each of its employees wages at a rate not less than the greater of (i) $13.50 per hour or (ii) the federal minimum wage. F. (For effective date, see Acts 2020, cc. 1204 and 1242) From January 1, 2026, until January 1, 2027, every employer shall pay to each of its employees wages at a rate not less than the greater of (i) $15.00 per hour or (ii) the federal minimum wage. G. From and after January 1, 2027, every employer shall pay to each of his employees wages at a rate not less than the greater of (i) the adjusted state hourly minimum wage or (ii) the federal minimum wage. H. By October 1, 2026, and annually thereafter, the Commissioner shall establish the adjusted state hourly minimum wage that shall be in effect during the 12-month period commencing on the following January 1. The Commissioner shall set the adjusted state hourly minimum wage at the sum of (i) the amount of the state hourly minimum wage rate that is in effect on the date such adjustment is made and (ii) a percentage of the amount described in clause (i) that is equal to the percentage by which the United States Average Consumer Price Index for all items, all urban consumers (CPI-U), as published by the Bureau of Labor Statistics of the U.S. Department of Labor, or a successor index as calculated by the U.S. Department of Labor, has increased during the most recent calendar year for which such information is available. The amount of each annual adjustment shall not be less than zero. 1975, c. 530; 1976, c. 736; 1978, c. 371; 1980, c. 532; 1991, cc. 547, 596; 1997, c. 544;2020, cc. 1204, 1242. 1 7/15/2021 12:00:00 AM 5.c.a Packet Pg. 20 Attachment: Minimum Wage Law (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) The chapters of the acts of assembly referenced in the historical citation at the end of this section(s) may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired. 2 7/15/2021 12:00:00 AM 5.c.a Packet Pg. 21 Attachment: Minimum Wage Law (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) Code of Virginia Title 40.1. Labor and Employment Chapter 3. Protection of Employees Article 2. Pay; Assignment of Wages; Sale of Merchandise to Employees § 40.1-29.2. Virginia Overtime Wage Act A. As used in this section: "Employ" includes to permit or suffer to work. "Employee" means any individual employed by an employer, including employees of derivative carriers within the meaning of the federal Railway Labor Act, 45 U.S.C. § 151 et seq. "Employee" does not include the following: (i) any individual who volunteers solely for humanitarian, religious, or community service purposes for a public body, church, or nonprofit organization that does not otherwise employ such individual, (ii) any person who is exempt from the federal overtime wage pursuant to 29 U.S.C. § 213(a), and (iii) any person who meets the exemptions set forth in 29 U.S.C. § 213(b)(1) or 213(b)(11). "Employer" means any person acting directly or indirectly in the interest of an employer in relation to an employee. "Employer" does not include any labor organization, other than when acting as an employer; anyone acting in the capacity of officer or agent of such labor organization; or any carrier subject to the federal Railway Labor Act, 45 U.S.C. §§ 151 through 188, except derivative carriers within the meaning of the federal Railway Labor Act. "Person" means an individual, partnership, association, corporation, business trust, legal representative, any organized group of persons, or the Commonwealth, any of its constitutional officers, agencies, institutions, or political subdivisions, or any public body. This definition constitutes a waiver of sovereign immunity by the Commonwealth. "Wages" means the same as that term is defined in § 40.1-28.9. "Workweek" means a fixed and regularly occurring period of 168 hours or seven consecutive 24- hour periods. It need not coincide with the calendar week and may begin on any day and at any hour. The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of this section. B. For any hours worked by an employee in excess of 40 hours in any one workweek, an employer shall pay such employee an overtime premium at a rate not less than one and one-half times the employee's regular rate, pursuant to 29 U.S.C. § 207. An employee's regular rate shall be calculated as follows: 1. For employees paid on an hourly basis, the regular rate is the hourly rate of pay plus any other non-overtime wages paid or allocated for that workweek, excluding any amounts that are excluded from the regular rate by the federal Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and its implementing regulations, divided by the total number of hours worked in that workweek. 2. For employees paid on a salary or other regular basis, the regular rate is one-fortieth of all wages paid for that workweek. C. For fire protection or law-enforcement employees of any public sector employer for whom 29 1 7/15/2021 12:00:00 AM 5.c.b Packet Pg. 22 Attachment: Virginia Overtime Wage Law Act (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) U.S.C. § 207(k) applies, such employer shall pay an overtime premium as set forth in this section for (i) all hours worked in excess of the threshold set forth in 20 U.S.C. § 207(k) and (ii) any additional hours such employee worked or received as paid leave as set forth in subsection A of § 9.1-701. D. An employer may assert an exemption to the overtime requirement of this section for employees who meet the exemptions set forth in 29 U.S.C. § 213(a)(1) or for employees who meet the exemptions set forth in 29 U.S.C. §§ 213(b)(1) or 213(b)(11). E. No agency, institution, political subdivision, or public body that complies with the requirements of 29 U.S.C. § 207(k) and § 9.1-701 shall be deemed to have violated subsection B with respect to fire suppression or law-enforcement employees covered by such statutes. F. Any employer that violates the overtime wage requirements of this section shall be liable to the employee for all remedies, damages, or other relief available in an action brought under subsection J of § 40.1-29. G. Any action pursuant to this section shall be commenced within three years after the cause of action accrues. 2021, Sp. Sess. I, c. 445. The chapters of the acts of assembly referenced in the historical citation at the end of this section(s) may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired. 2 7/15/2021 12:00:00 AM 5.c.b Packet Pg. 23 Attachment: Virginia Overtime Wage Law Act (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) 1 Kim Van Der Hyde From:Holly E. Stanfield Sent:Wednesday, July 14, 2021 7:50 AM To:Kim Van Der Hyde Cc:Pittsylvania County Executive Team Subject:FW: DOLI/VOWA analysis Kim, Here is a follow-up communication from Victor in regard to our call on Monday. I recommend we follow his advice and stop paying comp time for all employees until we get clarity (hopefully) by end of year as Victor relates in his message. We need to get a communication out soon once we are all on the same page about this issue, as well as the holiday matter. Thank you, Holly Holly E. Stanfield Human Resources Manager County Administration Tel. (434) 432-1976 | Fax. (434) 432-7714 1 Center Street P.O. Box 426 Chatham, VA 24531 Holly.Stanfield@pittgov.org www.pittsylvaniacountyva.gov Any e-mail or other correspondence sent to a member of the Board of Supervisors, or any other public official or employee of Pittsylvania County, Virginia (the "County"), in the transaction of public business, is considered a public record. Public records are subject to the Virginia Freedom of Information Act ("VA FOIA"). Virginia law requires the County to provide a copy of any such e-mail, upon request, for inspection and copying to any citizen of the Commonwealth, or to any member of the news media, unless lawfully exempted from production/disclosure under VA FOIA. If you have received this email or any attachments in error, please notify 5.c.c Packet Pg. 24 Attachment: DOLIVOWA analysis (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) 2 the sender immediately at (434) 432-7700, and by reply email, and delete this email and any attachments to it from your inbox, sent items, and deleted items. Thank you. From:Cardwell, Victor <cardwell@woodsrogers.com> Sent:Tuesday, July 13, 2021 5:36 PM To:Holly E. Stanfield <Holly.Stanfield@pittgov.org> Cc:Stiegler, Leah <lstiegler@woodsrogers.com>; Cardwell, Monica <mcardwell@woodsrogers.com> Subject:DOLI/VOWA analysis CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Holly, A deep dive into VOWA! The key, it appears that there are a number of places where DOLI has acted too quickly but I would follow our conservative advice. The bottom line, it looks like Fire and Police can still use comp time if there are more than 100 sworn in the departments. This overview is generalized but it can assist in how we approach the issues we discussed recently. The Virginia Wage Overtime Act (“VOWA”) (VA Code § 40.1-29.2) has drawn a lot of debate recently in terms of how it impacts public employers who have historically used compensatory time (“comp time”) in lieu of wages at time and one-half. Most recently, Virginia’s Department of Labor and Industry (“DOLI”) published FAQs stating, “Employers cannot provide comp time instead of pay.” That is the basis for our conversation and where I think you need to end up. DOLI based its interpretation on the fact that VOWA defines “wages” as “legal tender of the United States or checks or drafts on banks,” and therefore comp time is not within the definition. Due to the ongoing debate surrounding DOLI’s interpretation, it is likely we will see clarity from the General Assembly or a change in position on DOLI’s end by years’ end. However, for the time being, DOLI’s take is that localities cannot use comp time (with the 5.c.c Packet Pg. 25 Attachment: DOLIVOWA analysis (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) 3 exception of fire protection employees and law enforcement employees working in departments of 100 or more law-enforcement employees), and employers can face enforcement efforts from DOLI or current and former employees.Employers can be liable for up to 3 years after a violation and for overtime wages owed, plus an additional equal amount as liquidated damages, prejudgment interest, and reasonable attorney fees and costs. If an employer knowingly failed to properly pay an employee, the court is directed to (the court “shall”)award the employee an amount equal to triple the amount of wages due and reasonable attorney fees and costs.Because attorney’s fees are available for a successful case, many plaintiff’s attorneys are interested in pursuing these cases on behalf of employees as they can recover their fees from the employer—not their client/the employee. Ultimately, you don’t want to be the “test case” for whether or not DOLI’s interpretation is accurate. We therefore recommend you put a “stay” on any policies allowing comp time in lieu of wages at time and one-half until we have clarity from DOLI reversing its enforcement position or clarity from the General Assembly as to the intent and scope of VOWA. Since this will likely increase public employer payroll expenses, it is recommended you review and/or implement policies to manage overtime hours worked. This is a communication that we are going to convert to an ealert. But this summary is one that I wanted to share with you. Let me know when you might want to talk again. VOC Victor O. Cardwell Woods Rogers PLC 10 S. Jefferson Street, Suite 1800 | Roanoke, VA 24011 P (540) 983-7529 | F Main (540) 983-7711 Direct (540) 322-3812 cardwell@woodsrogers.com A member of Interlaw, an International Association of Independent Law Firms NOTICE: This communication from Woods Rogers PLC, including attachments, if any, is intended as a confidential and privileged communication. If received in error, you should not copy, save or reproduce in any manner or form, but delete immediately and notify the sender. P Please consider the environment before printing this email From:Holly E. Stanfield <Holly.Stanfield@pittgov.org> Sent:Monday, July 12, 2021 2:55 PM To:Cardwell, Victor Cc:Kim Van Der Hyde; Kathy Yeatts Subject:Question 11 **EXTERNAL EMAIL** Victor, Again, thank you for squeezing time in today for us. We appreciate it! 5.c.c Packet Pg. 26 Attachment: DOLIVOWA analysis (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) 4 This is a reminder to review DOLI question 11. Can employees be given “comp time” instead of overtime pay? Note: Under certain circumstances, fire protection and law enforcement employees may be compensated with leave for overtime hours instead of wages pursuant to Va. Code 9.1-701. Take care and talk soon, Holly Holly E. Stanfield Human Resources Manager County Administration Tel. (434) 432-1976 | Fax. (434) 432-7714 1 Center Street P.O. Box 426 Chatham, VA 24531 Holly.Stanfield@pittgov.org www.pittsylvaniacountyva.gov Any e-mail or other correspondence sent to a member of the Board of Supervisors, or any other public official or employee of Pittsylvania County, Virginia (the "County"), in the transaction of public business, is considered a public record. Public records are subject to the Virginia Freedom of Information Act ("VA FOIA"). Virginia law requires the County to provide a copy of any such e-mail, upon request, for inspection and copying to any citizen of the Commonwealth, or to any member of the news media, unless lawfully exempted from production/disclosure under VA FOIA. If you have received this email or any attachments in error, please notify the sender immediately at (434) 432-7700, and by reply email, and delete this email and any attachments to it from your inbox, sent items, and deleted items. Thank you. 5.c.c Packet Pg. 27 Attachment: DOLIVOWA analysis (2656 : General Employment Conditions (Staff Contact: Kim Van Der Hyde)) Finance Committee EXECUTIVE SUMMARY ACTION ITEM Agenda Title: Economic Development Grading Obligation (Staff Contact: Kim Van Der Hyde) Staff Contact(s): Kimberly G. Van Der Hyde Agenda Date: July 20, 2021 Item Number: 5.d Attachment(s): 2020.08.17. Amendment 30 Lots 1 and 2 grading plan Lot 1-2 65 Acre Pad Cost Estimate 3659 - Restricted Grant_Agreement.12222020 Email Reviewed By: SUMMARY: The following Economic Development Grading Obligations need be funded in the FY2022 County Budget: (1) Southern Virginia Mega Site at Berry Hill Lot 1; and (2) Southern Virginia Multimodal Park Lot 2. The County's share of the local match for these two (2) Projects totals up to $2,802,398. FINANCIAL IMPACT AND FUNDING SOURCE: Both Projects are being funded with Tobacco Commission Grants that will most likely be completed in FY2022 and a require a large local match that does not currently exist in the FY2022 County Budget. For the Committee’s review and consideration, attached are documents that discuss the Project costs and an e-mail from Matthew D. Rowe, Economic Development Director, discussing the Project timelines. Since this information was sent back at the end of January, I have asked Rowe for an update on the timeline that will be discussed at the Finance Committee Meeting. RECOMMENDATION: For the Finance Committee’s consideration. MOTION: For the Finance Committee’s consideration. 5.d Packet Pg. 28 Page 1 of 4 August 17, 2020 Mr. Robert W. Warren Chairman Danville-Pittsylvania Regional Industrial Facility Authority (RIFA) P.O. Box 3300 Danville, Virginia 24543 RE: Amendment #30 for Engineering Services Related to the Mega Park Master Plan Lots 1 and 2 Grading and Construction Administration Services Dear Mr. Warren: Dewberry Engineers Inc. (Dewberry) has been assisting the Danville-Pittsylvania Regional Industrial Facility Authority (RIFA) with development of the Southern Virginia (SoVA) Megasite at Berry Hill. RIFA would like to repurpose Virginia Tobacco Commission Grant 3358 ($2,624,800 with $2,624,800 local match) to create a graded pad on lots 1 and 2. SCOPE OF SERVICES Dewberry proposes to provide the following scope of services: Item 1 – Lots 1 and 2 Pad Grading Construction Plans and Specifications Dewberry will prepare detailed construction documents for the grading of ±65 pad acres as shown on the selected layout referenced above and attached to this proposal. The plans will use existing aerial survey and current wetland delineation, previously prepared, as the base map for the project. In addition, Dewberry will use the existing geotechnical survey to determine maximum cut/fill depth to minimize rock excavation where possible. Plans will include: • Cover Sheet • General Notes and Erosion and Sediment Control Notes • Existing Condition and Demolition Plan • Phase 1 Overall Erosion and Sediment Control Plan • Phase 1 Detailed Erosion and Sediment Control Plan (5 Sheets) • Phase 2 Overall Erosion and Sediment Control Plan • Phase 2 Detailed Erosion and Sediment Control Plan (5 Sheets) • Overall Grading Plan • Detailed Grading Plan (5 sheets) • Overall Stormwater Management Plan 5.d.a Packet Pg. 29 Attachment: 2020.08.17. Amendment 30 Lots 1 and 2 grading plan (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Mr. Robert W. Warren August 17, 2020 Page 2 of 4 • Detailed Stormwater Management Plan (4 Ponds) • Standard Details Sheets (4 Sheets) • Erosion and Sediment Control (4 Sheets) Project specifications will include all upfront bidding documents and technical specifications. The stormwater management program will be designed to meet the new 2014 Virginia Department of Environmental Quality General Permit for discharges from construction sites. Stormwater quantity calculations and pond sizes will be based on the impervious areas shown on attached layout. Stormwater quality calculations will be based on the graded pad area flowing to each stormwater quality measure. FEE: $165,000.00 Lump Sum Item 2 – Construction Administration Services Dewberry will provide Construction Administration Services (CONA) for the Development of Lots 1 and 2 in the SoVA Megasite. This scope item will consist of the following: • Bidding Assistance – Dewberry will provide bidding assistance consisting of the following: o Prepare prequalification package. o Prepare bidding advertisement for the Client to place in appropriate publications. o Supply two (2) plan rooms with plans and specifications. o Supply thirty (30) sets of plans and specifications for prospective bidders. o Conduct a pre-bid/pre-qualification conference for interested contractors and suppliers. o Respond to bidder’s questions during the bidding process. o Conduct one (1) public bid-opening meeting. o Review and tabulate submitted bids. o Review all required bonding, license, and insurance requirements. o Make award recommendation to Client. • Contract Negotiation – Dewberry will assist the Client in negotiating a contract with the selected bidder. • Construction Administration Services – Dewberry will provide construction administration (CONA) services that will include the following: o Review Contractor agreement, bonds, insurance, etc. o Attend one (1) pre-construction meeting. o Prepare and distribute meeting minutes from all construction meetings (assumes 8 meetings). o Monthly progress meetings with contractor until completion (assumes 8 meetings over a 8 month construction time). o Review shop drawings. o Review monthly pay requests. 5.d.a Packet Pg. 30 Attachment: 2020.08.17. Amendment 30 Lots 1 and 2 grading plan (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Mr. Robert W. Warren August 17, 2020 Page 3 of 4 o Review and respond to Contractor Requests for Information (RFI’s). o Attend substantial and final completion inspection (2 meetings). o Prepare project closeout documentation. FEE: $75,000.00 Lump Sum Item 3 – Construction Testing and Inspection Services Dewberry will subcontract with Froehling & Robertson, Inc. (F&R) for Construction Testing and Inspection Services. These services will include testing and inspections of earthwork for the Pad Graded Sites and Storm Water Management Installation. F&R will be onsite as needed to perform required testing and inspections in general accordance with the project documents. F&R will collect and test bulk soil samples and aggregate base material samples for the determination of soil compaction properties. It is anticipated that full time testing, and inspection services will be needed for six (6) months of the total eight (8) month construction time period. FEE: $50,000.00 Lump Sum FEE SUMMARY Below is a summary of fees for the respective services listed above: 1. Item 1 – Lots 1 and 2 Pad Grading Construction Plans and Specifications FEE: $165,000.00 Lump Sum 2. Item 2 – Construction Administration Services FEE: $75,000.00 Lump Sum 3. Item 3 – Construction Testing and Inspection Services FEE: $50,000.00 Lump Sum TOTAL PROJECT COST: $290,000.00 Lump Sum Except as amended in this proposal, all other terms, provisions, and conditions of our current Agreement for Professional Services to develop the Berry Hill property, dated February 9, 2009 shall remain in full force and effect, and the parties ratify and confirm that the Agreement for Professional Services to develop the Berry Hill property, dated February 9, 2009, as amended by this proposal, is and remains in full force and effect. 5.d.a Packet Pg. 31 Attachment: 2020.08.17. Amendment 30 Lots 1 and 2 grading plan (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Mr. Robert W. Warren August 17, 2020 Page 4 of 4 Again, we appreciate the opportunity to submit this contract amendment and look forward to continuing to work with you on this project. Please do not hesitate to call if you have questions or wish to discuss the proposal or project further. The return of an executed copy of this proposal will serve as our authorization to proceed. Sincerely, Shawn R. Harden, PE Senior Associate Brian K. Bradner, PE Vice President | Branch Manager Attachment: Conceptual Site Plan Titled “2020.06.16 BHIP Lot 1-2 65 Acre Pad” P:\50018376\Adm\Contract\2020.08.17. Amendment 30 Lots 1 and 2 grading plan.docx The foregoing Contract Amendment of Dewberry Engineers Inc. is accepted: Print (Type) Individual, Firm, or Corporate Name Signature of Authorized Representative Date Print (Type) Name of Authorized Representative and Title 5.d.a Packet Pg. 32 Attachment: 2020.08.17. Amendment 30 Lots 1 and 2 grading plan (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van POW J PFO JC PEM F PEM F WOUS G (R4) PFO GA PFO F PEM FA PEM HB PEM G WOUS AK (R4) WOUS G (R4) PFO GZ PFO AF PFO F1 PEM AF PEM HA Hydrology Conveyed Under Dirt Road Hydrology Conveyed Under Dirt Road PFO H LAT:36°34'17.8016"LON:79°34'24.1095" LAT:36°34'15.9704"LON:79°34'23.4364"LAT:36°34'15.9925"LON:79°34'20.3069" LAT:36°34'19.0548"LON:79°34'14.2527" LAT:36°34'20.9221"LON:79°34'06.2042" LAT:36°34'25.1498"LON:79°34'01.2474" LAT:36°34'22.3170"LON:79°34'24.8807" LAT:36°34'26.9520"LON:79°34'18.4445" LAT:36°34'28.0365"LON:79°34'17.6509" LAT:36°34'31.1562"LON:79°34'15.7605" LAT:36°34'31.6953"LON:79°34'17.1116" LAT:36°34'36.6803"LON:79°33'58.6483" LAT:36°34'35.3007"LON:79°34'02.3729" LAT:36°34'35.8548"LON:79°34'07.7982" Hydrology conveyed by overlandwash 0 75 150 GRAPHIC SCALE 150 300 1"=150' STORMWATER MANAGEMENT POND STORMWATER MANAGEMENT POND STORMWATER MANAGEMENT POND 321 C B A SHEET NO. KEY PLAN SEAL SCALE 4 D E 5 APPROVED BY CHECKED BY REVISIONS TITLE DRAWN BY DATE PROJECT NO. Dewberry Engineers Inc. 551 Piney Forest Road Danville ,VA 24540 Phone: 434.797.4497 Fax: 434.797.4341 6/16/2020 12:17:02 PMDanville VirginiaBerry Hill RoadLots 1 & 2 65 Acre PadBerry Hill Industrial Park5.d.a Packet Pg. 33 Attachment: 2020.08.17. Amendment 30 Lots 1 and 2 grading plan (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Hyde)) Est.Unit Extended Description Unit Qty Price Total Mobilization LS 1 $40,000 $40,000 Survey/Stakeout LS 1 $30,000 $30,000 Clearing & Grubbing AC 88.00 $2,500 $220,000 Gravel Construction Entrance EA 1 $1,500 $1,500 Silt Fence (SF)LF 4,000 $1.55 $6,200 Diversions (DV)LF 5,500 $1.00 $5,500 Temporary Sediment Basin (TSB)EA 3 $60,000.00 $180,000 Outlet Protection (OP)EA 3 $750.00 $2,250 Green area seeding, mulching, sod, top soils etc.AC 88.00 $1,300.00 $114,400 Topsoil - Cut, Stockpile & Respread CY 71,333 $4.00 $285,332 Earthwork - Compact Fill CY 482,199 $2.50 $1,205,498 Earthwork - Cut CY 411,774 $2.50 $1,029,435 New Pond LS 3 $100,000.00 $300,000 Gravel Roadway Ton 115.00 $45.00 $5,175 Roadway Striping LF 128 $0.35 $45 Erosion and Sediment Control LS 1 $10,000 $10,000 Sub - Total Cost $3,425,290 Contingency 20%$685,057.90 Permitting, Design, and Construction Admin 10%$342,528.95Total Construction Cost $4,452,876 Lot 1 & 2 - 65 Acre Pad Pad & Roadway Construction Construction Cost AnalysisProject ___________ Berry Hill Lot 1 & 2 - 65 Acre Pad 15-Jun-20 P:\50018376\CAD\Civil\2020.06.08 65 Acre Pad\Lot 1-2 65 Acre Pad Cost EstimateCost Estimate 6/16/2020 12:36 PM Page 1 of 1 5.d.b Packet Pg. 34 Attachment: Lot 1-2 65 Acre Pad Cost Estimate (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Hyde)) Tobacco Region Revitalization Commission Page - 1 - Rev. 12/2020 GRANT AGREEMENT – RESTRICTED FUNDS – UNRELATED PARTY This Grant Agreement (this “Agreement”) made and entered into on the 28th day of September, 2020 (the “Award Date”), by and between the Tobacco Region Revitalization Commission, a body corporate and political subdivision of the Commonwealth of Virginia (the “Commission”), and Pittsylvania County, Virginia (the “Grantee”). WITNESSETH: WHEREAS, the Virginia General Assembly created the Commission to, among other things, stimulate the economic growth and development of tobacco dependent communities in the Southern and Southwest regions (the “Region”) of the Commonwealth of Virginia (the “Commonwealth”), and WHEREAS, the Grantee submitted an application, to the Commission for funding (the “Application”) to undertake the Project (as defined herein) entitled SVMP Site Grading and Improvements - Lot 2, and WHEREAS, the Commission has determined that the Project benefits the Region and is consistent with and in furtherance of the Commission’s public purposes, and WHEREAS, the Commission approved a grant to the Grantee in the amount of $1,262,201.00 (the “Grant”) to fund the Project, the approval and funding of such Grant the Commission has determined constitutes a valid public purpose for the expenditure of public funds and is the animating purpose for the Grant, and WHEREAS, the parties desire to set forth their understanding and agreement as to the use of the Grant and the parties’ respective rights and obligations. NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises and undertakings of the parties to this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby represent, warrant, covenant and agree as follows: 1. Definitions. In addition to terms defined in the Recitals and the body of this Agreement, the following capitalized terms used in this Agreement have the meanings set forth below: “Capital Expenditure” means any cost of a type that is properly chargeable to capital account (or would be so chargeable with (or but for) a proper election or the application of the definition of “placed in service” under Treas. Regs. §1.150-2(c)) under general federal income tax principles, determined at the time the expenditure is paid. “Commission-Related Party” means a Person that is a Related Party to the Commission, the Issuer or the Commonwealth. Grant # 3659 5.d.c Packet Pg. 35 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 2 - Rev. 12/2020 “Controlled Group” means a group of entities controlled directly or indirectly by the same entity or group of entities within the meaning of this definition. (i) The determination of direct control is made on the basis of all the relevant facts and circumstances. One entity or group of entities (the controlling entity) generally controls another entity or group of entities (the controlled entity) for purposes of this definition if the controlling entity possesses either of the following rights or powers and the rights or powers are discretionary and non-ministerial— (A) The right or power both to approve and to remove without cause a controlling portion of the governing body of the controlled entity; or (B) The right or power to require the use of funds or assets of the controlled entity for any purpose of the controlling entity. (ii) If a controlling entity controls a controlled entity under the test set forth in paragraph (i) of this definition, then the controlling entity also controls all entities controlled, directly or indirectly, by the controlled entity or entities. (iii) An entity is not a controlled entity under paragraph (i) of this definition if the entity possesses substantial taxing, eminent domain, and police powers. For example, a city possessing substantial amounts of each of these sovereign powers is not a controlled entity of the state (Commonwealth). “501(c)(3) Organization” means any Person described in Section 501(c)(3) of the Tax Code and exempt from tax under Section 501(a) of the Tax Code. “Governmental Person” means a state or local governmental unit as defined in Treas. Regs. § 1.103-1 or any instrumentality thereof. The federal government and its agencies and instrumentalities are not Governmental Persons. “Issuer” means the Tobacco Settlement Financing Corporation, a public body corporate and an independent instrumentality of the Commonwealth. “Loan” means any transaction that is generally characterized as a loan for federal income tax purposes. A Loan may arise from the direct lending of money or may arise from transactions in which indirect benefits that are the economic equivalent of a loan are conveyed within the meaning of Treas. Regs. § 1.141-5. Certain leases, management contracts and other contractual arrangements and certain prepayments for property or services may constitute Loans under Treas. Regs. § 1.141-5. “Person” means any natural person, firm, joint venture, association, partnership, business trust, corporation, limited liability company, corporation or partnership, or any other entity (including a governmental entity). “Project Expenses” means the expenditures to be paid by or on behalf of, or reimbursed to, the Grantee in connection with the Grant as set forth in the Project Budget. 5.d.c Packet Pg. 36 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 3 - Rev. 12/2020 “Related Party” means, in reference to a Governmental Person or a 501(c)(3) Organization, any Person that is a member of the same Controlled Group and, in reference to any Person that is not Governmental Person or a 501(c)(3) Organization, a Related Person. “Related Person” shall have the meaning set forth in Section 144(a)(3) of the Tax Code. For purposes of Section 144(a)(3) of the Tax Code, a Person is a Related Person to another Person if— (A) the relationship between such Persons would result in a disallowance of losses under Section 267 or 707(b) of the Tax Code, or (B) such persons are members of the same controlled group of corporations (as defined in Section 1563(a) of the Tax Code, except that “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein). “Tax Code” means the Internal Revenue Code of 1986, as amended, and the applicable provisions of the regulations of the U.S. Department of Treasury promulgated thereunder. “Tobacco Bonds” means the Tobacco Settlement Asset-Backed Bonds, Series 2005, which were issued by the Issuer on May 16, 2005, and have a stated final maturity date of June 1, 2037, and the Tobacco Settlement Asset-Backed Bonds, Series 2007 B, C, and D which were issued by the Issuer on May 3, 2007, and have a stated final maturity date of June 1, 2047. “Working Capital Expenditure” means any cost that is not a Capital Expenditure. Generally, current operating expenses are Working Capital Expenditures. 2. Source of Grant Funds; Reliance. The Grantee represents that it understands that the Grant funds are derived from the proceeds of the Tobacco Bonds, the interest on which must remain excludible from gross income for federal income tax purposes (that is, “tax-exempt”) pursuant to both (i) Virginia law and (ii) contractual covenants made by the Commission, the Issuer and the Commonwealth for the benefit of the owners of the Tobacco Bonds. The Grantee further represents that (a) the undersigned authorized representative of the Grantee has been informed of the purpose and scope of Sections 103 and 141-150 of the Tax Code as they relate to the Tobacco Bonds and the Grant, and (b) the representations and warranties contained in this Section and throughout this Agreement can be relied on by the Commission, the Issuer and bond counsel for the Commission and Issuer in executing certain documents and rendering certain opinions in connection with the Tobacco Bonds. 3. Nature of Grantee. The Grantee represents that it is neither a Commission-Related Party nor an agent of the Issuer, the Commission or the Commonwealth. A true, correct and complete copy of the Grantee’s charter, articles of incorporation or similar governing instrument is attached hereto as Exhibit D and is in full force and effect on the date hereof. If the Grantee is a 501(c)(3) Organization, a copy of its IRS determination letter shall also be attached as part of Exhibit D hereto. The Grantee will not make any changes to its governing documents or structure, funding or operations during the term of the Tobacco Bonds that would or may cause the Grantee to become a Commission-Related Party or an agent of the Issuer, the Commission or the Commonwealth. 5.d.c Packet Pg. 37 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 4 - Rev. 12/2020 4. Project and Budget. The Grantee will complete all actions described in Exhibit A and the Application (the “Project”), both of which are hereby incorporated by reference. In connection with the Project, the Grantee shall meet or exceed the deliverables described in Exhibit A (the “Project Outputs”). In the event the description of the Project or Project Outputs in the Application and Exhibit A conflict, Exhibit A will control. The Grantee agrees to complete the Project by June 30, 2025 (the “Grant Period”). The Grant Period may be extended as provided in the Funding Policies (as defined herein). The Grantee represents that the Grant funds and funds available from the other sources specified in the Project Budget (as defined herein) will be sufficient to cause the Project to be completed and agrees that the Commission makes no actual or implied promise to fund the Project except as provided herein. The “Project Budget” is the budget included in Exhibit B that is attached hereto and incorporated by reference. The expenses for which the Grant will be used are identified in the Project Budget (“Project Expenses”). Upon the Commission’s request, the Grantee agrees to provide a detailed line item budget that more specifically identifies how the Grantee will expend the Grant for the Commission’s review and approval (“Detailed Budget”), and the Detailed Budget will replace the Project Budget. If requested, the Commission shall not disburse any portion of the Grant until it receives an acceptable Detailed Budget. The Grantee agrees to use the Grant exclusively for Project Expenses without the prior written approval of the Executive Director of the Commission (the “Executive Director”) or his designee. The Grantee must incur all Project Expenses during the Grant Period and acknowledges that the Commission will rescind and deobligate any remaining Grant proceeds. The Grantee agrees that it may not make any material changes to the scope of the Project or to the Project Budget without obtaining the prior written approval of the Commission as provided in the Commission’s Funding Policies for Grant Awards that are hereby incorporated by reference (“Funding Policies”). The Commission’s approval must specifically set forth the accepted change(s). The Grantee acknowledges the Commission may update the Funding Policies from time to time and agrees to comply with the Funding Policies then in effect. The Grantee agrees to provide a dollar-for-dollar match from non-Commission sources as required by Va. Code § 3.2-3103(A)(7) (“Match”) and that the Match must be consistent with the Funding Policies. The Executive Director or his designee must approve the Match. If the Project Budget does not identify an acceptable Match as of the Award Date, the Grantee must obtain the Match and provide satisfactory evidence thereof to the Commission within one year of the Award Date. The Grantee may make a written request for an extension for one or more years by demonstrating good cause for why it has not yet obtained the Match and explaining how it will obtain the Match. In his sole discretion, the Executive Director may grant a written extension for one or more additional years. If the Grantee fails to satisfy these requirements, the Commission may terminate this Agreement and rescind the Grant. The Grantee represents, warrants and covenants as follows: 5.d.c Packet Pg. 38 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 5 - Rev. 12/2020 (a) All Project Expenses will be Capital Expenditures. No Project Expenses will be a Working Capital Expenditure. (b) Other than as described in Sections 11 and 12 below, the Grant does not impose on the Grantee any obligation or condition to directly or indirectly repay any amount (in cash, property or services or otherwise) to the Commission, the Issuer, the Commonwealth or any Commission- Related Party. (c) No Project Expenses will represent, nor will the Grant involve, the use by the Grantee of any portion of the Grant funds, directly or indirectly, (i) to make or finance a grant or a Loan to a Commission-Related Party or (ii) to refund, redeem or pay debt service on the debt obligations (including without limitation any tax-exempt bonds) of the Grantee or any other Person. (d) No part of the assets to be financed by the Grant will be used by the Commission, the Issuer, the Commonwealth or other Commission-Related Party pursuant to a lease, a management or service contract, output contract, or pursuant to any other arrangement conveying special legal entitlements for the use of such assets that is comparable to a lease, a management or service contract or an output contract, such as an arrangement conveying priority rights to the use or capacity of a Grant-financed asset. The average reasonably expected economic life of the assets to be financed by the Grant is set forth in Exhibit E attached hereto. 5. Payment of Grant Funds. Subject to the terms of this Agreement, the Funding Policies, and the conditions set forth in Exhibit C attached hereto and incorporated by reference, the Commission will pay the Grant to the Grantee on a reimbursement basis. The Commission in its sole discretion will determine whether the Grantee is in compliance with this Agreement and the documents incorporated by reference. Prior to any disbursement, the Grantee must designate the officers, employees, or agents authorized to make a reimbursement request by submitting the Commission’s Signature Authorization Form. The Grantee may request reimbursement of Project Expenses upon submission of an original payment request on the Commission’s then-current form (“Payment Request Form”) signed by an authorized officer, employee or agent. The Grantee may submit reimbursement requests no more frequently than quarterly unless the Commission agrees otherwise. The Grantee acknowledges that expenses incurred prior to the Award Date are not eligible for reimbursement. The Grantee agrees to provide all supporting documentation required by the Funding Policies with each Payment Request Form. The Commission may in its sole discretion refuse to make a disbursement if the Grantee’s documentation is not in accordance with the Funding Policies, adequate expenditure of Match has not been documented, the disbursement includes items that are not Project Expenses, or is otherwise contrary to or in violation of the provisions hereof. In addition, the Commission may refuse to disburse any funds to the Grantee if the Grantee 5.d.c Packet Pg. 39 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 6 - Rev. 12/2020 is not current on its obligations to the Commission under this Agreement or an agreement related to a different Commission grant. If the Grant exceeds the amount necessary to complete the Project, the Grantee agrees that the Commission will retain the excess. If the Commission disbursed excess funds, the Grantee shall return such excess to the Commission within thirty (30) days of the completion of the Project or the expiration of the Grant Period, whichever occurs first. 6. Right of Inspection. The Grantee agrees that the Commission (including its employees and agents) may inspect the Project upon reasonable notice to the Grantee; provided, however, that in the event of an emergency, the Commission may inspect the Project to preserve the intended purpose of the Grant, with notice to the Grantee as practicable given the circumstances. 7. Inadequate Progress; Assurances. If after the first two years of the Grant Period have passed, the Grantee has failed to make material progress toward completing the Project such that the Commission determines in its sole discretion that it is not reasonably likely the Project will be completed before the end of the Grant Period, the Commission may give written notice that it is ceasing any further disbursements until the Grantee provides acceptable assurances. If the Grantee fails to provide assurances the Commission finds acceptable in its sole discretion within 30 days of such notice, the Commission may terminate this Agreement and rescind the undisbursed portion of the Grant. 8. Recordkeeping. The Grantee shall maintain accurate and timely books and records with respect to the Grant and the Project and in accordance with generally accepted accounting principles. The Grantee shall retain all invoices from goods purchased and services performed or received, receipts, or other evidence of the actual payment of costs related to the Project. For at least three years after the end of the Grant Period, the Grantee shall retain all such documentation and copies of all Payment Request Forms with supporting documentation and Annual and Final Reports (as defined herein) submitted to the Commission. The Commission (including its employees and agents) shall have the right to inspect and make copies of all such documentation. 9. Annual Reports. The Grantee shall submit to the Commission annual financial and narrative reports reflecting activity related to the Project and progress made toward completion of the Project and Project Outputs using the Commission’s then-current grant reporting form (“Annual Report”). The Grantee shall provide its first Annual Report one year from the Award Date and annually thereafter until the Project is complete. The Commission reserves the right to request, and the Grantee agrees to provide, additional information to supplement the information provided in the Annual Report, including but not limited to, the Grantee’s audited financial statements. In addition, the Grantee shall submit any additional information related to the Project upon the Commission’s request. 10. Final Report. The Grantee shall submit to the Commission a final financial and narrative report with the final reimbursement request using the Commission’s then-current grant reporting form (“Final Report”). The Final Report shall contain the type of information contained in the Annual Reports, including a narrative as to the success of the Project, the status of Project Outputs, and a discussion of the long-term achievements and expectations for the Project. The 5.d.c Packet Pg. 40 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 7 - Rev. 12/2020 Commission may withhold disbursement of the final reimbursement until it receives a satisfactory Final Report. In addition, the Grantee agrees to provide any additional reports concerning the Project that the Commission may request. 11. Misuse of Award; Rights of Commission. If the Commission determines that any part of the Grant has not been used for Project Expenses or for a purpose otherwise approved in writing by the Executive Director, or that the Grantee has failed to comply with any material term or condition of this Agreement, or has made any materially false or misleading statement to the Commission in this Agreement, the Application, or in communications with the Commission, its employees, or its agents related to the Project, the Commission may withhold any further disbursements to the Grantee until the Grantee provides further assurances the Commission finds acceptable in its sole discretion. In addition, the Commission may: (a) terminate this Agreement and rescind the Grant by written notice to the Grantee, in which event the Grantee shall be obligated to return to the Commission, within five (5) days following receipt of such notice, an amount, from legally available funds, equal to all Grant proceeds received pursuant to this Agreement; (b) take any action as necessary to preserve the integrity of the Grant or to preserve Grant funds for appropriate uses; (c) determine that the Grantee is ineligible to receive future grant funding from the Commission; (d) withhold any and all disbursements requested by the Grantee from the Commission under any other grant approved by the Commission; and/or (e) take such judicial action as is necessary to collect any amounts owed, including legal action for breach of this Agreement. The Commission reserves the right to modify or withhold any disbursement of Grant funds if the Commission determines that it is necessary to protect the purposes and objectives of the Commission and the Grant, the Grantee is unable or unwilling to complete the Project, or to comply with any law or regulation applicable to the Commission, the Grant and/or the Grantee. 12. Sale or Encumbrance; Security Interest. To the extent permitted by law, Grantee hereby pledges, delivers and assigns to the Commission a security interest in all tangible and intangible property acquired or improved with any portion of the Grant. Upon the Commission’s request, the Grantee shall execute, provide and sign all documents necessary to perfect Commission’s security interest in such property, including deeds of trust, supplemental deeds of trust, amendments or modifications thereto, financing statements, continuation statements or other instruments and documents which may be reasonably required from time to time. The Grantee agrees that if any interest in property acquired or improved in whole or in part with the Grant is licensed, leased, sold, exchanged, disposed of, hypothecated, mortgaged or encumbered in any manner, or no longer used in connection with the Project, the Commission will 5.d.c Packet Pg. 41 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 8 - Rev. 12/2020 be entitled to recover the portion of the current fair market value of the property attributable to the Commission’s funding of the Project as further provided in the Funding Policies. None of the assets or property acquired, constructed, improved, equipped, and/or furnished as part of the Project may be licensed, leased, sold, exchanged, disposed of, hypothecated, mortgaged or encumbered without the prior written approval of the Executive Director. In the event that such asset or property is licensed, leased, sold, exchanged, disposed of, hypothecated, mortgaged or encumbered without the prior written approval of the Executive Director, the Commission may assert its interest in the asset or property to recover the Commission’s share of the value of such asset or property and/or recover from the Grantee, unless otherwise prohibited by law. 13. Compliance; Procurement. The Grantee agrees to comply with all applicable federal, state, and local laws and regulations pertaining to the Project and the use of Grant funds. If the Grantee is a “public body” under the Virginia Public Procurement Act (Va. Code § 2.2-4300 et seq.) (the “VPPA”) and will procure goods or services from nongovernmental sources in connection with the Project, the Grantee agrees to comply with the VPPA. If the Grantee is not a public body or is otherwise not required to comply with the VPPA, the Grantee agrees to conduct competitive procurement processes consistent with applicable industry practice. 14. Miscellaneous. (a) Press Releases. The Grantee agrees that it shall not issue any press releases or other public statements regarding the Grant without the prior written consent of the Executive Director. (b) Entire Agreement; Assignment. To the extent there are inconsistencies between this Agreement and documents and exhibits incorporated by reference, this Agreement shall control. This Agreement expresses the entire understanding and all agreements between the Commission and the Grantee and may not be modified except in a writing signed by the parties. Neither this Agreement nor any rights under this Agreement may be assigned, by operation of law or otherwise, by the Grantee without the prior written consent of the other parties hereto. The provisions of this Agreement shall bind and inure to the benefit of the parties and their respective successors and permitted assigns. (c) Governing Law; Jurisdiction; Venue. This Agreement shall be governed by the applicable laws of the Commonwealth. The venue of any judicial action shall be in the Circuit Court of the City of Richmond, Virginia, and such litigation shall only be brought in such court. (d) Limitation of Liability; Indemnification; Attorneys’ Fees. No member, employee, or agent of the Commission shall incur any personal liability with respect to any action taken by him or her pursuant to this Agreement. In connection with the award of the Grant or the administration of the Project, the Commission does not and shall not assume any liability for any financial or other obligations of the Grantee made to third parties, whether or not related to the Project. There are no third party beneficiaries to this Agreement. Nothing contained herein shall be deemed an express or implied waiver of the sovereign immunity of the Commission or the Commonwealth. To the extent permitted by law, Grantee shall indemnify, save, and hold harmless the Commission, its agents, and employees from any claims or causes of action arising from the 5.d.c Packet Pg. 42 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 9 - Rev. 12/2020 performance of this Agreement by the Grantee or the Grantee’s agents or employees. In the event the Commission is required to take legal action under this Agreement, the Grantee shall be liable for all of the Commission’s costs expended for the administration and enforcement of this Agreement, including but not limited to, reasonable attorneys’ fees and court costs. In addition, the Grantee shall to the extent permitted by law at all times protect, indemnify and hold the Commission, the Issuer, the Commonwealth and the owners of the Tobacco Bonds, and their respective members, directors, officers, employees, attorneys and agents (the “Bond Indemnitees”), harmless against any and all liability, losses, damages, costs, expenses, penalties, taxes, causes of action, suits, claims, demands and judgments of any nature arising from or in connection with any misrepresentation, breach of warranty, noncompliance or default by or on behalf of the Grantee under this Agreement, including, without limitation, all claims or liability (including all claims of and liability to the Internal Revenue Service) resulting from, arising out of or in connection with the loss of the excludability from gross income of the interest on all or any portion of the Tobacco Bonds that may be occasioned by any cause whatsoever pertaining to such misrepresentation, breach, noncompliance or default, such indemnification to include the reasonable costs and expenses of defending any Bond Indemnitee or investigating any claim of liability and other reasonable expenses and attorneys’ fees incurred by any Bond Indemnitee in connection therewith. If the Grantee is a public body, the Commission acknowledges the Grantee’s obligations pursuant to this subsection (d) may be subject to receipt of necessary appropriations and applicable law. (e) Severability. If any provision of this Agreement shall be held invalid by any court of competent jurisdiction, such holding shall not invalidate any other provision hereof. (f) Public Documents. Unless specifically exempted pursuant to the Virginia Freedom of Information Act (Va. Code § 2.2-3700 et seq.), all reports, documents, financial data and other information provided to the Commission shall be public records. (g) Notices. Unless otherwise provided for herein, all notices, approvals, consents, correspondence and other communications pursuant to this Agreement shall be in writing and shall be deemed received upon receipt or refusal after mailing of the same in the United States Mail by certified mail, postage fully pre-paid or by overnight courier (refusal shall mean return of certified mail or overnight courier package not accepted by the addressee) to (a) the Commission at 701 East Franklin Street, Suite 501, Richmond, Virginia 23219, Attention: Executive Director, or (b) the Grantee at the address set forth below. (h) Conditional Funding. In the event that disbursement of Grant funds is contingent upon the happening of an event or events described herein that have not yet occurred as of the Award Date, the Commission may withdraw the Grant if such contingency has not been satisfied within twelve (12) months of the Award Date, unless otherwise provided in Exhibit C. (i) Survival. The rights and remedies available to the Commission shall survive any expiration or termination of this Agreement. (j) Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, and all of which together shall constitute but one and the same instrument. 5.d.c Packet Pg. 43 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 10 - Rev. 12/2020 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. TOBACCO REGION REVITALIZATION COMMISSION, a body corporate and political subdivision of the Commonwealth of Virginia Signature of Executive Director: Printed Name of Executive Director: Evan Feinman Date: Pittsylvania County, Virginia Signature of Grantee’s Chief Executive: _____________________________________ Printed Name of Chief Executive: __________________________________________ Date: ______________________ Grantee Information: Address_____________________________________________________________________________ Phone #__________________ e-mail__________________________ Federal ID #________________ 5.d.c Packet Pg. 44 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 11 - Rev. 12/2020 Exhibit A Project Description: Two applications, City of Danville ($742,875 - #3663) and Pittsylvania County ($1,262,201 - #3659), for a total of $2,005,076 of grant funds are requested to support grading of a 50-acrepad site at the Southern Virginia Multimodal Park (the former Burlington Industries site) in the Town of Hurt. The request is to meet the needs of an active prospect, Project Wahoo, with a first phase of development expected to result in 100 new jobs with $37,000 average salary and $40 million private capital investment. The company requires a site large enough for at least 500,000 square- foot building. The SVMP is currently privately owned by Hurt Partners, LLC, and the Staunton River RIFA would purchase and own the property prior to investment in site development. Project Outputs: Graded 50-acre site; the prospect’s creation of 100 new jobs paying an average annual wage of $37,000 and a capital investment of $40 million 5.d.c Packet Pg. 45 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 12 - Rev. 12/2020 Exhibit B Project Budget SVMP Site TRRC #3659 TRRC #3663 Improvements - Lot 2 Pittsylvania County (63%)City of Danville (37%) Total Project Budget Approved Grant Budget Approved Grant Budget TRRC Match Total TRRC Match TRRC Match PROPERTY & IMPROVEMENTS Acquisition - 74 acres @ $15,000 -$ 1,110,000$ 1,110,000$ -$ 699,300$ -$ 410,700$ Site Development - SVMP 50 Acre 2,005,076$ 994,265$ 2,999,341$ 1,262,201$ 626,387$ 742,875$ 367,878$ Contractual - A&E Services- -$ 260,812$ 260,812$ -$ 164,312$ -$ 96,500$ TOTAL 2,005,076$ 2,365,077$ 4,370,153$ 1,262,201$ 1,489,998$ 742,875$ 875,078$ 2,005,076$ 2,365,077$ 4,370,153$ 63%37% Budget Categories 5.d.c Packet Pg. 46 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 13 - Rev. 12/2020 Exhibit C Grant Conditions 1. At least 50% of the total Project Budget must be funded by non-Commission sources. The Grantee must provide satisfactory evidence thereof to the Commission prior to disbursement of any Grant proceeds. Unapproved applications to other funding sources are not satisfactory evidence. 2. The Grant is contingent upon Project Wahoo achieving Completion (as defined below) at the site at the Southern Virginia Multimodal Park where the Project will be undertaken by the end of the Grant Period (as defined in Section 4 of this Agreement). “Completion” will occur when Project Wahoo (a) makes a private taxable capital investment of at least $40 million, and (b) creates at least 100 new full-time jobs, all at the site. If the Commission cannot determine that Project Wahoo has achieved Completion by the end of the Grant Period, the Grantee agrees to repay to the Commission all Grant funds received within 30 days of the end of the Grant Period. The Grantee agrees to provide all information the Commission reasonably requests in order to determine whether Project Wahoo has achieved Completion. Such information may include information the Commission typically obtains in connection with grants made through its Tobacco Region Opportunity Fund Program, including information from the Grantee’s Commissioner of Revenue and information from Project Wahoo, such as its filings with the Virginia Employment Commission. The Commission will maintain the confidentiality of all such information to the maximum extent permitted by law. 5.d.c Packet Pg. 47 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 14 - Rev. 12/2020 Exhibit D Governing Documents of Grantee Attach charter, articles of incorporation or similar governing instruments, also attach IRS determination letter if a 501(c)(3) Organization. [NOT APPLICABLE TO LOCAL POLITICAL SUBDIVISION] 5.d.c Packet Pg. 48 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 15 - Rev. 12/2020 Exhibit E DETERMINATION OF AVERAGE REASONABLY EXPECTED ECONOMIC LIVES OF PROJECT ASSETS The Tax Code limits the length of average maturity for certain tax-exempt bonds, such as the Tobacco Bonds, to no more than 120% of the average reasonably expected economic life of the assets being financed with the proceeds of such bonds. In this Exhibit, the Grantee will determine the average reasonably expected economic life of the assets being financed by the Grant. There are two safe harbors in determining "economic life": the ADR midpoint life under IRS Revenue Procedures 83-85 and 87-56 and the guideline life under IRS Revenue Procedure 62-61(in the case of structures). For the purposes hereof, the reasonably expected economic life of an asset is to be determined as of the date the asset is expected to be placed in service. You may wish to consult your accountant in completing this Exhibit. Commission staff can provide copies of the above-referenced Revenue Procedures. Please complete the attached Schedule as follows: Step 1. Please list each of the assets comprising the Project to be financed or refinanced by the Grant funds by describing them in Column I. At the minimum, the assets should be broken down as "Land," "Land Improvements," "Building," and "Equipment." In Column II, indicate whether each asset will be acquired, constructed, installed, renovated, etc. Step 2. In Column III, set forth the corresponding total cost of each asset to be paid with Grant funds. Any amounts shown on the Project Budget as "Contingency" should be assigned to the shortest-lived asset. Step 3. In Column IV, set forth the date each asset is expected to be placed in service. An asset is first placed in service when it is first placed in a condition or state of readiness and availability for a specifically assigned function. Step 4. In Column V, set forth in years the ADR midpoint life or the guideline life of each asset listed in Column I, in accordance with the following: Land. If any portion of the Grant funds will be used to finance the acquisition of land, Commission staff should be consulted to determine the economic life to be assigned. In most cases, Commission staff will direct you to assign the land an economic life of 0 and to exclude the land from the economic life calculation. If land improved with one or more existing buildings will be acquired, please allocate the purchase price between the land and buildings and furnish the Commission with a copy of a recent appraisal of the relative value of the land and buildings to support your allocation. Buildings. A guideline life must be determined under Revenue Procedure 62-21 for any building to be financed with the Grant. Forty years is the guideline life for most buildings. Based on the nature of the particular building, your accountant or Commission staff will assist you in determining whether another guideline life is more appropriate. Each building includes the structural shell of the building and all integral parts thereof, equipment which services normal 5.d.c Packet Pg. 49 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 16 - Rev. 12/2020 Exhibit E con’t heating, plumbing, air conditioning, fire prevention and power requirements, and equipment such as elevators and escalators. Equipment. Please select a ADR midpoint life for each item of equipment to be financed. The tables of asset guideline classes, asset guideline periods and asset depreciation ranges included in Revenue Procedures 83-35 and 87-56 is used for reference. To use the table, you should first determine the asset guideline class in which each item of equipment falls. General business assets fall into classes 00.11 through 00.4 to the extent that a separate class is provided for them. Other assets, to the extent that a separate class is provided, fit into one or more of classes 01.1 through 80.0. Subsidiary assets (jigs, dies, molds, patterns, etc.) are in the same class as are the other major assets in an industry activity unless the subsidiary assets are classified separately for that industry. Each item of equipment should be classified according to the activity in which it is primarily used. If the equipment is not described in any asset guideline class, its estimated economic life must be determined on a case by case basis. Working Capital. Working Capital Expenditures are ineligible for Grant funding. Step 5. In Column VI, adjust the ADR midpoint or guideline life for each asset by adding the amount of time (in years) between May 16, 2005 (the closing date of the Tobacco Bonds) and the in- service date specified in Column IV. For example, if a building with a guideline life of 40 years will be placed in service one year and six months after May 16, 2005, the adjusted economic life for such building in Column VI should be 41.5 Step 6. In Column VII, show with respect to each asset the product of the respective entry in Column III multiplied by the respective entry in Column VI. Step 7. Total all of entries in Column III and Column VII. Step 8. Divide the Column VII Total by the Column III Total. The quotient is the average reasonably expected economic life of the assets to be financed with Grant funds as part of the Project. 5.d.c Packet Pg. 50 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Tobacco Region Revitalization Commission Page - 18 - Rev. 12/2020 Exhibit E con’t INFORMATION SCHEDULE REASONABLY EXPECTED ECONOMIC LIVES OF PROJECT FACILITIES COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN I II III IV V VI VII DESCRIPTION OF ASSETS INCLUDED IN THE PROJECT ACQUISITION, CONSTRUCTION, INSTALLATION, RENOVATION, ECT. TOTAL COST TO BE FINANCED BY GRANT IN SERVICE DATE GUIDELINE OR ADR MIDPOINT LIFE ADJUSTED ECONOMIC LIFE COLUMN III X COLUMN VI Land Improvements Construction $1,262,201 11/30/2021 20 36.55 46,137,769 0 Total: Total: $1,262,201 $46,137,769 AVERAGE RESONABLY EXPECTED ECONOMIC LIFE COLUMN VII TOTAL $46,137,769 / COLUMN III TOTAL: 1,262,201 = 36.55 YEARS 5.d.c Packet Pg. 51 Attachment: 3659 - Restricted Grant_Agreement.12222020 (2657 : Economic Development Grading From: Matthew Rowe Sent: Sunday, January 31, 2021 1:58 PM To: Kim Van Der Hyde <Kim.Vanderhyde@pittgov.org>; J. Vaden Hunt, Esq. <vaden.hunt@pittgov.org> Cc: David M. Smitherman <David.Smitherman@pittgov.org>; Kattie Saunders <Kattie.Saunders@pittgov.org> Subject: RE: SVMP Tobacco Commission Grant Agreements (#3663 / 3659) Kim: I apologize again for just getting this to you. The local County share as currently budgeted for the SVMP Lot 2 Site Improvement Grant (#3659) is $1,489,998. Based upon ongoing conversations with the Company, the timing of expenses associated with the project appear to be from the 2nd qtr. 2021 – 2nd qtr. 2022; dependent upon the timing of the company’s investors and their required due diligence period. Please note, that per the executed LOI and the Commission grant agreement draft, that Pittsylvania County cannot proceed with utilizing Commission grant funds until a Local Performance Agreement is executed and proper securitization is in place. County Staff has dictated this in both the draft Local Performance Agreement and the Commission Agreement to eliminate the risk of clawback. Tobacco Commission performance agreement draft is attached. Vaden has reviewed the document and has accepted the document as being legally acceptable – I have verified that the terms and conditions of the document are accurate. The local County share as currently budgeted for the Lot 1 Southern VA Megasite (repurposed grant #3358) is up to $1,312,400 – I believe that this money was listed by an active encumbrance in the County budget in 2017. The projected timing of expending these funds is dependent upon active Project Recycle – per State conversations on Friday, it has been stated that the Company is looking to make a final decision within the next 60-days. As with all projects, COVID is lengthening every part of the decision making process. If Recycle does not choose the site, then I believe there is desire for the County to not pursue the grading of the site until the next fiscal year (after July 1, 2021). Based upon Dewberry’s June project estimate, it appears that the total project cost could be almost $800,000 less than the cumulative grant and local match amount. Please see the Dewberry cost estimate sheet attached; also please see the attached Dewberry initial engineering proposal which has been approved by RIFA and can be included in the project costs. Total local County match liability is up to $2,802,398 for the 2 projects over the next 12-18 months. I hope this is what you are needing. If not, please let me know and I’ll definitely take another look. Thanks! Matt Matthew Rowe Director Economic Development 5.d.d Packet Pg. 52 Attachment: Email (2657 : Economic Development Grading Obligation (Staff Contact: Kim Van Der Hyde))