ORGANIZATIONAL COOPERATIVE AGREEMENT BETWEEN THE TOWN OF BEDFORD AND BEDFORD COUNTY FOR THE CREATION AND IMPLEMENTATION OF A JOINT TOURISM PROGRAM

This Cooperative Agreement is between the Town of Bedford, Virginia, hereinafter known as "town", and Bedford County, Virginia, hereinafter known as "county", for the creation and administration of a jointly sponsored tourism program under the provisions of Section 15.2-1300 and Section 15.2-940 of the Code of Virginia.

JOINT TOURISM PROGRAM

THIS AGREEMENT, made and entered into on this the 21 day of May, 1981, by and between THE COUNCIL OF THE TOWN OF BEDFORD, VIRGINIA, hereinafter referred to as "Town", party of the first part; and THE BOARD OF SUPERVISORS OF BEDFORD COUNTY, VIRGINIA, hereinafter referred to as "County", party of the second part.

WHEREAS, the Town and County jointly use library facilities known as the "Bedford Public Library" pursuant to an agreement entered into by the parties of the 14th day of October, 1969; and

WHEREAS, the Town and County now wish to amend and repeal a part of their previous agreement of the 14th day of October, 1969, as it applies to the use of library facilities so as to create a new regional library.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH: That for and in consideration of the mutual conditions, terms and obligations, the parties hereby agree as follows:

THIS AGREEMENT, made and entered into this the 1st day of July, 1986, by and between the BEDFORD COUNTY BOARD OF SUPERVISORS, hereinafter referred to as "The County", party of the first part; and THE COUNCIL OF THE TOWN OF BEDFORD, VIRGINIA, hereinafter referred to as "The Town", party of the second part.

WHEREAS, by the terms of a certain agreement, by and between the parties hereto, dated March 14, 1969, the county has provided health services to the citizens of the Town of Bedford; and

WHEREAS, by Resolution adopted by the county on the 29th day of November, 1983, the agreement of March 14, 1969 was terminated effective June 30, 1985; and

WHEREAS, the parties hereto have agreed that the county will continue to provide health services to the citizens of the Town of Bedford upon the terms and conditions as hereinafter set forth.

NOW, WHEREFORE, That for and in consideration of the mutual covenants and conditions herein contained, the parties hereto do covenant and agree as follows:

1.

That the county will continue to provide health services and facilities through the Bedford County Department of Health to the residents of the Town of Bedford in the same manner and to the same extent as they are presently being provided to the residents of Bedford County.

2.

That in consideration of the county's providing health services to residents of the Town of Bedford, the town shall pay to the county as billed from July 1, 1986, its cost for said services less revenue credited, according to the following procedure:

A.

The Virginia Department of Health shall annually calculate the percentage of services provided by the Bedford County Health Department which are utilized by residents of the Town of Bedford in each of the following categories:

1)

Environmental/health.

2)

Nursing/medical.

3)

Administrative/clerical.

These categories shall be defined by the Virginia Department of Health.

B.

The said percentage of utilization by the Town of Bedford shall be multiplied by the total operating expenditures for the fiscal year in that category, as determined by the Virginia Department of Health. The sum of these three amounts shall be the town's total cost for that year.

C.

The ratio of the town's total cost as calculated in paragraph B to the total expenditures of the Bedford County Health Department for that fiscal year shall be multiplied by the total of all revenues other than town and county payments received by the Bedford County Health Department for that fiscal year. The result shall be credited to the town for that fiscal year and the town shall pay to the county the town's total cost less revenue as calculated above.

3.

That the town agrees to pay promptly without offset, all bills tendered by the county for such services rendered in accordance with the terms of this agreement within 21 days from receipt thereof. That the monthly bills submitted by the county may be based upon budget estimates, provided that necessary adjustment shall be made between the parties based upon actual expenditures and assessments as shown by audit approved by the auditor of public accounts of the Commonwealth of Virginia, after the end of each fiscal year.

4.

That the parties agree that this agreement shall in no way affect the ownership or title of any property of the county, or agency or board thereof.

5.

That the parties agree that the provisions of this agreement concerning the furnishing of services and payment therefor shall remain in effect until terminated by either party after notice is given to the other in writing, which notice of termination shall be for termination of all of such services no sooner than June 30 of the second year following such notice.

6.

That the parties hereto agree that default in the payment of the sums due hereunder for a period of 45 days shall give the county the right to consider such as notice of termination of this agreement by the town. Provided further, that in such event, the county, in addition to any other remedy, shall have the right to terminate the service provided hereunder without further notice to the town and this agreement shall be deemed terminated at such time.

7.

This agreement shall take effect on July 1, 1986.

This Agreement, made this 28th day of June, 1988 by and among the board of supervisors of Bedford County, hereinafter referred to as "county," party of the first part; and

The council of the Town of Bedford, Virginia, hereinafter referred to as "the town," party of the second part; and

The school board of the County of Bedford, hereinafter referred to as "the county school board," party of the third part; and

The school board of the Town of Bedford, hereinafter referred to as "the town school board," party of the fourth part.

WHEREAS, the county school board has been providing educational services for the students of the Town of Bedford under an educational contract among the parties dated March 2, 1985, as amended by a subsequent agreement dated February 28, 1987; and

WHEREAS, the parties hereto agree to continue operation of a system providing joint education for town and county students, but with modifications and amendments of the prior agreements and this agreement shall replace all prior documents and educational services shall be provided pursuant to the terms and conditions hereof.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH:

That for and in consideration of the mutual promises and covenants herein contained and the benefits to each of the parties hereto, the parties agree as follows:

AN ORDINANCE APPROVING THE AMENDED COUNTY OF BEDFORD - TOWN OF BEDFORD JOINT ECONOMIC DEVELOPMENT AND GROWTH-SHARING AGREEMENT

WHEREAS, Bedford County and the Town of Bedford submitted to the Commission on Local Government for its review a Joint Economic Development and Growth Sharing Agreement dated June 2, 1997; and

WHEREAS, the Commission on Local Government conducted a public hearing required by law on August 18, 1997, and has submitted its report dated November, 1997, making certain recommendations; and

WHEREAS, the town council and the board of supervisors pursuant to the recommendations of the Commission on Local Government have agreed to modifications in amendments of the Joint Economic Development and Growth Sharing Agreement which are incorporated in a revised Joint Economic Development and Growth Sharing Agreement dated February 9, 1998; and

WHEREAS, the town council desires to adopt the modified agreement pursuant to section 15.1-3400;

NOW THEREFORE BE ORDAINED BY THE TOWN COUNCIL, the town council approves the agreement as modified which is dated February 9, 1998, and authorizes the mayor and town clerk to execute the agreement on behalf of the Town of Bedford. The town council authorizes and directs the town manager and town attorney to petition the Circuit Court for an order affirming the proposed agreement.

I hereby certify that the foregoing is a true and exact copy of an Ordinance adopted at a regular meeting of the council of the Town of Bedford, Virginia, held on February 10, 1998, at which said meeting a quorum was present and voted.

JOINT ECONOMIC DEVELOPMENT AND GROWTH SHARING AGREEMENT

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

RECITALS

1.

The county and the town historically have provided many public services for their respective citizens through joint contracts and other cooperative arrangements, such jointly provided services including the court and commonwealth attorney's services, welfare, health, public schools, and regional libraries.

2.

The board of supervisors of Bedford County (the "board") and the town council for the Town of Bedford (the "town council") are aware that the economic vitality of the Town of Bedford and the immediately adjoining areas of Bedford County are tied together and that economic and industrial expansion in either the town or the adjoining areas of the county provides increased employment opportunities and economic vitality for the citizens of both jurisdictions.

3.

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

4.

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

5.

As a result of discussions between the board and the town council, the county and the town have agreed jointly to develop and promote for industrial and commercial growth certain designated areas which consist of: (i) an industrial park site on property within the town near Independence Boulevard, and (ii) four areas of the county immediately outside the town limits. These "economic development areas" are described specifically in "attachment A." which includes maps of each area.

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

The purpose of the agreement is to establish and administer a tourism program that shall serve an area known as "the Bedford area", to include the entire geographical boundaries of the town and county. The program is intended to encompass all aspects of a comprehensive tourism program, including but not limited to, staffing, funding, planning and executing of tourism related programs and activities, and the development and operations of a state certified local/regional visitor information center.

(a)

The Bedford area tourism program shall function as a joint tourism department of local government and shall be administered by the county administrator of the county and the town manager of the town. The county administrator and the town manager shall employ a director of tourism who shall operate as head of the joint tourism department, who shall be responsible for the day-to-day operations of the joint tourism program, and who shall report directly to the county administrator and town manager.

(b)

The county administrator and the town manager shall have control of and exercise general supervision, or direct supervision when deemed appropriate, over all decisions relating to staffing, budgeting, and overall operations. On any issue where the town manager and the county administrator cannot agree upon the decision, they shall certify the issue to the chairman of the board of supervisors or to the town mayor who shall act as a tie breaker on a rotating basis, with the county chairman to so act in odd numbered years and the town mayor to so act in even numbered years. The tie breaker shall meet and confer with both administrators and shall attempt to resolve any differences by agreement.

(a)

The two governing bodies mutually agree that Bedford County shall be the fiscal agent and will process all income and expenditures associated with the program. The director of tourism shall be an employee of fiscal agent. The director of tourism will prepare an annual budget and submit it to the county administrator and town manager for their approval. Funding for said budget shall be on an equal basis with each government contributing 50 percent of both capital and operating portions. Said budget will be presented annually to both governing bodies for approval and adoption. In the event that one of the governing bodies should fail to approve the annual budget request in any given year the annual funding for said year shall revert to the amount funded in the previous year or a mutually agreed upon increased amount over the previous year.

(b)

Employees assigned to staff the program shall report to the director of tourism.

(c)

A program of work shall be approved annually by the governing bodies and shall guide the activities of the program and its staff.

(d)

Work shall be in partnership with other organizations as may be mutually beneficial.

(e)

Any such annual budget shall be subject to appropriation.

(a)

As a part of this agreement, and within six months of its adoption, there shall be created an advisory council which shall provide consultation to the county administrator, town manager and tourism staff in the implementation of an ongoing tourism program. This advisory council shall be known as the Bedford advisory council on tourism (BACT) The BACT shall be advisory in nature and shall assist regarding the regular updating and maintenance of all elements and components required to maintain Bedford as a Virginia tourism accredited community, more specifically, a current tourism marketing plan, situation analysis, community profile, and any other requirements.

(b)

The BACT shall consist of nine members who shall be residents of the Town of Bedford or Bedford County or who are employed or operate businesses in the hospitality industry in one of the jurisdictions. One member shall be a member of the town council appointed by that body; one member shall be a member of the board of supervisors selected by that body; one member shall be appointed by the Bedford area chamber of commerce; and the six remaining members shall be appointed by a committee composed of the county administrator, town manager and director of tourism. The committee appointees shall be individuals who will represent the Bedford area hospitality interests from area hotels, restaurants, and attractions.

(c)

The members of the BACT shall serve terms of office of two years, except the initial term for the town council appointee and for three of the committee appointees shall be for one year in order to assure that all terms do not expire at the same time. The appointing authority shall have an unqualified right to remove any appointee and to appoint a replacement if in the appointing authority's opinion such member has failed to attend meetings or otherwise has neglected the member's duties. Vacancies occasioned by inability of a member to act or by a member ceasing to meet eligibility requirements shall be filled by the appointing authority. Appointments to fill vacancies shall be only for the unexpired portion of the term.

(d)

The director of tourism shall serve as chairman of the BACT. The BACT shall adopt by-laws, including provisions for regular, quarterly meetings.

(a)

The town and the county shall provide such real estate, including a visitor's center and appropriate office, as is required for the joint tourism program.

(b)

The county as fiscal agent shall hold title to all tangible personal property used by the joint tourism program, subject to the town's rights upon termination as hereinafter described.

(c)

The county shall procure insurance policies insuring all real estate and tangible personal property used in the joint tourism program and shall provide workmen's compensation insurance for employees, premises liability, and general liability coverage insuring both jurisdictions in respect to the operations and properties of the joint tourism program. The costs of all such insurance shall be considered an operating cost of the program to be shared equally by the two jurisdictions.

It is understood that a critical component of this agreement includes the siting, construction, ownership, and operation of a state certified visitor center. Said visitor center shall be located in the Town of Bedford or in one of the revenue sharing areas as designated in the Joint Economic Development and Growth Sharing Agreement dated February 9, 1998. Capital funding and ownership associated with said visitor center shall be the equal responsibility of the two governing bodies.

This cooperative agreement shall become effective immediately upon approval and adoption of ordinances ratifying this agreement by the board of supervisors of the county and the town council of the town and shall run for a minimum of five years from the date of original signing. At the conclusion of the initial five year period, this agreement shall automatically renew for additional successive five year periods until action is taken by one or both parties to terminate the agreement.

Once the initial five year period of this agreement has passed, the agreement may be terminated upon written notice of either or both of the participating local governments. Written notice of the intent to withdraw shall be required at least 18 months prior to July 1 of the fiscal year in which the termination would be effective.

In the event of termination of this agreement, and absent the creation of a revised or replacement agreement, the following guidelines shall apply:

(a)

The parties shall use their best efforts to insure the ongoing operation of the visitor's center at the termination of this agreement.

(b)

Upon termination of this agreement, after the payment of all outstanding debts and costs, all remaining tangible personal property shall be divided equally between the participating political subdivisions.

In consideration of the county school board's providing educational services to town students, the town shall pay to the county as billed from July 1, 1988, for said services according to the following formula:

The parties hereby agree that the agreement previously entered into by the parties dated the 14th day of October, 1969, shall be modified, amended and repealed insofar as the agreement of October 14, 1969, deals with the operation of libraries. It is the intention of the parties that this agreement shall become the sole agreement between the parties dealing with the operation of libraries. It is further the intention of the parties that the agreement of October 14, 1969, shall remain in full force and effect as it applies to all other topics or items therein contained.

The regional public library to be jointly operated by the town and county shall be known as the "Bedford Public Library".

The purpose of this agreement is to create a regional library serving the library needs of the citizens of the Town and County of Bedford.

The operation of the public library shall be governed by a regional library board consisting of six members who shall serve terms of office appointed on a staggered basis. Three members shall be appointed by the council of the Town of Bedford and three shall be appointed by the board of supervisors of Bedford County. A member so appointed can only succeed himself in office one time. Regional library board members shall each have a term of office for four years, except when the board is initially constituted. Initially the terms shall be for two, three and four years with each jurisdiction assigning, by lot, terms to their members.

The regional library board shall be vested with the powers and duties necessary to operate a regional library for the Town of Bedford and the County of Bedford. The regional library board is empowered and authorized to adopt by-laws, rules, and regulations for the administration and operation of a regional library not inconsistent with state law and this agreement. The regional library board shall have control over the expenditures of all money credited to the library. The regional library board shall have the right to accept donations, bequests of money, personal property, endowments, or real estate for the establishment and maintenance of the regional library system. The regional library board is also empowered with the right to enter into contracts necessary for the operation of the regional library, including but not limited to the power to execute contracts with the state library board, with the library boards of respective jurisdictions, and any and all other agencies for the purpose of administering a regional library service including contracts concerning allocation and expenditure of funds. The power of the regional library board to contract shall include the power to hire necessary employees and to contract for necessary professional services including legal services as required for the operation of the regional library.

No business may be conducted by the regional library board unless a quorum is present. At least two voting members of each jurisdiction (total of four) shall designate a quorum. All questions before the regional library board shall be decided by a majority vote of those present, except as otherwise provided in this agreement. An affirmative vote from at least two members of each jurisdiction shall be required to approve a capital improvement funding request.

The regional library board shall not have the power to:

(1)

Provide library services, except normal inter-library arrangements or incidental service, to non-Bedford Town or County organizations, agencies and citizens, unless appropriate fees are assessed.

(2)

Nor, enter into contracts or create obligations beyond the funds made available and in no way shall they create an obligation which binds or purports to bind the parties of this agreement, without the expressed consent of these two jurisdictions.

The central offices and the headquarters library of the Bedford Public Library shall be designated by the regional library board. The buildings and property located within the Town of Bedford on North Bridge Street currently housing the Bedford Public Library, and to be used by the regional library, shall remain the sole property of the Town of Bedford. Any improvements or additions thereto shall also become and remain the property of the town.

Any building owned by the town or county used by the library shall be used rent free. The library, as part of its operational costs and expenses, shall pay for all utilities, maintenance, and routine repairs.

Each year, on or before the 15th of March, the regional library board shall prepare and submit to the town and county the capital improvement budget, for their approval, modification or rejection. Capital expenditures shall not include day-to-day maintenance and repair of buildings and facilities.

Each year, on or before the 15th of March, the regional library board shall present to the town and to the county for their approval an operating budget for the next fiscal year.

Each year the Bedford Public Library shall be audited by an independent auditing service paid for by the Bedford Public Library and copies of the audit shall be furnished to both the town and county. The audit shall be presented to the town and the county at their first regular meetings after the close of the fiscal year or thereafter as is reasonably expedient. A similar report of receipts and disbursements of all funds shall also be made to the state library.

After deducting the contributions from state and federal governments, all operational costs and expenses for the library shall be shared by the town and the county on a basis equal to the proportionate share based upon the ratio of patrons as determined on June 30 of the prior year. In the event that the town and county cannot agree on an operating budget, the town and county each shall contribute the same amount funded the prior year. The word "patron" shall be defined as an individual who possesses a valid library card as of the 30th of June and who professes to be a resident of either the town or county.

The regional library board shall insure and keep insured all properties of the town and county with insurance policies acceptable to the town and county, and shall present to the town and county certificates of insurance indemnifying the town and county and covering public liability for property damage and personal injury in amounts acceptable to the town and county.

There shall be a treasurer for Bedford Public Library who shall have the custody of the funds of the regional library system. The treasurer shall be bonded for an amount to be determined by the board. The board may authorize the treasurer to pay bond premiums from state aid library funds.

This agreement shall have a term of two years from the date of this agreement and shall be reviewed by the parties hereto at least every other year. At the expiration of the initial two year term this agreement shall continue in force on a year-to-year basis until terminated by either party upon two years written notice being given to the other party. This two-year termination notice may be given at any time and shall become effective at midnight on the third June 30th thereafter. The contract may be amended by the mutual consent of both governing bodies at any time.

Upon termination of the contract, the town and the county shall be entitled to receive a refund of all liquid assets and also all unexpended funds. The refund shall be in proportion to the share contribution for the year of termination. In addition each shall be entitled to a pro-rata share of the tangible personal property acquired during the operation of the regional library. This pro-rata share shall be based upon the total contribution for operating expenses for the regional library. It is expressly agreed and understood that the present buildings owned by the town and the present tangible personal property of the town is exempt from any distribution, such property being the sole property of the town at all times. It is further understood that real property assets acquired or constructed by the regional library board during its operation shall become the property of the jurisdiction in which they were located when acquired or constructed by the regional library board. Real property acquired by gift or donation shall become the property of the regional library board and thus shall be distributed on the basis of location as described.

WITNESS THE FOLLOWING SIGNATURES AND SEALS:

The county school board agrees during the duration of this agreement to continue to provide public school services and educational programs for the students of the Town of Bedford. Such educational services shall include free public school education (kindergarten program through high school), special education programs, adult education programs, vocational education programs, and such other educational services and programs as shall be provided by the county school board and the county for students of Bedford County. Educational services shall include all services incidental to educational programs such as pupil transportation and extracurricular activities. The county school board agrees to accept and educate all town children of school age, and to accept and receive from the town as compensation therefor the amounts herein set forth.

Initially, the county school board shall operate its facility on College Street, the town-owned buildings at Peaks Street and Longwood Avenue and high school facilities at Liberty High School for educational purposes. Upon completion by the town of a new elementary school on Burks Hills Road, the county school board shall operate its facility on College Street, the town-owned facility on Burks Hill Road and high school facilities at Liberty High School. At such time as the town provides a middle school facility, the county school board will operate schools at the facility on College Street, the new facility on Burks Hill Road, the middle school, and Liberty High School.

With the exception of children enrolled in special educational classes, vocational training, or other special educational programs, town children shall be assigned to the kindergarten, primary, elementary or middle facilities located within the corporate limits of the Town of Bedford, and high school students shall be assigned to Liberty High School facilities.

Administration, control and operation of the school system, pursuant to this agreement, shall remain solely the function of the county school board, and the county school board shall have full administrative and operational control of subject schools for school purposes except to the extent otherwise provided herein.

The parties hereby recommend to the general assembly of Virginia that enabling legislation be passed providing that the Town of Bedford shall have a representative appointed by the town council to be a member of the Bedford County school board during the term of this agreement who would have all of the rights, duties and responsibilities afforded and required of each county school board member, but with the understanding that the town would retain its separate school district. Until such enabling legislation is passed, the town representative thus appointed by the town council will have a nonbinding, advisory vote on the Bedford County school board during the term of this agreement.

The parties agree that on July 1, 1988, the county superintendent shall serve as superintendent of the Town of Bedford public schools; provided, however, that the town shall have the right at any time to designate its own superintendent.

For the duration of this contract, the town agrees to provide the following educational facilities for use by the county in operation of schools for such town students and for such county students as shall be designated by the county school board:

(a)

The red brick building and the yellow stucco building located at the intersection of Peaks Street and Longwood Avenue shall continue to be used for school purposes until the new facility located on Burks Hill Road is available and opened for operation. The town and the town school board agree to use their best efforts to have the facility on Burks Hill Road available for use by July 1, 1989.

(b)

Upon completion of the new elementary school facility on Burks Hill and delivery of possession to the county school board, the town agrees forthwith to commence renovation of the red brick building or construction of a school within the corporate limits for use as a middle school, with a minimum capacity of 500 students, and with an expected occupancy date of three years from the date delivery of possession of the Burks Hill Road School is made to the county school board, subject, however, to delays in completion not within the control of the town or town school board. The town and the town school board shall construct such renovations or new building in compliance with all requirements and standards of the Commonwealth of Virginia.

The town shall equip the town owned school facilities supplied hereunder with all necessary equipment, furnishings and fixtures except educational materials and office equipment other than furniture. Such educational materials, including by way of example and not limitation, computers and typewriters for student use, books, instructional and athletic equipment, audio-visual aids, flags, pictures and art, instructional or other consumable educational supplies, shall be provided by the county school board. Upon request by the town, the county school board will provide student seating at no cost to the town for student use in the new Burks Hill Elementary School facility for a period not to extend beyond September 1, 1990.

The town shall assume complete managerial and financial responsibility for the repair, maintenance and custodial care of the town owned school facilities and will provide heating fuel, liquid propane gas, water, sewerage and electricity for use on the properties. The town will provide personnel and supplies for all repairs and maintenance of town owned buildings and in addition will provide personnel and supplies for all custodial care of such school properties. Such custodians shall be paid by and subject to the control and management of the town; provided, however, that personnel for custodial care will be subject to the immediate supervision of the county school board administration with respect to the custodial duties arising in the course of the use of the town owned school properties by the county school board for educational purposes. The appropriate town personnel shall have access to the school properties during the hours of use by the county school board for the purpose of supervision of town personnel.

If the facilities provided by the town shall be destroyed by fire or other casualty or be so damaged thereby as to become wholly or partially unusable as school facilities, then the parties hereto agree that they will use their best efforts to provide facilities for the education of the students who were in said facilities, including assignment to other county owned facilities and the use of other available facilities such as churches. In such event this agreement will remain in force and the town, within a reasonable time, either shall repair the facilities, putting the premises in as good condition as they were immediately prior to the destruction or damage, or shall provide replacement facilities. The cost of rental of any facilities required to be used until completion of repair, in such case shall be upon the town.

The county school board shall neither bring nor keep in the town-owned facilities anything that will cause an increase in the fire or casualty insurance premiums on the buildings of which the demised buildings are a part and the county school board shall not permit its employees, agents, guests, or other persons to do any of the acts prohibited herein.

The town as owner of any town-owned and county-operated facility shall have the right to enter the premises at all reasonable hours to inspect them, perform required maintenance and repairs, or make additions, alterations, or modifications to any part of any building on the demised premises, and the county school board shall permit such acts. The owner of the facility may erect the necessary structures, post relevant notices, and place moveable equipment in connection with the making of such additions, alterations or modifications.

The town will have the use and control of the town-owned school properties at all times when those facilities are not being used by the county school board for its educational programs. However, in no event shall such use and control interfere with the county school board's educational program. The county school board shall schedule its use of the town-owned school properties after the usual hours of school operation with the town by providing reasonable advance notice of all such requirements. Any use of the town-owned properties by the county school board for the purposes other than its normal educational programs shall be subject to scheduling and approval by the town, which approval shall not be unreasonably withheld.

The county school board shall maintain sufficient insurance to protect both the town and town school board as owner of any town-owned and county-operated facility and the county school board from all claims for personal injury, including death, whether the claims are under the Workmen's Compensation Act or otherwise, which may arise from use of the town-owned facilities by the county school board. The county school board shall procure personal liability and motor vehicle policies naming the Town of Bedford and the Bedford County School Board as additional insured and shall file certificates of this insurance with the town.

Adjusted expenditures shall be the total expenditures by the county school board for operating a public school system for the then current fiscal year (including expenditures for New London Academy), excluding debt services (payment of bonds and other debt services, such as loans or service charges), excluding costs of any building leased for school purposes, excluding capital outlay for professional, architectural and engineering fees, contractual amounts for construction of new buildings and additions to existing buildings and alterations of existing buildings, and purchase of real estate, excluding the cost of special education students placed outside of the Bedford County public schools; and excluding operation and maintenance charges (which includes compensation and related fixed costs of maintenance employees and custodial personnel and their supervisors and compensation and related fixed costs of other employees such as clerical services, electrical service and water service and sewage disposal, custodial supplies, fuel, cost of operation of motor vehicles other than pupil transportation, repair and replacement of equipment, repair and replacement of motor vehicles except vehicles used for pupil transportation and service vehicles related to pupil transportation, buildings and grounds cost, and equipment other than motor vehicles, operation of school property, other expenses, building materials, and roof projects). The adjusted expenditures thus calculated shall be divided by the average daily membership of students in the Bedford County public schools as of March 30 of each fiscal year ("ADM" herein); that amount shall be multiplied by the number of students included in said ADM who are town students in order to represent the town's operating costs.

Revenues designated for educational purposes or derived by the operation of the county school system, and received by the treasurer of Bedford County, other than those sums transferred by Bedford County board of supervisors and the town council of the Town of Bedford, shall be placed in one of the following categories and credited accordingly:

(1)

Category A—Shared funds. Revenues which have not been differentiated according to category B or category C below or which are related to reimbursement of handicapped students placed outside of the Bedford County public schools. Those total revenues shall be divided by the total ADM of the Bedford County public schools and that amount shall be multiplied by the number of ADM who are town students. Town shall be credited with this amount.

(2)

Category B—Designated for town. Revenues which have been differentiated by federal or state sources for the benefit of town only. Town shall be credited with all such amounts.

(3)

Category C—Designated for county. Revenues which have been differentiated by federal or state sources for the benefit of county only, income from the rental of county-owned school buildings, income from sale from operation and maintenance properties in the county, rebates and refunds, sale/salvage of surplus equipment, insurance recoveries, and vandalism restitution.

An example of the formula for payment as applied to FY 88 is attached hereto as schedule "A".

The town's cost as set forth above shall be calculated in advance of each fiscal year based upon the adopted county school budget and the estimated ADM in that school budget including the New London Academy budget. The town shall pay said cost in 12 equal consecutive monthly installments not later than the 20th day of each month beginning July 20 of each fiscal year. Adjustments may be made periodically based upon changes in ADM and/or actual expenditures, supplemental appropriations and adjusted revenue projections. Final reconciliation shall be based upon the audit approved by the auditor of public accounts of the Commonwealth of Virginia, after the end of each fiscal year.

The town may arrange with the sources of the revenues for category B to have these revenues paid directly to town. In such event the county will not credit the town for the revenues until paid to the county treasurer by town.

In determining appropriate educational placement for handicapped students, as defined in P.L. 94-142, the county shall treat town and county students equally. Whenever a handicapped student is assigned to an educational placement outside the Bedford County public schools, then the jurisdiction in which the student legally resides shall bear the expense of said educational placement. This cost shall be in addition to cost set forth above. Any reimbursement from state or federal sources received by the county for town students so placed shall be credited to town. The town shall receive no credit for such reimbursement for county students so placed.

Upon termination of this agreement, town as well as county shall be responsible for carry-over operational expenses incurred during the fiscal year immediately preceding termination, even though payment of such expenses is not made until the next fiscal year.

For the purposes of this agreement, the term "town student" shall mean a student whose legal residence is within the corporate limits of the Town of Bedford and for whom the town receives basic state aid.

The town shall have complete access to all financial and accounting records of the county school board. Financial records shall include both routinely generated accounts and special summaries and studies prepared by the school administration. The county school board shall provide the town with the names and addresses of all town students within two weeks of the opening of school, and similar information pertaining to any changes during the school year shall be provided as soon as these changes occur.

The term of this agreement shall be in effect four fiscal years beginning July 1, 1988 and continuing as an automatically renewing perpetual agreement for each fiscal year unless terminated as herein provided. The town council or the county board of supervisors may terminate this agreement, effective at the end of any fiscal year by giving written notice of such termination not less than three years prior to the proposed termination date; provided, however, this agreement shall not terminate prior to June 30, 1996.

The town and county covenant and agree to begin immediate negotiations for the formulation of a strategic long range plan for future water and sewer development in the town and the central area of Bedford County. The town and county agree that the Bedford County public service authority shall participate in all such negotiations.

The town has a moratorium on additional connections to its water and sewer systems outside the town limits, and the town agrees to modify its moratorium in order to provide sewer and water connections for commercial and industrial development in the economic development areas located within the county in accordance with the provisions set forth hereinbelow.

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

The town agrees to extend water and sewer utility services into the economic development areas of the county by extending existing trunk lines into the county as funds are available and by allowing connections under the following terms and conditions:

(A)

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

(B)

Extension of town sewer and water pipelines. The parties agree that the existing town water and sewer pipelines shall be extended in order to provide water and sewer services within the four county economic development areas by extending trunk lines from existing facilities into each respective development area.

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

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

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

(C)

Limited residential connections. Notwithstanding the above limitation of additional sewer and water connections outside the town limits to commercial and industrial developments only, the town agrees to use its best efforts to provide connections to residential buildings located within the county economic development areas which are existing as of the date of this agreement should there be a failure of the private sewer or water systems serving the specific residence and if town connections are available under existing town policies.

(D)

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

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

The county subject to annual appropriation and the town agree in perpetuity to share equally all local taxes on real estate, personal property and machinery and tools, merchant's capital, sales and use taxes, and all business, professional and occupational taxation and any other taxes now and hereafter imposed or generated in respect to properties and activities within the economic development areas (including the industrial park site located within the town and the four designated areas located within the county.) Such shared taxes shall not include those taxes which pursuant to state or federal statutes are dedicated for a specific use or for which a specific use is prescribed (e.g., 911 tax). Shared taxes shall be transmitted by the collecting jurisdiction within 90 days of the due date or of the time of collection, whichever occurs later.

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

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

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

The parties agree that existing taxes which they contemplate sharing under this agreement are set forth as follows:

Taxes collected by the town to be shared with the county:

Real estate taxes.

Business personal property taxes.

Machinery and tool tax (if applicable).

Personal property taxes (vehicle).

Motor vehicle licenses.

Sales tax.

Business license.

Contracting.

Retail sales.

Professional.

Repairs/personal business.

Wholesale.

Bank franchise tax.

Meals tax.

Lodging tax.

Taxes collected by the county to be shared with the town:

Real estate taxes.

Business personal property taxes.

Machinery and tool tax (if applicable).

Merchant's capital tax (if applicable).

Personal property taxes (vehicle).

Motor vehicle licenses.

Sales tax.

Bank franchise tax.

Lodging tax.

The parties specifically agree to share the proceeds of any new taxes which shall be collected by either jurisdiction in respect to the economic development areas.

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

The town council and the board agree to the creation of a Joint Industrial Authority pursuant to the authority of section 15.1-1387 of the Code of Virginia, 1950, as amended. The Joint Industrial Authority shall be created by a joint resolution which shall be adopted by the governing bodies and shall be in substantially the same form as the proposed ordinance which is attached as "attachment C."

The town and the county shall equally contribute to the operations of the Joint Industrial Authority. (The one half of the electric department revenues to be paid by the town to the Industrial Development Authority under section 2.02 shall not be considered as part of the town's contribution toward the operations of the Joint Industrial Development Authority under section 3.02.)

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

Each year, on or before the 15th of January, the board of directors of the Joint Industrial Authority shall present to the town and to the county for their approval an operating budget for the next fiscal year.

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

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

Except as limited by this agreement, the Joint Industrial Authority shall have all the powers granted to such an authority by chapter 33 of title 15.1 of the Code of Virginia, 1950 as amended.

The Joint Industrial Development Authority shall promote economic and industrial development within such areas of the town specifically designated by the parties and within the economic development areas of the county described in this agreement.

Upon obtaining the necessary statutory approvals described in article IV herein, the Town of Bedford agrees to transfer to the Joint Industrial Development Authority title to all properties and options upon properties located within the proposed town industrial park and the Joint Industrial Development Authority shall assume all obligations of the town in respect to such properties.

The parties recognize that the provisions of section 2.01 which provide for sharing of taxes and for boundary line adjustments if the county fails to share revenue in respect to specified projects under the provisions of section 15.1-21.2 and section 15.1-1167.1 are subject to submission and review by the commission on local government as provided in paragraph 4 of section 15.1-945.3. In view of the fact that the town's agreements in article I to provide public water and sewer utilities for such development areas is based upon the tax sharing of economic development/industrial park projects found in article II of this agreement, the parties agree that the provisions of article I and of article II shall be contingent upon review of the provisions by the commission on local government, upon enactment of required ordinances by the governing bodies, upon adoption of a traditional zoning ordinance by the Bedford County board of supervisors covering the economic development areas in the county and upon affirming the provisions of the voluntary agreement by the three judge court as required under section 15.1-1167.1.

The parties agree that it is in the best interests of the jurisdictions to proceed with the development of the industrial park within the limits of the Town of Bedford and with the immediate extension of services to certain properties located within the Economic Development Area along the U.S. Route 460 corridor east of the town limits prior to the statutory approval of the provisions for sharing of revenues and taxes as set forth in section 4.01.

Accordingly, the board of supervisors upon execution of this agreement and prior to obtaining statutory approval shall advance to the town an amount equal to the sums actually expended by the town for development of the industrial park site within the town up to the date of the agreement and shall share equally with the town the costs of further development of the industrial park site through FY 97-98. Such advances by the county shall not exceed the sum of $425,000.00. Upon obtaining the statutory approval of this agreement as referred to above, the industrial park property shall be conveyed to the Joint Industrial Development Authority pursuant to the provisions of section 3.05 and all prior expenditures with respect to the industrial park site shall be treated as contributions by the county and by the town respectively to the Joint Industrial Development Authority. If statutory approvals have not been obtained by December 31, 1998, then such advances by the county shall be treated as loans to the town, without interest, and shall be repaid by the town in quarterly installments over a period of not more than five years or according to such other schedule of repayment as the parties may agree.

A projected budget for the development expenses of the industrial park site located within the limits of the Town of Bedford for FY 97-98 is attached as "attachment D."

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

(A)

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

(B)

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

(C)

Tract 130-A-16B.

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

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

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

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

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

WITNESS THE FOLLOWING SIGNATURES AND SEALS: