ADOPTED - OCTOBER 12, 2010

ADOPTED - OCTOBER 12, 2010

Agenda Item No. 13

Introduced by the Finance Committee of the:

INGHAM COUNTY BOARD OF COMMISSIONERS

RESOLUTION APPROVING BUILDING AUTHORITY CONTRACT AND NOTICE
FOR THE INGHAM COUNTY CONSOLIDATED 911 DISPATCH CENTER PROJECT

RESOLUTION #10-328

A RESOLUTION TO APPROVE:

· Construction of consolidated 911 dispatch center with
up to $5,200,000 in Building Authority Bonds;

· Publication of a Notice of Intent to enter into Contract with Building Authority;

· Other matters relative to sale and delivery of Bonds.

WHEREAS, the County of Ingham, State of Michigan (the “County”) determines it to be necessary for the public health, safety and welfare of the County and its residents to acquire and construct a new building for use as a consolidated 911 dispatch center, including appurtenances and site improvements (the “Project”); and

WHEREAS, Act 31, Public Acts of Michigan, 1948 (First Extra Session), as amended (“Act 31”) provides through the procedures of building authority financing a means to construct and finance the Project; and

WHEREAS, this County Board of Commissioners determines it to be in the best interest of the County to acquire and construct and finance all or part of the costs of the Project through the Ingham County Building Authority (the “Authority”), an authority established by the County in accordance with the provisions of Act 31; and

WHEREAS, the Limited Tax Full Faith and Credit General Obligation Contract of Lease (the “Contract”) between the County and the Authority providing for the acquisition and construction of the Project, the financing of all or part of the costs of the Project through the issuance by the Authority of its Bonds in one or more series (the “Bonds”), and such matters as are deemed necessary thereto has been prepared; and

WHEREAS, a notice of intent to enter into the Contract must be published in order to comply with the requirements of Act 31.

THEREFORE BE IT RESOLVED THAT:

1. Necessity. The County Board of Commissioners hereby determines it to be necessary for the public health, safety and welfare of the County to acquire and construct and finance the Project for the use of the County.

2. Building Authority Financing. The County Board of Commissioners deems it to be in the best interest of the County to finance all or part of the costs of the Project through the Authority in accordance with the provisions of Act 31, which cost is not expected to exceed Five Million Two Hundred Thousand Dollars ($5,200,000).

3. Publication of Notice of Intent. The County Clerk is hereby authorized and directed to publish a Notice of Intention of Entering into Limited Tax-Supported Contract of Lease in the City Pulse, a newspaper of general circulation in the County. The Notice shall appear as a display advertisement at least one-quarter (1/4) page in size and shall be in substantially the following form:

ADOPTED - OCTOBER 12, 2010

Agenda Item No. 13

RESOLUTION #10-328

FINANCE: Yeas: Grebner, Tennis, Schor, Holman, Dougan

Nays: None Absent: Bahar-Cook Approved 10/6/10

NOTICE OF INTENTION OF ENTERING INTO
LIMITED TAX-SUPPORTED CONTRACT OF LEASE
AND OF RIGHT TO PETITION FOR REFERENDUM THEREON

TO THE TAXPAYERS AND ELECTORS
OF THE COUNTY OF INGHAM, MICHIGAN:

PLEASE TAKE NOTICE that the County of Ingham intends to approve and execute a Limited Tax Full Faith and Credit General Obligation Contract of Lease with the Ingham County Building Authority pursuant to Act 31, Public Acts of Michigan, 1948 (First Extra Session), as amended (“Act 31”). Such Contract will provide, among other things, that the Building Authority will acquire and construct a new building for use as a consolidated 911 dispatch center, including appurtenances and site improvements, and WILL ISSUE ITS BONDS TO FINANCE ALL OR PART OF THE COSTS OF THE SAME FOR THE BENEFIT OF THE COUNTY IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $5,200,000. The bonds may be issued in one or more series and each series when issued will mature in annual installments not to exceed the maximum permitted by law and will bear interest on the outstanding principal balance at interest rates not exceeding the maximum permitted by law.

The Contract will further provide that the County will lease the 911 dispatch center from the Building Authority and WILL PAY AS RENTAL TO THE BUILDING AUTHORITY ALL SUMS NECESSARY TO RETIRE THE PRINCIPAL OF AND INTEREST ON THE BONDS, TOGETHER WITH ALL COSTS OF OPERATING AND MAINTAINING THE 911 DISPATCH CENTER AND ALL COSTS of the Building Authority in connection therewith regardless of whether the 911 dispatch center is tenantable. The principal amount to be borrowed by the Building Authority will be indebtedness of the County for purposes of constitutional and statutory debt limitations, and the principal amount, together with the County’s rental obligation for payment thereof, may be increased to cover increased costs of the project.

COUNTY’S CONTRACT OBLIGATION

BY VIRTUE OF THE PROPOSED CONTRACT AND ACT 31, ALL OF THE COUNTY’S REQUIRED PAYMENTS TO THE BUILDING AUTHORITY UNDER THE CONTRACT WILL BE A LIMITED TAX FULL FAITH AND CREDIT GENERAL OBLIGATION OF THE COUNTY PAYABLE FROM ANY AVAILABLE FUNDS OF THE COUNTY, AND THE COUNTY WILL BE REQUIRED TO LEVY AD VALOREM TAXES ON ALL TAXABLE PROPERTY WITHIN ITS BOUNDARIES TO THE EXTENT NECESSARY TO MAKE THE PAYMENTS REQUIRED TO RETIRE THE BONDS AND INTEREST THEREON IF OTHER FUNDS FOR THAT PURPOSE ARE NOT AVAILABLE, AND AS LIMITED BY LAW. THE OBLIGATION TO LEVY TAXES IS LIMITED BY APPLICABLE CONSTITUTIONAL AND STATUTORY TAX RATE LIMITATIONS.

IN THE EVENT THAT A VALID PETITION REQUIRING AN ELECTION WITH RESPECT TO THE CONTRACT IS FILED, AS DESCRIBED BELOW, AND THE CONTRACT IS APPROVED BY VOTE OF THE ELECTORS, THE OBLIGATION TO LEVY AD VALOREM TAXES TO PAY THE PART OF THE COUNTY’S RENTAL OBLIGATION THAT WILL BE USED TO PAY DEBT SERVICE ON THE BUILDING AUTHORITY’S BONDS SHALL BE WITHOUT LIMITATION AS TO RATE OR AMOUNT.

THE PROPOSED CONTRACT SHALL BECOME EFFECTIVE WITHOUT VOTE OF THE ELECTORS OF THE COUNTY, AS PERMITTED BY LAW, 60 DAYS FOLLOWING THE DATE OF PUBLICATION OF THIS NOTICE, UNLESS A PETITION REQUESTING AN ELECTION ON THE QUESTION OF WHETHER SUCH CONTRACT SHOULD BE EFFECTIVE, SIGNED BY NOT LESS THAN 15,000 OF THE REGISTERED ELECTORS OF THE COUNTY IS FILED WITH THE COUNTY CLERK WITHIN 45 DAYS FOLLOWING THE DATE OF PUBLICATION OF THIS NOTICE. If a valid petition is so filed in accordance with Act 31, the Contract described in such petition shall not be effective without an approving vote by a majority of electors of the County voting on the question.

This Notice is given pursuant to the requirements of Section 8b of Act 31. Further information concerning the details of the Contract, the project being financed and the matters set out in this Notice may be secured from the County Clerk’s office. A copy of the Contract will be on file in the office of the County Clerk for public inspection

Mike Bryanton, County Clerk
County of Ingham

4. Sufficiency of Notice and Designated Newspaper. The County Board of Commissioners hereby determines that the designated newspaper is the newspaper of general circulation within the County which reaches the largest number of persons to whom the Notice is directed, and that publication of the Notice in the designated newspaper represents the most practical and feasible means of informing the taxpayers and electors of the County of the Project and the financing thereof. A copy of the Contract shall be placed on file in the office of the County Clerk and shall be available for public examination.

5. Approval of Contract. The County Board of Commissioners hereby approves the Contract. The Chairperson of the Board of Commissioners and the County Clerk are authorized to execute the Contract. The Contract shall become effective sixty (60) days following the date of publication of the Notice, unless, under the provisions of Section 8b of Act 31, the effectiveness of the Contract is stayed by reason of the filing of a petition for referendum thereon within forty-five (45) days after such publication and the resultant necessity of prior approval thereof by the qualified electors of the County.

The Chairperson of the Board of Commissioners and the County Clerk are authorized to make such changes and insertions to the Contract in consultation with bond counsel as may be necessary or desirable to effectuate the sale and delivery of the Bonds, permitted by Act 31 and otherwise by law, and not materially adverse to the County.

6. Limited Tax Full Faith and Credit General Obligation. All of the County’s required payments under the Contract will be a limited tax full faith and credit general obligation of the County payable from any available funds of the County. The County Board of Commissioners does hereby ratify and confirm its covenant in the Contract to levy ad valorem taxes against all taxable property in the County to the extent necessary to meet the obligations of the County thereunder in the event revenues from other sources are insufficient for any reason whatsoever. Any such taxes levied to pay the Cash Rentals under the Contract shall be limited as to rate or amount in the manner provided by law.

· IRS Required Declaration of Intent. The County hereby makes the following declaration of intent for the purpose of complying with the reimbursement rules of Treas. Reg. § 1.150-2 pursuant to the Internal Revenue Code of 1986, as amended:

(1) The County reasonably expects to reimburse itself or the Authority with proceeds of debt to be incurred by the Authority for certain costs associated with the Project which were or will be paid subsequent to sixty (60) days prior to the date hereof from the general funds or capital fund of the County or the Authority.

(2) As of the date hereof, the maximum principal amount of debt expected to be issued for reimbursement purposes, including reimbursement of debt issuance costs, is $5,200,000, which debt may be issued in one or more series and/or together with debt for other purposes.

(3) A reimbursement allocation of the expenditures described in paragraph (1) above with the proceeds of the borrowing described herein will occur not later than 18 months after the later of (i) the date on which the expenditure is paid, or (ii) the date the Project is placed in service or abandoned, but in no event more than three (3) years after the original expenditure is paid. A reimbursement allocation is an allocation in writing that evidences the use of the proceeds of the debt to be issued for the Project to reimburse the County or the Authority for a capital expenditure made pursuant to this Resolution.

(4) The expenditures for the Project are “capital expenditures” as defined in Treas. Reg. § 1.150-1(b), which are any costs of a type which are properly chargeable to a capital account (or would be so chargeable with a proper election or with the application of the definition of “placed in service” under Treas. Reg. § 1.150-2(c)) under general Federal income tax principles (as determined at the time the expenditure is paid).

(5) No proceeds of the borrowing paid to the County or the Authority in reimbursement pursuant to this Resolution will be used in a manner described in Treas. Reg. § 1.150-2(h) with respect to abusive uses of such proceeds, including, but not limited to, using funds corresponding to the proceeds of the borrowing in a manner that results in the creation of replacement proceeds (within Treas. Reg. § 1.148-1) within one year of the reimbursement allocation described in (3) above.

7. Internal Revenue Code Requirements. If the Bonds are issued on a tax-exempt basis, the County hereby covenants that, to the extent permitted by law, it shall take all actions within its control and that it shall not fail to take any action necessary to maintain the exclusion of the interest on the Bonds from adjusted gross income for general federal income tax purposes under the Internal Revenue Code including, but not limited to, actions relating to any required rebate of arbitrage earnings and the expenditures and investment of Bond proceeds and moneys deemed to be Bond proceeds. If the Bonds are issued on a tax-exempt basis, then the Bonds are hereby designated as “qualified tax exempt obligations” for purposes of deduction of interest expense by financial institutions.

The County shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Bonds pursuant to the Internal Revenue Code, in such a manner as to cause the Bonds to be “arbitrage bonds” within the meaning of the Internal Revenue Code.

If the Bonds are issued as Recovery Zone Economic Development Bonds or Build America Bonds, then officers, administrators, agents and attorneys of the County are hereby directed to make any elections, representations and agreements in certificates delivered at the time of delivery of the Bonds as may be necessary to qualify the Bonds as Recovery Zone Economic Development Bonds or Build America Bonds and enable the Authority or the County to receive the direct payment credit from the United States Treasury, and to take all other actions necessary or advisable, and to make such other filings with any parties, including the Internal Revenue Service, to request the payment of the appropriate credits from the United States Treasury.

Internal Revenue Code requirements relating to Recovery Zone Economic Development Bonds and Build America Bonds impose limitations on use of Bond proceeds to pay costs of issuance. The officers, administrators, and agents of the County are authorized and directed to use monies legally available to the County to pay costs of issuance of the Bonds including but not limited to rating agency fees, costs of printing the Bonds and the preliminary and final official statements, publication of notices, financial consultant fees, transfer agent fees, bond counsel fees, and any other costs necessary to accomplish sale and delivery of the Bonds

8. Continuing Disclosure Required by SEC Rules. In order to enable underwriters of the Bonds to comply with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission, the County hereby agrees to undertake Continuing Disclosure on behalf of itself as an obligated person of the Bonds, and on behalf of the Authority as the issuer of the Bonds. Either the either the Controller/Administrator or the Director of Financial Services shall execute such Continuing Disclosure Undertaking on behalf of the County in such form as she shall, in consultation with bond counsel, determine to be appropriate.

9. Other Actions. Any officer of the County is hereby authorized to take such actions, including preparation and circulation of an Official Statement describing the Bonds, and preparation of applications for a rating on the Bonds and, if recommended by the Financial Advisor, insurance on the bonds, and any officer of the County is hereby authorized to execute any and all agreements, certificates and documents necessary to effectuate issuance of the Bonds.

10. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded.

I hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the County Board of Commissioners of the County of Ingham, State of Michigan, at a Regular meeting held on ________________, 2010 at ________ o’clock ___.m., prevailing Eastern Time, and that the meeting was conducted and public notice of the meeting was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, and that the minutes of the meeting were kept and will be or have been made available as required by Act 267.

I further certify that the following Members were present at the meeting: _______ _____________________________________________________________________________________________________________________ and that the following Members were absent: __________________________________________________________.

I further certify that Member ________________________ moved for adoption of the resolution and that Member __________________________ supported the motion.

I further certify that the following Members voted for adoption of the resolution: _____________________________________________________________________________________________________________________ and that the following Members voted against adoption of the resolution: _____________________________________.

____________________________________
County Clerk

LIMITED TAX FULL FAITH AND CREDIT
GENERAL OBLIGATION CONTRACT OF LEASE

Ingham County Consolidated 911 Dispatch Center Project

MADE AND EXECUTED as of this _______ day of ______________, 2010, by and between the INGHAM COUNTY BUILDING AUTHORITY (the “Building Authority”), a public corporation organized and existing under the authority of Act 31, Public Acts of Michigan, 1948 (First Extra Session), as amended (“Act 31”), and the COUNTY OF INGHAM, a Michigan municipal corporation organized and existing under the Constitution and laws of the State of Michigan (the “County”);

WITNESSETH:

WHEREAS, the Building Authority has been incorporated by the County under and in pursuance of the provisions of Act 31 for the purpose of acquiring, furnishing, equipping, owning, improving, enlarging, leasing, operating and maintaining a building or buildings, automobile parking lots or structures, recreational facilities, and the necessary site or sites therefor, together with appurtenant properties and facilities necessary or convenient for the effective use thereof, for use for any legitimate public purpose of the County; and

WHEREAS, the County has determined that it is necessary for the public health, safety and welfare of the County to acquire and construct a new building for use as a consolidated 911 dispatch center, including appurtenances and site improvements (the “Project”); and

WHEREAS, the total cost of the Project to be financed is estimated to be in the sum of not to exceed Five Million Two Hundred Thousand Dollars ($5,200,000), which will include architects’ fees, legal and financing costs, and contingencies; and

WHEREAS, Act 31 provides through the procedures of building authority financing a means for the acquisition, construction and financing of public buildings and facilities, including the Project, through the issuance of bonds by the Building Authority, and the Building Authority is willing to acquire and construct the Project and lease the Project to the County; and

WHEREAS, the County and the Building Authority have determined that all or part of the cost of the Project should be paid by the authorization and issuance of one or more series of bonds by the Building Authority (the “Bonds”) in anticipation of the limited tax full faith and credit general obligation contractual commitments of the County under this Limited Tax Full Faith and Credit General Obligation Contract of Lease (the “Contract”), pursuant to the provisions of Act 31, in the principal amount of not to exceed Five Million Two Hundred Thousand Dollars ($5,200,000), with the balance of the cost of the Project, if any, to be paid out of moneys to be made available by the County and the Building Authority as herein provided; and

WHEREAS, as a prerequisite to the authorization and issuance of the Bonds, it is necessary for the parties hereto to enter into this Contract whereby the Building Authority will lease the Project to the County, and the County will lease the same from the Building Authority for a period extending beyond the last maturity date of the Bonds, but not to exceed a period of fifty (50) years; and

WHEREAS, this Contract has been executed by the County pursuant to a resolution of the County Board of Commissioners of the County adopted on ________________, 2010, and notice thereof has been or will shortly be published in a newspaper or newspapers of general circulation in the County, and this Contract shall become effective after sixty (60) days have elapsed following such publication if no petition for referendum on the effectiveness of this Contract has been filed with the County Clerk of the County within forty-five (45) days of publication of such notice or, if such petition is filed, after this Contract has been approved by the electors of the County voting thereon;

IT IS, THEREFORE, AGREED BY AND BETWEEN THE PARTIES HERETO, for and in consideration of the agreement and covenants of each other and moneys to be paid out to the other, as follows:

11. At or prior to delivery of the Bonds:

(1) the County shall convey and transfer to the Building Authority, by quit claim deed, such rights in the site of the Project described in Exhibit A as to permit free and unrestricted use thereof by the Building Authority to acquire the Project, and

(2) the Building Authority will enter into a final contract or contracts calling for the acquisition and construction of the Project and shall proceed to cause the Project to be acquired, constructed and equipped in accordance with plans prepared by the architects.

12. In consideration of the rentals and other terms and conditions herein specified, the Building Authority does hereby let and lease the Project and the site of the Project to the County, and the County does hereby let and lease the Project and the site of the Project from the Building Authority, TO HAVE AND TO HOLD for a term commencing on the date possession of the same is to be delivered hereunder pursuant to Section 13 hereof and ending on a day fifty (50) years from the date hereof, or such lesser period as may be authorized by the provisions of this Contract.

13. The County hereby covenants and agrees to pay to the Building Authority cash rentals for the use of the Project (hereinafter referred to as “Cash Rental” or “Cash Rentals”) in such amounts and at such times as will be sufficient to enable the Building Authority to pay the principal of and the interest on the Bonds when due.

Except as otherwise provided in the resolution or resolutions authorizing the issuance and sale of the Bonds (the “Bond Resolution”), the terms of which Bond Resolution are incorporated herein by this reference and will, to the extent in conflict with the provisions of this Contract so amend this Contract, the Bonds will be issued in one or more series with annual principal maturities or mandatory sinking fund redemptions on the dates and in the amounts approved by the Controller/Administrator of the County as recommended by the County’s financial advisor and bond counsel.

The County will pay to the Building Authority, commencing on the first principal payment date of the Bonds (whether by serial maturity or mandatory sinking fund redemption), and annually thereafter as long as any of the Bonds are outstanding, Cash Rentals in an amount corresponding to the principal amount of Bonds maturing or coming due by mandatory sinking fund redemption on the corresponding principal payment date.

The County acknowledges also that the Bonds will bear interest at the rates determined at public sale thereof, and that as long as Bonds remain outstanding, such interest will accrue on the outstanding principal balance semiannually. Therefore, the County further covenants and agrees to pay to the Building Authority, as a part of Cash Rentals, commencing on the first interest payment date for the Bonds for which interest on the Bonds has not been capitalized, and on each semiannual interest payment date thereafter as long as Bonds are outstanding, such additional sums as shall be necessary to pay interest due on the Bonds on the corresponding Cash Rental payment date. Payment of Cash Rentals shall be made by the County to the paying agent for the Bonds directly, it being understood that such payment by the County shall be done from and on behalf of the Building Authority. The County acknowledges and agrees that interest on the Bonds from their dated date and until the Project is completed and occupied by the County, but in any event not to exceed 24 months from the dated date of the Bonds, may be paid from Bond proceeds as shall be determined by the Building Authority in the Bond Resolution; consequently, the County shall receive a credit on Cash Rentals for payments of interest paid from Bond proceeds.

It is understood and agreed by the parties hereto that the County’s minimum Cash Rental obligation hereunder shall be the payment of such amounts as shall equal debt service requirements on the Bonds falling due prior to the corresponding Cash Rental payment date, except to the extent that debt service requirements are paid from Bond proceeds pursuant to this section. However, the County shall retain the unrestricted right and privilege to prepay at any time whatever amounts of Cash Rentals it may choose in order to retire fully or partially the Bonds and any interest then due thereon or in order to provide for such retirement at a specified future date. The total aggregate obligation of the County hereunder for Cash Rentals shall at any given point in time be equal to the sum of the Cash Rentals yet to be paid to retire principal of the Bonds, plus interest accrued thereon since the last Cash Rental payment at the rates borne by the Bonds. The County warrants and represents that the amount of its obligations under this Contract, when taken together with other indebtedness of the County, will not cause its obligations under this Contract to exceed any constitutional or statutory debt limitation applicable to the County.

The Building Authority shall, within fifteen (15) days after the delivery of the Bonds, furnish the County with a complete schedule of maturities or sinking fund redemptions of principal and interest thereon.

If the Bonds are issued as Recovery Zone Economic Development Bonds or Build America Bonds, then the Building Authority agrees that any direct payment credit which the Building Authority receives from the United States Treasury will be used to pay interest on the Bond, and the County shall receive a credit on Cash Rentals for payments of interest equal to any amount received from the United States Treasury.

14. Except to the extent that the County and the Building Authority have agreed otherwise by separate written documents, the County, at its own expense during the term of this Contract, shall operate, maintain and keep in repair the Project and the site, and the total expense in connection therewith shall be borne and paid by the County in addition to all other rentals herein required. Operation and maintenance shall include any and all costs and expenses of operation and maintenance and such costs and expenses of repairs and maintenance as are necessary to keep the Project and the site in good repair and working order, and shall include, but not to the exclusion of any other items not herein specified, heating, lighting, snow and debris removal, painting and such other repair and maintenance items as are necessary to provide for efficient operation of the Project and the site, and to keep the same in good repair and working order, as well as proper insurance coverage. Further the County shall pay, as part of the operation and maintenance expense, upon written notification by the Building Authority, and within thirty (30) days after receipt thereof, such amounts as shall be required to meet all reasonable administrative costs and operating expenses of the Building Authority, including transfer agent fees, bond registration fees and any other costs or expenses of the Building Authority, incidental to the issuance and payment of the Bonds or attributable to the Project and the site.

15. It is understood and agreed by and between the parties hereto that the Bonds will be issued by the Building Authority in anticipation of the County’s contractual Cash Rental obligation, as stated in Section 3 hereof. The County, pursuant to authorization of Section 8a of Act 31, hereby recognizes and affirms that its contractual obligations expressed in Sections 3 and 4 hereof are full faith and credit general obligations of the County.

The County expressly and irrevocably pledges its limited tax full faith and credit for the prompt and timely payment of the Cash Rentals pledged for Bond payments as expressed in Section 3 of this Contract, and shall each year, commencing with the fiscal year beginning January 1, 2011, appropriate from its general funds as a first budget obligation sufficient moneys to pay such Cash Rentals. Such pledge shall include, if necessary, the obligation to levy annually, except as provided below, such ad valorem taxes on all the taxable property in the County which, taking into consideration estimated delinquencies in tax collections, shall be fully sufficient to pay such Cash Rentals under and pursuant to this Contract. Such levy, however, shall be subject to applicable constitutional and statutory tax rate limitations and shall not be in an amount or at a rate exceeding that necessary to pay such Cash Rentals, such levy being for the purpose of providing funds to meet the contractual obligations of the County in anticipation of which the Bonds are issued. Nothing herein contained shall be construed to prevent the County from using any, or any combination, of the means and methods provided in Section 8a of Act 31 for the purpose of providing funds to meet its obligations under this Contract, and if at the time of making any annual tax levy there shall be other funds on hand, including revenues derived from operation of the Project, earmarked and set aside for the payment of the contractual obligations due prior to the next tax collection period, then such tax levy may be reduced by such amount.

The County will include in its budget for the fiscal year commencing January 1, 2011, and shall include in its budget for each fiscal year thereafter, an amount sufficient to pay the total obligations under this Contract coming due in each such fiscal year. Annually before finalization of its budget for the next ensuing fiscal year the County shall prepare and transmit to the Building Authority a statement of the moneys to be included in the budget for payment of all costs of the Project. The Building Authority shall have the right to communicate directly with the Controller/Administrator or the Director of Financial Services or County Board of Commissioners regarding any items in the budget relative to the Project which might be disputed, and, in any event, the budget shall be reasonably adequate to cover all obligations of the County herein contained in this Contract.

16. The County, in connection with a redemption or defeasance of the Bonds, may pay in advance its obligations required to be paid by this Contract, in which event the Building Authority shall credit the County with advance payment on future-due payments to the extent of such advance payment. The County at the time of any such payment also shall specify by written request that the Cash Rentals paid in advance of the requirements set out in Section 3 hereof be used to purchase Bonds for redemption prior to maturity, either currently or at some future date, to the extent the provision for prior redemption is made in the Bonds, in which event the Building Authority shall be obligated to apply and use the advance payments for such purpose to the fullest extent possible. If such payments are made by the County for redemption of Bonds at some future date, the County shall make such payments on the date of such redemption or, if the Bonds are being defeased in advance of redemption, the date upon which funds are required to be deposited with an escrow agent or other fiduciary and irrevocably pledged to the payment of the principal of, interest on and redemption premium on the Bonds.

17. The County may install in the Project and on the site of the Project such equipment or fixtures as it may desire.

18. The County covenants and agrees that it will not permit the use of the Project or the site in any manner that will result in a violation of local, state or federal laws, rules or regulations now or hereafter in force and applicable thereto and shall keep the Building Authority and its officers and members harmless and indemnified at all times, to the extent permitted by law, against any loss, damage or expenses by any accident, loss, casualty or damage resulting to any person or property through any use, misuse, or nonuse of the Project or the site, or by reason of an act or thing done or not done on, in or about the Project and the site of the Project or in relation thereto. The County further covenants and agrees that it will promptly, and at its own expense, make and pay for any and all changes and alterations in or about the Project and the site which during the term of this Contract may be required to be made at any time by reason of local, state or federal laws and to save the Building Authority harmless and free from all costs or damage in respect thereto.

19. To carry out the acquisition and construction of the Project and the financing thereof in accordance with the provisions of Act 31, the following actions shall be taken by the Building Authority:

(1) The Building Authority will enact the necessary Bond Resolution to authorize the issuance of the Bonds in anticipation of the Cash Rentals to be paid by the County hereunder. The Building Authority will offer for sale and take such other necessary legal procedures as may be necessary to sell the Bonds as soon as (i) this Contract becomes effective and (ii) all other steps required to be taken prior to sale of the Bonds have been accomplished.

(2) The Building Authority will promptly enter into and execute contracts for the acquisition and construction of the Project in accordance with the plans and specifications therefor prepared and approved by the County. No changes in the plans and specifications shall be made by the Building Authority without the consent of the County.

(3) The Building Authority will require and secure from any contractor undertaking any work to be performed on the Project necessary and proper bonds to guarantee the performance of the contract and labor and material bonds in such amounts and in such forms as may be approved by the County’s Attorney.

(4) The Building Authority will immediately upon receipt of the proceeds of sale of the Bonds comply with all requirements provided for in the Bond Resolution relative to the disposition and use of such proceeds.

(5) The Building Authority may invest any bond proceeds as permitted by law and investment income shall accrue to and follow the fund producing such income. The Building Authority shall not invest, reinvest, or accumulate any moneys deemed to be proceeds of the Bonds pursuant to Internal Revenue Code of 1986, as amended and applicable regulations thereunder (the “Code”), in such a manner as to cause the Bonds to be “arbitrage bonds” within the meaning of the Code.

(6) The Building Authority and the County hereby covenant that if the interest on all or a portion of the Bonds can be excluded from gross income for federal income tax purposes, then to the extent permitted by law, they will take all action within their control, and that they shall not fail to take any action, as may be necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes, including but not limited to, actions relating to the rebate of arbitrage earnings, if applicable, and the expenditure and investment of Bond proceeds and moneys deemed to be Bond proceeds, all as more fully set forth in the Non-Arbitrage and Tax Compliance Certificate to be delivered by the Building Authority on the date of delivery of the Bonds.

(7) If the Bonds are issued as Recovery Zone Economic Development Bonds or Build America Bonds, then the Building Authority and the County agree to take all actions necessary or advisable to qualify the Bonds to receive the payment of credits from the United States Treasury.

20. In the event that it should be determined that for any reason there are not sufficient funds to complete the Project, or if repair, replacement or alteration of the Project should be required to make the Project useable for its originally intended purpose, and additional funds become necessary therefor, it is agreed by the parties hereto that this Contract may be supplemented or amended to provide for the issuance of additional bonds by the Building Authority to provide sufficient funds to complete, repair, replace or alter the Project and also to increase the Cash Rental by an amount fully sufficient to pay all principal of and interest on the Bonds herein referred to and such additional bonds when due.

In the event such determination of insufficient funds should be made after the letting of contracts for the Project, but before completion thereof, the Building Authority shall be authorized, on its own motion, to issue such additional bonds as may be necessary to provide sufficient funds to complete the Project or to make necessary repairs, replacements or alterations therein, and the Cash Rentals to be paid by the County shall automatically be increased by an amount fully sufficient to pay all principal of and interest on the Bonds herein referred to and such additional bonds when due. In the event any additional bonds are issued, the duties and obligations of the Building Authority and the County as expressed and set forth in this Contract shall be applicable to such additional bonds as well as the Bonds herein referred to, it being at all times fully recognized and agreed that the Cash Rentals to be paid by the County, as specified in Section 3 of this Contract, shall be based upon the total amount of bonds issued to pay costs of the Project. Any such additional bonds shall mature serially or be payable by mandatory sinking fund redemption on the dates as provided in Section 3 of this Contract and the Cash Rentals coming due on the dates as provided in Section 3 of this Contract shall be increased by the principal amount of such additional bonds maturing on the dates as provided in Section 3 of this Contract plus the additional interest payable thereon on the dates as provided in Section 3 of this Contract. All of the provisions of this Contract shall be applicable to the increased amounts. Immediately upon the issuance of such additional bonds, the Building Authority shall furnish and supply the County documentation specifying the new schedule of Bond payments and Cash Rentals, increased as herein authorized, which shall be substituted and take the place of the schedules herein specified. In the event additional bonds are issued, all references herein to the Bonds shall be deemed to include such additional bonds.

In lieu of the issuance of additional bonds, the Building Authority and the County may enter into any other mutually agreeable arrangement to meet increased costs or bring such costs within the amount of funds available for the Project.

21. In the event, by reason of favorable construction bids received, or for any other reason, it is not necessary to issue the Bonds in the full amount presently anticipated, the Building Authority shall be authorized, after consultation with the Controller/Administrator of the County, to reduce the amount of Bonds to such lesser principal amount as may be necessary to pay the cost of the Project and also to reduce the Cash Rental of the County so that the payments shall be sufficient to pay all principal of and interest on the Bonds. All the provisions of this Contract shall be applicable to the reduced amounts and/or the amended due dates the same as though such Bonds and Cash Rentals were originally in the reduced amounts and/or with the amended due dates. In such event, the Building Authority shall furnish and supply to the County documentation specifying the new schedule of Bond Payments and Cash Rentals, reduced and/or rescheduled as herein authorized, including copies of the Bond Resolution and any amendments thereto, which shall be substituted and take the place of the schedules herein specified and it shall not be necessary for the County Board of Commissioners of the County to take any further action to amend the provisions of Section 3 of this Contract.

22. After completion of the Project and payment of all costs thereof, any unexpended balance remaining from the proceeds of sale of Bonds and the amounts to be paid by the County to the Building Authority pursuant to Section 3 above, shall be used by the Building Authority, upon request made by resolution of the County Board of Commissioners of the County for improvements or enlargement of the Project or for any other projects of the Building Authority leased to the County. Any balance remaining after such use shall be applied to early redemption of the Bonds in accordance with law and shall reduce the Cash Rentals to the extent of such application.

23. The Building Authority shall deliver possession of the Project and the site of the Project to the County simultaneously with conveyance thereof by the County to the Building Authority, as provided in Section 1 hereof. The Project shall be completed as promptly as possible but in the event that for any reason whatsoever the Project is not completed in a timely fashion, the obligation of the County for the payment of the Cash Rentals and other costs of the Project and the performance of its other commitments under this Contract shall in any event remain in full force and effect in order to provide for the payment of principal of and interest on the Bonds and other costs in connection therewith.

24. The County shall provide, or cause to be provided:

(1) liability insurance to the extent necessary to protect the Building Authority and the County against loss on account of damage or injury to persons or property imposed by reason of the ownership of the Project and the site of the Project or resulting from any act of omission or commission on the part of the Building Authority or the County, their agents, officers and employees, in connection with the operation, maintenance or repair of the Project and the site of the Project or the furnishing of any service to the County;

(2) casualty insurance against such risks and in such amounts as are usually carried on projects of similar size and nature; and

(3) funds to pay the premium on a sufficient fidelity bond from any person handling the funds of the Building Authority.

25. Any funds received by the Building Authority or the County from any insurance policies, or otherwise, because of casualty or damage to the Project or the site of the Project shall be used promptly to restore the Project to a condition satisfactory to the County. If such funds are not sufficient to so restore the Project, the County may provide sufficient additional funds therefor in such amounts as the County and the Building Authority may agree upon, or the County and the Building Authority may agree to issue additional bonds for such restoration, in which event the provisions of Section 10 hereof with respect to additional bonds and increased Cash Rentals shall apply. If in the judgment of the Building Authority, concurred in by the County, the funds received from any insurance policies, or otherwise, by the Building Authority or the County shall be insufficient to restore the Project to a condition satisfactory to the County and if additional County funds are not made available or additional bonds are not authorized to make proper restoration, then, in that case, the Building Authority shall hold and/or invest the funds paid to it by reason of such loss for the benefit of the holders of the Bonds, and when upon receipt of sufficient Cash Rentals from the County which, together with the proceeds of the insurance and other available funds, will be sufficient to pay the principal of and interest on the Bonds, said moneys shall be deposited by the Building Authority, in trust, for the benefit of the bondholders and used to pay the principal of and interest on the Bonds as they mature.

26. The leasehold rights, duties and obligations of the County as specified in this Contract shall not be assigned or sublet, in whole or in part, during the term of this Contract or while any of the Bonds are outstanding and unpaid, except to the extent that such assignment or sublease benefits and serves a legitimate public purpose of the County, in which event the County shall be authorized to assign this Contract or sublet the Project or the site or any part thereof, but only to the extent and in the manner that the County could assign or sublet if it were the owner of the Project or the site of the Project. In no event shall any assignment or subletting relieve the County of its primary obligations to pay the Cash Rentals and operation and maintenance costs of the Project hereunder or perform any of its other obligations hereunder.

27. The County shall have, and is hereby granted, the right to require the Building Authority to release from the terms and restrictions hereof any part of the Project or the site thereof, or any interest therein, at any time and from time to time while the County is not in default hereunder, without cost to the County, provided that the County furnishes the Building Authority with:

(1) A notice, in writing, containing an adequate legal description of that portion of the site with respect to which such right is to be exercised, together with a survey thereof; and

(2) A certificate signed by an engineer or architect stating (i) that no part of the improvements constituting the Project (other than sewer, water, gas, electric and communication lines and other utilities, and the like, which shall be specified in such certificate) is located on the portion of the Project site with respect to which such right is exercised, and (ii) that the severance of such portion of the Project site will not impair the operating utility or materially alter the character of the Project or the balance of the site.

From and after the consummation of any release effected by the County pursuant to the provisions of this Section, any reference herein to the site of the Project shall be deemed to refer to the real property described herein, and the buildings and improvements thereon, less and except any portion or interest therein released to the County under this Section and any part theretofore released to the County under this Section. No release effected by the County under the provisions of this Section shall entitle the County to any abatement or diminution of the Cash Rentals or other obligations payable hereunder.

28. The Building Authority, its agents, servants or employees shall have the right at all times of entering the Project for the purpose of inspecting the same and determining whether all of the terms, agreements, covenants and conditions herein contained are being complied with.

29. The County covenants and agrees that it will continue to pay to the Building Authority, in accordance with the terms of this Contract, the Cash Rentals and the operation and maintenance costs of the Project at the times and in the manner herein established without reduction or abatement for any cause or reason whatsoever, including, but not limited to, casualty which results in the Project being untenantable or the failure to have the Project restored under Section 15 hereof, and without right of setoff or recoupment, until the principal of and interest on all Bonds are paid in full or adequate funds are available and held in trust for the benefit of the holders of the Bonds for that purpose.

30. The County covenants and agrees that if before the Bonds have been retired default shall at any time be made by the County in payments of Cash Rentals or operation and maintenance costs as herein required or in the performance of any of its obligations hereunder, the Building Authority shall have the right to use all the remedies provided by law to correct the default, including those specifically set forth in Act 31 and the Bond Resolution. In the event of any such default, the holder or holders of the Bonds may, to the extent permitted by law, exercise and enforce the rights of the Building Authority hereunder.

31. The Building Authority and the County each recognize that the Bonds are to be issued in anticipation of the Cash Rentals to be paid by the County hereunder and that the holders from time to time of the Bonds will have contractual rights in this Contract, and it is, therefore, covenanted and agreed by each of them that so long as any of the Bonds shall remain outstanding and unpaid the provisions of this Contract shall not be subject to any alteration or revision which would in any manner unfavorably affect either the security of the Bonds or the prompt payment of principal or interest thereon. The Building Authority and the County further covenant and agree that they will each comply with their respective duties and obligations under the terms of this Contract promptly at the times and in the manner herein set forth and will not suffer to be done any act which would in any way impair the Bonds, the security therefor, or the prompt payment of principal and interest thereon. The County may, in writing, waive strict compliance by the Building Authority with the dates set out herein for the entering into of final construction contracts and for completion of the Project, and such dates may be altered upon mutual agreement by the parties hereto.

32. In the event that, after issuance of the Bonds, it becomes possible to accomplish a net savings of debt service costs and consequently the payments payable by the County for lease of the Project through the issuance of Building Authority refunding bonds, the Building Authority shall be authorized, on its own motion, to issue such refunding bonds, and the aggregate Cash Rental to be paid by the County hereunder shall automatically be decreased to equal an amount sufficient to pay all principal of and interest on the Bonds and such refunding bonds when due. In the event any refunding bonds are issued, the duties and obligations of the Building Authority and the County as expressed and set forth in this Contract shall be applicable to such refunding bonds as well as the Bonds, it being at all times fully recognized and agreed that the Cash Rentals to be paid by the County, as specified in Section 3 above, shall be based upon the total amount of bonds issued to finance or refinance the costs of the Project. Any such refunding bonds shall mature on such dates as may be provided by the resolutions authorizing issuance and sale of the refunding bonds, and the Cash Rentals shall be adjusted as necessary to pay the principal of such refunding bonds plus the interest thereon. All of the provisions of this Contract shall be applicable to the adjusted amounts. Immediately upon the issuance of such refunding bonds, the Building Authority shall furnish and supply to the County documentation specifying the new schedule of Bond payments and Cash Rentals, increased as herein authorized, which shall be substituted and take the place of the schedules herein specified. In the event refunding bonds are issued, all references herein to the Bonds shall be deemed to include the refunding bonds.

33. Any notice necessary or proper to be given to any of the parties hereto may be served in the following manner:

(1) If to the Building Authority, by delivering the same to any member thereof;

(2) If to the County, by delivering the same to the County Clerk with a copy to the Controller/Administrator.

34. This Contract shall terminate on the payment in full of all principal and interest on all the Bonds. When the Bonds have been retired and the Contract terminated, the Building Authority shall convey the Project and the Site to the County, without consideration, by quit claim deed and appropriate bills of sale in such form and manner as may be approved by the Attorney of the County. Upon termination of this Contract in the manner set forth above, the Building Authority shall promptly pay over to the County any and all funds held by it pertaining to the Bonds or in any other manner relating to the Project.

35. The Building Authority covenants that the County upon compliance with the terms of this Contract shall and may peacefully and quietly have and hold and enjoy the Project for the term herein provided.

36. Nothing herein contained shall in any way be construed to prevent additional financing under the provisions of Act 31, or any other law, for any of the purposes set out in the Articles of Incorporation of the Building Authority.

37. This Contract shall inure to the benefit of and be binding upon the respective parties hereto, their successors and assigns.

38. In case any one or more of the provisions contained in this Contract shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Contract, but this Contract shall be construed as if such invalid or illegal or unenforceable provision never had been contained herein.

39. This Contract may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the INGHAM COUNTY BUILDING AUTHORITY, by its Commission, and the COUNTY OF INGHAM, Michigan, by its County Board of Commissioners, have each caused its name to be signed to this instrument by its duly authorized officers and its seal to be affixed hereto the day and year first above written.

INGHAM COUNTY BUILDING AUTHORITY

By______________________________________________

Its Chairperson

By_____________________________________________

Its Secretary

(Seal)

COUNTY OF INGHAM

By______________________________________________

Its Chairperson of the Board of Commissioners

By______________________________________________

Its County Clerk

(Seal)

STATE OF MICHIGAN )

: ss.

COUNTY OF INGHAM )

On this ______ day of ____________, 2010, before me appeared ______________________ and __________________, to me personally known, who being by me duly sworn, did, each for himself or herself, say that they are respectively, the Chairperson and Secretary of the INGHAM COUNTY BUILDING AUTHORITY, a public corporation of the State of Michigan, and that the instrument was signed and sealed on behalf of the Building Authority by authority of its Commission, and the persons acknowledged the instrument to be the free act and deed of the Building Authority.

______________________________________________

Notary Public,

Ingham County, Michigan

My Commission Expires: _____________________

STATE OF MICHIGAN )

: ss.

COUNTY OF INGHAM )

On this ______ day of ____________, 2010, before me appeared _________________ and ________________, to me personally known, who being by me duly sworn, did, each for himself or herself, say that they are, respectively, the Chairperson of the Board of Commissioners and the County Clerk of the COUNTY OF INGHAM, Michigan, a Michigan municipal corporation, and that the instrument was signed and sealed in behalf of the County by authority of its County Board of Commissioners, and the persons acknowledged the instrument to be the free act and deed of the County.

_____________________________________________

Notary Public,

Ingham County, Michigan
My Commission Expires: _____________________