§ 136-41.3. Use of funds; records and annual statement; excess accumulation of funds; contracts for maintenance, etc., of streets. - North Carolina Statutes

§136‑41.3.  Use of funds; records and annual statement; excessaccumulation of funds; contracts for maintenance, etc., of streets.

The funds allocated to citiesand towns under the provisions of G.S. 136‑41.2 shall be expended by saidcities and towns only for the purpose of maintaining, repairing, constructing,reconstructing or widening of any street or public thoroughfare includingbridges, drainage, curb and gutter, and other necessary appurtenances withinthe corporate limits of the municipality or for meeting the municipality'sproportionate share of assessments levied for such purposes, or for theplanning, construction and maintenance of bikeways located within the rights‑of‑wayof public streets and highways, or for the planning, construction, and maintenanceof sidewalks along public streets and highways.

Each municipality receivingfunds by virtue of G.S. 136‑41.1 and 136‑41.2 shall maintain aseparate record of accounts indicating in detail all receipts and expendituresof such funds. It shall be unlawful for any municipal employee or member of anygoverning body to authorize, direct, or permit the expenditure of any fundsaccruing to any municipality by virtue of G.S. 136‑41.1 and 136‑41.2for any purpose not herein authorized. Any member of any governing body ormunicipal employee shall be personally liable for any unauthorizedexpenditures. On or before the first day of August each year, the treasurer,auditor, or other responsible official of each municipality receiving funds byvirtue of G.S. 136‑41.1 and 136‑41.2 shall file a statement underoath with the Secretary of Transportation showing in detail the expenditure offunds received by virtue of G.S. 136‑41.1 and 136‑41.2 during thepreceding year and the balance on hand.

No funds allocated tomunicipalities pursuant to G.S. 136‑41.1 and 136‑41.2 shall bepermitted to accumulate for a period greater than permitted by this section.Interest on accumulated funds shall be used only for the purposes permitted bythe provisions of G.S. 136‑41.3. Any municipality having accumulated anamount greater than the sum of the past 10 allocations made, shall have anamount equal to such excess deducted from the next allocation after receipt ofthe report required by this section. Such deductions shall be carried over andadded to the amount to be allocated to municipalities for the following year.

In the discretion of the localgoverning body of each municipality receiving funds by virtue of G.S. 136‑41.1and 136‑41.2 it may contract with the Department of Transportation to dothe work of maintenance, repair, construction, reconstruction, widening orimproving the streets in such municipality; or it may let contracts in theusual manner as prescribed by the General Statutes to private contractors forthe performance of said street work; or may undertake the work by forceaccount. The Department of Transportation within its discretion is herebyauthorized to enter into contracts with municipalities for the purpose ofmaintenance, repair, construction, reconstruction, widening or improvingstreets of municipalities. And the Department of Transportation in itsdiscretion may contract with any city or town which it deems qualified andequipped so to do that the city or town shall do the work of maintaining,repairing, improving, constructing, reconstructing, or widening such of itsstreets as form a part of the State highway system.

In the case of each eligiblemunicipality, as defined in G.S. 136‑41.2, having a population of lessthan 5,000, the Department of Transportation shall upon the request of suchmunicipality made by official action of its governing body, on or prior to June1, 1953, or June 1 in any year thereafter, for the fiscal year beginning July1, 1953, and for the years thereafter do such street construction, maintenance,or improvement on nonsystem streets as the municipality may request within thelimits of the current or accrued payments made to the municipality under theprovisions of G.S. 136‑41.1.

In computing the costs, theDepartment of Transportation may use the same rates for equipment, rental,labor, materials, supervision, engineering and other items, which theDepartment of Transportation uses in making charges to one of its owndepartment or against its own department, or the Department of Transportationmay employ a contractor to do the work, in which case the charges will be thecontract cost plus engineering and inspection. The municipality is to specifythe location, extent, and type of the work to be done, and shall provide thenecessary rights‑of‑way, authorization for the removal of suchitems as poles, trees, water and sewer lines as may be necessary, holding theDepartment of Transportation free from any claim by virtue of such items ofcost and from such damage or claims as may arise therefrom except fromnegligence on the part of the Department of Transportation, its agents, oremployees.

If a municipality elects tobring itself under the provisions of the two preceding paragraphs, it shallenter into a two‑year contract with the Department of Transportation andif it desires to dissolve the contract at the end of any two‑year periodit shall notify the Department of Transportation of its desire to terminatesaid contract on or before April 1 of the year in which such contract shallexpire; otherwise, said contract shall continue for an additional two‑yearperiod, and if the municipality elects to bring itself under the provisions ofthe two preceding paragraphs and thereafter fails to pay its account to theDepartment of Transportation for the fiscal year ending June 30, by August 1following the fiscal year, then the Department of Transportation shall applythe said municipality's allocation under G.S. 136‑41.1 to this accountuntil said account is paid and the Department of Transportation shall not beobligated to do any further work provided for in the two preceding paragraphsuntil such account is paid.

Section143‑129 of the General Statutes relating to the procedure for letting ofpublic contracts shall not be applicable to contracts undertaken by anymunicipality with the Department of Transportation in accordance with theprovisions of the three preceding paragraphs.

The Department ofTransportation is authorized to apply a municipality's share of funds allocatedto a municipality under the provisions of G.S. 136‑41.1 to any of thefollowing accounts of the municipality with the said Department ofTransportation, which the municipality fails to pay:

(1)        Cost sharingagreements for right‑of‑way entered into pursuant to G.S. 136‑66.3,but not to exceed ten percent (10%) of any one year's allocation until the debtis repaid,

(2)        The cost ofrelocating municipally owned waterlines and other municipally owned utilitieson a State highway project which is the responsibility of the municipality,

(3)        For any other workperformed for the municipality by the Department of Transportation or itscontractor by agreement between the Department of Transportation and themunicipality, and

(4)        For any other workperformed that was made necessary by the construction, reconstruction or pavingof a highway on the State highway system for which the municipality is legallyresponsible. (1951, c. 260, s. 3; c. 948, s. 4; 1953, c. 1044;1957, c. 65, s. 11; 1969, c. 665, ss. 3, 4; 1971, c. 182, s. 4; 1973, c. 193;c. 507, s. 5; 1977, c. 464, ss. 7.1, 20; c. 808; 1993 (Reg. Sess., 1994), c.690, s. 1.1.)