Framework for a P.L. 93-638 Section 105( - PowerPoint Presentation

1. Framework for a P.L. 93-638 Section 105(l) Lease

2. Presentation OverviewWhat is a Section 105(l) lease?IA Framework Approach2

3. What is a 105(l) “lease”?Leases under Section 105(l) of P.L. 93-638: Are not traditional leases Are facility cost agreements that compensate the T/TO* owner for facility operational expenses associated with using the facility to administer or deliver P.L. 93-638 (ISDEAA) contracted/compacted services*Tribe or Tribal organization3

4. 105(l) Lease RequirementsRegulatory requirements for 105(l) leases are at:25 CFR 900, Subpart H (Lease of Tribally-Owned Buildings by the Secretary), which consists of Sections 900.69 to 900.74T/TO must have one of the following: (1) title to the facility, (2) a leasehold interest in the facility, or (3) a trust interest in the facility The facility must be used to carry out an ISDEAA compact/contract4

5. 105(l) Lease Requirements (cont’d)105(l) lease proposals must request that compensation be based on one of the following:Fair market rental;A combination of cost elements listed in 25 CFR Section 900.70 and fair market rental; orThe cost elements listed in Section 900.70 only.The cost elements at 900.70(a)-(h) include: rent, depreciation, reserve, P&I, O&M, unscheduled and scheduled maintenance, security services, management fees, and other reasonable costs. Costs included in compensation must be reasonable and not duplicative.5

6. Status of ImplementationInterior has signed 105(l) agreements with: Gila River for the Gila Crossing Community School Red Lake Band of Chippewa Indians for a Criminal Justice CenterThese two successful negotiations provided opportunity to focus on two different facility types and apply the statutory and regulatory requirements.The review of materials in both cases were quite similar.They afforded us an opportunity develop a framework while anticipating future 105(l) requests.6

7. FrameworkIA is defining an internal framework for accepting and reviewing lease requests, to be mindful of the 90-day agreement requirement and to address items such asThe funding agreement vehicle on which the lease is basedMethod for lease calculation of lease compensationFacility descriptionScope and purpose of leaseReview of materialsNegotiationLegal sufficiency reviewLease execution7

8. Funding Agreement Vehicle IA office/program staff works with the OSG/OSD/BIA/BIE staff* who serve the Regional office to identify the funding agreement vehicle by determining whether:The 105(l) lease request is for a facility that serves to carry out programs, services, functions, and activities (PSFAs) included in an approved ISDEAA agreement or 297 grant; and Any funding requested for the 105(l) lease is duplicative.*Office of Self-Governance (OSG), Office of Self-Determination (OSD), Bureau of Indian Affairs (BIA) or Bureau of Indian Education (BIE), as applicable.8

9. Lease Compensation CalculationMethod for calculation of 105(l) lease compensation:IA will rely on §§ 900.69-70 in assessing and reviewing proposed compensation components Excel spreadsheets with built-in formulas for compensation calculation:Rent (sublease); Depreciation and use allowance based on the useful life of the facility based on acquisition costs not financed with Federal funds; Contributions to a reserve for replacement of facilities; Principal and interest paid or accrued;Operation and maintenance expenses;Repairs to buildings and equipment; Alterations needed to meet contract requirements; andOther reasonable expenses9

10. Facility DescriptionLocation and address; Architectural floorplan showing gross square footage for all floors; In-service date of the facility (i.e. certificate of occupancy date);Identification of all programs/departments on the floor plan, and if more than one tenant occupies the facility, identification of square footage used in performance of the ISDEAA agreement or 297 grant;A certified copy of loan agreement and P&I payment schedule for the duration of the loan if requesting 1) depreciation, and/or 2) P&I;Recent photos of facility interior and exterior; Recent inspection report of the condition of the facility; Tribal information regarding contract support cost considerations for the building identified in the lease to ensure no duplicative costs are claimed;Proof of Ownership: Proof of mortgage, title, or loan; quitclaim or warranty deed; or lease agreement if sub-leasing to IA.10

11. Scope and PurposeIA will work with the office or program being contracted/compacted and the appropriate Awarding Official (AO) to ensure the leased facility meets necessary program requirements, dimensions, square footage, and the purpose indicated in the tribal request for the space.11

12. Review of MaterialsIA, Office of the Facilities, Property and Safety Management, Real Property Leasing (RPL) will:Oversee the review of the 105(l) lease proposals from T/TOs;Serve as the primary point-of-contact for questions about 105(l) lease compensation;Coordinate with the BIA, OSD, OSG or BIE on finalizing 105(l) lease proposals and ensuring reasonable and non-duplicative lease compensation. The Office of the Solicitor Division of Indian Affairs Headquarters Office conducts a legal sufficiency review prior to execution.12

13. Lease ExecutionThe lease agreement will be executed by:The designated approving official, An RPL representative, the IA Program Office, and The T/TO.The awarding official will incorporate the 105(l) lease agreement into the ISDEAA agreement or 297 grant by:Amending the ISDEAA agreement or 297 grant; and Attaching the 105(l) lease to the ISDEAA agreement or 297 grant.13

14. ContactsJudith Wilson, Director of Office of Facilities, Property, and Safety Management at Judith.Wilson@bia.gov with copy to Bryan.Shade@sol.doi.gov.14