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Proposed Contract Between UNC Charlotte and First Union Bank

July 28, 1993

Mr. William Steimer University Attorney University of North Carolina at Charlotte UNC-C Station Charlotte, North Carolina 28223

Re: Request for Attorney General’s Opinion

Dear Mr. Steimer:

You have asked for an opinion from the Attorney General’s Office regarding a proposed contract between the University of North Carolina at Charlotte and First Union National Bank of North Carolina. Based on the information you have provided, we understand that UNC-C proposes to refinance a $484,974.30 balloon payment due on an earlier loan obtained from First Union to finance construction of a campus cafeteria. (A copy of the proposed promissory note is attached hereto.) Specifically, you have requested our opinion as to:

(1)
Whether UNC-C has the legal capacity to borrow these funds from First Union and obligate itself to repay the loan upon such terms as are negotiated, and
(2)
Whether the signature of the Chancellor of UNC-C, or his designee, is sufficient to bind the University to a promissory note.

Article 21 of Chapter 116 of the General Statutes, specifically G.S. § 116-191, authorizes the Board of Governors of the University of North Carolina to enter into loan agreements to finance facilities for the benefit and convenience of students at its 16 institutions. At its meeting of March 13, 1987, the Board of Governors authorized UNC-Charlotte to act on its behalf to add an 11,000 square foot cafeteria/food service facility on the roof of the campus bookstore at an estimated cost of $1,398,000 to be financed through a bank loan. We note that the Board of Governors did not specify the terms by which UNC-C was to finance the loan. In our opinion, the Board of Governor’s 1987 authorization suffices to permit UNC-C to refinance the balloon payment.

The Board of Governors adopted a resolution in 1972 delegating to the boards of trustees of the constituent universities the authority, inter alia, to enter into contracts such as the one in question here. In turn, on March 6, 1991 the UNC-C Board of Trustees delegated to the Chancellor and designated employees of the University the authority to sign and execute agreements, contacts and other official documents on behalf of the University. Thus, the Chancellor or an appropriate "designated employee" of the University may bind the University to the promissory note or other contract memorializing the University’s agreement with First Union.

We hope this response fully addresses the questions you raise. Please feel free to contact us should further questions arise regarding these matters.

Andrew A. Vanore, Jr.

Chief Deputy Attorney General

David M. Parker Assistant Attorney General