Ordinance No. 12,964ORDINANCE NO. 12, 964
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING AND DIRECTING THE CITY MANAGER TO
EXECUTE AND THE CITY CLERK TO ATTEST TO A UTILITY
FUNCTIONS AND SERVICES ALLOCATION AGREEMENT WITH HARRIS
COUNTY MUNICIPAL UTILITY DISTRICT NO. 213-13; AND PROVIDING
FOR THE EFFECTIVE DATE THEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes
and directs the City Manager to execute and the City Clerk to attest to a Utility Functions and
Services Allocation Agreement with Harris County Municipal Utility District No. 213-B. A
copy of such agreement is attached hereto as Exhibit "A" and incorporated herein for all intents
and purposes.
Section 2: This ordinance shall take effect immediately from and after its passage by
the City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative /ofCity Council of the
City of Baytown this the 10`" day of September, 2015.
4--e4 -
IeATT
TICIA BRYSC, itytj�k—
APPROVED AS TO FORM:
c
ACIO RAMIREZ, SR., C t Attorney
TEPHEN
H. DONCARLOS,
%',,,COBFSOI\Legal',,,Karen',Files%City Councihordinances\2015`September IO\AIlocationAgreementOrdinance.doc
yor
Exhibit "A"
UTILITY FUNCTIONS AND SERVICES
ALLOCATION AGREEMENT
STATE OF TEXAS
COUNTY OF HARRIS
THIS UTILITY FUNCTIONS AND SERVICES ALLOCATION AGREEMENT (the
"Allocation Agreement") is entered into as of the date specified in Section 7.13 hereof, by and
between THE CITY OF BAYTOWN, TEXAS (the "City"), a municipal corporation and home -
rule city situated in Harris and Chambers Counties, Texas, and HARRIS COUNTY
MUNICIPAL UTILITY DISTRICT NO. 213-13, a body politic and corporate and a
governmental agency of the State of Texas under the provisions of Article XVI, Section 59 of the
Texas Constitution, Chapters 49 and 54 of the Texas Water Code, and Chapter 8479 of the
Special District Local Laws Code, as amended (the "District").
Recitals
WHEREAS, the City is a home -rule city and municipal corporation that provides various
municipal services to its citizens; and
WHEREAS, the District encompasses approximately 111.82 acres which is within the
City's corporate limits attached hereto as Exhibit "A" (the "Tract"); and
WHEREAS, the District has been created within the City for the purpose of, among other
things, providing water distribution, wastewater collection and drainage facilities and services as
more fully described below, (the "Facilities") to serve the development occurring with and near
that portion of the City situated within the boundaries of the District, by financing and
purchasing the Facilities; and
WHEREAS, the development will occur in phases and the District anticipates that each
phase will be platted separately; and
WHEREAS, the City has agreed to provide the services described herein under the
conditions and terms set forth in this Allocation Agreement; and
WHEREAS, this Allocation Agreement is entered into under the authority of Local
Government Code Section 402.014, as amended, and applicable provisions of Chapters 49 and
54 of the Texas Water Code, as amended, and applicable provisions of the City of Baytown Code
of Ordinances; and
WHEREAS, the City and the District have determined that they are authorized by the
Constitution and laws of the State of Texas to enter into this Allocation Agreement and have
further determined that the terms, provisions and conditions hereof are mutually fair and
advantageous to each; NOW THEREFORE,
AGREEMENT
For and in consideration of the mutual promises, obligations, and benefits contained
herein, and subject to the Consent Resolution of even date herewith, the City and the District
agree as follows:
ARTICLE I.
DEFINITIONS AND EXHIBITS
1.1 Definitions. Unless the context indicates otherwise, the following words as used
in this Allocation Agreement shall have the following meanings:
Approving Bodies shall mean the City, Harris County, Texas, the Texas Commission on
Environmental Quality, the Attorney General of Texas, the Comptroller of Public Accounts of
Texas, the United States Department of Justice and all other federal, state and local governmental
authorities having regulatory jurisdiction and authority over the financing, construction or
operation of the Facilities or the subject matter of this Allocation Agreement.
Bonds shall mean the District's bonds, notes or other evidences of indebtedness issued
from time to time for the purpose of financing the costs of acquiring, constructing, purchasing,
operating, repairing, improving or extending the Facilities as more fully set forth in the Baytown
Code of Ordinances, whether payable from ad valorem taxes, the proceeds of one or more future
bond issues or otherwise, and including any bonds, notes or similar obligations issued to refund
such bonds.
City means the City of Baytown, Texas.
City Water System means all the water production pumps, lines, meters, components,
facilities, and equipment owned and used by the City to pump, treat, monitor, convey, supply,
and distribute Water to the public.
City Wastewater System means all the wastewater treatment facilities, lines, components
and equipment owned and used by the City to collect, convey, treat, monitor, regulate, and
dispose of Wastewater to the West District Wastewater Treatment Plant.
Consent Resolution means Resolution No. 2256 adopted on August 8, 2013, by the City
consenting to the creation of the District.
Commission means the Texas Commission on Environmental Quality and any successor
or successors exercising any of its duties and functions related to municipal utility districts.
Detention Tract means any parcel or parcels in the District used for detention facilities
to serve the Tract.
Development Plan means the conceptual plan for the development within the District
attached as Exhibit "C" and approved simultaneously herewith.
District means Harris County Municipal Utility District No. 213-B, a body politic and
corporate and a governmental agency of the State of Texas, organized under the provisions of
Article XVI, Section 59 of the Texas Constitution, Chapters 49 and 54 of the Texas Water Code,
and Chapter 8479 of the Special District Local Laws Code, as amended, and which includes the
Tract within its boundaries.
District Assets means (i) all rights, title and interests of the District in and to the
Facilities, (ii) any Bonds of the District which are authorized but have not been issued by the
District, (iii) all rights and powers of the District under any agreements or commitments with any
persons or entities pertaining to the financing, construction or operation of all or any portion of
the Facilities and/or the operations of the District, and (iv) all books, records, files, documents,
permits, funds and other materials or property of the District.
District's Obligations means (i) all outstanding Bonds of the District, (ii) all other debts,
liabilities and obligations of the District to or for the benefit of any persons or entities relating to
the financing, construction or operation of all or any portion of the Facilities or the operations of
the District, and (iii) all functions performed and services rendered by the District, for and to the
owners of property within the District and the customers of the Facilities.
Engineers or District Engineers means consulting engineers, or its replacements,
successors or assignees designated by the District as its engineer.
Engineering Reports means and refers to engineering reports prepared by the Engineers
and accepted by the City in writing relating to the development of the District and describing the
initial scope and extent of the Facilities and any additional engineering reports prepared by the
Engineers from time to time and accepted by the City in writing relating to the issuance of Bonds
by the District, copies of which shall be on file in the offices of the District.
Equivalent Single -Family Connection or ESFC means that daily measure of Water and
Wastewater that is attributed to one Single -Family Residential Home as determined by the City.
Facilities means and includes the water supply and distribution, sanitary sewer collection,
transportation, and storm water collection, detention and drainage systems constructed or
acquired or to be constructed or acquired by the District and approved by the City in writing to
serve lands within and adjacent to its boundaries, and all improvements, appurtenances,
additions, extensions, enlargements or betterments thereto, together with all contract rights,
permits, licenses, properties, rights-of-way, easements, sites and other interests related thereto,
all as more fully described in the Engineering Reports.
Regional Improvements means those Facilities described in Section 2.6 which serve areas
outside and inside the District and which may include, but not be limited to, sanitary sewer trunk
lines, lift stations and force mains, water trunk lines, offsite drainage right-of-way and ditch
improvements, and transportation improvements.
Single -Family Residential Home means a building designated to be used and occupied by
one family, with a detached single-family residence being one residential home, a duplex being
two residential homes, and each unit in an apartment complex being one residential home.
Tract means the 111.82 acres of land described in Exhibit "A," and to which the City has
agreed to provide the services described in this Allocation Agreement.
Wastewater means the water -carried wastes, exclusive of ground, surface, and storm
waters, normally discharged from the sanitary conveniences of residential or commercial
structure of a domestic nature (not industrial), meeting the requirements of the City set forth in
the City's Code of Ordinances.
Wastewater Service means the services provided by the City in receiving, treating,
testing, and disposing of Wastewater from the District.
Water means potable water that meets Federal and State standards for consumption by
humans.
Water Supply Service means the services provided by the City in treating, pumping,
transporting, and delivering of Water to the District for consumption by District customers in
accordance with this Allocation Agreement.
1.2 Exhibits. The following Exhibits attached or to be attached to this Allocation
Agreement are a part of the Contract as though fully incorporated herein:
Exhibit A Description of the District
Exhibit B In City Procedures
Exhibit C Development Plan
Exhibit D Pipebursting Project
ARTICLE II.
AGREEMENT CONCERNING WATER SUPPLY
AND WASTEWATER SERVICES TO THE DISTRICT
2.1. City's Obligation to Provide Services. Subject to the District complying
with Section 2.7, the City agrees to provide Water Supply Service to the District to serve the
Tract in accordance with the terms and conditions of this Allocation Agreement. In order to
obtain Water Supply Service, the District agrees that it will (i) connect to the City Water System
as approved/directed by the City, and (ii) extend the line inside and/or outside the District as
necessary for the City to provide Water Supply Service to the Tract. Subject to the District
complying with Section 2.7, The City agrees to accept Wastewater from and to provide
Wastewater Service to the District to serve the Tract in accordance with the provisions of this
Allocation Agreement. In order to obtain Wastewater Service, the District agrees that it will (i)
connect to the City Wastewater System as approved/directed by the City, and (ii) extend the line
inside and/or outside the District as necessary for the City to provide Wastewater Service to the
Tract.
All services to be provided by the City herein shall be expressly subject to the payment of the
appropriate impact fees, without credit and/or reimbursement, and other costs specified in this
Allocation Agreement and the City's Code of Ordinances.
4
2.2. Standard of Service. Once the Facilities, including those specified in Section 2.7
hereof, are completed and approved by the City, the Water Supply Services and Wastewater
Services provided by the City to the District under this Allocation Agreement shall be equivalent
in quality to the water supply and wastewater services the City provides to other City customers.
Nothing contained in this Allocation Agreement shall create or imply in the District a
preferential right to the Water Supply Services or Wastewater Services over other City
customers.
2.3. Maximum Number of Connections. The City agrees to provide up to 414
ESFCs to serve the District.
2.4. Facilities. The Facilities, as described in the Engineering Reports, will be
designed and constructed in compliance with all applicable requirements and criteria of the City
as well as the applicable Approving Bodies and will be subject to the Consent Resolution. The
design and construction of the Facilities will be subject to the review and approval of the City.
Except as otherwise provided in Sections 2.1 and 2.7, the District shall design, construct or
extend the Facilities in such phases or stages as the District, in its sole discretion, from time to
time may determine to be economically feasible. All designs, design standards, construction
plans and drawings for any plants, facilities, connectors or points of connection including all
supporting facilities must be reviewed by and approved by the Director of Engineering before
any implementation or construction shall occur as provided herein.
2.5. Letter of Assurance and Issuance of Assignments of Capacity by the District.
The City agrees that, at such time as the District has acquired Water Supply Service or
Wastewater Service from the City up to 414 ESFCs, the City shall, upon reasonable request,
issue a letter of assurance that the District is entitled to the use and benefit of such capacity. The
letter of assurance shall provide for the use and benefit of quantities of services up to, but not in
excess of, the capacities as provided for herein necessary for the District to provide water and
wastewater services up to 414 ESFCs.
The District shall have the right to assign all or part of its capacity on assignment forms
approved by the City for reservation of capacity to landowner(s) and District(s) within its
boundaries. At such time as a landowner or District located within the boundaries of the District
requests a building permit from the City, the City shall honor such assignments of capacity or
agreements; provided, however, that the City shall have no duty to honor any assignment of
capacity that in the City's sole opinion was not validly issued or which will result in capacity
which exceeds the uncommitted capacity reserved by the District. Any such assignment shall be
subject to the restrictions noted herein.
2.6. Design and Construction of the Facilities; Regional Improvements;
Easement. The Facilities shall be constructed by or on behalf of the District at the District's
sole expense and shall be designed using the City's current standard criteria. It is understood and
agreed that the Facilities and the Regional Facilities must be supported by an Engineering Report
and approved by the City in writing.
The District agrees that it will provide the necessary engineering and construction for the
Facilities and Regional Improvements, if required, including all necessary appurtenances. The
District shall require that all engineers involved in designing the Facilities and Regional
Improvements tender a Certificate of Insurance evidencing a commercial liability policy, a
business automobile policy and a workers' compensation policy with the limits established
hereinbelow along with an errors and omissions policy complying with the following:
■ Limit: $1,000,000 for this project.
■ For all architects, engineers, and/or design companies
■ Claims -made form is acceptable
■ Coverage will be in force for three (3) years after construction of
the Project is completed.
Before commencing construction of the Facilities and Regional Improvements, the
District must receive the written approval from the City of the plans and specifications for the
Facilities and Regional Improvements. Upon written approval of the plans and specifications by
the City, the District shall proceed to construct the Facilities and Regional Improvements. The
City shall have the right to inspect the construction of the Facilities and Regional Improvements.
Upon completion of the Facilities and Regional Improvements, the City shall inspect the same
and shall note any deficiencies in the construction of the Facilities and Regional Improvements.
Upon completion, the District shall convey the Facilities and Regional Improvements and any
right-of-way for the Facilities and Regional Improvements to the City, subject to its acceptance,
and the City shall be responsible for the operation and maintenance of the Facilities and Regional
Improvements. The District shall warrant the Facilities and Regional Improvements or cause any
construction contract warranty to run to the City for a period of one year after final completion of
the Facilities and Regional Improvements. Before beginning construction on the Facilities and
Regional Improvements, the District shall provide the City with executed copies of payment and
performance bonds that comply with all applicable requirements of law, specifically including
the bond requirements of Texas Government Code Chapter 2253 and that name the City as an
additional obligee on such bonds. Evidence of proper authority of all signing officers or
representatives must be submitted. Additionally, prior to the construction of the Facilities and
Regional Improvements the City shall be provided with a copy of a Certificate of Insurance
reflecting that the contractor has the following minimum coverage amounts:
(1) Workers' Compensation Policy
■ Statutory amounts required by Texas law.
■ Employer's Liability: $1,000,000
(2) Commercial General Liability Policy
■ General aggregate of $2,000,000
■ Owners' and Contractors' Protective Liability of $1,000,000
■ Products and Completed Operations of $1,000,000
■ Personal and Advertising Injury of $1,000,000
■ Minimum of $1,000,000 per occurrence
■ Coverage shall be broad form CGL.
■ No coverage exclusions shall be deleted from standard policy
without notification of individual exclusions being attached
for review and acceptance.
(3) Automobile Liability Policy
■ Combined single limits of $2,000,000
■ Coverage for "Any Auto."
(4) Builder's Risk
■ Limit: 100% of insurable value, replacement cost basis
■ City of Baytown will be named Loss -Payee
All insurance certificates required in this section shall contain a provision that coverages
afforded under the policies will not be canceled, suspended, voided, or reduced until at least
thirty (30) days' prior written notice has been given to the City via certified mail, return receipt
requested. Prior to the end of each coverage period during the term of this Agreement, a new
Certificate of Insurance must be filed with the City evidencing continuation of coverage. The
contractor shall also file with the City valid Certificates of Insurance covering all Subcontractors.
The following are general requirements, which are applicable to all policies required in this
section:
(a) General Liability and Automobile Liability insurance shall be written by a carrier
with an A.M. Best Rating of B+ or higher in accordance with the current Best
Key Rating Guide.
(b) Only Insurance Carriers licensed and admitted to do business in the State of Texas
will be accepted.
(c) Deductibles shall be listed on the Certificate of Insurance and are acceptable only
on a per occurrence basis.
(d) Claims -made policies will not be accepted.
(e) The City, its officials, agents and employees are to be added as "Additional
Insureds" to all liability policies. The coverage shall contain no special limitation
on the scope of protection afforded to the City, its officials, agents and employees.
(f) A waiver of subrogation in favor of the City with respect to Workers'
Compensation Insurance must be included.
(g) Upon request, certified copies of all insurance policies and/or certificates of
insurance shall be furnished to the City at no cost to the City.
(h) The contractor shall comply with Section 110.110 of Title 28 of the Texas
Administrative Code.
2.7. Necessary Capital Improvements. In order for the City to provide services as
specified herein and as a condition thereof, the District shall contribute to the Eastpoint
Subdivision Pipebursting Project as described in this section and shall not seek in any way and
hereby waives any credit or reimbursement for which it may otherwise be entitled. In general,
the Eastpoint Subdivision Pipebursting Project entails pipebursting the eight -inch (8") sanitary
sewer line to a twelve -inch (12") sanitary sewer line for that portion of the line shown on Exhibit
"D," which is attached hereto and incorporated herein for all intents and purposes. The District
shall be responsible for 100% of the cost of this project. The following are the responsibilities of
the parties concerning this project:
(1) The City shall advertise for bids in accordance with law.
(2) After the bids are received, the City shall notify the District of the bid of
the lowest responsible bidder.
(3) The City shall enter into a contract with the lowest responsible bidder.
(4) Upon request, the City shall provide an update on the status of the Project
to the District.
(5) After completion and acceptance of the Project by the City, the City shall
notify the District of the actual project costs. District shall tender to the
City fifty percent (50%) of the full cost of the project within one hundred
eighty (180) days after the City Manager's execution of this Agreement,
and the remaining fifty percent (50%) within three hundred sixty (360)
days after the City Manager's execution of this Agreement.
The legal title to the Eastpoint Subdivision Pipebursting Project and all appurtenances related
thereto shall at all times be vested in the City; and District shall have no claim thereto. As such,
District shall have no right or privilege to remove or interfere with any part or portion of the
Eastpoint Subdivision Pipebursting Project during or after construction.
2.8. Operation by the City. As construction of each phase of the Facilities and
Regional Improvements (except for the Detention Tract) is completed, representatives of the City
shall inspect the same and, if the City finds that the same has been completed in accordance with
the final plans and specifications, the City will accept the same, whereupon such Facilities and
Regional Improvements shall be conveyed at no cost to the City as provided in Section 2.6 and
operated and maintained by the City at its sole expense as provided herein. In the event that the
Facilities and Regional improvements have not been completed in accordance with the final
plans and specifications, the City will advise the District in what manner said Facilities and
Regional Improvements do not comply, and the District shall immediately correct the same;
whereupon the City shall again inspect the Facilities and Regional Improvements and accept the
same if the defects have been corrected. During the term of this Allocation Agreement, the City
will operate the Facilities and Regional Improvements and provide Water Supply Service and
Wastewater Service, only to the extent necessary to satisfy the City's obligations as specified in
Section 2. 1, to all users within the District without discrimination. The City shall at all times
maintain the Facilities and Regional Improvements or cause the same to be maintained, in good
condition and working order and will operate the same, or cause the same to be operated, in an
efficient and economical manner at a reasonable cost and in accordance with sound business
principles in operating and maintaining the Facilities and Regional Improvements, and the City
will comply with all contractual provisions and agreements entered into by it and with all valid
rules, regulations, directions or orders by any governmental, administrative or judicial body
promulgating the same.
Prior to the first connection to the Water System within the Tract being made, the District
shall enter into a contract with the homeowners' association within the District, or other entity
acceptable to the City, but hereinafter referred to as "HOA." Said contract shall provide that (a)
the HOA will operate and maintain the stormwater detention systems from inception at no cost to
the District or the City, (b) the District will grant an easement to the HOA for said purpose, or (c)
if the District will be dissolved pursuant to any applicable law, the HOA, prior to the effective
date of dissolution, will accept conveyance of the sites for stormwater detention systems in fee
from the District, it being understood and agreed that the City will not own, operate or maintain
any stormwater detention facilities, including the Detention Tract.
2.9. Ownership. As the Facilities and Regional Improvements are acquired and
constructed, the District shall dedicate the same to the City (except for the Detention Tract)
including all warranties and interests in the land on which the Facilities and/or Regional
Improvements are located as necessary for the maintenance, operation, inspection, replacement,
reconstruction, and removal of the same, as determined by the City. The conveyance to the City
shall be subject to the acceptance by the City after inspection by the City. The District shall not
convey, and the City shall not accept, the Detention Tract.
2.10. Rates and Meters. The City shall bill and collect from customers of the
facilities and shall from time to time fix such rates and charges for such customers of the
Facilities as the City, in its sole discretion, determines are necessary; provided that the rates and
charges for services afforded by the Facilities will be equal and uniform to those charged other
similar classifications of users in non -municipal utility district areas of the City. All revenues
from the Facilities shall belong exclusively to the City. The City shall be responsible for
providing and installing any necessary meters with the individual customers; provided applicable
charges for such meters and service have been paid to the City.
2.11. Connection Charges. Notwithstanding any City ordinance to the contrary
and except as otherwise specifically set forth herein, the City may impose a charge on the
District or its customers, at its discretion, for connection to the Facilities at a rate to be
determined from time to time by the City, provided the charge is equal to the sums charged other
City users for comparable connections, and the connection charges shall belong exclusively to
the City. Nothing contained in this section shall relieve the District from its obligation to pay
connection charges, which are not paid by the District's customers.
2.12. Impact Fees. The District shall pay to the City impact fees for water supply and
wastewater services. The impact fees shall be the amount as adopted by the City Council for
water and wastewater services. The District shall pay water and sewer impact fees to the City in
accordance with Section 114-101 of the Code of Ordinances, and as may be hereinafter amended
and wastewater impact fees to the City in accordance with such section, as amended. In lieu of
collecting such amounts directly from the District, the City may, at its sole discretion, seek to
collect, in whole or in part, directly from the District's customers. If the City collects from the
District's customers, the City shall not collect such amounts from the District. However, nothing
contained in this section shall relieve the District from its obligation to pay the impact fees,
which are not paid by the District's customers.
2.13. Default; Remedies. Any party to this Allocation Agreement that believes that
the other party to this Allocation Agreement has defaulted in the performance of any condition,
term, or obligation owed to that party under this Allocation Agreement shall within ten (10)
9
business days after discovery of said default, give written notice of the default to the defaulting
party, specifying in detail the provision or provisions of this Allocation Agreement that have
allegedly been breached, what specific action must be taken to cure or correct the default, and
requesting that the City Council of the City provide the parties an opportunity to be heard in
public session to discuss the default at the next scheduled city council meeting. The City
Council, after review of such request, shall determine whether to provide the parties the
opportunity to be heard in public session to discuss the default at the next scheduled city council
meeting. Should the party receiving the notice fail to commence action to correct the default
within the time determined by City Council and/or thereafter fail to diligently pursue the
completion of the action to correct the default, or should City Council determine not to hear the
matter, the party giving the notice of default may exercise other available remedies at law and in
equity. Notwithstanding the foregoing, the parties hereto shall have all remedies provided at law
and in equity with respect to this Allocation Agreement.
ARTICLE III.
DEVELOPMENT PLAN
3.1. Development Plan. The District's Development Plan for the overall
development of the District is attached as Exhibit "C." The City and the District agree that
specific approvals are required for each phase or part of the Development Plan, provided,
however, that the City shall not withhold such approvals if the applicable phase or part is in
conformance with the Development Plan. In addition, the parties agree as follows:
(a) The District understands and agrees that a portion of the consideration for the City
to enter into this Allocation Agreement is the District's obligation to develop the
property consistent with the Development Plan. The creation of the District was
predicated on the developer's ability to develop the Property in conformance with
the Development Plan. The City, and the District agree that the District and the
City shall allow development of, the Tract in accordance with the Development
Plan; provided that the same complies with the Code of Ordinances. The current
Development Plan provides for approximately 4.94 net acres of commercial
development and approximately 106.88 net acres of single family development,
including recreational facilities, stormwater detention, open spaces and roadways,
as shown on Exhibit "C." Any material change to the Development Plan, as
determined by the City, shall be approved by the City and shall conform to the
then -current City standard criteria and Code.
(b) The City and the District recognize the City's rights and obligations to ensure that
all Facilities are constructed in accordance with approved plans and
specifications. The City and the District agree that the City shall be named as an
additional beneficiary on all construction, payment, performance, and
maintenance bonds and that no additional bonds shall be required of the District.
(c) The obligations provided in this Article shall be obligations solely of the District
and shall not be obligations of the City. Further, the District's obligations in this
10
Article shall survive the creation of the District and shall exist for the term of this
Allocation Agreement. Notwithstanding any other provision of this Allocation
Agreement, the District may not assign any of its obligations under this Article to
the District or any other person or entity without the prior written consent of the
City.
ARTICLE IV.
FINANCING OF FACILITIES
4.1. Authority of District to Issue Bonds. The District shall have authority to issue, sell
and deliver Bonds from time to time, as deemed necessary and appropriate by the Board of
Directors of the District, for the purposes, in such forms and manner and as permitted or
provided by federal law, the general laws of the State of Texas and the Consent Resolution. No
Bonds shall be issued by the District unless all terms and conditions of the City's Procedures for
the Creation of In -City Municipal Utility Districts attached as Exhibit "B" and of the Consent
Resolution have been followed.
4.2. Bonds as Obligation of District. Unless and until the City shall dissolve the District
and assume the District Assets and District Obligations, the Bonds of the District, as to both
principal and interest, shall be and remain obligations solely of the District and shall never be
deemed or construed to be obligations or indebtedness of the City.
V.
DISTRICT TAXES
5.1. District Taxes. The District is authorized to assess, levy and collect ad
valorem taxes upon all taxable properties within the District to provide for (i) the payment in full
of the District's Obligations, including principal, redemption premium, if any, or interest on the
Bonds and to establish and maintain any interest and sinking fund, debt service fund or reserve
fund and (ii) for administration, operation, and maintenance purposes, all in accordance with
applicable law. The parties agree that nothing herein shall be deemed or construed to prohibit,
limit, restrict or otherwise inhibit the District's authority to levy ad valorem taxes as the Board of
Directors of the District from time to time may determine to be necessary. The City and the
District recognize and agree that all ad valorem tax receipts and revenues collected by the
District shall become the property of the District and may be applied by the District to the
payment of all or any designated portion of the principal or redemption premium, if any, or
interest on the Bonds or otherwise in accordance with applicable law.
5.2. Sale or Encumbrance of Facilities. Except as expressly provided in Sections 2.6
and 2.7, it is acknowledged that the District may not dispose of or discontinue any portion of the
Facilities.
ARTICLE VI.
DISSOLUTION OF THE DISTRICT
6.1. Dissolution of District Prior to Retirement of Bonded Indebtedness. The
City and the District recognize that, as provided in the laws of the State of Texas and the Consent
Resolution, the City has the right to abolish and dissolve the District and to acquire the District's
Assets and assume the District's Obligations. Notwithstanding the foregoing, the City agrees that
it will not dissolve the District until the Facilities required to serve the District have been
completed. To discharge any remaining District's Obligations, the City may (i) if requested by
the District in writing, authorize the District to sell its Bonds before or during a transition period
prior to the effective date of dissolution, as established by the City, (ii) pursuant to Local
Government Code Section 43.080, as amended, issue and sell bonds of the City in at least the
amount necessary to discharge the District's Obligations, including those under any utility
development and reimbursement agreements with Districts in the District, or (iii) provide written
notice to the District that the City has sufficient funds available from other sources to discharge
the District's Obligations, including those under the utility development and reimbursement
agreements with Districts in the District. Upon dissolution of the District, the City shall acquire
the District's Assets and shall assume the District's Obligations. The City further agrees that it
will not dissolve the District until the District(s), including the District, developing Facilities in
the District shall have been reimbursed by the District to the maximum extent permitted by the
rules of the Commission or the City assumes any obligation for such reimbursement of the
District under such rules.
6.2. Transition upon Dissolution. In the event all required findings and
procedures for the dissolution of the District have been duly, properly and finally made and
satisfied by the City, and unless otherwise mutually agreed by the City and the District pursuant
to then existing law, the District agrees that its officers, agents and representatives shall be
directed to cooperate with the City in any and all respects reasonably necessary to facilitate the
dissolution of the District and the transfer of the District's Assets to, and the assumption of the
District's Obligations by, the City.
ARTICLE VII.
MISCELLANEOUS
7.1. City Code of Ordinances, Permits, Fees, Inspections. The District under-
stands and agrees that all City ordinances and codes, including applicable permits, fees and
inspections, shall be of full force and effect within its boundaries and shall apply in the same
manner as to other areas within the City's corporate limits and this Allocation Agreement shall at
all times be subject to full compliance with the City Code of Ordinances. The District
understands and agrees that any improvements to the Detention Tract will be done in accordance
with the Development Plan and conditions related thereto and any agreement entered into
between the City and the District.
7.2. Approvals and Consents. Approvals or consents required or permitted to be
given under this Allocation Agreement shall be evidenced by an ordinance, resolution or order
12
adopted by the governing body of the appropriate party or by a certificate executed by a person,
firm or entity previously authorized to give such approval or consent on behalf of the party.
7.3. Force Majeure. If any party is rendered unable, wholly or in part, by force
majeure to carry out any of its obligations under this Allocation Agreement, except the
obligation to pay amounts owed or required to be paid pursuant to the terms of this Allocation
Agreement, then the obligations of such party, to the extent affected by such force majeure and
to the extent that due diligence is being used to resume performance at the earliest practicable
time, shall be suspended during the continuance of any inability so caused to the extent provided
but for no longer period. As soon as reasonably possible after the occurrence of the force
majeure relied upon, the party whose contractual obligations are affected thereby shall give
notice and full particulars of such force majeure to the other party. Such cause, as far as possible,
shall be remedied with all reasonable diligence. The term "force majeure," as used herein, shall
include, without limitation of the generality thereof, acts of God, strikes, lockouts, or other
industrial disturbances, acts of the public enemy, including acts of terrorism, orders of any kind
of the government of the United States or the State of Texas or any civil or military authority
other than a party to this Allocation Agreement, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, hurricanes, storms, floods, washouts, drought, arrests, restraint of
government and people, civil disturbances, explosions, breakage or accidents to machinery,
pipelines or canals, partial or entire failure of water supply resulting in an inability to provide
water necessary for operation of the water system and sewer system, to the extent required
herein, or in an inability of the City to provide Water or receive Wastewater in accordance with
Section 2.1, and any other inabilities of any party, whether similar to those enumerated or
otherwise, which are not within the control of the party claiming such inability, which such party
could not have avoided by the exercise of due diligence and care. It is understood and agreed that
the settlement of strikes and lockouts shall be entirely within the discretion of the party having
the difficulty, and that the requirement that any force majeure shall be remedied with all
reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the
demands of the opposing party when such settlement is unfavorable to it in the judgment of the
party experiencing the difficulty.
7.4. Law Governing; Venue; Authority for Actions. This Allocation Agreement
shall be governed by the laws of the State of Texas and no lawsuit shall be prosecuted on this
Allocation Agreement except in a court of competent jurisdiction located in Harris County. The
parties hereto recognize and understand that disputes may occur or actions may be required
under this Allocation Agreement and that this Allocation Agreement involves a governmental
entity and, as such, there can be no delegation to a third party individual or third party entity of
the duties and obligations of the parties as herein provided.
7.5. No Additional Waiver Implied. No waiver or waivers of any breach or
default (or any breaches or defaults) by any party hereto of any term, covenant, condition, or
liability hereunder, or the performance by any party of any duty or obligation hereunder, shall be
deemed or construed to be a waiver of subsequent breaches or defaults or any kind, under any
circumstances.
13
7.6. Addresses and Notice. Unless otherwise provided in this Allocation
Agreement, any notice, communication, request, reply, or advice (herein severally and
collectively, for convenience, called "Notice") herein provided or permitted to be given, made, or
accepted by any party to the other (except bills), must be in writing and may be given or be
served by depositing the same in the United States mail postpaid and registered or certified and
addressed to the party to be notified, with return receipt requested, or by delivering the same to
such party, addressed to the party to be notified. Notice deposited in the mail in the manner
herein above described shall be conclusively deemed to be effective, unless otherwise stated in
this Allocation Agreement, from and after the expiration of three (3) days after it is so deposited.
Notice given in any such other manner shall be effective when received by the party to be
notified. For the purpose of notice, addresses of the parties shall, until changed as hereinafter
provided, be as follows:
If to the City, to:
City of Baytown
Attn: City Manager
P.O. Box 424
Baytown, TX 77522
If to the District, to:
Harris County Municipal Utility District No. 213-B
c/o Coats Rose
Attn: Timothy Green
9 East Greenway Plaza, Suite 1100
Houston, TX 77046
The parties shall have the right from time -to -time and at any time to change their respective
addresses and each shall have the right to specify any other address by at least fifteen (15) days'
written notice to the other.
7.7. Assignability. Except as set forth herein, this Allocation Agreement may
be not be assigned by either party except upon written consent of the other party hereto.
7.8. Merger and Modifications. This Allocation Agreement, including the exhibits
that are attached hereto and incorporated herein for all purposes, embodies the entire agreement
between the parties relative to the subject matter hereof. This Allocation Agreement shall be
subject to change or modification only with the written mutual consent of the parties. All
agreements or parts thereof inconsistent with the terms of this Allocation Agreement are hereby
repealed; provided, however, that such repeal shall be only to the extent of such inconsistency.
7.9. Reservation of Rights. All rights, powers, privileges and authority of the parties
hereto not restricted or affected by the express terms and provisions hereof are reserved by the
parties and, from time to time, may be exercised and enforced by the parties.
7.10. Captions. The captions of each section of this Allocation Agreement are
inserted solely for convenience and shall never be given effect in construing the duties,
14
obligations or liabilities of the parties hereto or any provisions hereof, or in ascertaining the
intent of either party, with respect to the provisions hereof.
7.11. Severability. The provisions of this Allocation Agreement are severable, and if any
part of this Allocation Agreement or the application thereof to any person or circumstances shall
ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any
reason, the remainder of this Allocation Agreement and the application of part of this Allocation
Agreement to other persons or circumstances shall not be affected thereby.
7.12. Benefits of Contract. This Allocation Agreement is for the benefit of the
City, the District, and the District, and shall not be construed to confer any benefit on any other
person except as expressly provided for herein.
7.13. Term and Effect. Except as otherwise specifically set forth herein, including
in this Section below, this Allocation Agreement shall become effective on the date of execution
by the City and shall remain in effect until the earlier to occur of (i) the dissolution of the District
by the City or (ii) the expiration of thirty-five (35) years from the effective date hereof. The City
may terminate this Allocation Agreement (i) after one (1) year from its effective date should
District fail to complete the installation of the Regional Facilities and/or (ii) after three (3) years
from its effective date should the District fail to commence any other construction of Facilities to
serve the Tract. Notice shall be given by the City in writing to the District at least thirty (30)
days prior to the termination date.
7.14. Meetings and Notices. The District shall comply with all provisions of the
Procedures for Creation of In -City Municipal Utility Districts related to District meetings and
notices.
IN WITNESS WHEREOF, the parties hereto have executed this Allocation Agreement in
multiple copies, each of equal dignity, on this _ day of , 2015, the date of
signature by the City Manager.
ATTEST:
LETICIA BRYSCH, City Clerk
APPROVED AS TO FORM:
IGNACIO RAMIREZ, SR., City Attorney
15
CITY OF BAYTOWN
RICHARD L. DAVIS, City Manager
HARRIS COUNTY MUNICIPAL UTILITY
DISTRICT NO. 213-B
(Signature)
(Printed Name)
(Title)
ATTEST:
(Signature)
(Printed Name)
(Title
APPROVED AS TO FORM:
TIMOTHY GREEN, Attorney for District
RAKarenlFiles\Contrac& In -City Municipal Utility District Contract & Ordinance\MUD 213-B\AllocationAgreement09102015Cleanp.m..doc
v
Exhibit "A"
Tract 1 aontaining 111.307 acres of land situated in the Talcott Patching Survey, Abstract
Number 620, Harris County, Texas, and being all of the 111.307 acre tract described in the
deed to Compass Bank, recorded under Harris County Clerk's File Number 20110005202; said
111.307 acres being more particularly described by metes and bounds as follows (all bearings
are based on the record bearings of the called 717.279 acres as described in the deed to
Garth-Wallisville, Limited, recorded under Harris County Clerk's File Number D892853):
Tract 1
COMMENCING at a 1 --inch iron pipe found in the west right-of-way line of Garth Road (width
varies), recorded under Harris County Clerk's File Numbers D838008, W485307 and X600931
and in Volume 858, Page 333 of the Harris County Deed Records, marking the southeast corner
of the called 89.1 acres conveyed to George Hamman in Volume 1054, Page 259 of the Harris
County Deed Records, common with the northeast corner of said called 717.279 acre tract and
the northeast corner of the called 25,000 square feet tract conveyed to Charles Kipple, Trustee
recorded under Harris County Clerk's File Number H510278;
THENCE, South 07°26'25" East, along said west right-of-way line and said Garth Road, at a
distance of 100.00 feet, pass the southeast corner of said called 25,000 square feet tract, at a
distance of 2,035.56 feet, pass a 5/8 -inch iron rod with plastic cap stamped "Terra Surveying"
set marking the northeast corner of the called 36.93 acre tract, conveyed to Costal Industrial
Water Authority recorded under Harris County Clerk's File Number D838008, at a distance of
2,364.83 feet, pass a 5/8 -inch iron rod found marking the southeast corner of said called 36.93
acre tract, at a distance of 4,640.76 feet pass the northeast corner of the called 5.0000 acre tract,
conveyed to Goose Creek Independent School District, recorded under Harris County Clerk's
File Number G873953, at a distance of 4,853.40 feet, pass the southeast corner of said called
5.0000 acre tract common with the northeast corner of a called 15.0000 acre tract conveyed to
Goose Creek Independent School District, recorded under Harris County Clerk's File Number
G812757, at a distance of 5,563.16 feet pass the southeast corner of said called 15.0000 acre
tract, in all a total distance of 5,685.71 feet to an angle corner in said west right-of-way line;
THENCE, North 85°44'25" West, continuing said west right-of-way line, a distance of 10.27
feet, to an angle corner in said west right-of-way line;
THENCE, South 07°26'25" East, continuing along said west right-of-way line, a distance of
25.02 feet to 5/8 -inch iron rod with plastic cap stamped "Terra Surveying" set marking the
northeast corner and the POINT OF BEGINNING of the herein described tract;
THENCE, South 07°26'25" East, continuing along said west right-of-way line, a distance of
1,870.53 feet, to a 5/8 -inch iron rod with plastic cap stamped "Terra Surveying" set marking the
north end of the northwest right-of-way line cutback line at the intersection of said Garth Road
and Wallisville Road (width varies), as described in the deeds recorded under Harris County
Clerk's File Numbers W485307, X715895 and X600931 and in Volume 311, Page 3 of the
Harris County Map Records;
Exhibit "A"
THENCE, South 36°32'16" West, along said northwest right-of-way cutback line, a distance of
21.59 feet, to a 5/8 inch iron rod with plastic cap stamped "Terra Surveying" set marking the
south end of said right-of-way cutback line;
THENCE, South 80°30'56" West, along the north right-of-way line of said Wallisville Road, a
distance of 772.43 feet to a 5/8 -inch iron rod with plastic cap stamped "Terra Surveying" set
marking an angle corner of the herein described tract;
THENCE, South 0718'28" East, continuing along the said north right-of-way line, a distance of
18.57 feet to a 5/8 -inch iron rod with plastic cap stamped "Terra Surveying" set marking an
angle corner of the herein described tract;
THENCE, South 80°22'16" West, continuing along said north right-of-way line, a distance of
844.01 feet, to an "X" in concrete found marking the southeast corner of a called 4.727 acre tract
conveyed to Houston Lighting & Power Company in Volume 3018, Page 26 of the Harris
County Deed Records, common with an angle corner of the herein described tract;
THENCE, North 09°36'02" West, along the east line of said called 4.727 acre tract, a distance of
498.68 feet, to a 5/8 -inch iron rod found marking the northeast corner of said called 4.727 acre
tract common with an interior corner of the herein described tract;
THENCE, South 80°23'58" West, along the north line of said called 4.727 acre tract, a distance
of 473.58 feet, to a 5/8 -inch rod found in the east line of a the 150 -foot wide Houston Lighting
& Power Company easement recorded in Volume 3021, Page 30 of the Harris County Deed
Records, common with the east line of the 22 -foot wide Houston Lighting & Power Company
easement recorded in Volume 2809, Page 645 of the Harris County Deed Records, marking the
northwest corner of said called 4.727 acre tract common with an angle corner of the herein
described tract;
THENCE, North 23°29'12" West, along the east line of said 22 -foot wide Houston Lighting and
Power easement common with the east line of a said 150 -foot Houston Lighting and Power
easement, a distance of 1,966.90 feet to a 5/8 -inch iron rod with plastic cap stamped "Terra
Surveying" set in the south line of the 20 -foot wide Seagull Petrochemical Corporation pipeline
easement recorded under Harris County Clerk's File Numbers M373402 and M645320 marking
the northwest corner of the herein described tract;
THENCE, North 66°30'50" East, along the south line of said 20 -foot wide Seagull
Petrochemical Corporation pipeline easement, a distance of 26.94 feet, to a 5/8 -inch iron rod
with plastic cap stamped "Terra Surveying" set marking an angle corner of the herein described
tract;
THENCE, North 79053'08" East, continuing along said south line, a distance of 505.26 feet, to a
5/8 -inch iron rod with plastic cap stamped "Terra Surveying" set marking an angle corner of the
herein described tract;
THENCE, South 85°44'33" East, continuing along said south line, a distance of 2,147.85 feet, to
a 5/8 -inch iron rod with plastic cap stamped "Terra Surveying" set marking an angle corner of
the herein described tract;
THENCE, North 85052'33" East, continuing along said south line, a distance of 32.31 feet to the
POINT OF BEGINNING and containing 111.307 acres (4,848,534 square feet) of land.
Exhibit "B"
ARTICLE VII. - IN -CITY MUNICIPAL UTILITY DISTRICTS
Sec. 98-701. - Polity.
There is hereby adopted a policy and plan establishing the conditions under which a municipal utility
district may be formed within the corporate limits of the city, which shall read as follows:
The following terms, conditions and standards establish the basis under which the city council may
consent to the formation of a municipal utility district within the corporate limits of the city in writing.
(Ord. No. 10003, § 1, 2-10-05)
Sec. 98-702. - Resolution to create a municipal utility district.
(a) The city's consent to the creation of a municipal utility district proposed to be formed within the
corporate limits of the city under the Texas Water Code and the Texas Constitution Section 59,
Article XVI, shall be evidenced by the adoption of a resolution.
(b) No resolution shall be adopted consenting to the creation of a municipal utility district until the city
council finds that the proposed municipal utility district (1) will be an economically feasible and sound
development benefiting the city, (2) will not adversely affect the existing city water, sewer and storm
facilities or other city utilities or city functions, and (3) will not increase the city's taxes or utility rates
or adversely impact the city's financing or bond rating, and that (4) all of the conditions imposed by
this article have been agreed to by the majority in value of landowners within the proposed municipal
utility district.
(Ord. No. 10003, § 1, 2-10-05)
Sec. 98-703. - Conditions to creation.
The following conditions shall apply to every municipal utility district within the city:
(1) The municipal utility district may acquire property outside its boundaries with prior written
consent of the city only for purposes of providing stormwater drainage and detention, potable
water distribution, wastewater collection, and for other purposes permitted by law; provided that
no land shall be annexed or added to the municipal utility district unless the city has given its
written consent by resolution of the city council to such addition or annexation;
(2) The municipal utility district shall not provide services for, or acquire property to provide services
for, any property outside its boundaries without the prior written consent of the city;
(3) The municipal utility district shall not allow use of easements or stormwater drainage facilities
owned or controlled by the municipal utility district for any property or development outside its
boundaries without the prior written consent of the city;
(4) The municipal utility district shall pay the actual costs incurred by the city for legal, engineering
and financial advisory services in connection with the allocation agreement (hereinafter defined)
and the adoption of a resolution consenting to creation of the municipal utility district;
(5) The facilities to be constructed by the municipal utility district shall be designed and constructed
in compliance with all applicable requirements and criteria of the applicable regulatory agencies
and subject to the applicable provisions of the city's resolution granting a petition for inclusion of
certain territory in the municipal utility district (the "consent resolution");
Page 1
(6) Prior to the sale or offer to sell any bonds of the municipal utility district, the terms and
conditions in this subdivision and the consent resolution must be approved and ratified in an
instrument executed by the governing body and officers of the municipal utility and such
instrument must be delivered to the city attorney;
(7) The city shall not allow any connection to be made to the municipal utility district's wastewater
system until, with respect to such connection:
a. The municipal utility district has issued an assignment of capacity specifying the number of
gallons per day of water supply and wastewater treatment allocated for such connection,
and has provided a copy thereof to the city manager;
b. The city has inspected the connection and premises and has issued a building permit for
that connection; and
c. All buildings or structures served by connections shall be located entirely within the
boundaries of a lot or parcel shown in a plan, plat or replat filed with and finally approved
by the city and duly recorded in the official records of the county where the property is
located (provided this limitation shall not apply if no plan, plat or replat is required by
applicable state statutes or city ordinances);
(8) Unless and until the city shall dissolve the municipal utility district and assume the properties,
assets, obligations and liabilities of the municipal utility district, the bonds of the municipal utility
district, as to both principal and interest, shall be and remain obligations solely of the municipal
utility district and shall never be deemed or construed to be obligations or indebtedness of the
city;
(9) All contracts with third parties for construction of water, wastewater and stormwater facilities to
serve the proposed municipal utility district will contain the following provisions:
a. A requirement that all plans and specifications for construction of improvements or
modification of improvements which are to be built to serve the municipal utility district
and/or require approval of the Texas Commission on Environmental Quality be prepared in
accordance with the then adopted city specifications and requirements for such facilities
and delivered to the city for approval prior to submission to the Texas Commission on
Environmental Quality. All plans and specifications presented to the bidders shall be
approved by the city in writing prior to advertising for bids;
b. A requirement that prior to the construction of such facilities within the municipal utility
district's territory, written notice by registered or certified mail be given to the city, stating
the date that such construction will commence;
c. An agreement that all construction or modification of improvements to serve the municipal
utility district will be subject to periodic inspections by the city or its duly authorized agent
and that no underground improvements will be backfilled prior to inspection and written
approval by the city;
d. All contracts for construction of improvements will be awarded in compliance with the terms
contained within public bidding statutes in Chapter 49 of the Texas Water Code;
If the municipal utility district is performing the services, the same terms and conditions as set
forth herein shall be applicable to the municipal utility district.
(10) As the municipal utility district's facilities are acquired and constructed, the municipal utility
district shall convey the same to the city, including all warranties relating to the facilities;
provided, however, that the municipal utility district shall not convey, and the city shall not
accept, stormwater detention systems;
(11) As acquisition and/or construction of each phase of the facilities is completed, representatives
of the city shall inspect the same and, if the city finds that the same has been completed in
accordance with the final plans and specifications, the city will accept the same, whereupon
such portion of the facilities shall be operated and maintained by the city at its sole expense;
Page 2
provided, however, that the city shall not accept, or operate and maintain, stormwater detention
systems; and further provided, however, that in the event that the facilities have not been
completed in accordance with the final plans and specifications, the city will immediately advise
the municipal utility district in what manner said facilities do not comply, and the municipal utility
district shall immediately correct the same, whereupon the city shall again inspect the facilities
and accept the same if the defects have been corrected;
(12) The city shall bill and collect from customers of the facilities and shall from time to time fix such
rates and charges for such customers of the facilities as the city, in its sole discretion,
determines are necessary; provided that the rates and charges for services afforded by the
facilities will be equal and uniform to those charged other similar classifications of users in
nonmunicipal utility district areas of the city; and all revenues from the facilities shall belong
exclusively to the city without rebate of such revenues to the municipal utility district;
(13) The city may impose a charge for connection to the facilities at a rate to be determined from
time to time by the city, provided the charge is equal to the sums charged other city users for
comparable connections; and the connection charge shall belong exclusively to the city;
(14) The municipal utility district is authorized to assess, levy and collect ad valorem taxes upon all
taxable properties within the municipal utility district to provide for (a) the payment in full of the
municipal utility district's obligations, including principal, redemption premium, if any, and
interest on the bonds to be issued by the municipal utility district and to establish and maintain
any interest and sinking fund, debt service fund or reserve fund, (b) for administration, operation
and maintenance purposes, all in accordance with applicable law and (c) to pay expenses of
assessing and collecting the taxes. The city will levy and collect ad valorem taxes upon all
taxable properties in the city, including the municipal utility district;
(15) Unless the municipal utility district is in default under the terms of its allocation agreement after
reasonable opportunity to cure, the city shall not dissolve the municipal utility district until the
water, wastewater and drainage utilities required to serve the municipal utility district have been
completed and bonds issued by the municipal utility district to finance same; and the city shall
afford the municipal utility district the opportunity to discharge any obligations of the municipal
utility district pursuant to any existing agreements of the municipal utility district with third parties
for construction of facilities, by either (a) authorizing the municipal utility district to sell its bonds
before or during a transition period prior to the effective date of dissolution, as established by
the city, (b) issuing bonds and selling bonds of the city pursuant to Vernon's Texas Codes
Annotated, Local Government Code Section 43.080, as amended, in at least the amount
necessary to discharge the municipal utility district's obligations, including those under any such
agreements, or (c) providing written notice to the municipal utility district that the city has
sufficient funds available from other sources to discharge the municipal utility district's
obligations, including those under any such existing agreements with third parties. The city shall
have the right to dissolve the municipal utility district if construction of water, wastewater or
drainage utilities required to serve the municipal utility district does not begin within 36 months
of execution of the allocation agreement;
(16) All city ordinances and codes, including applicable permits, fees and inspections, shall be of full
force and effect within the boundaries of the municipal utility district in the same manner as with
respect to other areas within the city's corporate limits, except as specifically herein provided
otherwise;
(17) No bonds, other than refunding bonds, or notes of the municipal utility district shall be issued or
sold unless not less than 20 days following the filing of an application with the Texas
Commission on Environmental Quality for the approval of projects and bonds, the municipal
utility district provides the city with a copy of such application and not less than 30 days prior to
publication of notice of sale, the municipal utility district provides the city with a copy of the staff
memorandum of Texas Commission on Environmental Quality approving the projects and
bonds, a copy of its proposed bond order, preliminary official statement, bid form and notice of
sale and the following criteria are met.
Page 3
The municipal utility district shall not issue bonds unless the following conditions have been
satisfied:
a. The municipal utility district shall not issue any bonds, other than refunding bonds, unless
the purpose for which the proceeds of such bonds may be used is limited to one or more of
the following and no others:
1. Designing, purchasing and/or constructing or otherwise acquiring
(i) Waterworks facilities to provide water supply for municipal, domestic, and
commercial uses, excluding industrial uses,
(ii) Wastewater facilities to collect, transport, process, dispose of and control all
domestic or communal wastes, excluding industrial waste, whether in fluid, solid
or composite state, or
(iii) Stormwater drainage and detention facilities to gather, conduct, divert and control
local stormwater or other local harmful excesses of water in the municipal utility
district,
2. Purchasing, constructing, owning, operating, repairing, improving, extending or
otherwise acquiring interests in real property, improvements, facilities, appliances,
equipment, buildings, plants or structures necessary or incidental to the operation of
waterworks facilities, wastewater facilities, or stormwater drainage facilities. Proceeds
of the bonds for costs of operations of the municipal utility district shall not exceed ten
percent of the issuance amount; and
3. All costs of issuance of the bonds (including but not limited to legal fees, financial
advisory fees, administrative and organizational fees and expenses and costs of
operations during construction, bond discount, capitalized interest, developer interest,
creation costs, printing expenses, publication expenses and contingencies relative to
facilities not yet under contract). Proceeds of the bonds for costs of operations of the
municipal utility district shall not exceed ten percent of the issuance amount.
b. The municipal utility district shall not sell or issue any bonds unless:
1. The terms of such bonds expressly provide that the municipal utility district reserves
and shall have the right to redeem the bonds not later than the 15th anniversary of the
date of issuance, without premium;
2. The bonds, except refunding bonds, are sold after the taking of public bids therefor;
3. None of such bonds and bonds sold to a federal or state agency, other than refunding
bonds, is sold for less than 95 percent of par;
4. The net effective interest rate on bonds so sold, taking into account any discount or
premium as well as the interest rate borne by such bonds, does not exceed two
percent above the highest average interest rate reported by the Daily Bond Buyer in
its weekly "20 Bond Index" during the one-month period next preceding the date
notice of the sale of such bonds is given and bids for the bonds will be received not
more than 45 days after notice of sale of the bonds is given;
5. The maximum term of any debt issuance shall be no greater than 25 years;
6. The minimum par amount of any bonds issued, except a final issue, shall be
$1,000,000.00;
7. Each issue of bonds shall be structured to achieve either level principal payments or
level debt service payments, excluding the first two years of debt service;
8. The municipal utility district shall submit to the city pro forma cash flows prepared in a
manner consistent with the financial feasibility rules of the Texas Commission on
Environmental Quality evidencing a municipal utility district tax rate (both maintenance
Page 4
and operations rate and interest and sinking rate combined) not to exceed $1.50 per
$100.00 assessed valuation; and
Each bond issue shall not include more than two years of capitalized interest.
The city staff shall review the documents required to be provided hereunder and the
evidence of compliance with the foregoing criteria within 15 days following receipt of
same. If the city staff gives a favorable approval of the bonds, an item will be placed
on the next available regular or special council meeting agenda for consideration by
the city council. The issuance of bonds by the municipal utility district must be
approved by the city council of the city, or its designee. Any costs incurred by the city
in connection with review of the issuance of bonds shall be paid by the municipal
utility district, in an amount not to exceed $2,500.00;
c. The municipal utility district's resolution authorizing the issuance of the municipal utility
district's bonds must contain a provision that the pledge of the revenues from the operation
of the municipal utility district's water and sewer and/or drainage system to the payment of
the municipal utility district's bonds will terminate when and if the city takes over the assets
of the municipal utility district and assumes all of the obligations of the municipal utility
district.
(18) The city acknowledges that a municipal utility district has authority to assess an unlimited tax for
payment of debt service. However, prior to implementation of any increase in tax rate above its
initial rate, the municipal utility district shall make a formal presentation to city council explaining
the need for the increase, at which time residents of the municipal utility district shall be given
an opportunity to be heard. Notice of such presentation shall be sent to each owner of taxable
property within the municipal utility district as reflected on its most recent certified tax roll. This
provision shall be in addition to any requirements of notice and hearing which may be contained
in the Texas Water Code and in the Texas Tax Code which apply to the municipal utility district;
(19) In addition to the information the municipal utility district is required to file of record as required
by the Texas Water Code, the municipal utility district shall annually deliver to each property
owner within the municipal utility district, as reflected on its most recent certified tax roll, written
notice of the existence of the municipal utility district and its right to assess taxes in addition to
those assessed by the city. Such notice shall also contain a reference to the allocation
agreement, the consent resolution and this paragraph. Such notice shall advise the property
owner that such documents are available for inspection during regular business hours in the
municipal utility district's office;
(20) The majority in value of landowners within the proposed municipal utility district shall enter into
a utility functions and services allocation agreement ("allocation agreement") with the city, which
shall contain the terms and conditions set forth in this section, as well as other terms and
conditions which may be agreed to by the city or imposed herein. The allocation agreement
shall be assigned by the proponent to the municipal utility district upon its creation;
(21) The allocation agreement shall be entered into simultaneously with the adoption of the consent
resolution;
(22) The municipal utility district shall establish an official meeting location within the corporate limits
of the city and at all times after the municipal utility district has 100 residential connections shall
hold the meetings of its board of directors at such location;
(23) In addition to any other notice requirements applicable to the municipal utility district, the
municipal utility district must post an agenda of the meetings of its board of directors at all
primary entrances to the municipal utility district and at the location designated for notices at city
hall not less than 72 hours prior to any meeting. An agenda shall also be provided to the city
manager of the city prior to any meeting of the board of directors.
Page 5
(24) The official office for recordkeeping of the municipal utility district must be accessible to the
district's residents and shall not require a long distance phone call for a district resident to
contact the official office for recordkeeping;
(25) The municipal utility district shall comply with all applicable requirements of the Texas
Commission on Environmental Quality regarding the display of signage at entrances into the
municipal utility district.
The city may specify other conditions with which the municipal utility district must comply in this code, the
resolution consenting to the creation of the municipal utility district, and/or the allocation agreement.
(Ord. No. 10003, § 1, 2-10-05)
Sec. 98-704. - Petition for creation of municipal utility district.
Upon the presentation of a petition for consent for the creation of a municipal utility district within the
corporate limits of the city, the majority in value of landowners within the proposed municipal utility district
shall:
(1) Present evidence that the proposed municipal utility district contains 100 or more acres; present
evidence that the petition is filed on behalf of the majority in value of landowners within the
proposed municipal utility district; and show that the proposed municipal utility district is wholly
within the corporate limits of the city;
(2) Present a preliminary report describing the municipal utility district and proposed use of the land
within the municipal utility district showing that the proposed municipal utility district and land
use are feasible;
(3) Present an estimate of assessed valuation of the municipal utility district showing the value of
property as it exists on date of the petition; a build -out schedule showing the projected value of
the property when 50 percent of the projected vertical improvements for the municipal utility
district, exclusive of wastewater, water, sewer and drainage improvements, have been
completed; and showing the projected value of the improvements upon completion of the
development within the municipal utility district; and
(4) Agree that the majority in value of landowners within the proposed municipal utility district shall
develop the property for the purposes substantially as described in the preliminary report,
except as may otherwise be agreed by the proponent and the city, and that prior to
commencement of any improvements, will comply with all provisions of the subdivision
ordinances and zoning ordinances of the city.
(Ord. No. 10003, § 1, 2-10-05)
Sec. 98-705. - Other requirements.
(a) The city reserves the right to impose other specific requirements relative to a given municipal utility
district, including, but not limited to park requirements, construction material for houses and other
buildings, amenities, and minimum lot sizes, which shall be agreed to and set forth in the allocation
agreement.
(b) The land within the district will be developed in accordance with the general plan to be approved by
the city.
(Ord. No. 10003, § 1, 2-10-05)
Sec. 98-706. - Abolition.
Page 6
It is the policy of the city that a municipal utility district created within the city should not be abolished
until such time as it has retired all of its outstanding bonded indebtedness, so that the city's taxpayers
outside the municipal utility district shall not have to pay off all or any part of the bonded indebtedness
incurred by the municipal utility district. The city does reserve the right to abolish any municipal utility
district, regardless of whether it has any outstanding debt, if it is deemed to be in the best interest of the
city.
(Ord. No. 10003, § 1, 2-10-05)
Sec. 98-707. - City services.
The city shall provide fire, police and other general city services to the areas within the municipal
utility district similar to those provided in similarly situated nonmunicipal utility district areas of the city.
Different levels of service may be provided if different characteristics of topography, land uses and
population density constitute a sufficient basis for providing different levels of service as determined by
the city.
(Ord. No. 10003, § 1, 2-10-05)
Page 7
Exhibit "C"
Development Plan
to be attached
Exhibit "D"
�# ■` r i i 3
� n