Ordinance No. 12,283ORDINANCE NO. 12,283
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 THE FIRST
AMENDMENT TO THE INDUSTRIAL DISTRICT AGREEMENT WITH
CHEVRON PHILLIPS CHEMICAL LP;, AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF.
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown hereby authorizes and directs the
City Manager to execute and the City Clerk to attest to the First Amendment to the Industrial District
Agreement with Chevron Phillips Chemical LP. A copy of the amendment is attached hereto, marked
Exhibit "A," and made a part hereof for all intents and purposes.
Section 2: This ordinance shall take effect immediately r d after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative v e 'of the City Council of the City of
Baytown this the 11th day of July, 2013.
o
S EPHEN DONCARLOS, Mayor
ATTEST:
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5 ,
LETICIA BRYSCkf, ,C .
"t. ' %Clerk
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APPROVED AS TO FORM:
NACIO RAMIREZ, SR., Attorney
RAKaren \Files \City Council \0rdinances\2013Vuly 11\ 1stAmendment2ChevronPhillipsIDAOrdinance .doc
Exhibit "A"
First Amendment
to
the Industrial District Agreement ( "Agreement ")
between
the City of Baytown, Texas and Chevron Phillips Chemical LP
This First Amendment to the Agreement is made and entered into between the City of
Baytown, Texas, a municipal corporation in Harris and Chambers counties, Texas
(`Baytown" or "City ") and Chevron Phillips Chemical LP ( "Property Owner"), a
company organized and existing tinder the laws of the State of Delaware ( "Property
Owner "). The City and the Property Owner are sometime jointly referred to herein as the
"Parties."
RECITALS
WHEREAS the Parties entered into the above - referenced Agreement for tax years
2010 through 2016; and
WHEREAS, Property Owner has filed permit applications to progress plans for a
world -class petrochemical expansion in the U.S. Gulf Coast to be located within the
Industrial District (the "Project "); and
WHEREAS, such permits were filed with the U.S. Environmental Protection
Agency and the Texas Commission on Environmental Quality in anticipation of start --up
of the Project in 2017; and
WHEREAS, the City has expressed concerns that over the next three- to four --year
period, the intense construction activity regarding the anticipated Project will place a
burden on City emergency services, particularly police services, provided for the general
public welfare. While the Project will hire off -duty law enforcement for point - specific
assistance, the City anticipates there will be a need for additional policing infrastructure
for the general public welfare, and not for the direct or specific benefit of the Project, as a
result of increased traffic, increased numbers of workers and increased policing activity;
and
WHEREAS, the City is requesting assistance from Property Owner in funding an
additional 6 (six) full -time police officers, 3 (three) vehicles, and/or other police -- related
expenses approved in writing by the Property Owner ( "Manpower and Infrastructure ") to
effectively address the increase in call volume and traffic issues that are projected to
occur on City thoroughfares as a result of the Project; and
WHEREAS, City finances are insufficient to cover the costs of the added
Manpower and Infrastructure requirements; and
WHEREAS, Property Owner is willing to make, as provided in this Amendment,
supplemental industrial district payment obligations under the Agreement ( "Supplemental
Payments ") in connection with the Agreement to the City to assist the City with the costs
directly connected with the Manpower and Infrastructure requirements pursuant to the
terms and conditions specified in this Amendment to the Agreement; and
WHEREAS, Property Owner is willing to make such Supplemental Payments to
the City as additional payments under the Agreement pursuant to the terms and
conditions of this Amendment; and
WHEREAS, given the scope of the Project and the City's concerns, the City and
Property Owner agree, notwithstanding the provisions of Article XIX of the Agreement,
to enter into this Amendment for the sole purpose of addressing the Manpower and
Infrastructure needs as they relate to the Project during the term of the Agreement; and
WHEREAS, Property Owner and the City agree that a portion of the Property
Owner's Supplemental Payments made under this Amendment will be credited by the
City against future industrial district payments that Property Owner may owe to the City;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, City and Property Owner agree as
follows:
1. Amendment.
Except as expressly modified hereby, all of the provisions of the Agreement are
being continued in full force and effect as set forth herein. The terms as utilized in this
Amendment have the same meaning as utilized in the Agreement, unless expressly
modified by this Amendment.
2. Supplemental Payments.
Property Owner agrees to undertake the following Supplemental Payments to be
used for the purpose of Manpower and Infrastructure:
(a) In December 2013, Property Owner will remit three hundred thousand
U.S. Dollars ($300,000) to the City.
(b) In December 2014, Property Owner will remit five hundred thousand U.S
Dollars ($500,000) to the City.
(c) In December 2015, Property Owner will remit five hundred thousand U.S.
Dollars ($500,000) to the City.
(d) In December 2016, Property Owner will remit five hundred thousand U.S.
Dollars ($500,400) to the City.
2
These Supplemental Payments as set forth in this Section 2 are in addition to
Property Owner's existing financial obligations under the Agreement, subject to the terms
and conditions set forth in this Amendment. The Supplemental Payments will be levied
and invoiced by the City to Property Owner at or around December 15` of each year and
will be payable on or before December 31S` of each year. Should Property Owner fail to
timely make payment as required in this section, the amount due and owing shall bear
interest at the rate established in Section 2251.025 of the Texas Government Code.
3. Verification.
(a) Upon written request by Property Owner made at least thirty (30) days
before the due date of each supplemental payment contained in Section 2,
the City will provide public documents evidencing that the Supplemental
Payments are or will be spent in accordance with the City's planned or
actual provision of the Manpower and Infrastructure (the "Required
Documentation ").
(b) If the Required Documentation is properly requested by Property Owner
but the Property Owner reasonably believes the documentation provided
by the City is insufficient, the Property Owner shall notify the City of its
belief in writing within ten (10) calendar days of receipt of the
documentation from the City. Such notice shall detail what
documentation is reasonably believed to be missing. The failure of the
Property Owner to timely notify the City of any suspected insufficiency
shall result in the documentation provided by the City being deemed to
sufficient.
(c) Within ten (10) calendar days of receipt of the notice described in
subsection (b) of this section, the City shall provide either (i) the
additional documentation reasonably requested or (ii) the reason the
additional documentation requested is not available.
(d) If the Required Documentation is properly requested by Property Owner
and provided by the City, Property Owner has the obligation to tender
payment in accordance with Section 2.
(e) If the City fails to comply with this Section 3, Property Owner may cease
to make additional payments under this Amendment until such
documentation is tendered to Property Owner. If Property Owner ceases
to matte such payments due to the City's failure to supply documentation:
(i) all payments received by City previous to such cessation shall remain at
the City's disposal and are subject to the credit/reimbursement provisions
described in Section 9, and (ii) all payments that have not yet been
received by City under this Amendment, are suspended until Required
Documentation is provided by the City.
4. Transfer of Funds.
All Supplemental Payments will be transferred in U.S. Dollars to the account of
the City using the same payment procedures and account used to make payments under
the Agreement.
S. City Control of Investment Funds.
At all times, the City will exercise full control over the Manpower and
Infrastructure. Property Owner is not responsible for the selection of Manpower or
Infrastructure performed with the investment funds.
6. Usage of Investment Funds.
All Supplemental Payments must be used by City in strict compliance with the
terms and conditions hereunder only and only for the Manpower and Infrastructure
described herein. The City will allow Property Owner access to any public documents
related to the use of Supplemental Payments for the purpose of ensuring that
Supplemental Payments are being used for the purposes described herein. Savings on
payments, if any, may be used by the City for other law enforcement purposes. If
Supplemental Payments are insufficient to cover the full cost of the Manpower and
Infrastructure described herein, nothing contained herein shall be construed so as to
require the City to bear costs or to provide Manpower and Infrastructure in excess of the
amount received by the Property Owner pursuant to the terms of this Amendment.
7. Term.
This Amendment becomes effective once signed by both of the Parties (the "Effective
Date "). The provisions of Section 8 by their nature extend beyond this Amendment's
cessation /cancellation, remain in effect until fulfilled, and apply to the successors and
assigns of each Party.
8. Credit / Reimbursement of Investment Funds.
Property Owner and the City agree that Property Owner's Supplemental Payments made
under this Amendment will be credited by the City against future industrial district
payments that Property Owner may owe to the City. More specifically:
(a) In the event that Property Owner enters into an industrial district
agreement for a seven -year period commencing in tax year 2017, the
Parties agree that eighty percent (80 %) of all Supplemental Payments by
Property Owner to the City under this Amendment shall be credited by the
City against future industrial district payment obligations of Property
Owner to the City. The City shall credit Property Owner against such
future payment obligations on a year -by -year basis as follows:
i. The 2017 industrial district payment will be credited by 80% of the
payment received in December 2013;
ii. The 2018 industrial district payment will be credited by 80% of the
payment received in December 2014; and
iii. The 2019 industrial district payment will be credited by 80% of the
payment received in December 2015; and
iv. The 2020 industrial district payment will be credited by 100% of the
payment received in December 2016.
(b) In the event that Property Owner does not enter into an industrial district
agreement, and the City annexes the Property on or before December 31,
2016, thereby subjecting the Property to ad valorem taxes, the Parties
agree that eighty percent (80 %) of all Supplemental Payments remitted to
the City by Property Owner covering industrial district payments made for
the years 2013, 2014, and 2015 and 100% of the Supplemental Payments
remitted to the City by Property Owner covering industrial district
payments made for the year 2016 to the City under this Amendment shall
be credited by the City against such future ad valorem taxes.
(c) In the event that Property Owner does not enter into an industrial district
agreement commencing in tax year 2017 and the City does not annex the
Property on or before December 31, 2016, the Parties agree that the City
shall not be required to reimburse Property Owner any Supplemental
Payments remitted by Property Owner to the City under this Amendment.
9. Intent of the Parties
The Parties recognize that this Amendment is extraordinary in that it amends the financial
terms of the Agreement. The sole purpose of this Amendment is to provide a funding
bridge for Manpower and Infrastructure until such time as the City obtains additional
revenue from the Property Owner through a new Industrial District Agreement. The
Parties do not anticipate any similar circumstance in the future and this Amendment
should not be construed as precedent for amendments to the Agreement.
10. Complete Agreement.
This Amendment contains all the agreements of the Parties relating to the subject matter
hereof and is the full and final expression of the agreement between the Parties.
11. Execution.
This Agreement is executed and signed by the authorized representatives of the Parties in
two originals.
W
Executed by the Parties effective as of the Effective Date.
Chevron Phillips Chemical LP City of Baytown, Texas
Name: l�.fivy Qvr��
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Name:
Title: DEAL �sr-4TE J2oP r !Ax I''fANAr � Title:
Date: 1-1'" 2 — 13 Date:
R:\Karcn\Ftles\Contracts\Chevron 1DA Amendment\Draft IDA amendment for police funding v4 Clean.doc