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Ordinance No. 1,566ORDINANCE NO.1566 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,AUTHORIZING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO AN INDUSTRIAL DISTRICT CONTRACT BETWEEN HELMERICH &PAYNE,INC.AND THE CITY OF BAYTOWN,TEXAS,AND PROVIDING FOR THEEFFECTIVE DATE HEREOF. WHEREAS,the Municipal Annexation Act,Article 970a,Revised Civil Statutes of Texas,provides forthe creation of industrial districts within the extrater ritorial jurisdiction of cities;and WHEREAS,pursuant to such Municipal Annexation Act and in the interest of further cooperation with industry and the economic enhancement of Baytown, the City Council of the City of Baytown enacted Ordinance No.886,dated the 19thday of September,1967,designating a part of its extraterritorial jurisdiction as an industrial district known as Baytown Industrial District No.1;and WHEREAS,a portion of Helmerich &Payne's Baytown Plant is located within Baytown Industrial District No.1;and WHEREAS,the City Council of the Cityof Baytown and Helmerich &Payne,Inc. desire to enter into a new industrial district contract;NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,TEXAS: Section 1:That the City Council of the City of Baytown authorizes the Mayor to execute andthe City Clerk to attestto an industrial district con tract between Helmerich &Payne,Inc.and the City of Baytown,Texas.A copy of said contract is attached hereto,marked Exhibit "A",and made a part hereof for all intents and purposes. Section 2:Effective Date: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 voteof the City Council of the City of Baytown,this 28th day of March ,1974. TOM GENTRY,Mayor ATTEST: EDNAOLIVER,City Clerk APPROVED: JON C.L PFENNIG,Assistant'City Attorney NEXTRICHAfOSONT City Attorney -2- EXHIBIT "Allnil f*INDUSTRIAL DISTRICT AGREEMENT BETWEEN HELMERICH &PAYNE,INC. AND THE CITY OF OTTQWN,TEXAS This Agreement is made and entered into between the City of Baytown, Texas,a municipal corporation in Harris County,Texas,hereinafter also referred to as "Baytown"and "City,"and Helmerich &Payne,Inc.,a Delaware corporaton with a permit to engage in business in the State of Texas,Hereinafter referred to as "Company"and "Helmerich": W 11 i£1111 H.: WHEREAS,Baytown has a history ofcooperating with industries located /ps within and near its city limtis;and WHEREAS,the City Council of the City of Baytown is of the considered opinion that such cooperation results in economic growth and stability for Baytown and its adjacent areas;and WHEREAS,the Texas Legislature in 1963 adopted the "Municipal Annexation Act,"Article 970a,Revised Civil Statutes of Texas,which provides forthe creation of Industrial Districts within the extraterritorial jurisdiction of cities;and WHEREAS,pursuant to such Municipal Annexation Act and in the interest of further cooperation with industry and the economic enhancement ofBaytown, the City of Baytown enacted Ordinance No.886,dated the 19th day of September, 1 1967,designating a part of its extraterritorial jurisdiction as an Industrial District known as Baytown Industrial District No.1;and WHEREAS,the City Councildesires that all of Helmerich's Baytown Plant and facilities which are notnow annexed as described in Appendix A, be included in theBaytown Industrial District No.1 and further desires to enter into this contractual agreement with Helmerich for this purpose;and WHEREAS,Helmerich's Baytown Plant includes both real and personal property in its refining and chemical manufacturing and research facilities, including any office facilities used in direct support of these operations and either situated contiguous thereto or separated by public roads;NOW THEREFORE, a In consideration of the promises and of the mutual covenants and agreements ,hereincontained,it is agreed by and between the Company and the City of Baytown .as follows: 1.The City of Baytown hereby agrees that all of the land and improvements ..thereon owned,used,occupied,leased,rented or possessed by the Company within the area designated as Baytown Industrial District No.1 by Ordinance No.886 and amendments thereto which Industrial District is more particularly described in AppendixA to this Agreement and made a part hereof shall continue its extrater- rritorial status as an Industrial District and shall not be annexed by the City of Baytown nor shall the City attempt to annex,or in any way cause or permit to be annexed any of such property during the term of this Agreement. The City further agrees,promises and guarantees that during the termof this Agreement the City of Baytown shall not apply or purport to apply any ordinance, rule orregulation to such property except as relating to noise,vibration, and pollution performance standards as hereinafter provided.Specifically, but without limitation,the City agrees,promises and guarantees that itwill not extend to.said property any ordinance,rules orregulation (a)governing plats and the subdivision of land;(b)prescribing any zoning,building,electrical, plumbing or inspection code or codes;and (c)attempting to exercise in any manner whatsoever control over the conduct of the Company's business thereon. The City further agrees thatduring the term of this Agreement,it will not levy or purport to levy ad valorem taxes against any real or personal property owned,used,occupied,leased,rented,or possessed by the Company within the property boundaries described in said Appendix A. 2.It is further agreed that during the term of this Agreement the Cityof Baytown shall not berequired to furnish municipal services to the Company's Baytown Plant,which are ordinarily and customarily supplied by the City to property owners within its boundaries,except as provided by mutual agreement.Specifically,but without limitation,it is agreed that the City of Baytown shall not be required to furnish:(1)sewer or water service,(2) police protection,(3)fire protection,(4)roador street repairs,and (5) garbage pickup service. -2- f*-3.The Company and the City recognize that in the past the Company has paid a share of the needed revenue for operating the City and providing services for its residents.It is further recognized that during the next succeeding seven years the Cityof Baytown will experience population growth as a resultof industrial expansion which will necessitate increased revenue to provide expanded service and facilities.In view of this increased need for revenue,the Company agrees to pay the City an Industrial District payment on or before January 31 of each year during the term of this agreement an amount to be calculated on the basis of the following formula,except for calendar years 1974 and 1975 as hereinafter provided in Paragraph 4: ^The Company's Industrial District value,as defined below,x 0.06 x the property tax rate per $100 of assessed valuation adopted by the City Council for theCity of Baytown for financing the fiscal year in which such January 31 due date falls. in applying the above formula,the factor referred to as the "Company's Industrial District Value"shall be defined as: (A)The fair market valueof the Company's Baytown Plant within the City's jurisdiction as of January 1 of the calendar year next preceding the calendar year in which such January 31 due date falls,less; (B)The fair market value of that portion of the Company's Baytown •P.Iant annexed to the City of Baytown,which is 20%of the fair market \value within the City's jurisdictional area as of January 1 of the calendar year next preceding the calendar year in which such January 31 due date falls,except for calendar years 1974 and 1975 as hereinafter provided. Annual payments under this Agreement shall be calculated by the City of Baytown in the above stated manner.Determination of City and Industrial District fair market value in the above stated manner shall be made by City of Baytown and approved by the Board of Equalization.Such final fair market value as approved by theBoard of Equalization shall be subject to exception by the Company and should the Company take exception to the fairmarket value -3- unable,through negotiations,to reach a mutually acceptable fair market value on orbefore September 1 of the calendar year next preceding the calendar year in which such January 31 due date falls,then either party may request determination of such disagreement by a mutually acceptable arbitrator.The costof such arbitrator shall be shared equally by the City of Baytown andthe Company,and such arbitrator's determination shall be final and binding unless either party within thirty (30)days after such arbitrator's determination is received by the parties,petitions for a Declaratory Judgment to the Civil District Courtof Harris County,Texas,as pro vided for by Section 5 hereof. Should the parties be unable to agree upon a mutually acceptable arbitrator, each party shall nominate one arbitrator and the arbitrators so nominated by the parties shall-select a third arbitrator who will act with them as a three-member arbitration panel to decide the disagreement between the parties by the concurrence ofa majority of such panel.Such arbitrator or arbitration panel shall determine whether the fair market value of such property is as contended by the Board of Equalization,by the Company,or some intermediate value.The cost of such arbitration panel shall be shared equally by the Cityof Baytown and the Company,and such panel's determination shallbe final and binding unless either party within thirty (30)days after such determination is received by the parties,petitions for a Declaratory Judgment to the Civil District Court of Harris County,Texas,as provided for by Section 5 hereof. In determining the fair market value of property and improvements as used herein,the Board of Equalization and any arbitrator or arbitration panel shall base its determination on the replacement cost of comparable present day facilities considering and givingeffect to sound engineering valuation practices relative to service life,life expectancy,process and functional obsolescence. 4.The Company and the City recognize the necessity of uniform appli cation of Industrial District provisions.The Company and the City further re-• cognize that such uniform application will require some annexations andsome disannexations of industrial areas over the period 1974 to 1976.Timingdif ference in such annexations and disannexations could reduce assessed values for the City for this period.In view of the need for maintaining current -4- levels ofindustrial assessed value during this period,the Company will render to the City in 1974 and1975 a minimum value of ONE HUNDRED SIXTY-TWO THOUSAND NINETY AND NO/100 ($162,090.00)DOLLARS for the portion of its Baytown Plant annexed to the City.This value equates to the final 1973 assessed tax value base as determined by the City's Board of Equalization. The Company and the City agree that the Company's total annual payment to the City for 1974will be based on an ad valorem tax payment plus an Industrial District payment.The total payment will consist of anad valorem tax payment on a minimum of ONE HUNDRED SIXTY-TWO THOUSAND NINETY AND NO/100 ($162,090.00) DOLLARS plus an Industrial District payment sufficient to bring the total payment to THREE THOUSAND TWENTY AND NO/100 ($3,020.00)DOLLARS. The Company and the City agree that the Company's total annual payment to the City for the year 1975 will be based on the Industrial District payment formula as provided in Section 3,plus an ad valorem tax payment.The total payment would consist of the ad valorem tax applicable to an assessed value of ONE HUNDRED SIXTY-TWO THOUSAND NINETY AND NO/100 ($162,090.00)DOLLARS and a variable Industrial District payment to be determined by substracting the aforementioned ad valorem tax from a total amount calculated using an ad valorem tax paymentbased on twenty (20%)percent of the market value of theCompany's Baytown Plant within the City's jurisdiction and an Industrial District payment based on eighty (80%)percent of the market value of the plant within the City's jurisdiction,as defined in Section 3.Such total payment shall not be less than the ad valorem tax applicable to an assessed value of ONE HUNDRED SIXTY-TWO THOUSAND NINETY AND NO/100 ($162,090.00)DOLLARS,even if the calculated payment using the Section 3 market value percentages is lower. 5.If any disagreement arises between the parties concerning the interpretation of this Agreement or the decisions of the arbitrator or arbitration panel provided for hereunder,it is agreed that either of said parties may petition anyCivil District Court of Harris County,Texas,for a Declaratory Judgment determiningsaid controversy and the cause shall be tried as other -5- civil causes in which plaintiff must establish by a preponderance of the evidence the correct interpretation of valuation.Pending final determination of said .controversy,the Company shall pay to the City on the due date thesame amount Which it paid to the City for the last preceding period as to which there was no controversy concerning the amount owed by the Company to the City.The Company agrees to tender the amount of potential liability to the registry of the Civil District Court,Harris County,Texas,pending final determination of the controversy beyond any further appeal. 6.All payments of the City of Baytown provided for herein shall be made to the City at the City Hall in Baytown,Texas.If any payment is not made on or before the due date,the same penalties,interest,attorneys' fees and costs of collection shall be recoverable by the City as would be collectible in the case of delinquent ad valorem taxes;provided,however,that this sentence shall not apply to any payment which may be found to have been deficient as the result of proceedings provided for in Section 5 hereof.The City shall have a lien upon any delinquency in Industrial District payment. 7.If any other municipality attemptsto annex any land or property owned,used,occupied,leased,rented or possessed by the Company within the area designated as Baytown Industrial District No.1,more particularly described in AppendixA to this agreement,or if the creation of anynew municipality should be attempted so as to include within its limits any ofsuch land or property,the City ofBaytown shall,with the cooperation ofthe Company,seek Injunctive relief against any such annexation or incorporation,and shall take such other legal steps as may be necessary or advisable under the circumstances. The cost of such legal steps,including fees of attorneys(other than the City Attorney)retained bymutual agreement of the parties,shall be paid by the Company.Should the Cityrefuse or fail to comply with its obligation under this paragraph,the Company shall have the right to seek such legal or equitable relief as it deems necessary or advisable in its own name or in the name of the City and,if necessary,the Company may join the City as a party to any such legal action. -6- If the City and the Company are unsuccessful in preventing any such attempted annexation or incorporation,the Company shall have the right to terminate this Agreement as to any property so annexed or incorporated retroactive tothe effective dateof such annexation or incorporation,orthe Company may continue this Agreement in full force and effect;provided,however,that the Company's right of terminating this Agreement must be exercised within thirty (30)days after judgment upholding such annexation or incorporation becomes final beyond further appea.1.If any payment is made by the Company to the City after the effective date of such annexation or incorporation and if the Company elects to terminate this Agreement as above provided,then as to such property so annexed or incorporated such payment shall be refunded bythe City to the Company. 8.The City and the Company mutually recognize that the health and welfare of Baytown residents require adherence to high stands of quality in the air emissions,water effluents and noise,vibration and toxic levels of thoseindustries located in the Baytown Industrial District No.1.To this end,the Company and the City agree that the same standards and criteria re lative to noise,vibration and toxic levels which are adopted by theCity and applicable to portions of the City adjacent the Company's Baytown Plant shall also be applicable to the plant within the Industrial District.The Company further agrees to abide by the rules and regulations and the permits issued to it by the Environmental Protection Agency,the Texas Water Quality Board, the Texas Air Control Board,and any other governmental agency having legal authority in these matters.In this connection,it is recognized between the parties that these agencies are charged with the responsibility for enforcing airand water quality standards,and it is agreed that so long as the Environmental Protection Agency,the Texas Water Quality Board,the Texas Air Control Board, and other related agencies are charged with such responsibility,nothing contained herein shall be construed to impose upon the City of Baytown any responsibility, or right,by termination of this Agreement or otherwise,to enforce any standards relative to air and water quality as are established by law,rule,regulation or permit.Itis also agreed that no violation of any standards or criteria adopted by the City shall be a reason for termination of this Agreement. -7- 9.This Agreement shall be for a term of seven (7)years from the date this instrument is executed and for such additional period or periods of time as provided by the Texas Municipal Annexation Act and mutually agreed Upon by the parties hereto.This Agreement shall further terminate and replace that certain Industrial District agreement entered into between Helmerich & Payne,Inc.and the City of Baytown,dated January 24,1967. 10.The benefits accruing to the Company under this Agreement shall also extend to theCompany's "affiliates"and to any properties owned or acquired by said affiliates within the area described in Appendix A to this Agreement, and where reference is made herein to land,property and improvements owned bythe Company,that shall also include land,property and improvements owned by Its affiliates.The word "affiliates"as used herein shall mean all companies with respect to which the Company directly or indirectly,through one ormore intermediaries at the time in question,owns or has the power to exercise the control over fifty (50%)percent or more of the stock having theright to vote for the election of directors. 11.It is agreed by the parties to this Agreement that only full, complete and faithful performance of the terms hereof shall satisfy the rights and obligations assumed by the parties and that,therefore,in addition to any action at law for damages which either party may have,the Company may enjoin the enactment or enforcement of any ordinance or charter amendment in violation of,or in conflict with,the terms of this Agreement and mayobtain such other equitable relief,including specific performanceof the Agreement, asis necessary to enforce its rights.It is further agreed that should this Agreement be breached by the Company,the City shall be entitled,in addition to any action at law for damages,to obtain specific performance of this Agreement and such other equitable relief necessary to enforce its rights.However, nothing contained herein shall be construed to give the City any right to terminate this Agreement on the basis of the Company'sviolation of any standard or criteria relative to air emissions,water effluents,noise,vibration,or toxic levels established by any law,ordinance,rule,regulation or permit. -8- 12.In the event the terms and conditionsof this contract are rendered ineffective by the Constitution and/or Legislative changes,both parties mutually agree that said contract shall be re-negotiated to accomplish the intent of this agreement. EXECUTED IN DUPLICATE ORIGINALS this day of , A.D.,1974. HELMERICH &PAYNE,INC. By_ Vice President ATTEST: Secretary ATTEST: By. EDNA OLIVER,City Cleric CITY OF BAYTOWN By. TOM GENTRY,Mayor' -9- APPENDIX A BEGINNING at the northwestern cornerof said 3.6 acre tract, THENCE,north 89°34'east,along the City Limit Line of the City of Baytown,a distance of 60.40 feet to a pointfor corner; THENCE,south 00o26'east,a distance of 432.74 feet to a poirtt for corner; THENCE,south 89°34*west,a distance of 60.40 feet to a point for corner; THENCE,north 00°26'west,a distance of 432.74 feet to the Point of Beginning.