Ordinance No. 6,511930128 -3
ORDINANCE NO. 6511
AN ORDINANCE AUTHORIZING THE MAYOR OF THE CITY OF BAYTOWN
TO EXECUTE AND ATTEST AN INDEMNIFICATION AGREEMENT
BETWEEN THE CITY OF BAYTOWN AND THE BAYTOWN HOUSING
FINANCE CORPORATION; FINDING THAT SAID INDEMNIFICATION
AGREEMENT ACCOMPLISHES A PUBLIC PURPOSE; FINDING THAT
SAID INDEMNIFICATION AGREEMENT IS ACCOMPANIED BY CONTROLS
THAT INSURE THAT SAID INDEMNIFICATION AGREEMENT IS IN
FACT USED TO ACCOMPLISH A PUBLIC PURPOSE; PROVIDING A
REPEALING CLAUSE; CONTAINING A SAVINGS CLAUSE; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, the City of Baytown has received monies from the
Baytown Housing Finance Corporation which were received by the
Baytown Housing Finance Corporation as net proceeds of the
refunding of certain bonds; and
WHEREAS, the Baytown Housing Finance Corporation may be liable
for arbitrage arising out of its activities as a Housing Finance
Corporation; and
WHEREAS, such arbitrage liability might hamper the ability of
the Baytown Housing Finance Corporation to perform its purposes as
a Housing Finance Corporation; and
WHEREAS, Texas Local Government Code Section 394.002(c)
provides that the creation of a housing finance corporation is for
the benefit of the people of the state, improves the public health
and welfare, and promotes the economy, and that its purposes are
public purposes, and that it is a public instrumentality, and that
it performs an essential government function on behalf of and for
the benefit of the local government; and
WHEREAS, a Texas municipality may enter into an
indemnification agreement with another entity if such agreement
accomplishes a public purpose and is accompanied by controls that
insure that said indemnification agreement is in fact used to
accomplish such public purpose; and
WHEREAS, the determination that a particular indemnification
agreement accomplishes a public purpose and is accompanied by
sufficient controls is within the sound discretion of the governing
body of such municipality; and
WHEREAS, the City Council of the City of Baytown finds and
determines that the proposed indemnification agreement between the
City of Baytown and the Baytown Housing Finance Corporation
accomplishes a public purpose and is accompanied by controls that
insure that said indemnification agreement is in fact used to
accomplish such public purpose; NOW THEREFORE
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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 finds
that the indemnification agreement between the City of Baytown and
the Baytown Housing Finance Corporation (attached hereto as Exhibit
"A") accomplishes a public purpose and is accompanied by controls
that insure that any monies received by the Baytown Housing Finance
Corporation under said indemnification agreement will be used for
a public purpose.
Section 2: That the City Council of the City of Baytown
hereby authorizes and directs the Mayor of the City of Baytown to
execute and attest to an indemnification agreement between the City
of Baytown and the Baytown Housing Finance Corporation, a copy of
which is attached hereto as Exhibit "A" and made a part hereof for
all intents and purposes.
Section 3: All ordinances or parts of ordinances
inconsistent with the terms of this ordinance are hereby
repealed; provided however, that such repeal shall be only to the
extent of such inconsistency and in all other respects this
ordinance shall be cumulative of other ordinances regulating and
governing the subject matter covered by this ordinance.
Section 4: If any provisions, section, exception,
subsection, paragraph, sentence, clause or phrase of this
ordinance or the application of same to any person or set of
circumstances, shall for any reason be held unconstitutional,
void or invalid, such invalidity shall not affect the validity of
the remaining provisions of this ordinance or their application
to other persons or sets of circumstances and to this end all
provisions of this ordinance are declared to be severable.
Section 5: 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 vote of the
City Council of the City of Baytown, this the 28th day of January,
1993.
O BY J,,, ILLS, Mayor
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930128 -3b
ATTEST:
W
EILEEN P. 'MALL, City Clerk
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IO IREZ, R., City Attorney
legal / council /1- 28- 93authKhousingFINANCE
STATE OF TEXAS §
§ INDEMNITY AGREEMENT
COUNTY OF HARRIS §
Indemnity agreement made this the /q.% day of ,
19 'd, in the City of Baytown, Counties of Harris and Cha bers,
State of Texas, between the Baytown City Council located at 2401
Market Street, City of Baytown, Counties of Harris and Chambers,
State of Texas, subsequently called "indemnitor," and Baytown
Housing Finance Corporation, of 805 Nazro, City of Baytown, County
of Harris, State of Texas, subsequently called "indemnitee."
Indemnitee has entered into an agreement with indemnitor
whereby, based, on the express condition that this agreement be
executed, indemnitee has agreed to contribute to the City of
Baytown monies to be used for specific capital expenditures of the
City of Baytown an amount of approximately ONE MILLION ONE HUNDRED
SEVENTY-SEVEN THOUSAND NINETY-FIVE AND 43/100 DOLLARS
($1,177,095.43). This contribution shall come from the monies
received by the Baytown Housing Finance Corporation as a result of
refunds credited by the Bond Refinance Program of the 1979 Tax Free
Revenue Bonds issued by the Baytown Housing Finance Corporation.
In consideration of indemnitee's obligations under this
agreement and ONE MILLION ONE HUNDRED SEVENTY-SEVEN THOUSAND
NINETY-FIVE AND 43/100 DOLLARS ($1,177.095.43), receipt of which
by indemnitor has acknowledge, the parties agree as follows:
SECTION I
Scope of Indemnity
Indemnitor undertakes to indemnify indemnitee to the extent
of monies received hereunder from such liability indemnitee may
suffer as a result of claims, demands, reasonable costs, or
judgments against indemnitee arising out of the Internal Revenue
Service, bond holders or other parties involved in the 1985 Bond
Refinancing of the Raintree Apartment Project located in Baytown,
Harris County, Texas.
SECTION II
Limitation on Amount of Liability
Indemnitor's liability under this contract shall in no event
exceed the sum of ONE MILLION ONE HUNDRED SEVENTY-SEVEN THOUSAND
NINETY-FIVE AND 43/100 DOLLARS ($1,177,095.43) and shall not
include or cover initial claim up to $587,665.34.
SECTION III
Expenses, Attorney's Fees, and Costs
Should it become necessary for purposes of resisting,
adjusting, or compromising any claims or demands arising out of the
subject matter with respect to which indemnification as provided
by this agreement, or for purposes of enforcing this agreement, for
indemnitee to incur any expenses, or become obligated to pay
attorney's fees or court costs, indemnitor agrees to reimburse
indemnitee for such expenses, attorney's fees, or costs within a
reasonable time, in no event to exceed 180 days, after receiving
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written notice from indemnitee of the incurring of such expenses,
attorney's fees, costs or obligations.
SECTION IV
Notice of Claim Against Indemnitee
Indemnitee shall give indemnitor 45 days written notice of any
claim with respect to the subject matter of this agreement.
SECTION V
PROOF OF USE OF INDEMNIFICATION FUNDS
At any time subsequent to any indemnification pursuant to the
terms of this agreement, indemnitee shall, upon written demand by
the City Manager of the City of Baytown, furnish to the Finance
Director of the City of Baytown, documentary proof that funds
received by indemnitee under this agreement were in fact used for
the purposes contemplated herein.
SECTION VI.
PROOF OF USE OF RETAINED FUNDS
Prior to any indemnification pursuant to this agreement,
indemnitee shall provide to the Finance Director of the City of
Baytown documentary evidence that $587,665.34 received by the
Baytown Housing Finance Corporation as its portion of net proceeds
from refunding of bonds were in fact paid to offset liability
arising out of the 1985 Bond Refinancing of the Raintree Apartment
Project.
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SECTION VII
Binding Effect
The terms of this indemnity agreement shall bind and inure to
the benefit of the parties and their heirs, legal representatives,
successors, and assigns.
Executed this i day of 6-geaiwz�,f , 19 '.
BAYTOWN HOUSING FINANCE CORPORATION
(Indemnitee)
c?2,
BAYTOWN CITY COUNCIL
(Indemnitor)
legal/contracts/INDEMNIFICATIOIThhfc
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