HomeMy WebLinkAboutApril 05, 2011 AgendaAGENDA
CITY OF DENTON CITY COUNCIL
April 5, ?O11
After deterinining that a quoniin is present, the City Council of the City of Denton, Texas will
convene in a Worlc Session on Tuesday, April 5, 2011 at 3:00 p.m. in the Council Worlc Session
Room at City Hall, 2115 E. McILiiuiey Street, Denton, TeYas at wluch the following items will be
considered:
WORIL SESSION
L Citizen Coininents on Consent Agenda Iteins
Tlus section of the agenda allows citizens to speak on Consent Agenda Items oiily. Each
spealcer will be given a total of three (3) minutes to address any items he/she wishes that
are listed on the Consent Agenda. A Request to Spealc Card should be coinpleted and
returned to the City Secretary before Council considers this itein.
Requests for clarification of agenda items listed on the agenda for April 5, 21011.
3. Receive a report, hold a discussion and give staff direction on a proposal to enter into an
liiterlocal Cooperation Agreement between the City of Denton and Denton County
Transportation Authority (DCTA) for the provision of fleet maintenance operations for
the DCTA fleet.
4. Receive a report and hold a discussion regarding the Denton County Transportation
Authority's (DCTA) proposal to install a radio anteiuia tower for the DCTA A-train
proj ect.
5. Receive a report, hold a discussion and give staff direction regarding the governance of
the Airport as recommended in the Denton Airport 21010 Business plan.
6. Receive a report, hold a discussion and give staff direction regarding terms and
provisions of a Vulnerable Road User ordinance.
7. Receive a report, hold a discussion and give staff direction concerning proposed
amendments to Sections 35.13.7.C, 35.202.A.3.c, 35.203.13, 35.203.13.1, 35203.C and
35.?32 of the Denton Development Code regarding estates lots and sidewallcs and/or
bicycle facilities. (D(,A10-0008)
8. Receive a report, hold a discussion and give staff direction regarding the adoption of an
ordinance of the City of Denton, TeYas, authorizing the City Manager to eYecute a First
Amendment to the 21010-21011 Agreement between the City of Denton and the Fred
Moore Day Nursery School ("Original Agreement"), said Original Agreement
contemplatint', the provision of Community Development Block Grant funds for
improvements to the facility at 821 Cross Tiinber Street, Denton County, TeYas; and
providing for an effective date.
9. Receive an update, hold a discussion, and give staff direction concernint', the Phase II
Sustainability Plan.
City of Denton City Council Agenda
April 5, 20 11
Page ?
Following the completion of the Work Session, the City Council will convene in a Closed
Meeting to consider specific items when these items are listed below under the Closed Meeting
section of this agenda. When iteins for consideration are not listed under the Closed Meeting
section of the a(yenda, the City Council will not conduct a Closed Meetincl, and will convene at
the time listed below for its regular or special called meetintly. The City Council reserves the
right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with
Chapter 551 of the TEXAS GOVERNIVMENT CODE, as amended, as set forth below.
CLOSED MEETING
L Closed Meeting:
A. Deliberations regarding Real Property - Under TeYas Goveriunent Code Section
551.07?; Consultation with Attorneys - Under TeYas Goveriunent Code Section
551.071
1. Discuss, deliberate, and receive inforination froin Staff and provide Staff
with direction pertainint', to the acquisition or the condemnation of fee
simple tracts, permanent drainage easement tracts and temporary
constniction easement tracts for the Maylull Road Wideiung and
linprovements project, the limits of wluch generally being between the
intersection of Maylull Road and liiterstate Highway 35 East and the
intersection of Mayhill Road and U.S. Highway 380, affecting real
property tracts in the M. Forrest Survey, Abstract No. 417, the D. Hough
Survey, Abstract No. 646, the M.E.P. & P.R.R. Surveys, Abstract Nos.
927, 950 and 1469, the D. Lainbert Survey, Abstract No. 784, the G.
Wallcer Survey, Abstract 1330, and the J. Brandon Survey, Abstract No.
1515, in the City and County of Denton, TeYas. Consultation with the
City's attorneys regarding legal issues associated with the acquisition or
condemnation of the tracts referenced above where a public discussion of
these legal inatters would conflict with the duty of the City's attorneys to
the Denton City Council under the Texas Rules of Disciplinary Conduct of
the State Bar of TeYas, or would jeopardize the City's legal position in any
admiiustrative proceedings or potential litigation.
B. Consultation with Attorneys - Under Texas Governinent Code, Section 551.071;
and Deliberations Regarding Real Property - Under Texas Governinent Code,
Section 551.072.
1. Discuss, deliberate and receive iiiformation from Staff and provide Staff
with direction pertaiiung to the possible acquisition of certain real property
located in the downtown area of Denton, TeYas, Denton County, TeYas,
includint', real property located in the H. Cisco Survey, Abstract No. 1184
and in B.B.B. & CRR Company Survey, Abstract No. 185. Consultation
with the City's attorneys regarding legal issues associated with the
potential acquisition of the real property referenced hereinabove, where a
public discussion of these legal matters would conflict with the duty of the
City's attorneys to the Denton City Council under the TeYas Rules of
Disciplinary Conduct of the State Bar of TeYas, or would jeopardize the
City's legal position in any potential litigation.
City of Denton City Council Agenda
April 5, 20 11
Page 3
ANY F1NAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED
MEETING WILL ONLY BE TAIiEN 1N AN OPEN MEETING THAT IS HELD 1N COMPLIANCE
WITH TEXAS GOVERNMENT CODE, CHAPTER 55 1, EXCEPT TO THE EXTENT SUCH F1NAL
ACTION, DECISION, OR VOTE IS TAIiEN IN THE CLOSED MEETING 1N ACCORDANCE WITH
THE PROVISIONS OF ti551.086 OF THE TEXAS GOVERNMENT CODE (THE `PUBLIC POWER
EXCEPTION'). THE CITY COUNCIL RESERVES THE RIGHT TO ADJOURN 1NT0 A CLOSED
MEETING OR EXECUTIVE SESSION AS AUTHORIZED BY TEX. GOV'T. CODE, `551.001, ET
SEO. (THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING AGENDA
OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED
MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN MEETINGS
ACT, INCLUDING, WITHOUT LIMITATION ti55 1.071-55 1.086 OF THE TEXAS OPEN MEETINGS
ACT.
Regular Meeting of the City of Denton City Council at 6:30 p.in. in the Council Chainbers at
City Hall, 2115 E. McILiiuiey Street, Denton, TeYas at wluch the following items will be
considered:
REGULAR MEETING
1. PLEDGE OF ALLEGIANCE
A. U. S. Flag
B. TeYas Flag
"Honor the TeYas Flag - I pledge allegiance to thee, TeYas, one state under God, one and
indivisible."
2. PROCLAMATIONS/PRESENTATIONS
A. Proclainations/Awards
1. Youth Peace Day International
National Financial Literacy Month
3. National Commuiuty Development Weelc
4. Child Abuse Prevention Month
3. CITIZEN REPORTS
A. Review of procedures for addressing the City Council.
B. Receive citizen reports from the followin~:
1. George Calhoun regarding the wideiung of Maylull Road.
Janet Calhoun regarding the wideiung of Maylull Road.
3. Nel Yeldell regarding civil rights matters on air quality.
4. CONSENT AGENDA
Each of these iteins is recoininended by the Staff and approval thereof will be strictly on
the basis of the Staff recoininendations. Approval of the Consent Agenda authorizes the City
Manager or lus designee to implement each item in accordance with the Staff recommendations.
The City Council has received baclcground iiiformation and has had an opportuiuty to raise
questions regarding these items prior to consideration.
City of Denton City Council Agenda
April 5, 20 11
Page 4
Listed below are bids, purchase orders, contracts, and other items to be approved under
the Consent Agenda (Agenda Items A- P). Tlus listing is provided on the Consent Agenda to
allow Council Meinbers to discuss or withdraw an item prior to approval of the Consent Agenda.
If no iteins are pulled, Consent Agenda Iteins A- P below will be approved with one inotion. If
items are pulled for separate discussion, they may be considered as the first items followint"
approval of the C onsent Agenda.
A. Consider adoption of an ordinance of the City Council of the City of Denton,
Texas acceptin~ a proposal and awardin~ a contract for a utility assistance
program for low-income households to liiterfaith Miiustries in an amount not to
eYCeed $85,000; providing for the eYpenditure of funds therefor; and providing an
effective date. The Public Utilities Board recommends approval (4-0).
B. Consider a request for an eYCeption to the Noise Ordinance for the purpose of the
Singing Oalcs Church of Christ Commuiuty Festival to be held on Sunday,
May 22, 2011, from 4:00 p.m. to 9:00 p.m. The event will be held in the church
parlcint', lot located at 101 Cardinal Drive. The requestor is specifically aslcint" for
an eYCeption to the noise ordinance to allow amplified sound on Sunday. An
increase in decibels will not be needed. Staff recommends approval of the
request.
C. Consider a request for an eYCeption to the Noise Ordinance for the purpose of
performing music during the 20 11 Relay for Life to be held at the Uiuversity of
North Texas Fouts Field beginning at 3:00 p.m. on Saturday, April 16, 2011, until
6:00 a.in. on Sunday, April 17, 2011. The request is for a variance in decibels
(dBs) for an outdoor concert from 70 to 75 dBs and for amplified sound on
Sunday until 6:00 a.m. Staff recommends approval of the request.
D. Consider a request for an exception to the Noise Ordinance for the purpose of the
fourth Aiuiual Beanstoclc Music Festival, sponsored by Cool Beans Bar and Grill.
The event will be held at Cool Beans, located at 1210 W. Hiclcory Street, on
Saturday, April 16, 2011, be~innin~ at 12:00 p.m. and concludin~ at 12:00 a.m.
The exception is requested for extension of the hours of operation for amplified
sound. Staff recommends approval of the request.
E. Consider adoption of an ordinance of the City of Denton, Texas, granting the
Denton Festival Foundation, pursuant to Section 17-20 of the Code of Ordinances
of the City of Denton, TeYas, an eYCeption to the limitations imposed by that
section with respect to hours of operation of an amplified loudspeaker system; and
setting an effective date. Staff recommends approval of the request.
F. Consider approval of a resolution allowing La MeYicana to be the sole participant
allowed to sell alcoholic beverages at the Cinco de Mayo Celebration on May 7,
2011, upon certain conditions; authorizing the City Manager or his designee to
execute an a~reement in conformity with this resolution; and providin~ for an
effective date. The Parks, Recreation and Beautification Board recommends
approval (5-0). Staff recommends approval of the request.
City of Denton City Council Agenda
April 5, 20 11
Page 5
G. Consider approval of a resolution of the City of Denton, Texas approving the
eYlubition of poetry as a public art proj ect; pursuant to the City of Denton Public
Art policy approved by Ordinance 21006-105, and funded with Hotel TaY revenues
previously authorized and encumbered for expenditure to such purposes; and
declaring an effective date. The Parlcs, Recreation and Beautification Board
recommends approval (6-1).
H. Consider adoption of an ordinance of the City of Denton, Texas, adding Section
18-36 of the Code of Ordinances relating to vulnerable road users; by creating
Section 18-36 to define vulnerable road users and re-affirm the obligation of all
operators of motor velucles to eYercise due care in the operation of motor
vehicles; providing a repealer clause; providing a savings clause; providing for a
penalty not to exceed $200 for violations of this ordinance; and providing for an
effective date.
L Consider adoption of an ordinance of the City Council of the City of Denton
awarding a Merchant Services Contract to Elavon, Inc. for a term beginning June
1, 20 11 and ending May 31, 2016; authorizing the City Manager to eYecute a
Merchant Services Contract with Elavon, liic. for credit/debit and checlc
processing services; authorizing the City Manager and other City employees to
transact business with Elavon, Inc.; and providing an effective date. The
Audit/Finance Committee recommends approval (3-0).
J. Consider adoption of an ordinance of the City Council of the City of Denton
designating a Depository for City Funds for a term beginning June 1, 2011 and
ending May 31, 2016; authorizing the City Manager to eYecute a Depository
Services Contract with Wells Fargo Banlc, N.A., as the primary depository;
authorizing the City Manager and other City employees to transact business with
the Depository; and providing an effective date. The Audit/Finance Coininittee
recommends approval (3-0).
K. Consider adoption of an ordinance of the City of Denton authorizing the City
Manager or his designee to execute a purchase order through the Buy Board
Cooperative Purchasing Networlc for the purchase of a Two Declc Vibratory
Shaker and Eight Station Mobile Process Conveyor System to provide mechaiucal
processint', to separate and recycle constniction and demolition waste at the City
of Denton Municipal Solid Waste Facility by way of an Interlocal Agreement
with the City of Denton; and providing an effective date (File 4677-Purchase of
Two Deck Vibratory Shaker and Eight Station Mobile Process Conveyor System
awarded to McCourt and Sons Equipment, Inc. in the amount of $484,700). The
Public Utilities Board recommends approval (5-0).
L. Consider approval of a resolution approving the City of Denton's Strategic Plan;
and providing for an effective date.
M Consider adoption of an ordinance of the City of Denton, TeYas, authorizing the
City Manager to eYecute a contract with the Denton liidependent School District
for the 2011 Summer Food Service Program; authorizing the expenditure of funds
to administer the program; and providing an effective date.
City of Denton City Council Agenda
April 5, 20 11
Page 6
N. Consider approval of the minutes of:
Febniary 15, 20 11
Febniary 17, 20 11
March 1, 2011
March 8, 2011
0. Consider adoption of an ordinance of the City of Denton, Texas, amending
Chapter 30 of the Denton Code of Ordinances to comply with National Flood
Insurance Rate Prograin; providing for severability; providing for a penalty not to
eYCeed $2,000 for violations of tlus ordinance; and providing for an effective date.
P. Consider adoption of an ordinance authorizing the City Manager of the City of
Denton, Texas ("CITY") to execute for and on behalf of the City an Easeinent
Abandoiunent Agreement to abandon (i) that certain Public Drainage and
Detention Easement, dated August 23, 21000, from Campus Parlc Denton, Ltd. to
the City of Denton, Texas, recorded as County Clerk file number 00-R0088188,
Voluine 4671, Page 42, Real Property Records of Denton County, Texas, (ii) that
certain Limited Easement for the liistallation of Water and Sewer Utilities, dated
Noveinber 11, 1987, from George E. liunan, George E. liunan, Jr., Glen Ray
Inman and Jimmie D. Inman to the City of Denton, Texas, recorded as Volume
2356, Page 711, Real Property Records, Denton County, Texas, and (iii) a portion
of that certain Public Utility Easement, dated August 17, 21000, from Campus Parlc
Denton, Ltd. to the City of Denton, Texas, recorded as County Clerlc File No. 00-
R0088189, and Volume 4671, Page 48, Real Property Records of Denton County,
Texas, insofar and only insofar as said Public Utility Easement encumbers a
544.46 square foot tract, as more particularly described in the easement
abandonment agreement; and declaring an effective date.
5. ITEMS FOR INDIVIDUAL CONSIDERATION
A. Consider appointing a nominating committee to recommend appointees to serve
on the Economic Development Partnership Board.
B. Consider adoption of an ordinance considering all matters incident and related to
the issuance, sale and delivery of up to $32,100,000 in principal amount of "City
of Denton Certificates of Obligation, Series 2011"; authorizing the issuance of the
certificates; approvin~ and authorizin~ instniments and procedures relatin~ to said
certificates; and enacting other provisions relating to the subject.
C. Consider adoption of an ordinance considering all matters incident and related to
the issuance, sale and delivery of up to $10,845,000 in principal amount of "City
of Denton General Obligation Refunding and linprovement Bonds, Series 21011";
authorizing the issuance of the bonds; approving and authorizing instniments and
procedures relating to said bonds; and enacting other provisions relating to the
subj ect.
D. Consider approval of a resolution amending Resolution No. R2009-015 to
establish a standing coininittee of the City Council of the City of Denton, Texas to
be lcnown as the City Council Airport Coininittee to advise and assist the City
City of Denton City Council Agenda
April 5, 20 11
Page 7
Council regarding City of Denton Municipal Airport Matters; alternatively
assigiung such duties to an eYisting City Council committee; and providing for an
effective date.
E. Consider adoption of an ordinance amending Ordinance No. 97-299 and Section
3-? of the Code of Ordinances of the City of Denton by renaming the Airport
Advisory Board to the Aviation Safety and Tecluucal Advisory Board; assigiung
the duties of the board, and prescribing an effective date.
F. Tabled - Continue Council deliberation and consideration of an ordinance of the
City of Denton, TeYas, regarding a Specific Use Permit (SUP) for a
telecommunications tower on property currently located within an Employment
Center Industrial (EC-I) zoning district. The approxiinately 14.9-acre property is
located east of Teasley Lane and south of the DCTA railroad right-of-way. (SI0-
0010) The Plaiuung and Zoiung Commission recommends approval (6-1).
[Public Hearing closed - Council deliberation only]
6. PUBLIC HEARINGS
A. Hold the first of two public hearings to consider the voluntary annexation and
Service Plan of approximately 1.148 acres of land in accordance with Chapter 43
of the TeYas Local Goveriunent Code. The property is appraised for ad valorem
taY purposes as land for agricultural use and is located on the west side of Country
Club Road, just north of the Education Center at Denton. (Al1-0001, Bitr•ch
Pr•ol)er•ty Arrraexatiora)
7. CITIZEN REPORTS
A. Review of procedures for addressing the City Council.
B. Receive citizen reports from the following:
1. Robert Doiuielly regarding the Maylull Road eYpansion project.
2. Hatice Salih retlyardincl, petition to repeal Ordinance 2010-292.
3. Carolyn Phillips regarding ordinance petition drive.
8. CONCLUDING ITEMS
A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries
from the City Council or the public with specific factual iiiformation or recitation
of policy, or accept a proposal to place the matter on the agenda for an upcoming
meeting
AND
Under Section 551.0415 of the TeYas Open Meetings Act, provide reports about
items of commuiuty interest regarding wluch no action will be talcen, to include:
expressions of thanks, congratulations, or condolence; information regarding
holiday schedules; an honorary or salutary recognition of a public official, public
employee, or other citizen; a reminder about an upcoming event orgaiuzed or
sponsored by the goveriung body; iiiformation regarding a social, ceremoiual, or
community event organized or sponsored by an entity other than the governing
body that was attended or is scheduled to be attended by a member of the
City of Denton City Council Agenda
April 5, 20 11
Page 8
governing body or an official or employee of the municipality; or an
aiuiouncement involving an imminent threat to the public health and safety of
people in the muiucipality that has arisen after the posting of the agenda.
B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the
TeYas Open Meetings Act.
C. Official Action on Closed Meeting Itein(s) under Sections 551.071-551.086 of the
Texas Open Meetings Act.
CERTIFICATE
I certify that the above notice of ineetin~ was posted on the bulletin board at the City Hall of the
City of Denton, TeYas, on the day of ,2011 at o'cloclc
(a.m.) (P.m.)
CITY SECRETARY
NOTE: THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN
ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL
PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF
REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING.
PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-
TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE
CITY SECRETARY' S OFFICE.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Transportation Operations
ACM: Jon Fortune ~
SUBJECT
Receive a report, hold a discussion and give staff direction on a proposal to enter into an
liiterlocal Cooperation Agreement between the City of Denton and Denton County
Transportation Authority (DCTA) for the provision of fleet maintenance operations for the
DCTA fleet.
BACKGROUND
DCTA currently leases property and facilities froin Solid Waste at the City of Denton Landfill
for the DCTA Bus Operations. DCTA utilizes the leased property for parlcing and staging of
their bus and velucle fleet of more than 80 pieces of equipment as well as bus and velucle
maintenance operations, bus dispatch, administration offices and employee parlcing. DCTA's
agreement with Solid Waste also permits DCTA to utilize the Solid Waste Administration
Building Coiiference Room and Traiiung Room. Additionally, DCTA purchases over 500,000
gallons of fuel aiuiually through the City of Denton Fleet Services and DCTA fuels their fleet at
the Solid Waste fuel facility located at the Landfill.
DCTA's multi-year lease with Solid Waste terminated at the end of Febniary ?O11 and DCTA is
continuing their operation at the Landfill through a month-to-month clause established in the
original lease agreeinent. Solid Waste is at a point where they need to renegotiate a new 24-
month to 36-month agreement with the intent of recapturint', certain facilities and property in the
18-month to 36-month time frame to advance Landfill operations. As part of tlus transition, and
prior to DCTA committing to constnicting a standalone bus operations and maintenance facility
on approximately 17 acres located on Teasley adjacent to the existin"; rail corridor, City of
Denton staff and DCTA staff have contemplated the benefits of entering into an agreement
between the City of Denton Fleet Services and DCTA for the provision of fleet maintenance and
fueling services.
This agenda item is intended to serve as an opportunity for staff to provide City Council a
general overview of the potential service agreement, ancillary issues that will need to be
addressed and the opportuiuty for Council to provide staff with direction on the proposaL City
of Denton staff will present the attached power point presentation as part of the project overview.
Agenda Inforination Sheet
April 5, 20 11
Page ?
EXHIBITS
1. DCTA-Fleet Services Power Point
Respectfully submitted,
7,
Marlc Nelson
Transportation Director
'
'
'
'
'
'
~
~
n
4~
'
'
'
- -
T-k~T-v Rus operoLtiolis
i C CX'`,
. _-Y....,_t-- _r.T.. - ~
V~
•,-i
V~
aaaa aaaa aaaa aaaa
,
tand.ing lte~la t.
puts e e
Cost sharing .cl e pa
A g,~s ~nd Vehl . eA s.
~,~,~ratlolls • , enl
. lss es w
1
~
~
w~
~
~
~
~
Ot'-ier Items - DCTA may use phased approach to relocate from Landfill.
o Operations would be closer to the Downtown Denton Transit Center.
Examining 1o-year agreement.
Catalyst project that will rec uire capital expenditure and
investment in the Service Center.
Phased development of Service Center property.
Potential benefits to both organizations by pooling
resources.
May enhance future partnerships between organizations.
W
r--4
V
WSJ
r
ll
W
^0
0
V
W
N
c~
O U
~Q
aA ~
O
Q
bA
s~-~ O
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Transportation Operations
ACM: Fred Greene
SUBJECT
Receive a report and hold a discussion regarding the Denton County Transportation Authority's
(DCTA) proposal to install a radio anteiuia tower for the DCTA A-train project.
BACKGROUND
At the March 1, ?Oll Council Meeting, Council received a briefing by City of Denton Plaiuung
and Developinent staff regarding a Specific Use Perinit (SUP) for DCTA to constnict a 180-foot
tall self-supportin~ lattice telecommunications tower in an EC-I zonin~ district. Pursuant to
Section 35.122.8J of the Denton Development Code (DDC), a self-supporting lattice
telecommuiucations tower located in an EC-I zoiung district in eYCess of 50-feet is permitted
only by an SUP.
During Council deliberation on tlus item, a number of questions were raised by Council on the
proposed tower regarding alternative locations, other options in lieu of tlus facility, associated
costs, and what impact, if any, the transmissions may have on the community and environment.
DCTA executive staff has been invited to attend the Council Worlc Session and will provide a
presentation on the proposed commuiucations tower directed at answering the questions raised
on March 1 by Council and concerned citizens. On March 16, 21011, DCTA submitted a letter to
the City Manager requesting that the tower SUP be considered at the April 5, 2011 Council
Meeting. The DCTA tower SUP has been placed on the April 5, 2011 Denton City Council
Regular Meeting.
Additionally, one question raised by Council was whether DCTA was going to place antennas or
equipinent froin other entities on the proposed tower. The response to that question at the March
1, 2011 meeting was "no." However, City of Denton staff walited to advise Council that
discussions have occurred with DCTA engineers about the possibility of allowing the City of
Denton Traffic Operations to utilize the tower to place an antenna to assist with the
implementation of an intelligent traffic system (ITS) project. The ITS project linlcs intersections
in the City via fiber optic and traditional copper wire and tlus linlcage permits the traffic
mana(yement system to remotely sequence and monitor intersections to enhance mobility in high
traffic intersections. At this point no concrete plans have been made to place any City equipment
on the proposed tower, oiily that the DCTA tower was considered as one option among others.
Staff wanted to ensure that Council was aware of tlus and correct the statement that was made at
the March 1, 2011 meeting. Finally, it is important to note that the decision to grant an SUP for
the tower should not take into account the City's needs as there are other options available to
facilitate the ITS project.
Agenda Inforination Sheet
April 5, 20 11
Page ?
PRIOR ACTION
The City Council tabled the consideration of an SUP for the DCTA telecommuiucations tower
after deliberation during the March 1, 20 11 Regular Session of the Denton City Council. The
Plannin~ and Zonin~ Commission recommends approval (6-1).
EYHIBITS
1. DCTA SUP Letter dated March 16, 2011
Prepared by,
~
Marlc Cunninghain
Planning and Development Director
Respectfully submitted,
f
Fred Greene
Assistant City Manager
. Dev~~~~~~~~~~~~~ansportataon Autwiority EXHIBIT 1
DCTA 1660 5.5temmons, Suite 250 a LewisvilPe,T7C 75067
972-221-460Q • fax 972-221-4601 • dcta.net
March 1 b, 2011
Michael Leavift
City 1VIanager
City ofHighland Village
1004 Highland Vi11age Road
Higl-dand Village, Texas 75077
Claude King
City Manager
City of L,ewisville
151 W. Church Street
Lewisville, Texas 75067
Gemrge Campbell
City Manager
City of Denton
215 E. McKinney
Denton, TX 76201
I3ear CityNIanagers
Recently the Denton City Council tabled our request for an SLTP for a communications
tower au7tii its April 5, 2011 mecting. The DGTA Baaxd of Dfrectars has determined that
we will not aperate the ALLtrain systein without an acceptable redundant ccammunicatican
system in place.
If you have any furtlier questicans or comments please do not hesitate to contact m.e.
Res t y,
.Tirn Witt,
CEO
This page left blank intentionally.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, ?O11
DEPARTMENT: Airport
ACM: Jon Fortune ~
SUBJECT
Receive a report, hold a discussion and give staff direction regarding the governance of the
Airport as recommended in the Denton Airport 2010 Business plan.
BACIiGROUND
On Noveinber 16, 21010, the City Council approved the Denton Airport Business Plan. During
discussions of tlus document, the City Council requested that staff provide a recommendation on
airport governance options. With these issues in mind, staff has discussed a variety of
Vvernance proposals with the City Council since our initial discussion on December 14, 2010.
On March 1, 2011, the City Council amended the duties and responsibilities of the Economic
Development Partnership Board (EDPB) as outlined in the staff proposal. The City Council,
however, tabled the action iteins related to the Airport Coininittee and Safety and Stalceholder
Relations Committee recommendations.
After listenin- to this discussion and considering these issues in more detail, staff has now
developed the following modifications to previous proposals for Council's consideration.
r Ainend the current Ordinance No. 97-299 that establishes the Airport Advisory Board to
do the following:
o Rename the Airport Advisory Board as the Aviation Safetv and Tecluucal
Advisorv Board.
o Redefine purpose and charge of the Board to: review, consider, and inalce
recommendations to the City Council regardint', relevant safety issues, flight
procedures, and ground operations; provide input related to safety and security in
the creation of long-term master plans; and facilitate tenant/stakeholder outreach.
The City Council Airport Coininittee is presented in essentially the saine forinat and design as
contemplated on March 1, 2011. However, the duties and responsibilities of tlus committee have
been further detailed in the accompanying resolution (Item 5 D) to provide greater specificity on
the purpose and charge of the coininittee.
An Airport Governance Responsibilities matriY has also been included as EYlubit 1 to clearly
document the duties and responsibilities of each aspect of the proposal. lii addition, a copy of
the March 1`t a~enda item in its entirety is included for your review as Exhibit 3.
Agenda liiformation Sheet
April 5, 2011
Page 2
PRIOR ACTION/VIEW (COUNCIL, BOARDS, COMMISIONS)
On Noveinber 16, 2010, the City Council approved the Denton Airport Business Plan. At this
tiine, the City Council also aslced staff to prepare a recoininendation on airport governance
options.
On December 6, 2010, City management discussed potential governance options with the Airport
Advisory Board (AAB). The AAB expressed soine concerns regarding the options presented,
but they did not provide a formal recommendation to the City Council.
On December 7, 2010, City manatlyement discussed potential ~overnance options with the
Econoinic Developinent Partnership Board (EDPB The EDPB was very supportive of the staff
recommendation, and has recommended that the City Council approve the proposed revisions to
the memberslup and role of the EDPB.
On December 13, 2010, the AAB held a special called meetint', to discuss their potential response
and recommendation to the City Council conceriung the governance options that were presented
by staff. As a result of tlus discussion, the AAB developed a letter that was forwarded to the
City Council on December 14, 2010. In this communication, the AAB recommended that the
City Council either 1) table the item until more discussion could talce place or 2) increase the size
of the Airport Advisory Board from seven (7) to iune (9) members with one additional member
coming from the Economic Development Partnerslup Board and one member coming from the
Chainber of Coininerce.
On Deceinber 14, 21010, staff made a presentation to the City Council on the airport governance
options that were identified. The City Council elected to table the Airport governance discussion
until the Febnjary 1, 2011, meetin~ since only four Council members were in attendance.
On January 5, 21011, the AAB held a meeting to discuss the Airport governance options that were
presented by staff.
On January 19, 2011, the AAB held a special called meeting to discuss the Airport governance
options. The focus of tlus meeting was to receive input and consider the views of the Airport
tenants and stalceholders.
On January 24, 21011, a three member committee of the AAB met to consider drafting a response
to the City Council on governance options.
On Febniary 1, 2011, the City Council was scheduled to discuss the Airport governance issue,
but the item was tabled due to inclement weather.
On Febnjary 9, 2011, the Airport Advisory Board inet to discuss the Airport governance options
that would be presented to the City Council.
Agenda liiformation Sheet
April 5, 2011
Page 3
On Febniary 15, 2011, the City Council discussed the Airport governance recommendations, but
the issue was ultimately tabled in order for a specific recommendation to be developed
conceriung safety and tenant stalceholder relations.
On Febniary 21, 2011, the Airport Advisory Board inet to discuss the Airport governance
options that would be presented to the City Council.
On March 1, 2011, the City Council amended the duties and responsibilities of the Economic
Developinent Partnership Board (EDPB) to include Airport branding and inarlceting, as well as
review and development Airport incentive policies. The City Council also tabled the Airport
Committee and Safety and Stakeholder Relations Committee items.
EXHIBITS
1. Airport Governance Responsibilities MatriY
2. PowerPoint Presentation
3. March 1, 2011, Agenda Inforination Sheet, Exhibits and PowerPoint Presentation regarding
Airport governance options.
Respectfully submitted:
~ -
Bryan Langley
Chief Financial Officer
Activity
Increase access and public input into matters that
involve Airport operations.
Elevate importance of Airport to the community.
Relevant safety issues at the Airport.
Flight operation procedures.
Ground operation procedures.
Facilitate tenant/stakeholder outreach.
Provide input related to safety and security in the
creation of long-term master plans.
Review, consider, and make recommendations to
the City Council regarding Airport branding and
marketing efforts.
Review development incentive policies for the
Airport.
Leverage common goals and create synergy
between development of Airport and the
development of the community.
Monitor and review business plan, master plan,
infrastructure improvements, and other similar
projects.
Review and seek grant funding opportunities.
Review and make recommendations regarding
leases and contracts at the Airport.
Monitor budget and assist with development of
long term financial plans for the Airport.
Provide a direct interface between the City
Council, tenants, and other interested parties
regarding Airport related issues.
Airport Governance Responsibilities
EXHIBIT 1
Aviation Safety and
Technical Economic Development City Council Airport
Advisory Board Partnership Board (EDPB) Committee Airport Manager
✓ ✓ ✓ ✓
✓ ✓ ✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓ ✓
EXHIBIT 2
APRIL , 2011
- V lail Y" `r`- i '
, e~s 1Q . t ~~11
. t Bus
~Nln 16, z0Cau
r Or 1~ ~r he CWY .
Al on
p :ll oVem .s~u ~s ,
on sslo tlon
Coun~ i l an Dl mmend~
es~ P . ~eco
~n ~~de a
: Durln~ taff r
that s
ed
ue~~
r _ _ T~rr► a11Ce Ij v , c v
wltjl Vly~ ~QlU•
~er 14,
~ ecem
1
p , .
tlon~' • • AlrPOrt
. 1 1 OLli
rua~ e T~
_ Fe~ tl~ al. .
4n . . ardl~~ rop os s
st~ p the aAltl.-, ~lfl y t11~
s e t of l• en~ed ~t
p
,Qns asp ec 1 d~ Ai'r ~.m. Rela or
°un c ncl~
tl 1 St c ED pB to 1
~ ~ r 0I the city _ - +A-, P.
Q~
44-+
U
U
Q
r--i
V
k
r--1
k
U
t
0
rl
4-
4
'
U
~
4J
U
4-j
4-+
I
4-+
Q)
O
a)
4-j
U
;-4
U
O
~
NO
~
U
4J
V~
t~t~~l~lt
424
4-+
U
4-+
4-+
;--1
4J
4-+
4J
4J
r-i
O
r~
NO
~ U
O U
O
O ~
G4 a
c~
x x
Key Aspects of Staff Proposal
• Review and seek grant funding opportunities.
• Review and make recommendations regarding leases and contracts
at the Airport.
• Monitor budget and assist with development of long term financial
plans for the Airport.
• Provide a direct interface between the City Council, tenants, and
other interested parties regarding Airport related issues.
Increase access and public input into matters that involve
Airport operations.
Elevate importance of Airport to the community. ~
Relevant safety issues at the Airport.
I Flight operation procedures.
Ground operation procedures.
~ Facilitate tenant/stakeholder outreach.
Provide input related to safety and security in the creation
of long-term master plans.
Review, consider, and make recommendations to the City
Council regarding Airport branding and marketing efforts.
~ Review development incentive policies for the Airport. ~
Leverage common goals and create synergy between
development of Airport and the development of the
community.
w '
Monitor and review business plan, master plan,
infrastructure improvements, and other similar projects.
~ Review and seek grant funding opportunities. ~
Review and make recommendations regarding leases and
contracts at the Airport.
Monitor budget and assist with development of long term
financial plans for the Airport.
Provide a direct interface between the City Council,
tenants, and other interested parties regarding Airport
related issues.
✓
d
✓
d
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
L
~ y
✓
~ ✓ ~
✓
✓
✓
r--4
t ;
0
U
0 NIL-
0
. .
4-1
bk
O
4-1
r
O
4-1
O
U
c~
N
4-1
~I
H
r--4
V
O
cCS
r
O
4-1
_;z
O
P4
Q
4-1
v
O
U
O
O
U
c~
N
U
0
W
a~
-11
vs
N
U
C~
0
O
O
N
i
co
a--+
ct
a~
+r
ct
ct
O
P-6 -.4
ct
•y
a~ ct
+r
cn
a~ v
a~
ct
a~
ct
0
ct
a
ct
cn
0
cn
O
ct
0
0
a~
ct
v
a
a~
a~
O
a~
+r
0
ct
U
EXHIBIT 3
4/05/2011
AGENDA INFORMATION SHEET
AGENDA DATE: March 1, 2011
DEPARTMENT: Airport
ACM: Jon Fortune ~
SUBJECT
Receive a report, hold a discussion and give staff direction regarding the governance of the
Airport as recommended in the Denton Airport 2010 Business plan.
BACIiGROUND
On Noveinber 16, 21010, the City Council approved the Denton Airport Business Plan. The
approved Airport Business Plan stresses financial self sufficiency for the Airport and specifically
states that "The City of Denton should also consider modifyint', its airport (yovernance stnicture
to assist with vetting financial proposals for the Airport as well as provide policy input related to
targeted marketing initiatives and development." During discussions of tlus document, the City
Council requested that staff provide a recoininendation on airport governance options. With
these issues in inind, staff proposed the following on Deceinber 14, 2010:
r EYpand the role of the Economic Development Partnerslup Board (EDPB) to review,
consider, and make recommendations to the City Council regarding airport branding,
marlceting, and development incentive policies.
r liicrease EDPB meinberslup by two meinbers from seven (7) to iune (9). One of the new
meinbers will be required to have laiowledge or eYperience in general aviation related
inatters and inust reside or worlc within the city. The other new ineinber will be a citizen
of the city who in the discretion of the City Council has specific lcnowledge, slcills, and
abilities that cati assist with any or all of the functions related to the EDPB.
r Create a City Council Airport Committee to oversee Airport operations.
r Hold regularly scheduled ineetings with interested stalceholders and Airport tenants to
share information and solicit ideas, comments, or concerns, relative to the Airport
operations or development. The intent of these meetings will be to increase access and
public input into matters that involve airport operations.
r Continue to have the Airport Manager adininister the day-to-day operations of the Denton
Airport.
Subsequent to the Deceinber 14, 2010, recoininendation, Council Meinber Engelbrecht
suggested that staff consider forinalizing the existing Airport Safety Coininittee. The Safety
Committee is currently admiiustered by staff, but the memberslup of the committee is not
formally defined and the meetings occur on an irregular basis. lii addition, the charge of tlus
committee is not officially defined in a written format. As such, Council Member Engelbrecht
proposed that the committee membership, charge, and meeting schedules be formalized if the
Agenda liiformation Sheet
March 1, 2011
Page 2
EXHIBIT 3
4/05/2011
proposed governance stnicture is changed. Staff agreed with this approach and incorporated the
concept into the Febniary 15th recommendation.
The staff proposal is inore coinpletely described in the attached Agenda Inforination Sheet,
Exhibits and PowerPoint Presentation that was discussed with the City Council on Febniary 15,
?010 (See EYlubit 1). lii essence, staff recommended the creation of a new Council Airport
Committee, an eYpanded role for the EDPB, and the formal creation of a staff level Safety
Coininittee and Tenant/Stalceholder Relations Group. As part of this approach, the ordinance
establishing the Airport Advisory Board would also be rescinded. The lcey eleinents of the staff
Febniary 15th recommendation are summarized in the grapluc below:
Recommend'ed
Po1icy Governance
Structure
\l
1
Airport Mgmt.
Structure
E.9
On Febniary 15, 2011, the City Council tabled the proposal until a specific recommendation
could be presented regarding the safety, tenant, and stalceholder groups inentioned. As such, the
purpose of tlus item is to review the above described proposal and provide a specific
recommendation on how the Safety and Tenant/Stalceholder groups will be orgaiuzed. lii
considering this issue, staff has reviewed the City Council and Airport Advisory Board (AAB)
comments that were mentioned over the past few weeks. The City Council and AAB have
agreed and emphasized that:
r Tenants and other stakeholders at the Airport should have ample input on Airport related
issues.
r Historical and general aviation laiowledge at the Airport should be preserved.
r Economic Development at the Airport should be eiilianced.
r Citizens should have increased access to the City Council on Airport matters.
Agenda liiformation Sheet
March 1, 2011
Page 3
EXHIBIT 3
4/05/2011
r Various aspects of the proposed governance stnicture should be inore coinpletely defined.
lii the view of staff, the following recommendation addresses each of the above issues:
r Forinally establish an Airaort Mana~-,er Safetv and Stalceholder Coininittee.
r liitent of the committee will be to eYplore a wide range of safety and operational issues
including Flight and Ground Operations.
o Focus will be on tenant/stakeholder outreach.
r The Airport Manatlyer will conduct the meetings.
r May meet montlily (or more frequently based on need), but not less than 4 times per
year.
r In order to be responsive to any issue that may be raised, the meetings will conducted by
management and will include an opportLinity to discuss any issue.
r At a miiumuin, invitees to the meetings will include FiYed Base Operator (FBO)
representatives, Air Traffic Control management, and the Airport Operations
Coordinator.
o Any member of the public will be encouraged to participate in the discussion.
r FAA representatives and contractors at the Airport may also occasionally be invited to
attend to discuss a wide range of issues that may be relevant.
r The Chairinan of the newly forined Airport Coininittee will also be forinally invited to
attend each meeting.
r A summary of the Airport Manager Safety and Stalceholder Committee's discussions
will be forwarded for review to the Airport Committee and City Council.
The reinaining lcey aspects of the proposed governance stnicture are detailed below:
Economic Develoament Partnerslua Board (EDPB):
• Expand EDPB by two ineinbers (froin 7 to 9).
• Review, consider, and malce recommendations to the City Council regarding Airport
branding and marlceting efforts.
• Outline development incentive policies for the Airport.
• Leverage common goals and create synergy between development of Airport and the
development of the commuiuty.
Airaort Coininittee:
• Three member City Council Committee.
• City Manager (or designee) also on Coininittee.
• Review and inalce recoininendations regarding leases at the Airport.
• Review gratit funding opportuiuties. (e.g. master plan, iiifrastnicture improvements, etc.)
• Moiutor budget and assist with development of long term financial plans for the Airport.
• Provide a foniin for tenants and other interested parties to interface directly with the City
Council on Airport related issues.
EXHIBIT 3
Agenda liiformation Sheet 4/05/201 1
March 1, 2011
Page 4
PRIOR ACTION/VIEW (COUNCIL, BOARDS, COMMISIONS)
On Noveinber 16, 2010, the City Council approved the Denton Airport Business Plan. At this
tiine, the City Council also aslced staff to prepare a recoininendation on airport governance
options.
On December 6, 2010, City management discussed potential governance options with the Airport
Advisory Board (AAB). The AAB expressed soine concerns regarding the options presented,
but they did not provide a formal recommendation to the City Council.
On Deceinber 7, 2010, City inanageinent discussed potential governance options with the
Econoinic Developinent Partnership Board (EDPB The EDPB was very supportive of the staff
recommendation, and has recommended that the City Council approve the proposed revisions to
the memberslup and role of the EDPB.
On December 13, 2010, the AAB held a special called meetint', to discuss their potential response
and recommendation to the City Council conceriung the governance options that were presented
by staff. As a result of tlus discussion, the AAB developed a letter that was forwarded to the
City Council on December 14, 2010. In this communication, the AAB recommended that the
City Council either 1) table the item until more discussion could talce place or 2) increase the size
of the Airport Advisory Board from seven (7) to iune (9) members with one additional member
coming from the Economic Development Partnerslup Board and one member coming from the
Chainber of Coininerce.
On Deceinber 14, 21010, staff made a presentation to the City Council on the airport governance
options that were identified. The City Council elected to table the Airport governatice discussion
until the Febnjary 1, 2011, meetin~ since only four Council members were in attendance.
On January 5, 21011, the AAB held a meeting to discuss the Airport governance options that were
presented by staff.
On January 19, 2011, the AAB held a special called meeting to discuss the Airport governance
options. The focus of tlus meeting was to receive input and consider the views of the Airport
tenants and stalceholders.
On January 24, 21011, a three member committee of the AAB met to consider drafting a response
to the City Council on governance options.
On Febniary 1, 2011, the City Council was scheduled to discuss the Airport governance issue,
but the item was tabled due to inclement weather.
On Febnjary 9, 2011, the Airport Advisory Board inet to discuss the Airport governance options
that would be presented to the City Council.
Agenda liiformation Sheet
March 1, 2011
Page 5
EXHIBIT 3
4/05/2011
On Febniary 15, 2011, the City Council discussed the Airport governance recommendations, but
the issue was ultimately tabled in order for a specific recommendation to be developed
conceriung safety and tenant stalceholder relations.
On Febniary 21, 2011, the Airport Advisory Board inet to discuss the Airport governance
options that would be presented to the City Council. As a result of tlus meeting, the AAB
developed the recommendation that is attached as EYlubit 3.
EXHIBITS
1. Febniary 15, 2011, Agenda liiformation Sheet, EYlubits and PowerPoint Presentation
regarding Airport governance options.
2. PowerPoint Presentation
3. Airport Advisory Board Febniary ? 1" Recommendation
Respectfully submitted:
,n
Bryan Langley
Chief Financial Officer
EXHIBIT 3
4/05/2011
AGENDA INFORMATION SHEET
AGENDA DATE: Februai-N 15, 2011
DEPARTMENT: Airport
ACM: Jon Fortune ~
SUBJECT
Receive a report and public input, hold a discussion and give staff direction regarding the
governance of the Airport as recommended in the Denton Airport 2010 Business plan.
BACIiGROUND
On Noveinber 16, 21010, the City Council approved the Denton Airport Business Plan. The
approved Airport Business Plan stresses financial self sufficiency for the Airport and specifically
states that "The City of Denton should also consider modifying its airport governance structure
to assist with vetting financial proposals for the Airport as well as provide policy input related to
targeted marketing initiatives and development." During discussions of tlus document, the City
Council requested that staff provide a recoininendation on airport governance options. With
these issues in inind, staff proposed the following on Deceinber 14, 2010:
Staff Recommendation:
The purpose of the staff proposal is to further enhance the value of the Airport as an economic
engine for the commuiuty and heighten the City's commitment to the Airport. Tlus objective will
be accomplished by:
r Expanding the role of the Economic Development Partnership Board to review, consider,
and malce recommendations to the City Council regarding airport branding, marlceting,
and development incentive policies.
r Increasing EDPB membership by two members from seven (7) to nine (9). One of the
new ineinbers will be required to have lcnowledge or experience in general aviation
related matters and must reside or work witlun the city. The other new member will be a
citizen of the city who in the discretion of the City Council has specific lcnowledge,
slcills, and abilities that can assist with any or all of the functions related to the EDPB.
r Transitioiung from an Airport Advisory Board, as currently eYists, to a City Council
Airport Committee. The recommended course of action will effectively eliminate the
current Airport Advisory Board stnicture.
r Holding regularly scheduled ineetings with interested stalceholders and Airport tenants to
share iiiformation and solicit ideas, comments, or concerns, relative to the Airport
operations or development. The intent of these meetings will be to increase access and
public input into matters that involve airport operations.
Agenda liiformation Sheet
Febniary 15, 2011
Page 2
EXHIBIT 3
4/05/2011
r Continuing to have the Airport Manager adininister the day-to-day operations of the
Denton Airport.
The staff proposal is inore coinpletely described in the attached Agenda Inforination Sheet and
PowerPoint Presentation that was discussed with the City Council on December 14, 2010 (See
EYlllUlt 1).
Since December 14ti' the Airport Advisory Board (AAB) has met on January Sti' and January 19ti'
to discuss the ~overnance options in more detail. In addition, on January 24ti' a three member
committee of the AAB met and drafted a letter to the City Council wluch provided additional
options for consideration. The committee's letter is attached for review as EYlubit
In addition, Council Member Engelbrecht has suggested that staff consider formalizing the
eYisting Airport Safety Committee. The Safety Committee is currently admiiustered by staff, but
the memberslup of the committee is not formally defined and the meetings occur on an irregular
basis. While the purpose of the meetings is to discuss current operational and safety issues at the
Airport, the char~e of this committee is not officially defined in a written format.
Typically, participatits at the Safety Committee meetings include FBO representatives, Air
Traffic Control inanageinent, the Airport Operations Coordinator, and pilots who are active at
the Airport. In addition, FAA representatives and contractors at the Airport occasionally attend
to discuss a wide range of issues that may be relevant.
To provide assurance that Airport staff properly addresses safety concerns, Council Meinber
Engelbrecht proposes that the committee membership, charge, and meeting schedules be
formalized if the proposed governance stnicture is changed. Staff is in agreement with tlus
recommendation and will draft a proposal for the City Council to consider if directed to do so.
~
Agenda liiformation Sheet
Febniary 15, 2011
Page 3
RECOMMENDATION
EXHIBIT 3
4/05/2011
Staff recoininends that the current duties of the Airport Advisory Board be reassigned to a new
Council Airport Coininittee and the EDPB. As part of this approach, the ordinance establishing
the Airport Advisory Board will also be rescinded. The recommended approach is graplucally
described below:
Recommended
Policy Governance
Current Structure Structure
i
.
i
Airport Mgmt.;
5tructure
~s f
~
,
PRIOR ACTION/VIEW (COUNCIL, BOARDS, COMMISIONS)
On Noveinber 16, 21010, the City Council approved the Denton Airport Business Plan. At tlus
time, the City Council also aslced staff to prepare a recommendation on airport governance
options.
On Deceinber 6, 21010, City management discussed potential governance options with the Airport
Advisory Board (AAB). The AAB eYpressed some concerns regarding the options presented,
but they did not provide a formal recommendation to the City Council.
On December 7, 21010, City management discussed potential governance options with the
Economic Development Partnerslup Board (EDPB The EDPB was very supportive of the staff
recommendation, and has recommended that the City Council approve the proposed revisions to
the ineinbership and role of the EDPB.
On December 13, 21010, the AAB held a special called meeting to discuss their potential response
and recommendation to the City Council concernin~ the ~overnance options that were presented
by staff. As a result of this discussion, the AAB developed a letter that was forwarded to the
City Council on December 14, 2010. lii tlus commuiucation, the AAB recommended that the
~
Agenda liiformation Sheet
Febniary 15, 2011
Page 4
EXHIBIT 3
4/05/2011
City Council either 1) table the item until more discussion could talce place or 2) increase the size
of the Airport Advisory Board from seven (7) to iune (9) members with one additional member
coming from the Economic Development Partnerslup Board and one member coming from the
Chainber of Coininerce.
On Deceinber 14, 21010, staff made a presentation to the City Council on the airport governatice
options that were identified. The City Council elected to table the Airport governatice discussion
until the Febniary 1, 2011, meetin~ since only four Council members were in attendance.
On January 5, 2011, the AAB held a meeting to discuss the Airport governance options that were
presented by staff.
On January 19, 2011, the AAB held a special called meetint', to discuss the Airport governance
options. The focus of tlus meeting was to receive input and consider the views of the Airport
tenants and stalceholders.
On January 24, 2011, a three member committee of the AAB met to consider drafting a response
to the City Council on governance options.
EXHIBITS
1. Deceinber 14, 21010, Agenda liiformation Sheet and PowerPoint Presentation regarding
Airport governance options.
2. January 26, 2011, Letter froin Airport Advisory Board Coininittee regarding governance
options.
3. PowerPoint Presentation
Respectfully submitted:
Bryan Langley
Chief Financial Officer
~
EXHIBIT 3
4/05/2011
EXHIBIT 0-'\E
EXHIBIT 3
4/05/2011
AGENDA INFORMATION SHEET
AGENDA DATE: December 14, ?O10
DEPARTMENT: Finance
ACM: Jon Fortune ~
SUBJECT
Receive a report, hold a discussion, and give staff direction regarding the Airport governance
stnicture as recommended in the adopted Denton Airport ?O10 Business Plan.
BACKGROUND
lii 2003, the City Council approved an Airport Master Plan that established a clear vision for the
Airport. This plan became the basis for airport development and the creation of a business plan.
The Master Plan included an outcoine stateinent that defined the Airport as follows:
r First class aviation center that serves as the home for corporate aircraft from the North
Texas region, as well as locally owned general aviation aircraft.
r Financially self-reliant.
r Maj or mid-continent refueling center.
r Land in viciiuty of Airport is locally owned or controlled.
r Fully served by municipal infrastnicture and utilities.
r Malce the airport a major economic development benefit to the community.
r Established partnerslups to include a nationally recoguzed aviation education institute.
r Public understands the value of the Airport to the Denton economy and futtire.
As stated above, the 2003 Master Plan recoininended that the Denton Airport becoine financially
self-reliant and become a major economic development benefit to the commuiuty. With tlus
goal in mind, the Council approved a Business Plan on Noveinber 16, 2010 to help the Airport
achieve these objectives. The approved Airport Business Plan specifically states that "The City
of Denton should also consider modifyint', its airport governance stnicture to assist with vettin(Y
finaticial proposals for the Airport as well as provide policy input related to targeted marlceting
iiutiatives and development."
Accordin~ly, the purpose of this worlc session item is to explore the ~overnance stnicture of the
Airport and provide the City Council with a recommendation on wluch stnicture provides the
best foundation to aclueve the above mentioned goals.
The current Airport Advisory Board (AAB) is comprised of seven (7) board members that have
been appointed by the City Council. The primary purpose of the board is to provide the City
Council and City Manager with advice regarding lease agreements, development policy, and
grant projects. Lilce other advisory boards in the City of Denton, the AAB is only advisory in
nature, and as such, final decision inalcing authority on any issue rests with the City CounciL In
EXHIBIT 3
4/05/2011
Agenda liiformation Sheet
December 14, 2010
Page 2
addition, since the AAB oiily provides advice regarding the issues described above, the Airport
Manager is charged with managing all day-to-day operations at the Airport.
In evaluating potential Airport governance options, the followin"; central question should be
addressed:
r poes the current AAB governance stnicture best fit the goal of establishing the Airport
as an economic engine for the community? If it is determined that the current stnictLire
does not provide the best fit, what options are available to better meet the City's needs?
With this question in inind, the following Airport governance options have been identified by
staff for consideration.
Oation A: Redefine role and meinberslup requirements of the AAB to clarify eYpectations.
Under this scenario, the membership of the AAB could be altered or modified to
increase the ineinbership and diversity of the board. In addition, the inission of
the board could be reevaluated to provide more focus on Council priorities.
Oation B: Transfer airport governance to another existing board or Council Coininittee.
Under this scenario, the duties of the AAB could be reassigned to another
eYisting board or committee.
Oation C: Stahis quo. Under this scenario, no changes to the AAB stnjcture would be
implemented.
Oation D: Transfer branding, marketing, and development incentive activities to the
Economic Development Partnership Board (EDPB) and create a new Council
Coininittee to oversee all other activities for the Airport. This option is
recommended by management, and is more fully eYplained below.
Under the Option D scenario, the Economic Development Partnership Board (EDPB) would be
taslced with the following:
r Review, consider, and malce recommendations to the City Council conceriung Airport
branding and inarlceting efforts.
r Outline Airport development incentive policies and malce recommendations to the City
Council conceriung any development incentives as assigned by the City Council or
requested by the City Manager.
r Leverage coininon coininunity goals and create a synergy between the developinent of
the Airport and the development of the overall community.
To accomplish the above tasks, the EDPB memberslup would be eYpanded by two members
(froin 7 to 9). One of the new ineinbers will be required to have lcnowledge or experience in
general aviation related inatters and inust reside or worlc within the city. The other new ineinber
EXHIBIT 3
4/05/2011
Agenda liiformation Sheet
November 2, 2010
Page 3
will be a citizen of the city who in the discretion of the City Council has specific laiowledge,
slcills, and abilities that can assist with any or all of the functions related to the EDPB.
lii addition, under Option D, a new City Council standing committee called the Airport
Committee would be created. The purpose of the committee would be to review, consider, and
inalce recoininendations to the City Council regarding Airport operations as assigned by the City
Council or requested by staff. The day-to-day operations would continue to be managed by the
Airport Manager under tlus governance stnicture.
Finally, under Option D and as recommended in the 2010 Airport Business Plan, staff would
create a standing ineeting (at least quarterly) with existing stalceholders, clients, and tenants to
discuss:
r Safety and security issues.
r Airport operations.
r Development activities.
r Special events.
r Any questions or other issues as appropriate.
lii summary, staff is recommending Option D, wluch proposes that the current AAB duties be
reassigied to the EDPB and a new Council Airport Committee. lii our view, tlus new
~overnance stnicture will enhance development opportunities in the community and at the
Airport. The benefits of this new approach include:
r EYpanded marketing efforts and eiilianced collaboration with commuiuty development
initiatives.
r Effective implementation of 2010 Business Plan.
r Eiiliaticed stnicture to provide the City Council with more direct contact on Airport
Issues.
While a number of options are presented above for consideration, staff would like to point out
that we can successfully work with any of the governance models presented.
RECOMMENDATION
Staff recommends that Option D as defined above be implemented by the City Council. Under
tlus scenario, the current duties of the Airport Advisory Board will be reassigied to the EDPB
and a new Council Airport Coininittee. As part of this approach, the ordinance establishing the
Airport Advisory Coininittee will also be rescinded.
PRIOR ACTION/VIEW (COUNCIL, BOARDS, COMMISIONS)
On Deceinber 6, 2010, City Manageinent discussed potential governance options with the
Airport Advisory Board (AAB The AAB eYpressed some concerns regarding the options
EXHIBIT 3
4/05/2011
Agenda liiformation Sheet
December 14, 2010
Page 4
presented, but they did not provide a formal recommendation to the City Council. The AAB
called a special meeting on December 13, 2010, to discuss their potential response and
recommendation to the City Council.
On December 7, 21010, City Management discussed potential governance options with the
Economic Development Partnerslup Board (EDPB The EDPB was very supportive of the staff
recommendation, and has recommended that the City Council approve the proposed revisions to
the ineinbership and role of the EDPB.
EYHIBITS
PowerPoint Presentation
Respectfully submitted:
~
~ t
Bryan Langley
Chief Financial Officer
M ~
r
O
m N
2 `O
X o
~
W NT
~
~
o~
~
~
~
~
3a1,4, .~3,~ ~ ~ C~
EXHIBIT 3
4/05/2011
Airport Master P'--an w • •
as approved by the City Councll 1
2 o n
03,
The Business Plan states•
.
EXHIBIT 3
~ 4/05/2011
~ . ~
~
~ ~
AA],
v.r ~ ° ~ ~ ~ . ~ A ) ~ ~e~ R~ ~ A
. al:
.
of seven board members appointed by the
Comprised
City Council.
• r
~ses the City Council and/or City Manager on al port
Advl ,
issues such as:
W
to other advisory boards,
Similar ronnm m PYl &q tl o115.
the AAB may only make
CO
0
m CV
2 LO
o
x
w~
4-1
cn
O
4~
EXHIBIT 3
4/05/2011
~ ~~k
A,
~ ~3,
edefine role and mem ers 11p
Option A:. R ~ ~
'
re ulrements ' of f--ie AAB to c_arlfy expectations.
q
irport governance to a n o t z e r
Option B: , T r a n s fe r a
-.3oard or Council Committee.
exi sting .
. .
Economic Development Partnership Board:
EDBP would be tasked wi •
th the following*
EXHIBIT 3
4/05/2011
To accomplish the above
tasks, the EDPB member
sh•
~p
oud be expanded by two
members (from 7 to 9).
EXHIBIT 3
~ 4/05/2011
~ ~ ~l I
~ L A t~ A. A
~
Commee:,
Airport
.
.
Council standing commlt ee ca__e
Create a new City
f-'ie Airport Committee.
Purpose of t ze comml •ttee ' wi-_-- be to review, conslder,
a -~e recommendations to t Ze City Council
and m
arding Airport s assigne d bY t 1 e C l t y
e r a tio s a
o p
re
g
~ or requested by staff.
Council
Dav-to-day operations wi.~~ continue to be managed
by f-ie Airport Manager.
EXHIBIT 3
~ 4/05/2011
~ . ~ ~ ~ I ~e~. .
~ ~ L t~ A. A
' . , , x
~
g% ~
kll,,,";x
Tenant/stakeholder Relations:,
- .
•g meeting (at ~east quarter-y) wlt 1
Create a sta ndln .
__,re_1o__ders, c~l ~ 'ents, and tenants to discuss:
existin g sta
ity issues.
• Airport operations.
• Development activities.
EXHIBIT 3
~ 4/05/2011
~.,,r 11.4 A; 1. A . Al
:
~
EXHIBIT 3
4/05/2011
Current Structure, Proposed Struct
ure
EXHIBIT 3
4/05/2011
EXHIBIT TWO
EXHIBIT TWO
EXHIBIT 3
4/05/2011
MEMORANDUM
TO: DENTC)N CITY CC)UNCIL
FROM: AIRPC)RT ADVISC)RY BC)ARD
SUBJECT: FUTURE ()F AIRP()RT AND (7()VERNAN(;E ()F THE B()ARD -
PART 2
DATE: 1/28/2011
CC: CIT'YMANAGEMENT, AIRPORT STAIiEHOLDERS
(;IIRRENT ST ATIIS
The (;ity Manager recently pro>posed a change in "governance" relating to the airpo>rt.
The St<itt pro>po>sa1 c0mes t0>11()«1ng the appro>tiTal ()t the Business Plan ana is meant to>
pro>tiTiae an ()ppo>rtLinity to> pursue the ()bjectitiTes ()utlinea in the Business Plan. The Statt
recommendation proti-ided tor dissolution ot the existing Airport Adti-isorv Board and
merger ot its tunctions to the Economic Deti-elopment Partnership Board and to a ne«-
three-member sub-committee ot the Council.
The Council tabled action on the goti-ernance item until their February «-ork session.
Since the time ()t the ()riginal present<itio>n, the AAB has hela apublic meeting ana a
co>mnuttee meeting ()t the AAB, ana hereby presents these rea>nuiienaati()ns to> the (,itv
( ;c nincil.
Basea ()n the public meetings ana citizen input (Nebrig letter att<ichea) the A-NB has
determined that the tollo«-ing are the most important considerations in goti-ernance ot the
airport:
• AIRPORT KNOWLEDGE
There «-as consensus trom all parties on the need tor speciflc airport kio«-ledge
and experience on anv goti-ernance structure implemented. The airport, much
like the utility is "special creature" and needs speciflc attention in ati-iation related
areas.
• ECONOMIC DEVELOPMENT
There was consensus from all parties on the need for "more aggressive"
ec()n()mic aetiTel()pment, branaing ana marketing.
0 BOARD MEMBERS
EXHIBIT 3
There «as input that restricting baara membership to> only "people in city limits 4/05/2011
()t Denton" limited our choices and has in tact in the past aepritiTea the baara ()t
tiTaluable citizen intiT()ltiTement.
• TENANT RETENTION
There «as input that eco>no>nuc aetiTeh>pment be tho>t~ght ()t to>r ezisting tenants
as «-ellas attracting ne«- tolks.
• ENTERPRISE BOARD
There «as input ana aiscussi()n that this «as an ezcellent ()ppo>rttinitv to> create a
real Enterprise Board charged with maintaining the airport's self sufficiency into
the tuture.
Accordingly, the AAB recommends that the city take eti-en more time to studv this
matter aue to> its imp()rt<ince ana the signiflcance that any change co>ula hatiTe ()n the airp()rt
ana the citv. While the AAB belietiTes «e hatiTe no>« a>nsiaerea all tiTo>ices, it conila be that
there are ()ther iaeas that nught be imp()rtant to> co>nsiaer beto>re enacting so> s«eeping a
change (like research into> ho>« ()ther airpo>rts manage themseltiTes, regY>na1 co>()perati()n
opportunities or to get input on «-hat the Council or Chamber is thinl~ing.)
In the alternative, if a decision «-ere to be made today, based on all available information
the AAB belieti-es the following "governance option" is best suited tor the Denton Airport
and the citt- of Denton:
(;RE ATI0N 0F NEWDENT(~N AIP(~RT ENTERPISE BO ARD
The G>uncil co>ula create ana transiti()n to> a ne« Dento>n Airpo>rt Enterprise Bo>ara (the
"DAEB"). This new board «-ould still be an adti-isory board but «-ould tunction much like
the Public Utilitv Board (PUB.) All airport business «-ould go through the DAEB and it
«-ould al«-avs seek flnancial selt-sutflciencv. There should still be some discussion as to ho«-
much authoritv to giti-e this board but «-e are recommending a tormat similar to the PUB.
As a ne« baara a11 its members «o>ula hatiTe to> be appo>intea. Ezisting members ()t the AAB
«o>ula be eligible to>r appo>intment, but that «o>ula be up to> the G>uncil. All term limits
«o>ula begin upo>n appo>intment to> the ne« DAEB.
SIZE 0F BO ARD: &>ara size conila be increasea tro>m 7 to> 9«ith an aaaiti()nal member
eacli from tlie Economic Development Partnersliip Board and tlie Chamber of Commerce.
As an Enterprise Board it may also make sense to have a Council member "ex officio" to
improti-e the lines ot communication.
BOARD MEMBERS: Board members «-ould be nominated by the council under the same
terms as the ezisting AAB (Terms similar in length to> the PIIB, ()ne appo>intment per
G)uncil member) but «e rea>mmena a tiTariance the appro>priate citv ()rainance to> aIlh>« no
>
~
EXHIBIT 3
mo>re rh<ln 2()t rhe setireii qualitiea members tro>m ()utsiae rhe city limits. (Iniri<11 4/05/2011
appo>intments shonila be st<it~gerea so> as to> atiTo>ia all member terms enaing at the same time.
Fo>r ezanlple 2, tvo> year, 2 three year ana 3 to>ur year terms.) It the aecisi()n is to> hatiTe 9
members their initial appointments should be staggered also. The ttwo additional members
«-ould be chosen by the Chamber and EDPB, approti-ed by Council.
MISSION: Bo>ara «ill be airectea to> co>ntinue the ezisting aatiTiso>ry tunctio>ns ()t the prio>r
AAB ana aaaiti()nally seek to> turther the airpo>rts nussi()n as st<itea in the Business Plan
which "is to serve as an engine to>r ea>no>nuc aetiTel()pment in the Dento>n area, pro>tiTiaing
()perati()n satety; <>utstanaing service; ana abso>lute securitv t()r pritiTate pil()ts ana the atiTiatiOn
industry". Board «-ould also be directed to turther the selt-sutflciency ot the airport so as
neti-er again to require general tunds.
The ne«- DAEB could torm subcommittees to proti-ide ideas to the City on such areas as
economic deti-elopment, marketing and branding, capital improti-ements,securitv, pollution
co>ntro>1 (air, no>ise, retuse), airpo>rt ()perati()ns, tenant retenti()n ana relatio>ns, the Airsho>«,
regio>nal intiTo>ltiTement ana ()ther impo>rtant issues.
It is ()w- ASstunpti~ ui that the City's eco ~no ~mic devekpment effi ~rts, ui theu cw-rent ro ~le, sho ~uld
already be actiN-e1y uivc 4ved ui tlie -3irpc ~rt, tlie prc ~pc ~sed airpc ~rt bc ~ard Nv,()uld Nv,()rk in cc ~njtuicti()n
Nvitli tliem ()r ativ ()tlier departinent ()r advisc ~i-y bc ~ard ()f tlie citv, as ()PPc Viatiities arise.
SU:NI:NLNRY
The AAB belieti-es the Statt recommendation to giti-e all these airport related responsibilities
to statt only signiflcantly underestimates the character and nature ot the airport and the
amount ot time necessarV to goti-ern such an important part ot our citv intrasttucture.
Further, atter pro>tiTiaing to>r public aiscussi()n ana co>nuiients, the AAB ao>es n()t belietiTe the
Statt reco>mmenaati()n «ill tullyachietiTe a11 the go>als ()t the airpo>rt as ()utlinea by the citizens,
v()ur aatiTiso>ry b()ara, ana the Business Plan. Aca>raingly, «e respecttully request that the
G>uncil n()t aao>pt the St<itt reco>mmenaatio>n. The AAB also> respecttully requests that v()u
either (i) torm a special committee to study the matter turther or (ii) adopt a Denton Airport
Enterprise Board similar in theory to that discussed aboti-e.
PROS
- Builas ()n ezisting 40 vear AAB histo>ryana kno>«leage
- Builas ()n atiTiato>r backgro>unas ana kiio>«leage ()t setiTeral b()ara members
- AAB suppo>rt (past & present)
- Pro>tiTiaes a«ay to> enhance eco>no>mic aetiTel()pment ana marketing
- Sho«-s actual city support tor Airport and does not combine «-ith other
Boards/Priorities
- Support ot majority ot airport tenants
- Helps insure FA-A "revenue compliance" (Tide 49 U.S. Code 47107(b), 47133)
- Helps insure "Enterprise operation" GASB 34 compliance
- Aaaiti()n ()t co>mmunity b()ara members helps turther branaing ana eco>no>mic
aetiTeh)pment
- NeNv b()ara «o>ula pursue «ays to>r eco>no>nuc selt sutflciency to>r 10-20 year «inao>«
- Would not place addition burdens and responsibilities on EDP Board or Council
- Expandirig board membership «-illallo«- tor more opportunities
,
~
EXHIBIT 3
4/05/2011
MISSION AND ACCOMPLISHMENTS OF CURRENT STRUCTURE
(;hapt. 3, article I, sectio>n 2c. The baara sha11 serve in an aatiTiso>ry capacityana shaIl aatiTise
the city co>uncil ()n a11 matters co>ncerning ()r pert<iining to> the Dento>n Municipal Airpo>rt,
ana sha11 subnut a buaget reco>nuiienaatio>n to> the citv manager t()r the airpo>rt to>r his
c0nsiaerati()n in preparing the to>ta1 city buaget (C()de 1966, 71 1-21(b); Ord. No 97-291), 71 I, 10-
7-97)
The AAB, acting unaer the ()rainance quortea ab()tiTe, rej()ices in P()inting ()ut that in the last
40 vears «-e hati-e helped guide deti-elopment and proti-ide the tollo«-ing beneflts to the City ot
Denton ti-ia the airport. We hope that «-ith an Enterprise Board and additional assistance
from tlie Economic Development Partnersliip Board «-e can do even better.
The baara as no>« co>nstnictea, «o>rking cksely «ith city statt ana co>uncil, has ao>ne
n()thing less than a spect<icular Wb ()t aetiTekping the airpo>rt tro>m a smaIl airPo>rt
«ith a4(1(1(1 to>()t nin«ayana 6 builaings to> ()ne (>t 60 builaings plus to>«er ana
terminal builaing«ith a 7000 to>()t tun«-ayana an aaaea parallel t.lzi«ay plus a to>«er
and radar. ~'e made creatiti-e use ot resources and some economic incentiti-es to do
this «-ith no subsidies, no taxabatements, and no giti-e-a«-aVs.
We've gone from a total dependence on the City's General Fund to collecting more
m0nev in tiscal 2009 tro>m gro>una leases ana tuel t<~zes than the city's expenditure.
We are in the pro>cess, «ithin 3years, 4aaaing a seco>na (para11e1) nin«ay,5000 tt.
kng, ()n the «est siae ()t the main n11-1«aV.
4. We «-ere designated Reliever Airport of the Year in Texas for 2009 by the Aviation
Department of TXD(-)T.
:i. We hatiTe aaaea miles ()t patiTea t<lzi«aVs.
6. Mo>re than quaatuplea the patiTea ramp space.
7. Added perimeter tencing to increase securitY, not just trom human intruders, but
also trom cov()tes, stray dogs, deer, and other «-ild creatures in the area.
Attracted substantial business to DTO, the top three ot «-hich do more than 100
milli()n ao>llars «o>rth ()t business per year to> the airpo>rt, «ith ()tf-airpo>rt businesses
that aaa milli()ns mo>re to> the eco>no>nuc beneflt ()t Dento>n.
Uro>«n tro>m selling a te« tho>usana gaIlkns ()t tuel per year to> mo>re than a nulliOn
gallons a year.
10. Increased the «-ork torce on DTO trom te«-er than 10 to more than 400, «-ith a total
pavroll of more than $14 million per year.
4
EXHIBIT 3
11. Increasea the airect eco>no>mic beneflt to> Dento>n tro>m a te« tho>usana ao>llars per 4/05/2011
year to> mo>re than 100 milli()n ao>llars per year. It v()u a>nsiaer the multiplier ettect
()t business in Dento>n, the numbers get signiticantly larger.
12. Attracted businesses that located here because «-e hati-e a good airport. Sally Beauty,
IInitea G>pper, ana Hulcher Emergency Services, Inc. are ezaniples.
13. Attractea service businesses to> DT(~ that ao> aircratt repair, maj()r jet inspectio>ns,
airtranie repair, aircratt interi(>rs ana painting, atiTi()nics inst<illati()n ana repair, ana
other goods and set-vices that make DTO a desirable place to o«-n and base an
airplane. We have:
? helicopter tlight schools, 1 tixed «-ing tlight school
4 ()r :i maintenance sho>ps
N-ery high-ena paint sho>p
Operati()ns ()t 13-14,000 per mo>nth; mo>re than 160,000/year.
2 atiTi()nics sho>ps
One maintenance and ati-ionics shop that is open 18 hours/davand on
«-eekends.
Thank w)u tor w)ur time and tor the opportunitv to proti-ide this adti-ice.
EXHIBIT 3
4/05/2011
T; Denfan City Councii Members
Airpart Advlsary Board 1Vlembers ebri
Quentin Hix Assocaates, Itycm
Mark Nelson 181 0 7 ;c}1iI,
,z
FIdOMn Mike Nebrig
tl`'
dt'tC1.3:i7. O~
ld-r0r,~
SUBJECTd L7enton Airport Advisary Baard
I am writing tQ express Iny concern regaraing the proposed changes to the L)entan
Airpart Advisary Baard. I attended a presentation by City Staff on Wednesday,
january 1961, 2011, and while I agree with same points of the proposal, I remain
uncanvinced as to the necessity of athers.
I da agree that the Airport needs to be marketed and branded to its maximun7 potential,
and if partnering with t11e Ecanomic Development Partnersllrp Board does this, then I
suppart a change.
I am less convinced as to the necessity to change from an Airpart Advisory Board to a
City Council Airport Cammittee for gavernance. T11e preseiztatian by City staff an
January 19t11 sim.ply did nat prove a compelling reason for achange.
Nebrig & Associatcs has a vested interest in seeing contlnued success at our Airpart.
Since relocating to the Airpart in 1997, we I1ave constructed, and currently own and
manage aver 80,000 square feet of hangar and office area, coinprised of thirty-six (36)
individual t-hangars, and six (6) individual corparate hangars. In addition, we ovvn and
manage one of the three fuel farm facilities located an t11e Airport.
EXHIBIT 3
4/05/2011
EXHIBIT THREE
~
~
~
EXHIBIT 3
4/05/2011
~ A .
~
NN
. . . . , . . . . . . .
. . . . .
. . . . . . . . . . . . . . . . . . . . . . , . . _ . . . . . . 3~ . .
~
_ ~
g
ffically states:
" it of Denton should also consider modifying its airport governance
The C y
structure to assist with vetting fi •nancial proposals for the Airport as well as provide p d
olicy input related to targeted marketing initiatives an
development."
During Business Plan Discussions, f-ie City Council
.
re uested f-iat staff provide a recommendatlon on
q .
airport governance optlons.
~
~
~ ~ ~ ~ ~ staff i
zovernance gi t ~ ~ ` ~
- ,»....-s-. ..f ; ~ ~ " F -^~'*n~ ~ :
. ~H
CO
0
m CV
2 LO
o
x
w~
EXHIBIT
:
4/05/2013
_ 1
, 1 ~
. . _ ~ ~
-lk
~...w. : _
_ . =~a
e~
T -
On December 13,2010, t ze AAB ie-d a s ec~a~
. p ca--ed
meeting to discuss t--1e governance optlons t Zat were
presented by staff.
EXHIBIT
:
4/05/2013
_ 1
, 1 ~
. . _ ~ ~
-lk
~...w. : _
_ . =~a
e~
On JanuarY •
5, 20 11, t Ze AAB Ze
g d a meetln
,
. to
discuss t-ze Airport governance o t l o n s t h a
p t were
presented by staff.
On January 1 2011
9~ , t 1e AAB `Ze--Cl asnPpia- oa~-darl
%.-/1 Ly uouncl- on governance options.
EXHIBIT 3
4/05/2011
~
~ u ~ ~
~
~
~ ~ ~ ~ ~ J~ ~ . ~
~ _ = =
_ ~ _ ~
a:
~ ~ ~ ~ _ . x . x, n.~ ~ a . x
~
: : , ~ . , . .
_ - ~
£ x:.~m..
_
- _
' f t;ze
th t~zree member commlttee o
On January 26 , a ~ . ~
;etter to t 1e City Councl~ w 11c 1
AAB su.~mltted a ,
• ' ' ~ tions for consideration.
rovlded addltlona_ op
p ~
~ ~ ~ ~
~ ~ ~Zas su ested t:~1at
_ Member En e_brec 1t gg
Councl g
• ~ • ' ' tin Air ort Safety
~~der forma~lzing t 1e ex~s g p
staff con
.
.n.
.
3,..
EXHIBIT 3
~
~
.
,
,
w.-
.r ,
. 4/05/2011
x;
_
~ _ . . . . . ~ ~ . ,
~..w .
: :
Expand the role of the EDPB ' •
to re~ew, conslder, and make
recommendations to the Cit Counci •
, y 1 regarding alr ort
branding, mar ' p
ket~ng, and development incentive policies.
Increase EDPB membershi
p by two members from s v
(7) to nine e en
(9).
Transition from an Air ort Advi
, p sory Board, as currentl
exlsts, to a C, ~t Council • y
y A~rport Committee.
Hold regularly scheduled m interested
eetings wlth stakeholders to share information and ideas relatlve to
Airport operations or development.
Continue to have the Airpor t Manager administer day-to-
day o erations p of the Denton Airport.
EXHIBIT 3
• ~
/05/2011
~
~ y ~
; . _ ~ - ~ ~ _ _ ~ ~ _ ~
~4>
Recommended
Current ii
Structure Policy Governance Airport Mgmt.
Structure Structure
$
~
~
EXHIBIT 3
4/05/2011
~ A .
~
NN
. . . . , . . . . . . .
. . . . .
. . . . . . . . . . . . . . . . . . . . . . , . . _ . . . . . . 3~ . .
~
_ ~
g
ffically states:
" it of Denton should also consider modifying its airport governance
The C y
structure to assist with vetting fi •nancial proposals for the Airport as well as provide p d
olicy input related to targeted marketing initiatives an
development."
During Business Plan Discussions, f-ie City Council
.
re uested f-iat staff provide a recommendatlon on
q .
airport governance optlons.
~
~
~ ~ ~ ~ ~ staff i
zovernance gi t ~ ~ ` ~
- ,»....-s-. ..f ; ~ ~ " F -^~'*n~ ~ :
. ~H
. .
.n.
3
.
:
r.
~ -w.- ~ r
4/0
5 ~
r
I,~ ~ f
5/2011
x;.
,.l. . .
~
~...w. :
_ . -~a
4 e~ _ _ . _
Expand the role of t • •
he EDPB to revlew, conslder, an
. , d make
recommendatlons to the City Council re ar '
g ding Airport
branding, marketin and devel ' • • •
g~ opment lncentlve pollcies.
Increase EDPB membershi b two
. p y members from seven (7) to
nlne (9).
Create City Council Air ort Commi
p ttee to oversee Airport
operations.
Continue to have the Air ort Mana
p ger administer day-to-da
operations of the Denton Airpo y
rt.
EXHIBIT 3
4/05/2011
~
~
~
SA
a:
~ ~ ~ ~ _ . x . x, n.~ ~ a . x
_
:
~
_ ,F~
EXHIBIT 3
4105/2011
:
_
~
~ x . ; ' : < . • ~ ~ ~ ~ ~ , ~ ~ _ ~ ~ ~ _ ~ : ~ . -
~
Af - ~ - , _ ~ -
~
~ . . . . ~ . = , , ~ ; . • . , _ _ ,
.
. . -z 3 .
f`x
Recommended
Policy Governance Airport Mgmt.
Structure Structure
EXHIBIT 3
4/05/2011
~ ~~,e„~
~
4 .
. ~ ~
NN~
. . . . . , . . . . .
~ ~
. ~
~ s~`
h , the City Councl 'l rec uested the proposal
1 _
On February 5 t .
•l a s ecl 'fic staff recommendatlon could `~e
d untl
3e table p
presented tenant~ and stak~holder
re arding the safety, g
groups presented.
In consl 'dering thl 's issue, staff examined the concerns
and AAB over the
'
and com
ments of ~oth the City Council past several weeks.
g
X
.u..
~
a
~
.
~
d .
. ~
~
-
=
~
.
~
/05/20
11
~
.
. ~
- -
~
w
;
~
: ~ ~
. .
_ . ~ x. . z
~..w :
~
iti
~ ~
A~
.
o Various aspects of the proposed governance structure should
be more completely defined.
In the view of staff, the following ~ recommendatlon
specifically addresses each of
these issues.
s. ~
~
e:
e:.
x = _
x.
• - ~i
XH
.
IBIT3
~
,e
,
4/05/201
1
Y ~ -
:
~
_
.
~ ;
~
Formall establish ' _
Y an Alrport Manager Safetv and Stakeh
Committee. - older.
The Airport Manager will conduc
t the meetings.
May meet monthly (or more freque
ntly based on need), but not
less than q. times per Year.
In order to be responsive to an sub' •
, y ~ ect that may be ralsed, the
meetings wlll be conducted by mana ement 'll l'
. , g and wlnclude an
opportunlty to dlscuss any issue.
~
.
~r
z,
j~
~
1
1
.
=
. . . . .
~~a ~f=
e~
.
FAA representatives and contractor
s at the Airport may also
occasionally be invited to attend to dis
cuss a vvide range of issues
that may be relevant.
The Chairman of the newl form '
y ed Alrport Committee would
also be formally invited to attend
each meeting.
A summary of the Airport Manager
, Safety and Stakeholder
Commlttee's discussions will be for •
warded for revlew to the
Airport Committee and Cit Counci
y l.
~.r
~
,
0
;O
~...w. :
-~a
' e~
EXHIBIT 3
( 4 k V, 4 11 ~ . ~ V .~A 4/05/2011
_
~
L~~d~~u r~r~s ay two members (from 7 to
9)•
• Review, consider, and make recommendations to the '
Airport branding and marketing efforts ~lty Council regarding
.
• Outline development incentive policies for the Air or
• Leverage common oals and p t~
and the develo m~ create synergy between development of Air ort
p ent of the community, p
• 1 nree member City Council Committee.
• City Manager (or designee) also on Committee.
• Review and make recommendations regardin leases
• Review grant fundin o • g at the Airport.
g pportunities. (e.g, master plan, infrastructure
improvements, etc.)
• Monitor budget and assist with development of lon
the Airport. g term financial plans for
• Provide a forum for tenants and other interested arti
p es to interface directly
with the Cit~'_-
Cour~cil or~ Airnnrt rP1atA~
C'7 ~
_ O
m N
~
2 LO
L1J
~ °~~~lll~r§
...~ssm,.........
...~ssm,.........
~ °~~~lll~r§
'AU~ ~quPYr
•
~ °~~~lll~r§
~
1"~
V~, v
~
.~w~...~,. ~
s~ r... ,
+y'~
EXHIBIT 3
4/05/2011
~ y~~. °
~ ~-EE~ a ~ ~
~a~ ~m
NN~
~ ~ . . .
. . . . . . . . . . . . . . ~ ~,S ~
~
T--iree items are und • • er consideration tonlg zt:
# • EDPB Role and
pdlnance ex ands
YY - Or
Item
r E
Mem-Ders-lip by 2 mem ers.
Repeals ordinance that established Airport Advisory Board.
'nance establishes City Councl~
# F - Ordl
Item ~
Airport Committee.
is estab,1es
Item # ~ G Reso-ution c 1arge, nd meeting .
, .
requirements o Airport
members 11p, a ,
nd Sta~ce-1o-der Committee.
Manager Safety a
EXHIBIT 3
Page 1 of I 4/05/2011
Economic Develonment Partnership Board
Add to the membership of the Economic Development Partnership Board
and expand the duties of that board to include branding and marketing for
the Denton Municipal Airport in support of the Denton Airport 2410
Business Plan and to further include duties related to economic development
incentives.
Denton Airport Enterprise Board
Restructure and rename the current Denton Airport Advisory Board to the
Denton Aizport Enterprise Board. The baard along with the City Airport
Manager is to advise and assist the City Council regarding City of Denton
Airport matters, implementation of the Denton Airport 2010 Business Pian,
Airport 5afety, Tenant/Stakeholder relations and additional matters as
assigned by the City Council.
Denton Airport Enterprise Board Structuxe
• 7 members each nominated by a city counczl member, up t0 2
members could be appointed from outside Denton city limits.
• Staggered initial term length
& Tez7m limits to be the same as the Denton Public Utilities Board.
• Past or current Airport Advisory Board members are eligible, but past
service shali be mcluded to determine term limit eligibility.
• Conflict of interesf guidelines to be consistent with City of Dentan
guidelines for other boards.
Airport Board pption
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Transportation Operations
ACM: Jon Fortune ~
SUBJECT
Receive a report, hold a discussion and give staff direction regarding terms and provisions of a
Vulnerable Road User ordinance.
BACKGROUND
The purpose of a vulnerable road users or safe passage ordinance is to protect vulnerable road
users wluch are typically defined as a pedestrian, cyclist or an individual who must occupy a
portion of the roadway as part of their employment. Sixteen other states have passed vulnerable
road user laws to provide additional protection to non-inotorist using public roadways.
Additionally, the cities of San Antoiuo, Austin, El Paso, New Brauiifels, Edinburgh and Helotes
have passed local vulnerable road user ordinances.
As part of the March 1, 2011 City Council Worlc Session, staff received direction to revise a
draft ordinance that was provided as part of the Work Session back up to better define separation
distances between defined vulnerable road users and velucles. Council Meinbers indicated that
for the proposed ordinance to be effective, the ordinance should include language establislung a
safe passint', distance of three (3) feet for cars and light tniclcs and six (6) feet for commercial
vehicles. Staff revised the ordinance to include the proposed definition as part of Section 1,
Paragraph (f). The new ordinance is included on the consent agenda for City Council approval.
Tlus work session item is being provided to allow the City Council the opportuiuty to discuss the
ordinance or to ask any questions.
PRIOR ACTION
The City Council reviewed the proposed ordinance as part of the April 5, 21011 and March 1,
2011 Council Work Sessions. The Mobility Committee received briefin~s at the September 2010
regular ineeting and an executive session of the Mobility Coininittee was held on the proposed
ordinance as part of the October 12, 2010 meeting.
FISCAL INFORMATION
The proposed ordinance establishes a$?00 fine for violations. No iiiformation has been
generated at tlus time on the costs to eiiforce a proposed vulnerable road user ordinance.
Respectfully submitted,
Marlc Nelson
Transportation Director
s:Uegal\our documents\ordinances\11\safe passage-vulnerable road users-032511.docx
ORDINANCE NO.
AN ORDINANCE OF THE CITY QF DENTON, 1,EXAS, ADDING SECTION 18-36 OF THE
CODE OF ORDINANCES RELATING TO VULNERABLE ROAD USERS; BY CREATING
SECTION 18-36 TO DEFINE VULNERABLE ROAD USERS AND REAFFIRM THE
OBLIGATION OF ALL OPERATORS OF MOTOR VEHICLES TO EXERCISE DUE CARE
1N THE OPERATION OF MOTOR VEHICLES; PROVIDING A REPEALER CLAUSE;
PROVIDING A SAVINGS CLAUSE; PROVIDING FOR A PENAL'I'Y NOT TO EXCEED
$200 FOR VIOLATIONS OF THIS ORDINANCE; AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, bicyclists and pedestrians are allowed ta use the roadway by law in Texas,
but these users da not have the same physical pratection as motorists and are at greater risk of
injury ar death; and
WHEREAS, approximately 50 cyclists and 400 pedestrians are killed every year in
Texas; and
WHF,REAS, a safe passing ordinance pravides the foundation for an education campaign
oF tolerance and acceptance for "active" forms af alternative transportation, which furthers the
City's goals of promoting Dentan as a bicycle friendly community, as well as for the
enhancement of wallcable streets and neighborhoads; NOW, THERFFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION l. Chapter 18 "Motor Vehicles and Traffic" of the Cade of Ordinances of
Denton, Texas, is hereby amended by adding Sectian 18-36 regarding vulnerable road users.
Section 18-36 shall read as follows:
Sec. 18-36 VULNERABLE ROAD USERS.
(a) In this section, a"Vulnerable Road User" means a person utilizing the roadway for travel
including:
(1) a pedestrian, a runner, a physically disabled person, a highway construction or
maintenance worker, tow truck operator, a utility worker, or any other worker
with legitimate business in or near the road or right-of=way, or a stranded motorist
or passenger, or one assisting or providing aid to a stranded or injured motorist;
(2) a person on horseback;
(3) a persan operating equipment other than a motor vehicle, including, but not
limited to, a bicycle (including an electric bicycle), tricycle, hand-cycle, moped,
horse-drawn conveyance, skateboarder, rollerblader, roller-skater, or a person
operating a manual scooter, so lang as any such equipment is legally operable on
public streets; or
s:Uegal\our documents\ordinancesU 1\safe passage-vulnerable road users-032511.docx
(4) a person operating an electric personal assistive mobility device in compliance
with the following requirements:
a. A person may operate an electric personal assistive mobility device on a
residential street, roadway, ar public highway with a speed limit of 30
miles per haur or less only:
while making a direct crossing of a highway in a marked or
unmarkecl crosswalk;
2. where no sidewalk is reasonably accessible; or
3. when so directed by a traffic control device or by a law
enforcement officer.
b. A person may operate an electric personal assistive mobility device on a
path set aside for use by bicyclists or pedestrians.
c. Any person operating an electric personal assistive mobility device on a
residential street, roadway, or public highway shall ride as close as
practicable to the right-hand edge.
d. Except as otherwise provided by this section, provisions of this section
applicable to the operation of bicycles appiy to the aperation af electric
personal assistive mobility devices.
(b) In this section, a"motor vehicle" means a self propelled vehicle or a vehicle that is
propelled by electric pawer from overhead trolley wires. The term does not include an
electric persanal assistive mobility device.
(c) Pedestrians, runners, and physically disabled persons shail utilize a sidewalk when
reasonably available and accessibie or, if nane, shall travel against traffic as close as
practicable to the edge of the roadway.
(d) Vulnerable road users, as defined by subsections (a)(2), (a)(3) and (a)(4) above, shall
comply with the requirements for bicycles set forth as follows:
(1) Except as provided by subsection (2), a person operating a bicycle on a roadway
who is moving slower than the other traffic on the roadway shall ride as near as
practicable to the right curb or edge of the roadway, unless:
a. the person is passing another vehicle moving in the same direction;
b. the person is preparing to turn left at an intersection or onto a private road
or driveway;
Page 2
s:Uegal\our documents\ordinances\11\safe passage-vuinerable road users-032511.docs
c. a condition on or off' the roadway, including a fixed or moving abject,
parked or moving vehicle, pedestrian, animal, or surface hazard prevents
the person from safely riding next to the right cttrb or edge of the roadway;
or
d. the person is operating a bicycle in an outside lane that is:
less than 14 feet in width and cioes not have a designated bicycle
lane adjacent to that lane; or
2. too narrow for a bicycle and a motor vehicle to safely travel side
by side.
(2) A person operating a bicycle on a ane-way roadway with two or more inarked
traffic lanes may ride as near as practicable to the left curb or edge of the
roadway.
(3) Persons operating bicycles on a roadway may ride two abreast. Persons riding
twa abreast on a laned roadway shail ride in a single lane. Persons riding two
abreast may not impede the normal and reasanable flow of traffic on tlze roadway.
(e) An aperatar of a motor vehicle passing a vulnerable road user operating an a highway or
street shall:
(1) move to the left lane if the highway has two or more marked lanes running in the
same direction; ar
(2) pass the vulnerable roaa user at a safe distance.
( fl For the purpose of subsection (e)(2), when road conditions allow, safe distance is at least:
(1) three (3) feet if the operator's vehicle is a passenger car or light truck; or
(2) six (6) feet if the operator's vehicle is a truclc, other than a light truck, or a
commercial motor vehicle as defined by the Texas Transportation Code §
522.003.
(g) An operator of a motor vehicle that is making a left turn or a u-turn at an intersection,
including an intersection with an alley or private road or driveway, sha11 yield the right-
af-way to a vulnerable road user in ali circumstances in which the operator would be
requireci to yield right-of way pursuant to the traftic 1aw.
(h) An aperator of a motor vehicle may not overtake a vuinerable road user traveling in the
same direction and subsequently make a right-hand turn in front of the vulnerable road
I'age 3
s:\legal\our documents\ordinances\11\safe passage-vulnerable road users-032511.docx
user unless the operalor is safely clear of the vulnerable road user in light of a11
canditions impacting safety.
(i) An operator of a motor vehicle may not maneuver the vehicle in a manner th1t:
(1) is intended to intimidate or harass a vulnerable road user; or
(2) places the vulnerable road user at risk of unreasonable imtninent bodily injury.
(j) An operator of a mator vehicle shall exercise due care to avoid colliding with any
vulnerable road user on a roadway including public rights-of-way.
(k) A vulnerable road user on a roadway or public right-of-way shall exercise due care and
comply with all applicabie city ordinances and state statues. It is a defense to prosecution
under this section that at the time of the offense, the vulnerable road user was acting in
violation of the law.
SECTION 2. If any section, subsection, paragraph, sentence, clause, phrase, or word in
this Ordinance, or applicatian thereof ta any person or circumstances is held invalid by any court
of competent jurisdiction, sueh holding shall not affect the validity of the remaining portions of
this Ordinance, and the City Cauncil of the City oF Denton, Texas, hereby declares it would have
entered such remaining portions despite any invalidity.
SECTION 3. Save and except as amended hereby, all the provisions, sectians,
subsections, paragraphs, sentences, clauses, and phrases of the Code of Ordinances shall remain
in full force and effect.
SECTION 4. Any person found guilty of violating this Ordinance by a court of
competent jurisdiction shall be fined a sum not to eXCeed two hundred dollars ($200).
SECTION 5. This Ordinance praviding for a penalty shall become effective fourteen
(14) days from the date of its passage, and the City Secretary is hereby directed to cause the
caption af this Ordinance to be published twice in the Denton Record-Chranicle, the official
newspaper of the City of Denton, Texas, within ten (10) days of the date of its passage.
FASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
Page 4
s:Uegal\our documents\ordinances\11\safe passage-vulnerable road users-032511.docx
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
~
BY:
Page 5
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Plaiuung Department
ACM: Fred Greene SUBJECT - DCAI0-0008,'Videjvalk- Exceptaon
Receive a report, hold a discussion, and give staff direction conceriung proposed amendments to
Sections 35.13.7.C, 35.2102.A.3.c, 35203.B, 35.203.B.1, 35.203.C and 35.2132 of the Denton
Developinent Code regarding estates lots and sidewallcs and/or bicycle facilities. (DCA10-0008)
Issue:
Sidewallcs are required pursuant to Section 35203.B of the Denton Development Code (DDC).
Prior to January 6, 2009, developers and hoine builders had the option to apply for a variance
from the requirement of installin~ sidewallcs throu~h the Plannin~ and Zonin~ Commission.
However, a Code amendment was necessary to bring the DDC into coiiformity with statutory
changes. The Code amendment appropriately replaced what was categorized as an eYaction
variance with a rou~h proportionality appeal procedure that's consistent with Texas Local
Government Code 212.904. The rough proportionality assessment procedure is contained in
Subchapter 353 of the DDC.
Notwithstanding the requireinents of Section 35203.B of the DDC, there are instances when the
absence of sidewallcs will not ne(,atively impact agiven community. One example is in the case
of a low density niral residential development that features large estate style lots. The DDC
currently define estate style lots as lots of one (1) acre or greater. The absence of sidewallcs in
this subdivision type is consistent with the typical niral settint', of the surroundint', area.
Furtherinore, this forin of residential developinent generates very little pedestrian traffic to
justify the constniction and maintenance cost associated with sidewallcs.
Given the aforementioned, staff is proposing a Code amendment to Section 35.202.A.3.c and
35.203.B. The proposed ainendinents will provide an exception froin the installation of
3
sidewallcs associated with estate lot subdivision, subject to conditions.
Recommendation:
Staff recoininends that Subchapter 35.203.B.4 of the DDC be ainended to read as follows:
B. A11 devel()pments shall, wifliin a dedicated ri~ght-()f-way ()r easetnesit, provide sidewalks and/()r bicvcle ficilities
desigiied aid l()cated ui accordance wifli flie Transportation Criteria Maiual aid street dassihcation al()ng b()th
sides 4 all streets wifliin flie devel()pment, betweesi the esids 4 court\-ard streets/ciil-d sacs and sidewalks within
adjacent right 4 wars ()r ()pen space, al()ng ()ne (1) side 4 all peruneter streets aid as shown ()n flie Pedestriai
(;()tnponent 4 flie :NI()bilitY Plan; escept as foll()ws:
1. A developmesit, which is escepted from makirig perimeter street unprovesnents in accordance wifli
subsection 1) M.4.c of this section shall not be recltured to install a sidewalk or bicrcle ficilitY along
fliat peruneter street.
I NCliere tuiplatted propertY is required to be platted in order to obtain a builduig pemiit to inake air
improvesnents to an existing btulding or to constnict anr additional btulding to be located on flie
propertY, a sidewalk or bicrde facilitY shall not be required along an efiistuigperuneter street i£
a. The peruneter street is not required to be improved ui accordaice wifli this Code;
b. The building unprovements would not result in an uicrease ui flie floor area of flie existing
building or buildings br nwre flian ten (11_I) percent;
c The building unprovements are to be located on flie same tract or tracts of laid, as described br
recorded deed in flie real propert\- records of flie cotmti-, on which flie existing btulding or anr
existing unprovements to seiye flie existing building are located; aid
d. The building improvements will not require flie constniction of additional parkiug spaces to meet
flie reqiuresnents of flie zonirig ordinance.
3. Sidewalks or bicrcle ficilities shall not be reqtured for a replat of propertY zoned for single-fitnilr
residential use if flie preceduig plat covering flie same propertY did not require sidewalks or bicrde
facilities aid a zoning chaige to a district oflier fliai single familr residential use is not aiticipated.
4. Excent for Planned Develonments or Master Planned Communities, sidewalks or bicvcle
facilities are not repuired along streets fronted bv an estate-lot residential subdivision
provided that:
a. All lots are nlatted and have a minimum lot area of one (11 acre:
b. None of the lots are within 1/2 mile of a nublic elementarv or middle/iunior high
(secondarv) school; and
c_ None of the lots mav front on a street that serves more than 200 total vehicle trins ner
day. - - -
-5. No variance or wavier shall be Q-ranted for anv of the reauirements stated in 4.a-c above.
Staff recoininends that Subchapter 3520.2.A.3.c of the DDC is deleted in its entirety.
Staff recommends that Subchapter 35.213.21 of the DDC is amended to add the following
defiiution:
Estate Lot: 31()t that is at least (me (1) acre ui size NVith the pw-po ~se 4 beuig deve1()ped Nvith a suigle-
f uni1v detached dwelluig as the prun~uv use.
While reviewing Section 35.20 of the DDC, staff identified subsection references that do not
eYist. Staff recommends that Subchapter 35203.B.1 and 35.203.C of the DDC be amended to
read as follows:
1. 3 deve1~ )pment. that is exemnted fro ~m makiig peruneter street unpr~ ~Vements ui
acc( )rd~uice ~Tith subsecti~ ui . 35.20.2.L.4 4 this secti(ui sh~~ll no ~t be requued to ~ uist~~ll a
siAk ()r bicycle facility ale )ng that peruneter street.
pc1~e - 2
C. N\liere the deN-el()per whc ~ Nv,(-)uld (aliel-Wise be required tc ~ unPmve ati esistuig ununprc ~ved peruneter
street tc ~(Jity specificitic )ns elects tc ~p~i~- tc ~ the (~it~- the cc ~st ()f the required unprc ~~-einents ~is
prc ~vided fc ~r ui subsectic )n 35.20.2.L.3.B ()f tliis secti()n, the de~-el()per m~i~- like~~-ise elect tc ~
pay to ~ the City the co ~st ()f aiy required sidewalk ()r bicyde ficilitv unpr()Vements fi ~r that street. If
the m()neV paid fi ~r the sidewalk ()r bicyde ficility unpr~ ~vements is no ~t used f~r that pw-po ~se Withui
tive (5) Vears ()f pavment, the fiuids shall be retw-ned to ~ the perso ~n making the unpr()Vements.
Staff recoininends that Subchapter 35.13.7.C of the DDC be ainended to read as follows:
-3ll deve1()pment, Nvith the escepti()n ()t estate stv1e suugle-fiunily subdB-isi()ns shall be recluired to
phunt street trees ul acco ~rdxice Nvith the fo ~ll()Nvung standards and ul acco ~rdance to ~ the Site Desi~q~
Criteria Manual. Estate stv1e suigle-funil~- subdi~-isi~ ~ns ~ue th( )se subdi~-isi()ns
~ ~ , ' _ . ~ , . . . . . . : . . . : , utilize
barr~ ~Nv, ditches as draulage ~~1()ng streets, ()n public ()r pri~-ate streets. The Duecto ~r ()t Plannuig and
Devel()pinent may apprc ~ve alternatiVe platis due tc ~ special site cc ~nditi()ns, w1iicli may, fc ~r reasc ~ns
such as safetv, site c~ fflditi(Ms, ()r existuig trees ()n the 1()t, ~~ffect the abilit~- to ~ meet these regulati~ Ms.
PRIOR ACTION/REVIEW
1. January 19, 2011 Plannincl, and Zonincl, Commission Work Session
Febniary ?3, ?O11 Plaiuung and Zoiung Commission Public Hearing
OPTIONS
1. Direct staff to proceed with the ainendinents as presented
Direct staff to proceed with the amendments with changes
3. Direct staff to talce another direction
RECOMMENDATION
The Plaiuung and Zoiung Commission recommends approval of tlus request (7-0).
Staff recoininends approval of this proposed Code ainendinent.
Prepared by:
Ron Mengniita, AICP
Developinent Review Liaison
Respectfully submitted:
~
Marlc Cunninghain, AICP, CPM
Planning and Development Department Director
Page - 3
This page left blank intentionally.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Planning & Development
ACM: Fred Greene
SUBJECT
Hold a discussion and give staff direction regarding the adoption of an ordinance of the City of
Denton, Texas, authorizing the City Manager to execute a First Amendment to the 2010-2011
Agreement Between the City of Denton and the Fred Moore Day Nursery School ("Original
Agreement"), said Original Agreement contemplating the provision of Commuiuty Development
Block Grant funds for improvements to the facility at 821 Cross Timber Street, Denton County,
Texas; and providing for an effective date.
BACKGROUND
The Original Agreement between the Nursery and the City provided that the Nursery grant a lien
in favor of the City to secure the Nursery's contractual obligation to provide child care services.
After approval of the Original Agreement on October 5, 21010, additional iiiformation was
provided by the Denton liidependent School District ("DISD") regarding the ownerslup of the
Fred Moore Day Nursery School ("Property"). A review of the chain of title to the Property
revealed that the Fred Moore Day Nursery School likely owned only an estate subject to a
reverter to DISD, the reverter would be "triggered" in the event the Nursery ceased to provide
cluld care services. This intent of DISD and the Nursery was made certain by subsequent
correction of the deed by DISD and the Nursery.
Any lien that would be granted by the Nursery in favor of the City would oiily encumber the
interest in the Property owned by the Nursery. As a result, in the event the Nursery ceased to
provide child care services, in violation of the limitations/conditions contained in the deed from
DISD to the Nursery, the Property would revert to DISD and extinguish the City's deed of trust
lien.
The City approached DISD relating to DISD joining in the deed of tnist with the Nursery.
However, due to legal issues and the general desire to avoid potential loss of their interest in
subj ect property, DISD did not at that time agree to j oin in the eYecution of the deed of tnist.
The U.S. Department of Housing & Urban Development (HCTD) requires that any facilities
rehabilitated using Commuiuty Development Block Grant (CDBG) funds, must continue to serve
low and moderate-income residents for a period of at least five years after close-out of the grant
year. If services do not continue to be provided, HUD has the authority to request that the City
return CDBG funding expended on the property to the City's CDBG letter of credit.
Agenda liiformation Sheet
April 5, 2011
Page 2
EYecution of a lien, by non-profit orgaiuzations awarded CDBG funding, had not been the
standard practice in regard to past agreements. However, funding agreements eYecuted with
organizations experiencin~ financial difficulties led to staff recommendation of more strin~ent
requirements, particularly when si~nificant amounts of fundin~ are awarded.
As a result of the lack of practical value of the deed of tnist lien required by the Original
Agreeinent, City staff desires to bring this inatter to the attention of City Council in the forin of
the proposed First Amendment.
Revisions to the Original Agreement (see EYlubit as set forth in the First Amendment, include
the following:
L Correction of the term "Contractor" to "Subrecipient" in Article 4, paragraph F;
Correction of Article 7, paragraph D to correct the term "revision" to "reversion;" and
3. Deletion of Article 9, paragraph A, wluch is the real estate lien requirement.
OPTIONS
Option 1- Approval of the Amendment authorizing the eYpenditure of $120,400 in Commuiuty
Development Bloclc Grant funds to complete improvements at the non-profit day care facility
without the execution of a lien on the Property.
Option Witliliold approval of the Amendment and request that staff worlc with DISD to
tratisfer property ownerslup to the Fred Moore Day Nursery School orgaiuzation or that DISD
a~rees all future use of the facility will benefit low to moderate-income households/persons.
Option 3- Deny approval of the Amendment, terminate the Original Agreement for conveiuence
(Article 25, paragraph B) and request that staff work with the Commuiuty Development
Advisory Committee to reallocate the fundint', committed to the Fred Moore Day Nursery School
proj ect.
RECOMMENDATION
Staff recommends approval of the Amendment. Community Development staff will worlc with
the Fred Moore Day Nursery School Board of Directors, staff, and the Denton Independent
School District to support continued service to low and moderate-income families for the term
of the contract.
ESTIMATED SCHEDULE OF PROJECT
April - Staff will work with Fred Moore Board and staff to develop work specifications.
May - Bid out the proj ect.
June - Constniction phase.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
1. The Commuiuty Development Advisory Committee recommended funding of the project in
the spring of 2010.
2. City Council approved the 2010 Action Plan, which included funding of the project, on May
4, ?010.
. The Original Agreement was approved by City Council on October 5, 21010.
3
Agenda liiformation Sheet
April 5, 2011
Page 2
FISCAL INFORMATION
The project is funded with ?O10 CDBG funds.
EXHIBITS
•?O10 Ordinance and Funding Agreement with Fred Moore Day Nursery School
• Ordinance and First Ainendinent
Respectfully submitted:
~
Marlc Cunninghain
Director of Plaiuung and Development
Prepared by:
Barbara L. Ross
Commuiuty Development Admiiustrator
s:llegal\our documents\ordinances\1 0120 1 0-20 1 I fred moore ordinance.doc
ORDINANCE NO. 2010-247
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY
MANAGER TO EXECUTE A FUNDING AGREEMENT BETWEEN THE CITY AND FRED
MOORE DAY NURSERY SCHOOL TO PROVIDE COMMUNITY DEVELOPMENT
BLOCK GRANT FUNDS FOR IMPROVEMENTS TO THE FACILITY AT 821 CROSS
TIMBER STREET, DENTON, TEXAS; AUTHORIZING THE EXPENDITURE OF FUNDS
NOT TO EXCEED $120,400; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City has received funds from the U.S. Department of Housing and
Urban Development under the Housing and Community Development Act of 1992; and
WHEREAS, the City Council has approved the 2010 Action Plan for Housing and
Community Development which includes an authorized budget for expenditure of funds for
rehabilitation of the Fred Moore Day Nursery School facility; and
WHEREAS, the Fred Moore Day Nursery School has developed a program to assist low
and moderate-income families with affordable child care services; and
WHEREAS, the City Council deems it in the public interest to enter into an agreement
for renovation of the child care facility to provide improved services for Denton families; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager is hereby authorized to execute the attached Agreement
between the City of Denton and the Fred Moore Day Nursery School to provide for
improvements to the day care facility noted therein.
SECTION 2. The City Council hereby authorizes the City Manager to expend funds in
the manner and amount specified in the Agreement, not to exceed $120,400 and to take any other
actions necessary to complete the City's obligations under the Agreement.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the ga day of " D'f4j , 2010.
X)
,
MARK'A. BU'RAO14G~9, MAYOR
s:1(egallour documents\ordinances11 012 0 1 0-20 1 1 fred moore ordinance.doc
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ATtITA BURGESS, CITY ATTORNEY
F /
BY:
/
2010-2011
AGREEMENT BETWEEN THE CITY OF DENTON
AND THE FRED MOORE DAY NURSERY SCHOOL
This Agreement is made and entered into by and between the City of Denton, a Texas munici-
pal corporation, acting by and through its City Manager, pursuant to ordinance, hereinafter referred to
as CITY, and the Fred Moore Day Nursery School, 821 Cross Timber Street, Denton, Texas, 76205, a
Texas non-profit corporation, hereinafter referred to as SUBRECIPIENT.
WHEREAS, CITY has received certain funds from the U.S. Department of Housing and Urban
Development under Title I of the Housing and Community Development Act of 1974, as amended,
CDBG Program, CFDA Number 14-218; and
WHER.EAS, CITY has adopted a budget for such funds and included therein an authorized
budget for expenditure of funds for improvements to their existing day care facility for the SUBRECI-
PIENT; and
WHEREAS, CITY has designated the Community Development Division as the division re-
sponsible for the administration of this Agreement and all matters pertaining thereto; and
WHEREAS, CITY wishes to engage SUBRECIPIENT to carry out such project;
NOW, THEREFORE, the parties hereto agree, and by the execution hereof are bound to the
mutual obligations and to the performance and accomplishment of the conditions hereinafter described.
1.
TERM
This Agreement shall commence on or as of October 1, 2010, and shall terminate on September
30, 2020, unless sooner terminated in accordance with Section 26 "Termination".
2.
RESPONSIBILITIES
SUBRECIPIENT hereby accepts the responsibility for the performance of all services and ac-
tivities described in the Scope of Services attached hereto as Attachment A, and incorporated herein by
reference, in a satisfactory and efficient manner as determined by CITY, in accordance with the terms
herein. CITY will consider SUBRECIPIENT's executive officer to be SUBRECIPIENT's representa-
tive responsible for the management of all contractual matters pertaining hereto, unless written notifi-
cation to the contrary is received from SUBRECIPIENT, and approved by CITY.
The CITY's Community Development Administrator will be CITY's representative responsible
for the administration of this Agreement.
SUBRECIPIENT certifies that the activities carried out with Community Development Block
Grant funds shall meet the program's National Objective of benefit to low and moderate-income per-
sons. SUBRECIPIENT shall provide services to persons whose income is equal to or lower than SO%
of the median income of the Da11as standard metropolitan statistical area. To accomplish this, the
Page 1 of 26
SUBRECIPIENT shall use the current applicable income limits published by the Department of Hous-
ing and Urban Development for the CDBG program. Income eligibility shall be determined by the
sum of the gross income of a.ll individuals residing in the household. Services must be provided direct-
ly to or on behalf of specific identified eligible clients. Eligibility documentation must be included in
each client's file and updated annually or services must be provided to a clientele that is within a"pre-
sumed benefit" category.
3.
CITY'S OBLIGATION
A. Limit of Liability. CITY will reimburse SUBRECIPIENT for expenses incurred pursuant and
in accordance with the project budget attached hereto as Attachment B and the Scope of Ser-
vices herein attached as Attachment A and incorporated herein by reference. Notwithstanding
any other provision of the Agreement, the tota.l of all payments and other obligations made or
incurred by CITY hereunder shall not exceed the sum of $120,400.
B. Measure of Liability. In consideration of full and satisfactory services and activities hereund-
er by SUBRECIl'IENT and receipt of a requisition for payment with appropriate documenta-
tion of expenditures, CITY shall make payments to SUBRECIPIENT based on the Budget at-
tached hereto and incorporated herein for all purposes as Attachment B, subject to the limita-
tions and provisions set forth in this Section and Section 7 of this Agreement. Payments may be
contingent upon certification of the SUBRECII'IENT's financial management system in accor-
dance with the standards specified in OMB Circular A-110.
(1) The parties expressly understand and agree that CITY's obligations under this Section
are contingent upon the actual receipt of adequate Community Development Block
Grant (CDBG) funds to meet CITY's liabilities under this Agreement. If adequate funds
are not available to make payments under this Agreernent, CITY shall notify SUBRE-
CIPIENT in writing within a reasonable tirne after such fact has been determined. CITY
may, at its option, either reduce the amount of its liability, as specified in Subsection A
of this Section or terminate the Agreement. If CDBG funds eligible for use for purposes
of this Agreement are reduced, CITY shall not be liable for further payments due to
SUBRECIPIENT under this Agreement.
(2) It is expressly understood that this Agreement in no way obligates the General Fund or
any other monies or credits of the City of Denton.
(3) CITY shall not be liable for any cost or portion thereof which:
(a) has been paid, reimbursed or is subject to payment or reimbursement, from any
other source;
(b) was incurred prior to the beginning date, or after the ending date specified in
Section 1;
(c) is not in strict accordance with the tertns of this Agreement, including all at-
taclunents attached hereto;
(d) has not been billed to CITY within 90 calendar days following billing to SUB-
RECIPIENT, or termination of the Agreement, whichever date is earlier; or
Page 2 of 26
(e) is not an allowable cost as defined by Section 10 of this Agreement or the
project budget.
(4) CITY shall not be liable for any cost or portion thereof which is incurred with respect to
any activity of SUBRECIPIENT requiring prior written authorization from CITY, or af-
ter CITY has requested that SUBRECIPIENT furnish data concerning such action prior
to proceeding further, unless and until CITY advises SUBRECIPIENT to proceed.
(5) CITY shall not be obligated or liable under this Agreement to any party other than
SUBRECIPIENT for payment of any monies or provision of any goods or services.
(6) Funding not expended within two years of initial contract approval will revert to the
City of Denton CDBG budget for use on alternative projects.
4.
COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS
A. SUBRECIPIENT understands that funds provided to it pursuant to this Agreement are funds
which have been made available to CITY by the Federal Government (U.S. Department of
Housing and Urban Development) under the Housing and Community Development Act of
1974, as amended, in accordance with an approved Grant Application and specific assurances.
Accordingly, SUBRECIPIENT assures and certifies that it will comply with the requirements
of the Housing and Community Development Act of 1974 (P.L. 93-383) as amended and with
regulations promulgated thereunder, and codified at 24 CFR 570. The foregoing is in no way
meant to constitute a complete compilation of all duties imposed upon SUBRECIPIENT by law
or administrative ruling, or to narrow the standards which SUBRECIPIENT must follow.
SUBRECIPIENT further accrues and certifies that if the regulations and issuances promulgated
pursuant to the Act are amended or revised, it shall comply with them, or notify CITY, as pro-
vided in Section 23 of this Agreement.
SUBRECIPIENT agrees to abide by the conditions of and comply with the requirements of the
Office of Management and Budget Circulars Nos. A-122, A-87, A-133 and the regulations at
24 CFR Part 84 as applicable.
B. SUBRECIPIENT shall comply with all applicable federal laws, laws of the State of Texas and
ardinances of the City of Denton.
C. SUBRECIPIENT is required to comply with the applicable uniform administrative require-
ments as described in 24 CFR 570.502, 570.505 and 24 CFR 570 subpart K with the exceptions
noted below:
(1) SUBRECIPIENT does not assume CITY' S environmental responsibilities described at
CFR 570.604; and
(2) SUBRECIPIENT does not assume the CITY's responsibility for initiating the review
process under the provisions of 24 CFR Part 52.
Page 3 of 26
D. SUBRECIPIENT agrees to comply with the requirements of the Secretary of Labor in accor-
dance with the Davis-Bacon Act as amended, the provisions of the Contract Work Hours Safety
Standards Act, the Copeland "Anti-Kickback Act (40 U.S.C. 276a-276a-5; 40 USC 327 and 40
USC 276c) and all other applicable Federal, state and local laws and regulations pertaining to
labor standards and insofar as those acts apply to the performance of this contract. SUBRECI-
PIENT will work with CITY to obtain and maintain documentation of compliance. Upon writ-
ten request by the CITY, SUBRECIPIENT will obtain the services of consultant to monitor the
contractor's compliance with these requirements.
E. SUBRECIPIENT agrees to comply with the provisions of Section 3, the regulations set forth in
24 CFR 135, and all applicable rules and orders issued hereunder prior to the execution of this
agreement, and shall also be binding on any of the SUBRECIPIENT' S subcontractors. The
SUBRECIPIENT certifies that no contractual or other disability exists which would prevent
compliance with these requirements. SUBRECIPIENT further agrees to include a statement in
all subcontracts requiring compliance with Section 3 and requiring subcontractors, to the great-
est extent feasible, to provide opporhuiities for training and employment to low and moderate-
income individuals that are residents of the project area. Upon written request of the CITY,
SUBRECIPIENT will obtain the services of a consultant to monitor the general contractor's
compliance with the Section 3 requirements.
F. CONTRACTOR certifies that it is not currently listed on the General Services Administration's
List of Parties Excluded from Federal Procurement or Nonprocurement Programs in accordance
with Executive Orders 12549 and 12689 and will not enter into agreements to expend Federal
funds with contractors that are currently listed.
5.
REPRESENTATIONS
A. SUBRECIPIENT assures and guarantees that it possesses the legal authority, pursuant to any
proper, appropriate and ofFicial motion, resolution or action passed or taken, to enter into this
Agreement.
B. The person or persons signing and executing this Agreement on behalf of SUBRECIPIENT do
hereby warrant and guarantee that he, she, or they have been fully authorized by SUBRECI-
PIENT to execute this Agreement on behalf of SUBRECIPIENT and to validly and legally bind
SUBRECIPIENT to all terms, performances and provisions herein set forth.
C. CITY shall have the right, at its option, to either temporarily suspend or permanently terminate
this Agreement if there is a dispute as to the legal authority of either SUBRECIPIENT or the
person signing the Agreement to enter into this Agreement. SUBRECIPIENT is liable to CITY
for any money it has received from CITY for performance of the provisions of this Agreement
if CITY has suspended or terminated this Agreement for the reasons enumerated in this Sec-
tion.
D. SUBRECIPIENT agrees that the funds and resources provided to SUBRECIPIENT under the
terms of this Agreement will in no way be substituted for funds and resources from other
sources, nor in any way serve to reduce the resources, services, or other benefits which would
Page 4 of 26
have been available to, or provided through, SUBRECIPIENT had this Agreement not been ex-
ecuted.
6.
PERFORMANCE BY SUBRECIPIENT
SUBRECIPIENT will provide, oversee, administer, and carry out all of the activities and ser-
vices set out in the Work Statement, attached hereto and incorporated herein for all purposes as At-
tachment A, utilizing the funds described in Attaclunent B, attached hereto and incorporated herein for
all purposes and deemed by both parties to be necessary and sufficient payment for full and satisfacto-
ry performance of the program, as determined solely by CITY and in accordance with all other terms,
provisions and requirements of this Agreement.
No modifications or alterations may be made in the Scope of Services without the prior written
approval of the City's Community Development Administrator.
7.
PAYMENTS TO SUBRECIPIENT
A. The CITY sha11 pay to the SUBRECIPIENT a maximurn amount of money totaling $120,400
for activities carried out under this Agreement. CITY will pay these funds on a reimbursement
basis to the SUBRECIPIENT within twenty days after CITY has received supporting documen-
tation of eligible expenditures. SUBRECIPIENT's failure to request reimbursement on a timely
basis may jeopardize present or future funding.
Funds are to be used for the sole purpose of carrying out the activities described in the Scope of
Services herein attached as Attachment A and based on the budget herein attached as Attach-
ment B.
B. Excess Payment. SUBRECIPIENT shall refund to CITY within ten working days of CITY's
request, any sum of money which has been paid by CITY and which CITY at any time thereaf-
ter determines:
(1) has resulted in overpayment to SUBRECIPIENT; or
(2) has not been spent strictly in accordance with the terms of this Agreement; or
(3) is not supported by adequate documentation to fully justify the expenditure.
C. Disallowed Costs. Upon termination of this Agreement, should any expense or change for
which payment has been made be subsequently disallowed or disapproved as a result of any
auditing or monitoring by CITY, the Department of Housing and Urban Development, or any
other Federal agency, SUBRECIPIENT will refund such amount to CITY within ten working
days of a written notice to SUBRECIPIENT, which specifies the amount disallowed. Refunds
of disallowed costs may not be made from these or any funds received from or through CITY
D. Reversion of Assets. SUBRECIPIENT, upon expiration of this Agreement sha.il transfer to the
CITY any CDBG funds on hand at the time of expiration and any accounts receivable attribut-
Page 5 of 26
able to the use of CDBG funds. If CITY finds that SUBRECIPIENT is unwilling and/or unable
to comply with any of the terms of this Contract, CITY may require a refund of any and all
money expended pursuant to this Contract by SUBRECIPIENT, as well as any remaining un-
expended funds which shall be refunded to CITY within ten working days of a written notice to
SUBRECIPIENT to revert these fmancial assets. The revision of these financial assets sha11 be
in addition to any other remedy available to CITY either at law or in equity for breach of this
Contract.
E. Obligation of Funds. In the event that actual expenditure rates deviate from SUBRECIPIENT's
provision of a corresponding level of performance, as specified in Attachment A, CITY hereby
reserves the right to reappropriate or recapture any such underexpended funds.
F. Contract Close Out. SUBRECIPIENT shall submit the Agreement close out package to CITY,
together with a final expenditure report, for the time period covered by the last invoice request-
ing reimbursement of funds under this Agreement, within 15 working days following the close
of the Agreement period. SUBRECIPIENT shall utilize the form agreed upon by CITY and
SUBRECIPIENT.
8.
WARRANTIES
SUBRECIPIENT represents and warrants that:
A. All information, reports and data heretofore or hereafter requested by CITY and furnished to
CITY, are complete and accurate as of the date shown on the information, data, or report, and,
since that date, have not undergone any significant change without written notice to CITY.
B. Any supporting financial statements heretofore requested by CITY and furnished to CITY, are
complete, accurate and fairly reflect the financial condition of SUBRECIPIENT on the date
shown on said report, and the results of the operation for the period covered by the report, and
that since said date, there has been no rnaterial change, adverse or otherwise, in the financial
condition of SUBRECIPIENT.
C. No litigation or legal proceedings are presently pending or threatened against SUBRECI-
PIENT.
D. None of the provisions herein contravene or are in conflict with the authority under which
SUBRECIPIENT is doing business or with the provisions of any existing indenture or agree-
ment of SUBRECIPIENT.
E. SUBRECIPIENT has the power to enter into this Agreement and accept payments hereunder,
and has taken all necessary action to authorize such acceptance under the terms and conditions
of this Agreement.
F. None of the assets of SUBRECIPIENT is subject to any lien or encumbrance of any character,
except for current taxes not delinquent, except as shown in the financial statements furnished
by SUBRECIPIENT to CITY.
Page 6 of 26
G. Each of these representations and warranties sha11 be continuing and sha11 be deemed to have
been repeated by the submission of each request for payment.
9.
COVENANTS
A. CONTRACTOR agrees to execute a lien that will be placed on the property assisted with HOME
funds. The lien will name the CITY as the primary beneficiary for a period not to exceed six
years.
B. During the period of time that payment may be made hereunder and so long as any payments
remain unliquidated, SUBRECIPIENT shall not, without the prior written consent of the Com-
munity Development Administrator or her authorized representative:
(1) Mortgage, pledge, or otherwise encumber or suffer to be encumbered, any of the assets
of SUBRECIPIENT now owned or hereafter acquired by it, or permit any pre-existing
mortgages, liens, or other encumbrances to remain on, or attached to, any assets of
SUBRECIPIENT which are allocated to the performance of this Agreement and with
respect to which CITY has ownership hereunder.
(2) Sell, assign, pledge, transfer or otherwise dispose of accounts receivables, notes or
claims for money due or to become due.
(3) Sell, convey, or lease all or substantial part of its assets.
(4) Make any advance or loan to, or incur any liability for any other firm, person, entity or
corporation as guarantor, surety, or accommo.dation endorser.
(5) Sell, donate, loan or transfer any equipment or item of personal property purchased with
funds paid to SUBRECIPIENT by CITY, unless CITY authorizes such transfer.
(6) Enter into any subcontracts with any agency or individual in the performance of this
contract without the written consent of the Grantee prior to the execution of such an
agreement.
B. SUBRECIPIENT agrees, upon written request by CITY, to require its employees to attend
training sessions sponsored by the Community Development Division.
10.
ALLOWABLE COSTS
A. Costs shall be considered allowable only if incurred directly and specifically in the perfor-
mance of and in compliance with this Agreement and in conformance with the standards and
provisions of Attachments A and B.
Page 7 of 26
B. Approval of SUBRECIPIENT's budget, Attachment B, does not constitute prior written ap-
proval, even though certain items may appear herein. CITY's prior written authorization is re-
quired in order for the following to be considered allowable costs:
(1) CITY shall not be obligated to any third parties, including any contractors of SUBRE-
CIPIENT, and CITY funds shall not be used to pay for any contract service extending
beyond the expiration of this Agreement.
Written requests for prior approval are SUBRECIPIENT's responsibility and shall be made
within sufficient time to permit a thorough review by CITY. SUBRECIPIENT must obtain
written approval by CITY prior to the commencement of procedures to solicit or purchase ser-
vices, equipment, or real or personal property. Any procurement or purchase which may be ap-
proved under the terms of this Agreement must be conducted in its entirety in accordance with
the provisions of this Agreement.
11.
PROGRAM INCOME
A. For purposes of this Agreement, program income means earnings of SUBRECIPIENT realized
from activities resulting from this Agreement or from SUBRECII'IENT's management of fund-
ing provided or received hereunder. Such earnings include, but are not limited to, income from
interest, usage or rental or lease fees, income produced from contract-supported services of in-
dividuals or employees or from the use or sale of equipment or facilities of SUBRECIPIENT
provided as a result of this Agreement, and payments from clients or third parties for services
rendered by SUBRECIPIENT under this Agreement.
B. SUBRECIPIENT shall mainta.in records of the receipt and disposition of program income in
the same manner as required for other contract fu.nds, and reported to CITY in the format pre-
scribed by CITY. CITY and SUBRECIPIENT agree that any fees collected for services per-
formed by SUBRECIPIENT shall be used for payment of costs associated with service provi-
sion. Revenue remaining after payment of a11 prograxn expenses for service provision shall be
considered Program Income and sha11 be subject to all the requirements of this Agreement and
the regulations found at CFR, Section 570.504.
C. SUBRECIPIENT shall include this Section in its entirety in all of its contracts which involve
other income-producing services or activities.
D. It is SUBRECIPIENT's responsibility to obtain from CITY a prior determination as to whether
or not income arising directly or indirectly from this Agreement, or the performance thereof,
constitutes program income. SUBRECIPIENT is responsible to CITY for the repayment of any
and all amounts deternuned by CITY to be program incorne, unless otherwise approved in writ-
ing by CITY.
12.
MAiNTENANCE OF RECORDS
A. SUBRECIPIENT agrees to maintain records that will provide accurate, current, separate, and
complete disclosure of the status of the funds received under this Agreernent, in compliance
Page 8 of 26
with the provisions of Attachment B, attached hereto, and with any other applicable Federal
and State regulations establishing standards for financial management including OMB Circu-
lars A-87, A-122, A-133 and the regulations at 24 CFR Part 84 as applicable; Title 24 CFR
Section 570.502 (b); Title 24 CFR Sections 570.504 and 570.506 as they pertain to costs in-
curred, audits, program income, administration and other activities and fiulctions. SUBRECI-
PIENT's record system shall contain sufficient documentation to provide in detail full support
and justification for each expenditure. Nothing in this Section shall be construed to relieve
SUBRECIPIENT of fiscal accountability and liability under any other provision of this Agree-
ment or any applicable law. SUBRECIPIENT shall include the substance of this provision in
a11 subcontracts. B. SUBRECIPIENT agrees to retain all books, records, documents, reports, and written account-
ing procedures perta.ining to the operation of programs and expenditures of funds under this
Agreement for five years.
C. Nothing in the above subsections shall be construed to relieve SUBRECIPIENT of responsibili-
ty for retaining accurate and current records, which clearly reflect the level and benefit of ser-
vices provided under this Agreement.
D. At any reasonable time and as often as CITY may deem necessary, the SUBRECIPIENT shall
make available to CITY, HUD, or any of their authorized representatives, all of its records and
shall permit CITY, HUD, or any of their authorized representatives to audit, examine, make ex-
cerpts and copies of such records, and to conduct audits of all contracts, invoices, materials,
payrolls, records of personnel, conditions or employment and all other data requested by said
representatives.
13.
REPORTS AND INFORMATION
At such times and in such form as CITY
statements, records, data and information as CITY
by this Agreement,
may require, SUBRECIPIENT shall furnish such
may request and deem pertinent to matters covered
SUBRECIPIENT sha11 submit quarterly beneficiary and financial reports to CITY no less than
once each three months. The beneficiary report shall detail client information, including race, income,
female head of household and other statistics required by CITY. The financial report shall include in-
formation and data relative to a11 programmatic and financial reporting as of the beginning date speci-
fied in Section 1 of this Agreement. Beneficiary and financial reports shall be due to City within 15
working days after the completion of each quarter.
Unless the CITY has granted a written exemption, SUBRECIPIENT shall submit an audit con-
ducted by independent examiners in accordance with Generally Accepted Accounting Principles. If
the SUBRECIPIENT receives and/or expends more than $500,000 in federal funding, the audit must
be conducted in accordance with OMB Circular A-133 as applicable within thirty days after receipt of
such audit.
Page 9 of 26
14.
MONITORING AND EVALUATION
A. CITY shall perform on-site monitoring of SUBRECIPIENT's performances under this Agree-
ment.
B. SUBRECIPIENT agrees that CITY may carry out monitoring and evaluation activities to en-
sure adherence by SUBRECIPIENT to the Scope of Services, and Program Goals and Objec-
tives, which are attached hereto as Attachment A, as well as other provisions of this Agree-
ment.
C. SUBRECIPIENT agrees to cooperate fully with CITY in the development, implementation and
maintenance of record-keeping systems and to provide data determined by CITY to be neces-
sary for CITY to effectively fulfill its monitoring and evaluation responsibilities.
D. SUBRECIPIENT agrees to cooperate in such a way so as not to obstruct or delay CITY in such
monitoring and to designate one of its staff inembers to coordinate the monitoring process as
requested by CITY staff.
E. After each official monitoring visit, CITY sha11 provide SUBRECIPIENT with a written report
of monitoring findings documenting fmdings and concerns that will require a written response
to the City. An acceptable response must be received by the City within 60 days from the
SUBRECIPIENT's receipt of the monitoring report or audit review letter. Future contract
payments can be withheld for SUBRECIPIENT's failure to submit a response within 60 days.
F. SUBRECIPIENT shall submit copies of any fiscal, management, or audit reports by any of
SUBRECIPIENT's funding or regulatory bodies to CITY within five working days of receipt
by SUBRECIPIENT.
0. SUBRECIPIENT will monitor all subcontracted services on a regular basis to assure contract
compliance. Results of monitoring efforts shall be sununarized in written reports and sup-
ported with documented evidence of follow-up actions taken to correct areas of noncompliance.
15.
DIRECTORS' MEETINGS
During the terms of this Agreement, SUBRECIPIENT shall cause to be delivered to CITY cop-
ies of all notices of ineetings of its Board of Directors, setting forth the time and place thereo£ Such
notice shall be delivered to CITY in a timely manner to give adequate notice, and shall include an
agenda and a brief description of the matters to be discussed. SUBRECIPIENT understands and agrees
that CITY representatives shall be afforded access to all of the Board of Directors' meetings.
Minutes of all meetings of SUBRECIPIENT's governuig body shall be available to CITY with-
in ten days after Board approval.
Page 10 of 26
16.
INSURANCE
A. SUBRECIPIENT shall observe sound business practices with respect to providing such bond-
ing and insurance as would provide adequate coverage for services offered under this Agree-
ment.
B. The premises on and in which the activities described in Attachment A are conducted, and the
employees conducting these activities, shall be covered by premise liability insurance, com-
monly referred to as "Owner/Tenant" coverage with CITY named as an additional insured.
Upon request of SUBRECIPIENT, CITY may, at its sole discretion, approve alternate insur-
ance coverage arrangements.
C. SUBRECIPIENT will comply with applicable workers' compensation statues and will obtain
employers' liability coverage where available and other appropriate liability coverage for pro-
gram participants, if applicable.
D. SUBRECIPIENT will maintain adequate and continuous liability insurance on all vehicles
owned, leased or operated by SUBRECIPIENT. All employees of SUBRECIPIENT who are
required to drive a vehicle in the normal scope and course of their employment must possess a
valid Texas driver's license and automobile liability insurance. Evidence of the employee's
current possession of a valid license and insurance must be maintained on a current basis in
SUBRECIPIENT's files.
E. Actual losses not covered by insurance as required by this Section are not allowable costs under
this Agreement, and remain the sole responsibility of SUBRECIPIENT.
F. The policy or policies of insurance shall contain a clause which requires that CITY and SUB-
RECIPIENT be notified in writing of any cancellation of change in the policy at least 30 days
prior to such change or cancellation.
17.
CIVIL RIGHTS / EQUAL OPPORTiJ1vITY
A. SUBRECIPIENT shall comply with all applicable equal employxnent opportunity and affirma-
tive action laws or regulations. The SUBRECIPIENT shall not discriminate against any em-
ployee or applicant for employment because of race, color, creed, religion, national origin,
gender, age or disability. The SUBRECIPIENT will take affirmative action to insure that all
employinent practices are free from such discrimination. Such employment practices include
but are not limited to the following: hiring, upgrading, demotion, transfer, recruitment or re-
cruitment advertising, layoff, termination, rates of pay or other forms of compensation and se-
lection for training, including apprenticeship...
B. The SUBRECIPIENT agrees to comply with Title VI of the Civil Rights Act of 1964 as
amended, Title VIII of the Civil Rights Act of 1968 as amended, Section 104(b) and Section
109 of Title 1 of the Housing and Community Development Act of 1974 as amended, Section
504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Age
Page 11 of 26
Discrimination Act of 1975, Executive Order 11063 and Executive Order 11246 as amended by
Executive Orders 11375 and 12086.
C. SUBRECIPIENT will furnish all information and reports requested by the CITY, and will per-
mit access to its books, records, and accounts for purposes of investigation to ascertain com-
pliance with local, state and Federal rules and regulations.
D. In the event of SUBRECIPIENT's non-compliance with the non-discrimination requirements,
CITY may cancel or terminate the Agreement in whole or in part, and SUBRECIl'IENT may
be barred from further contracts with CITY.
18.
PERSONNEL POLICIES
Personnel policies shall be established by SUBRECIPIENT and shall be available for examina-
tion. Such personnel policies shall:
A. Be no more liberal than CITY's personnel policies, procedures, and practices, including poli-
cies with respect to employment, salary and wage rates, working hours and holidays, fringe
benefits, vacation and sick leave privileges, and travel; and
B. Be in writing and shall be approved by the governing body of SUBRECIPIENT and by CITY.
19.
CONFLICT OF INTEREST
A. SUBRECIPIENT covenants that neither it nor any member of its governing body presently has
any interest, direct or indirect, which would conflict in any manner or degree with the perfor-
mance of services required to be performed under this Agreement. SUBRECIPIENT further
covenants that in the performance of this Agreement, no person having such interest shall be
employed or appointed as a member of its governing body.
B. SUBRECIPIENT further covenants that no member of its governing body or its staff, contrac-
tors or employees shall possess any interest in or use his position for a purpose that is or gives
the appearance of being motivated by desire for private gain for himself/herself, or others, par-
ticularly those with which he/she has family, business, or other ties.
C. No officer, member, or employee of CITY and no member of its governing body who exercises
any fiuiction or responsibilities in the review or approval of the undertaking or carrying out of
this Agreement shall participate in any decision relating to the Agreement which affects his or
her personal interest or the interest in any corporation, partnership, or association in which he
or she has a direct or indirect interest.
20.
NEPOTISM
SUBRECIPIENT shall not employ in any paid capacity any person who is a member of the
immediate family of any person who is currently employed by SUBRECIPIENT, or is a member of
Page 12 of 26
SUBRECIPIENT's governing board. The term "member of immediate family" includes: wife, hus-
band, son, daughter, mother, father, brother, sister, in-laws, aunt, uncle, nephew, niece, step-parent,
step-child, half-brother and half-sister.
21.
POLITICAL OR SECTARIAN ACTIVITY
A. Neither the funds advanced pursuant to this Agreement, nor any personnel who may be em-
ployed by the SUBRECIPIENT with funds advanced pursuant to this Agreement shall be in
any way or to any extent engaged in any conduct or political activity in contravention of Chap-
ter 15 of Title 5 of the United States Code.
B. The SUBRECIPIENT is prohibited from using funds provided herein or personnel employed in
the administration of the program for: political activities; sectarian or religious activities, lob-
bying, political patronage or nepotism activities.
C. The SUBRECIPIENT agrees that none of the funds or services provided directly or indirectly
under this Agreement shall be used for any partisan political activity or to further the election
of defeat of any candidate for public office, or for publicity, lobbying and/or propaganda pur-
poses designed to support or defeat pending legislation. Employees of the SUBRECIPIENT
connected with any activity that is funded in whole or in part by funds provided to SUBRECI-
PIENT under this Agreement may not under the term of this Agreement:
1. use their official position or influence to affect the outcome of an election or nomination.
2. solicit contributions for political purposes; or
3. talce an active part in political management or in political campaigns.
SUBRECIPIENT hereby agrees to sign a Certification Regarding Lobbying included herein as At-
tachment "F" and if necessary, the Disclosure of Lobbying Activities provided by the CITY.
22.
PUBLICITY
A. Where such action is appropriate, SUBRECIPIENT shall publicize the activities conducted by
SUBRECIPIENT under this Agreement. In any news release, sign, brochure, or other advertis-
ing medium, disseminating information prepared or distributed by or for SUBRECIPIENT, the
advertising medium sha11 state that the U.S. Department of Housing and Urban Development's
Community Development Block Grant Program funding through the City of Denton has made
the project possible.
B. All published material and written reports submitted under this project must be originally de-
veloped material unless otherwise specifically provided in this Agreement. When material not
originally developed is included in a report, the report shall identify the source in the body of
the report or by footnote. This provision is applicable when the material is in a verbatim or ex-
tensive paraphrase format.
All published material submitted under this project shall include the following reference on the
front cover or title page:
Page 13 'of 26
This document is prepared in accordance with the City of Denton's Community
Development Block Grant Program, with funding received from the United
States Department of Housing and Urban Development.
C. All reports, documents, studies, charts, schedules, or other appended documentation to any
proposal, content of basic proposal, or contracts and any responses, inquiries, correspondence
and related material submitted by SUBRECIPIENT shall become the property of CITY upon
receipt.
23.
CHANGES AND AMENDMENTS
A. Any alterations, additions, or deletions to the terms of this Agreement shall be by written
amendment executed by both parties, except when the terms of this Agreement expressly pro-
vide that another method shall be used.
B. SUBRECIPIENT may not make transfers between or among approved line items within budget
categories set forth in Attachment B without prior written approval of CITY. SUBRECIPIENT
shall request, in writing, the budget revision in a form prescribed by CITY, and such request for
revision sha11 not increase the total monetary obligation of CITY under this Agreement. In ad-
dition, budget revisions cannot significantly change the nature, intent, or scope of the program
fiuided under tlv.s Agreement.
C. SUBRECIPIENT will submit revised budget and program information, whenever the level of
funding for SUBRECIPIENT or the program(s) described herein is altered according to the to-
tal levels contained in any portion of Attachment B.
D. It is understood and agreed by the parties hereto that changes in the State, Federal or local laws
or regulations pursuant hereto may occur during the term of this Agreement. Any such modifi-
cations are to be automatically incorporated into this Agreement without written amendment
hereto, and shall become a part of the Agreement on the effective date specified by the law or
regulation.
E. CITY may, from time to time during the term of the Agreement, request changes in Attachment
A, which may include an increase or decreased in the amount of SUBRECIPIENT's compensa-
tion. Such changes shall be incorporated in a written amendment hereto, as provided in Subsec-
tion A of this Section.
F. Any alterations, deletion, or additions to the Contract Budget Detail incorporated in Attachment
B shall require the prior written approval of CITY.
G. SUBRECIPIENT agrees to notify CITY of any proposed change in physicallocation for work
performed under this Agreement at least 30 calendar days in advance of the change.
H. SUBRECIPIENT shall notify CITY of any changes in personnel or governing board composi-
tion.
Page 14 of 26
I. It is expressly understood that neither the performance of Attachment A for any program con-
tracted hereunder nor the transfer of funds between or among said programs will be permitted.
24.
SUSPENSION OF FUNDING
Upon determination by CITY of SUBRECIPIENT's failure to timely and properly perform
each of the requirements, time conditions and duties provided herein, CITY, without limiting any
rights it may otherwise have, may, at its discretion, and upon ten working days written notice to SUB-
RECIPIENT, withhold further payments to SUBRECIPIENT. Such notice may be given by mail to the
Executive Officer and the Board of Directors of SUBRECIPIENT. The notice shall set forth the default
or failure alleged, and the action required for cure.
The period of such suspension shall be of such duration as is appropriate to accomplish correc-
tive action, but in no event shall it exceed 30 calendar days. At the end of the suspension period, if
CITY deterrnines the default or deficiency has been satisfied, SUBRECIPIENT may be restored to full
compliance status and paid all eligible funds withheld or impounded during the suspension period. If
however, CITY determines that SUBRECIPIENT has not come into compliance, the provisions of
Section 26 may be effectuated.
25.
TERMINATION
A. CITY may terminate this Agreement for cause under any of the following reasons or for other
reasons not specifically enumerated in this paragraph:
(1) SUBRECIPIENT's failure to attain compliance during any prescribed period of suspension
as provided in Section 24.
(2) SUBRECIPIENT's failure to materially comply with any of the terms of this Agreement.
(3) SUBRECIPIENT's violation of covenants, agreements or guarantees of this Agreement.
(4) Termination or reduction of funding by the United States Department of Housing and Ur-
ban Development.
(5) Finding by CITY that SUBRECIPIENT:
(a) is in such unsatisfactory financial condition as to endanger performance under
this Agreement;
(b) has allocated inventory to this Agreement substantially exceeding reasonable re-
quirements;
(c) is delinquent in payment of taxes, or of costs of performance of this Agreement
in the ordinary course of business.
Page 15 of 26
(6) Appointment of a trustee, receiver or liquidator for a11 or substantial part of SUBRECI-
PIENT's property, or institution of ba.nlcruptcy, reorganization, rearrangement of or liquida-
tion proceedings by or against SUBRECIPIENT.
(7) SUBRECIPIENT's inability to conform to changes required by Federal, State and local
laws or regulations as provided in Section 4, and Section 2 of this Agreement.
(8) The commission of an act of bankruptcy.
(9) SUBRECIPIENT's violation of any law or regulation to which SUBRECIPIENT is bound
or shall be bound under the terms of the Agreement.
CITY shall promptly notify SUBRECIPIENT in writing of the decision to terminate and the ef-
fective date of termination. Simultaneous notice of pending termination rnaybe made to other funding
source specified in Attachment B.
B. CITY may terminate this Agreement for convenience at any time. If CITY terminates this
Agreement for convenience, SUBRECIPIENT will be paid an amount not to exceed the total of
accrued expenditures as of the effective date of termination. In no event will this compensation
exceed an amount which bears the same ratio to the total compensation as the services aciually
performed bears to the total services of SUBRECIPIENT covered by the Agreement, less pay-
ments previously made.
C. SUBRECIPIENT may terminate this Agreement in whole or in part by written notice to CITY,
if a termination of outside funding occurs upon which SUBRECIPIENT depends for perfor-
mance hereunder. SUBRECIPIENT may opt, within the limitations of this Agreement, to seelc
an alternative funding source, with the approval of CITY, provided the termination by the out-
side funding source was not occasioned by a breach of contract as defined herein or as defined
in a contract between SUBRECIPIENT and the funding source in question.
SUBRECIPIENT rnay terminate this Agreement upon the dissolution of SUBRECIPIENT's
organization not occasioned by a breach of this Agreement.
D. Upon receipt of notice to terminate, SUBRECIPIENT shall cancel, withdraw or otherwise ter-
minate any outstanding orders or subcontracts, which relate to the performance of this Agree-
ment. CITY shall not be liable to SUBRECIPIENT or SUBRECIPIENT's creditors for any ex-
penses, encumbrances or obligations whatsoever incurred after the ternunation date listed on
the notice to terminate referred to in this paragraph.
E. Notwithstanding any exercise by CITY of its right of suspension or termination, SUBRECI-
PIENT shall not be relieved of liability to CITY for damages sustained by CITY by virtue of
any breach of the Agreement by SUBRECIPIENT, and CITY may withhold any reimburse-
ment to SUBRECIPIENT until such time as the exact amount of damages due to CITY from
SUBRECIPIENT is agreed upon or otherwise determined.
Page 16 of 26
C. In no event shall any payment to SUBRECIPIENT hereunder, or any other act or failure of
CITY to insist in any one or more instances upon the terms and conditions of this Agreement
constitute or be construed in any way to be a waiver by CITY of any breach of covenant or de-
fault which may then or subsequently be committed by SUBRECIPIENT. Neither shall such
payment, act, or omission in any manner impair or prejudice any right, power, privilege, or re-
medy available to CITY to enforce its rights hereunder, which rights, powers, privileges, or re-
medies are always specifically preserved. No representative or agent of CITY may waive the
effect of this provision.
D. This Agreement, together with referenced attachments, constitutes the entire agreement be-
tween the parties hereto, and any prior agreement, assertion, statement, understanding or other
commitment antecedent to this Agreement, whether written or oral, shall have no force or effect
whatsoever; nor sha11 an agreement, assertion, statement, understanding, or other commitment
occurring during the term of this Agreement, or subsequent thereto, have any legal force or ef-
fect whatsoever, unless properly executed in writing, and if appropriate, recorded as an
amendment of this Agreement.
E. In the event any disagreement or dispute should arise between the parties hereto pertaining to
the interpretation or meaning of any part of this Agreement or its governing rules, codes, laws,
ordinances or regulations, CITY as the party ultimately responsible to HUD for matters of
compliance, will have the final authority to render or to secure an interpretation.
F. For purposes of this Agreement, all official comrnunications and notices among the parties
shall be deemed made if sent postage paid to the parties and address set forth below:
TO CITY:
TO SUBRECIPIENT:
City Manager
Executive Director
City of Denton
Fred Moore Day Nursery School
215 E. McKinney
821 Cross Timber St.
Denton, Texas 76201
Denton Texas 76205
G. This Agreement shall be interpreted in accordance with the laws of the State of Texas and ve-
nue of any litigation concerning this Agreement shall be in a court competent jurisdiction sit-
ting in Denton County, Texas. ~
IN VE S OF WHICH this Agreement has been executed on this the day of
~Q,u ,2010.
CITY OF DENTON
BY:
GEORGE ~~j C r1B3EZ'__
. A CITY MANAGER
Page 18 of 26
26.
NOTIFICATION OF ACTION BROUGHT
In the event that any cla.im, demand, suit or other action is made or brought by any person(s),
firm, corporation or other entity against SUBRECIPIENT, SUBRECIPIENT shall give written notice
thereof to CITY within two working days after being notified of such claim, demand, suit or other ac-
tion. Such notice shall state the date and hour of notification of any such clairn, demand, suit or other
action; the names and addresses of the person(s), firm, corporation or other entity making such claim,
or that instituted or threatened to institute any type of action or proceeding; the basis of such claim,
action or proceeding; and the name of any person(s) against whom such claim is being made or threat-
ened. Such written notice shall be delivered either personally or by mail.
7.
INDEMNIFICATION
A. It is expressly understood and agreed by both parties hereto that CITY is contracting
with SUBRECIPIENT as an independent SUBRECIPIENT and that as such, SUBRECI-
PIENT shall save and hold CITY, its officers, agents and employees harmless from all lia-
bility of any nature or kind, including costs and expenses for, or on account of, any
claims, audit exceptions, demands, suits or damages of any character whatsoever result-
ing in whole or in part from the performance or omission of any employee, agent or rep-
resentative of SUBRECIPIENT.
B. SUBRECIPIENT agrees to provide the defense for, and to indemnify and hold harmless
CITY its agents, employees, or SUBRECIPIENTs from any and all claims, suits, causes of
action, demands, damages, losses, attorney fees, expenses, and liability arising out of the
use of these contracted funds and program administration and implementation egcept to
the extent caused by the willful act or omission of CITY, its agents, employees, or SUB-
RECIPIENTs.
28.
NON-RELIGIOUS ACTIVITIES
The SUBRECIPIENT will provide all services under this Agreement in a manner that is exclusively
non-religious in nature and scope. There sha11 be no religious services, proselytizing, instruction or
any other religious preference, influence or discrimination in connection with providing the services
hereunder.
29.
MISCELLANEOUS
A. SUBRECIPIENT shall not transfer, pledge or otherwise assign tlv.s Agreement or any interest
therein, or any claim arising thereunder, to any party or parties, bank, trust company or other
financial institution without the prior written approval of CITY.
B. If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining
provisions shall remain in full force and effect and continue to conform to the original intent of
both parties hereto.
Page 17 of 26
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
Wa'm' ap
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
ATTEST:
BY: / .
ALONZO Z$TERSON
EXECUTIVE DIliECTOR
FRED MOORE DAY NURSERY SCHOOL
BY: jIJAMIAMSON
NT, BOARD OF DIRECTORS
Page 19 of 26
ATTACHMENT "A"
SCOPE OF SERVICES
Descrintion of Rehabilitation Imnrovements
Rehabilitation project will consist of various improvements to the day care facility. Improvements will
include but not be limited to: roof repairs, HVAC replacement, exterior window replacement, door
repairs and entry reframing, electrical and plumbing improvements. See budget below for information on
rehabilitation costs.
Work Statement
Fred Moore Dav Nurserv School
In order to complete the agreed upon activity SUBRECIPIENT shall provide the following
services from the improved facility:
Fred Moore Day Nursery School is a nonprofit childcare facility for low to moderate-income fanv.-
lies. FMDNS will serve a minimutn of 62 children ranging in age from six (6) weeks through five
(5) years of age. Parents must be working, going to school full time or doing a combination of both
to be eligible. In addition, parents will be required to volunteer at the childcare center. FMDNS will be
open Monday through Friday from 6:30 am to 6:00 p.m.
FMDNS will provide the services listed below and meet a11 stated requirements:
• Provision of a safe, healthy environment that will meet the development needs of each child.
Activities will be designed for each age group to meet the individual and group needs. The
curriculum will include education, emphasizing learning skills, creative arts, motor skills,
physical development, speech development, personal hygiene and manners.
• Provision of breakfast, lunch and an aftemoon snack for each child. All meals will meet the
USDA and Texas Department of Human Services Special Nutrition food requirements for
children in childcare.
• Remain open for service from 6:30 am to 6:00 pm.
• Be licensed by the TX Department of Protective and Regulatory Services.
• Meet or exceed the TX Department of Human Services rninimum standards for Day Care
Centers.
• Must be a North Central Texas Childcare Services designated vendor.
Page 20
ATTACHIvv1ENT "B"
BUDGET
Improvement
Roof Repairs
HVAC Replacement
Replacement of Exterior Windows
Electrical Repairs
Plumbing Repairs
Interior/Exterior poor Replacement
Interior Security Vestibule
TOTAL
Cost ~
$54,050.00 ~
$29,350.00 ~
$15,000.00 ~
$5,000.00 ~
$6,500.00
$6,000.00
$4,500.00
$120,400.00
Please note: Prior to the start of construction, Fred Moore Day Nursery School, sha11 provide the
Community Development Division with a total project budget, documentation of a11 funding
sources and commitments (if other funding sources are included in the project), and a project plan-
ning/construction schedule.
Page 21
ATTACHMENT "C"
24 CFR § 570.505
The standards described in this section apply to real properiy within the recipient's control which
was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These
standards sha11 apply from the date CDBG funds are first spent for the property until five years after
closeout of an entitlement recipient's participation in the entitlement CDBG program or, with
respect to other recipients, u.ntil five years after the closeout of the grant from which the assistance
to the property was provided.
(a) A recipient may not change the use or planned use of any such property (including
the beneficiaries of such use) from that for which the acquisition or improvement was made
unless the recipient provides affected citizens with reasonable notice of, and opportunity to
comment on, any proposed change, and either:
(1) The new use of such property qualifies as meeting one of the national
objectives in Section 570.208 and is not a building for the general conduct of
government; or
(2) The requirements in paragraph (b) of this section are met.
(b) If the recipient determines, after consultation with affected citizens, that it is
appropriate to change the use of the properly to a use which does not qualify under
paragraph (a)(1) of this section, it may retain or dispose of the property for the changed use
if the recipient's CDBG program is reimbursed in the amount of the current fair market
value of the property, less any portion of the value attributable to expenditures of non-
CDBG funds for acquisition of, and improvements to, the property.
(c) If the change of use occurs after closeout, the provisions governing income from the
disposition of the real property in Section 570.504(b) (4) or (5), as applicable, sha11 apply to
the use of funds reimbursed.
(d) Following the reimbursement of the CDBG program in accordance with paragraph
(b) of this section, the property no longer will be subject to any CDBG requirements.
Page 22
ATTACHIVIENT "D"
24 CFR § 570.503
(a) Before disbursing any CDBG funds to a subrecipient, the recipient sha11 sign a written
agreement with the subrecipient. The agreement shall remain in effect during any period
that the subrecipient has control over CDBG funds, including program income.
(b) At a niinimum, the written agreement with the subrecipient sha11 include provisions
concerning the following items:
(1) Statement of Work. The agreement shall include a description of the
work to be performed, a schedule for completing the work, and a budget. These
items shall be in sufficient detail to provide a sound basis for the recipient
effectively to monitor performance under the agreement.
(2) Records and Renorts. The recipient shall specify in the agreement the
particular records the subrecipient must maintain and the particular reports the
subrecipient must submit in order to assist the recipient in meeting its
recordkeeping and reporting requirements.
(3) ProLyram Income. The agreement shall include the program income
requirements set forth in Section 570.504(c).
(4) Uniform Admuustrative Reauirements. The agreement sha11 require the
subrecipient to comply with applicable uniform adinuustrative requirements, as
described in Section 570.502.
(5) Other Proeram Reauirements. The agreement shall requ.ire the
subrecipient to carry out each activity in compliance with a11 Federal laws and
regulations described in subpart K of these regulations, except that:
(i) The subrecipient does not assurne the recipient's environmental
responsibilities described at Section 570. 604; and
(ii) The subrecipient does not assume the recipient's responsibility
for initiating the review process under the provisions of 24 CFR Part 52.
(6) Conditions for Reliizious Omanizations. Where applicable, the conditions
prescribed by HUB for the use of CDBG funds by religious organizations sha11
be included in the agreement.
(7) Susnension and Terinination. The agreement shall specify that, in
accordance with 24 CFR 85.43, suspension or teinunation may occur if the
subrecipient materially fails to comply with any term of the award, and that the
award may be ternvnated for convenience in accordance with 24 CFR 85.44.
Page 23
(8) Reversion of Assets. The agreement shall specify that upon its expiration
the subrecipient sha11 transfer to the recipient any CDBG funds on hand at the
time of expiration and any accounts receivable attributable to the use of CDBG
funds. It shall also include provisions to the use of CDBG funds. It shall also
include provisions designed to ensure that any real property under the
subrecipient's control that was acquired or improved in whole or in part with
CDBG funds in excess of $25,000 is either:
(i) Used to meet one of the national objectives in Section 570.208
until five years after expiration of the agreement, or for such longer
period of time as deternuned to be appropriate by the recipient; or
(ii) Disposed of in a manner that results in the recipient's being
reimbursed in the amount of the current fair market value of the property
less any portion of the value attributa.ble to expenditures of non-CDBG
funds for acquisition of, or improvement to, the property.
(Reimbursement is not required after the period of time specified in
paragraph (b) (8) (1) of tlus section.)
Page 24
ATTACFiMENT "E"
24 CFR § 570.504
(a) Recordina Proaram Income. The receipt and expenditure of program income as defined in
Section 570.500(a) sha11 be recorded as part of the fmancial transactions of the grant
program.
(b) Disnosition of ProQram Income Received bv Recipients.
(1) Program income received before grant closeout may be retained by the
recipient if the income is treated as adclitional CDBG funds subject to a11
applicable requ.irements governing the use of CDBG funds.
(2) If the recipient chooses to retain program income, that income shall affect
withdrawals of grant funds from the U.S. Treasury as follows:
(i) Program income in the form of repayments to, or interest
earned on, a revolving fund as defined in Section 570.500(b) sha11 be
substantially disbursed from the fwid before additional cash withdrawals
are made from the U.S. Treasury for the same activity. (This rule does
not prevent a lump sum disbursement to finance the rehabilitation of
privately owned properties as provided for in Section 570.513.)
(ii) Substantially all other program income shall be disbursed for
eligible activities before additional cash withdrawals are made frorn the
U.S. Treasury.
(3) Program income on hand at the time of closeout shall continue to be
subject to the eligibility requirements in Subpart C and all other applicable
provisions of this part until it is expended.
(4) Unless otherwise provided in any grant closeout agreement, and subject
to the requirements of paragraph (b) (5) of this section, income received after
closeout shall not be governed by the provisions of this part, except that, if at the
time of closeout the recipient has another ongoing CDBG grant received darectly
from HUD, funds received after closeout shall be treated as program income of
the ongoing grant program.
(5) If the recipient does not have another ongoing grant received directly
from HLJD at the time of closeout, income received after closeout from the
disposition of real property or from loans outstanding at the time of closeout shall
not be governed by the provisions of this part, except that such income shall be
used for activities that meet one of the national objectives in Section 570.208 and
the eligibility requirements described in Section 105 of the Act.
Page 25
ATTACHMENT "F"
Certification Regarding Lobbying
The undersigned certifies, to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been paid or will be paid by or on behalf of the un-
dersigned, to any person for influencing or attempting to influence an officer or employee
of any agency, a Member of Congress, an officer or employee of Congress, or an em-
ployee of a Member of Congress in connection with the awarding of any Federal con-
tract, the making of any Federal grant, the making of any Federal loan, the entering into
of any cooperative agreement, and the extension, continuation, renewal, amendment, or
modification of any Federal contract, grant, loan or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been pa.id or will be paid to any
person for influencing or attempting to influence an officer or employee of any agency, a
Member of Congress, an ofFicer or employee of Congress, or an employee of a Member
of Congress in connection with a Federal contract, grant, loan or cooperative agreement,
the undersigned shall complete and subrnit Standard Form-ILL, "Disclosure Forrn to Re-
port Lobbying," in accordance with its instructions.
(3) The undersigned shall require that the language of this Certification be included in the
award documents for all subawards at all tiers (including subcontractors, subgrants and
contracts under grants, loans and cooperative agreements) and that all subrecipients sha11
certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this
transaction was made or entered into. Submission of the certification is a prerequisite for making
or entering into this transaction imposed by Section 1352, title 31, US Code. Any person who
fails to file the required certification shall be subject to a civil penalty of not less than $10,000
and not more than $100,000 for each such failure.
Alonzo PeterWn, Fred Moore Day Nursery School
Grantee
Executive Director
Signature Title
~~~10
Date: ~ I
Page 26
s:\legal\aur documents\ordinances\ll\fred moare amendment ordinance.dot
ORDINANCE NO.
AN ORDIN.ANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY
MANAGER TO EXECUTE A FIItST AMENDMENT TO THE 2010-2011 AGREEMENT
BETWEEN THE CITY OF DENTON AND THE FRED M4ORE DAY NIJRSERY SCHOOL
("ORIGINAL AGREEMENT"), SAID ORIGINAL AGREEMENT CONTEMPLATING THE
PROVISION OF COMMUNITY DEVEL4PMENT BLOCK GRANT FUNDS FOR
IMPROVEMENTS TO THE FACILITY AT 821 CROSS TIMBER STREET, DENTON
COUNTY, TEXAS; AND PROVIDING AN Ek'FECTIVE DATE.
WHEREAS, pursuant to that ceztain Ordinance No. 2010-247, dated October 5, 2010, the
City of Denton, Texas (the "City") and Fred Moore Day Nursery School ("Nursery") entered
into the Original Agreement (the "Origznal Agreement"); and
WHEREAS, the City and Nursery have discovered the Original Agreernent is in need of
amendment to correct certain typagraphical errors and to delete a requirement on the Nursery to
execute and deliver, in favor af the Czty, a lien encumbering cerkain real property owned by tlie
Nursery; and
WHEREAS, the City and the Nursery are amen.able to amending the Originai Agreement
as provided by the First Amenciment to 2010-2011 Agreernent Between t.he City of Denton and
tiie Fred Moore Day Nursery Schoai, which is attached hereto and incorporated herein by
reference; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager is hereby authorized to execute the attached First
Amendment to the 2010-2011 Agreement between the City of Denton and the Fred Moore Day
Nuxsery School, attached to this ordinance as Exhibit "A", and incorporated herein.
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the daq af .2011.
MARK A. BURROUGHS, MAYOR
s:\legal\our documents\ordinances\li\fred maore amendment ordinance.doc
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL F4RM:
ANITA BURGESS, CITY ATTORNEY
BY: ~ (2-,-
h:lmy documentslpUblic improv projectslfied moore irnplfrn improvements 20101fred moore day nursery school agreement revised (3).doc
Exhibit A
FIRST AMENDMENT TO
2U14-2U1i
AGREEMENT BETWEEN THE CITY OF DENTON
AND THE FRED MOORE DAY NURSERY SCHOOL
This FIRST AMENDMENT TO 2010-2011 AGREEMENT BETWEEN THE CITY OF DEN-
TON AND THE FRED MOORE DAY NURSERY SCHOOL (the "Amendment"), is made and en-
tered into as of the date set forkh below, by and between the City of Denton, a Texas home rule munic-
ipal corparation (the "City") and the Fred Maore Day Nursery School, a Texas non-profzt corporation
(the "Subrecipient").
WITNESSETH
WHEREAS, pursuant to that certain Ordinance No. 2014-247 dated October 5, 2010, the City
af Denton, Texas approved that certain 2010-2011 Agreement Between the City of Denton and the
Fred Moore Day Nursery School (the "Original Agreement");
WHEREAS, the City and Nursery have discovered tliat the Original Agreement is in need of
amendment to correct certain typographical errors and to delete a requirement on the Subrecipient to
execute and deliver, in favor of the City, a lien encumbering certain real property owxied by the Subre-
cipient;
WHEREAS, the City and Subrecipient are amenable ta amending the 4riginal Agreement as
set forth below.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained
herein, the receipt and sufficiency of such consideration being expressly acknowledged by City and
Subrecipient, the City and Subrecipient now amend the Original Agreement as follows:
1. Article 4, Paragraph F. of the Original Agreement zs hereby deleted in its entirety and replaced
with the following:
SUBRECIPIENT certifies that it is not currently listed on the General Services Administra-
tion's List of Parties Excluded frorn Federal Procurement or Nonprocurement Programs in ac-
cordance with Executive Orders 12549 and 12689 and wili not enter into agreements ta expend
Federal funds with contractors that are currently listed.
2. Article 7, Paragaraph D. of the Original Agreement is hereby deleted in its entirety and xeplaced
with the following:
Reversion of Assets. SUBRECIPIENT, upon expiration of this Agreement sha11 transfer to the
CITY any CDBG funds on hand at the tirne of expiration and any accaunts receivable attribut-
able ta the use of CDBG funds. If CITY finds that SUBRECIPIENT is unwilling and/ar unable
to comply with any of the terms of this Contract, CITY may require a refund of any and all
money expended pursuant to this Contract by SUBRECIPIENT, as well as any rernaining un-
expended funds which shall be refunded to CITY within ten working days of a written notice to
SUBRECIPIENT to revert these financial assets. The reversion of these financial assets shali
h:lmy documentslpnblic improv projectslfred moore implfm improvements 20lOlfred moore day nursezy school agreement revised (3).doc
be in addition to any other remedy available to CITY either at law, or in equity for breach af
this Cantract.
3. Article 9, Paragraph A. of the Original Agreement is hereby deleted in its entirety.
4. Except as expressly amended by this A.mendment, the terms and provisions of the Original
Agreement shall remain valid and subsisting as originally provided. City and Subrecipient he-
reby ratify, in all of its terms, as amended hereby, the Original Agreement.
IN WITNESS OF WHICH tliis Agreement has been executed an this the day of
, 2011.
CITY OF DENTON
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
9 -
BY: ~C
ATTEST:
BY: ALONZO PILtERSON
EXECUTIVE DIRECTOR
BY:
GEORGE C. CAMPBELL
CITY MANAGER
FRED MOORE DAY NURSERY SCHOOL
BY: z
J AI~AMSON
SIDENT, BOARD OF DFRECTORS
2
This page left blank intentionally.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Enviroiunental Services and Sustainability
UTILITIES ACM: Howard Martin, 349-8?3? IkN--
SUBJECT
Receive a report, hold a discussion, and give staff direction concernint-, the Phase II
Sustainability Plan.
BACKGROUND
One of the projects outlined in the City of Denton's Energy Efficiency and Conservation Bloclc
Grant (EECBG) was completion of "Phase II" of the City of Denton's Sustainability Plan. Recall
that the iiutial activities associated with development of Denton's Energy Efficiency and
Conservation Strategy (EECS) during the early phases of the EECBG included the development
of "Phase T' of Denton's Sustainability Initiative. Phase I included an evaluation of existing
enviroiunental iiutiatives and establislunent of a baseline for Denton, created industry
comparison criteria for green iiutiatives/sustainability efforts, benclunarlced Denton against these
criteria by cate~ories, and provided a technical report summarizin~ study results.
Phase II of the Denton Sustainability liutiative includes (very briefly) prioritizing baseline
evaluation components of Phase I; establishint', a community partners group; developint" "'oals
and strategies via a series of staff and public meetings; identifying funding, resources, and
staffing needs; developing methods for traclcing and progress reporting; and implementing
identified strategies. The overall goal of the project is to create a comprehensive sustainability
plan for Denton that encompasses municipal operations, community / citizens, and the
commercial / industrial sectors of the community. During the last several months,
Enviroiunental Services staff has also been worlcing as a meinber of the staff strategic plaiuung
committee to add sustainability objectives to the appropriate sections of the draft strategic plan.
As a part of the EECBG project adininistration, a consultant was selected for coinpleting the
Phase II sustainability plan. A staff team evaluated candidates, and ultimately selected Camp,
Dresser, and McILee (CDM) as the consultant to perform tlus taslc. Staff wanted to talce tlus
opportunity to introduce Ms. Glennis Nelson and Ms. Adrienne Thorpe (is Adrienne going to be
there?) of (CDM) to the City Council and aslc them provide a presentation outlinint" current
proj ect strategies, proj ect needs, and timeline. There will be many actions related to the Phase II
Sustainability project that will be occurring over the neYt several months, including a
Coininunity Partners ineeting that will be held this weelc. Staff will be presenting inforination
pertaining to these efforts to the City Council Coininittee on the Environinent, and will provide
updates to the Council through the reading file or via additional worlc session / regular session
presentations. Staff and CDM would greatly appreciate any feedback or recommendations from
the City Council regarding information presented tonight.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
February 2, 2009: Committee on the Environment (Individual Item concernint', Community
Sustainability Initiatives).
Febniary 18, 2009: Committee on the Environment (liidividual item conceriung Commuiuty
Sustainability iiutiatives)
Septeinber 17, 2009: Coininittee on the Environment (as a part of Assistant City Manager
"ACM" grant update)
Noveinber 2009: Committee on the Environment (ACM update).
Deceinber 9, 2009: Presentation of ranlcing strategy inethodology to the Coininittee on the
Enviroiunent.
January 13, 2010: Presentation of final ranlcing strategy to the Coininittee on the
Environment.
January 15, 2010: Staff report to City Council outliiung Committee on the Environment
Recommendation and staff's intent to submit recommended
proj ects.
April 5, 21010: Staff report to City Council conceriung the notice of approval from the
Departinent of Energy of the City of Denton's Energy Efficiency and
Conservation Bloclc Grant (EECBG) awarded to the City of Denton.
Apri16, 21010: Presentation of an ordinance of the City of Denton TeYas authorizing the
City Manager or his designee(s) to administer all expenditures of the
EECBG.
August 2010: Staff provided an update of grant progress and challenges to the
Coininittee on the Environment
Septeinber 13, 21010 Staff provided an ACM update aiuiouncing selection of CDM as the
consultant selected for the Phase II Sustainability Plaiuung proj ect.
November 1, 2010: Staff provided an analysis of the current status of EECBG projects, and
recommended cancellation of the anaerobic digester project and
reallocation of funding among other proj ects. The recommendation was
approved by the Coininittee on the Environment and was provided to the
City Council in the reading file for this weelc.
Noveinber 16, ?010: Ordinance adopted for Professional Services Agreement with CDM for
preparation of a sustainability plan and iinpleinentation strategy for the
City of Denton.
Febniary 7, 2011: Staff provided an update to COE regarding Phase II of Sustainability Plan
and introduced Ms. Amelia Pellegrin, Ms. Gleiuus Nelson and Ms.
Adrieiuie Thorpe of Camp, Dresser, and McILee (CDM) for a brief
presentation outlining the process for Phase II.
March 7, 2 011: Staff provided an update to COE regarding selection of Commuiuty
Sustainability Committee Partners.
FISCAL INFORMATION
The total formula funding allocated to Denton was $1,117,000. The budget for the Phase II
Sustainability Plan is $169,190.
EYHIBITS
1. Presentation
Respectfully prepared and submitted by,
Q~~~~----
ILatherine Barnett
Sustainability and Special Projects Administrator
71 ' 1,
I
~ t k i~
I
11
1
0
70
~
~
~
~
Illl~l~~lluu
liT
IN
~
~
iiillllllllll I '
i IIIIIIII`i II
~
~ fi CDM Adrienne --iorpe
:
~M
.
G ennis Ne son
4
~
Summcry of Phcske--.\,.
P -iase
report completed
Potentia sustainabi ity strategies reorganized
by focus area
Strategies will be considered for Sustainabi ity
-
P an in P -)ase
Performance metrics will be determined
t -iroug P -)ase
N
(U)
~0CD
C) CU
L U ~
~•E CO
=3 N
E (B
E
CU o is
U W
Y U)_
o
L
~U }C
VJ
) L
n
U
N
Q
X
a
z
N i
N c ;I
Q°
moo!
~co
a
i
N I
O
U
0
c
i
i
i
a
v
oc
A
O
0
C
Phase 1,1 - Purpose
~
Develop a Sustainability Plan for t-)e City of
Denton - government and community
Facilitate implementation of t -)e pan t -iroug~
partners -iip deve opment and pubic
invo vement
Create an Implementation Tracking Tool &
Communications Tool for measuring and
reporting progress
U
0
n l I
cry O
n1 nn11 ~ ;
W W O z
• _
B O O O O O O
O 0 0 0 0>~
p O U O
U
c}i~
N
O~ O~ 4~ p U p Q
O O O O p O~
UE
4) E ~ O ' - ~ U O 4) 4)
U 4) O Q O N Q U cn
0
o J
c ,
~ _
~
0
0
~
Distri
Develop& o Multi-media approach:
- Web, email, paper, public meetings and through
partner organizations
Present the Sustainable Denton Vision and
ask 2 main questions: _
rWhat strategies would help Denton achieve this
-w-Vision? (Projects, policies, best practices, -
incentives etc.)
--How should CitY decide which strategies to
include? (Prioritization Criteria)
,
il ~
~ ~
~
M ~
F~H ~
c
_ .
' ~
3~,~::.~ ~
~
`.Gn~~
0
~
T
~
'L
Q
=
O
~
N
cr~
~
Q
, ,
~ v /
~
4~ } ~ ~
~ Q CU
-r
- Draft P'icn &
I
Key characteristics of a successful plan:
~ Focused to Vision and Goals
s Acknowledges achievements
Plan for measuring progress
Promotes accountability
vA RECIPE - not a menu!
Strateay Profile/Factsheet Approach:
Descriptive, graphics focused
Highlights importance to community
Links to other initiatives
Provides progress to date
Identifies implementation timeline
and roles
-Costs, benefits and funding
alternatives
Tells a community success story
- Prioritization Criteria Ranking (visual)
- Metrics and tracking schedule
~tod~sd~SQlstdxirac~I~ifst~~~c~ucr~tiur~ U~ait
EECHi.ActMhy TvUe 10
Pe_ y-icnCl3zteeti EhfRGYSNAPSHOT
- . N tl tl ' he
pt P f t .,'gt €fi C .-ry
:tr gl .Ty h -tlb t p Ietl ~fl<^.re h ~c7a~!~ tor, d therFUdic
en[.. TRi4 ~ridlLproriIIe a Yznd-[' e.vpEnen[e for [h';e
wiaM1ing cc I:~!.~ ~b: ~t rcn:ling a~c cncre•v' =-cnry. TM1:
- .,~ItlLe u~ometl~cVtill onry_nee]..~ o~.gF
II~ I f I.- - mil.tl ~~asa:~e't5tlesi~~xC
- 5e R&+ . . . ..-1_TMe
tZiif 2EUY -1 k eqd1p1ed Ntth 5efa^ [znels an~ ttinE Cv~b3nx
pr.-c~_e the eners're:tlecta
~ a~ . .ne.~._
I ~ I en :]5 ,~~C 1. C(C y~ ,,:.2 Ito[ 'DP YE
Tot31GHG-ngs _00m tQzx
lab; tresretl/Ret34netl; ~
. -i l ,3cO.JP~;E
. 1,. 1Nnr ~ F33. Q~ 95.E1r : ~ th tM~1- v-..elc
S~mR~eW3~bk In~:e]~ate _
21 tto
Pn "luce -i. ,~.rance.t~eantl'..aborfcr I• .nk.g.
vP<exd~es
~
we6 ende.4ni• -4..f :i-Etlbc'xCJn
ry
t
iC -:ePerti~a I d 0.. c :W'
03cQ~865 klvhanil
3 CYt~ern~l tr
aneC3
a
e I o~d
an
e
m
~b-saR~on
It=exR=
tl-EE=EGf tln
~ 0 5
I
-
,
.
~
.
.
~
,
p
_
„
bI . e, Gt 'on lr, G R - t ^y {C3 B d na~e
ialeerz
-
.inec...-5I S.QO.he: 17 EEi6C F eft. ac~.~io ma.e aene. ab..,t,:peope.
p~
se ea
be Ecws,
em
Ei .Ra I € :P f -l . i 6 . : . tl € , o.a
~ hlcblev'eFrcl ~Ilcw~ricreFl.E bl Vf_rrea_^~-ng ~reaternu tll- ~ ofa~denes
1 ta-,h[ecarioai~na-ltlreart 3rtlLeneft, •consen~~io~and sus:arn3biiy at ,en4 n4Ir,in-I r~ene ..,t~ rthena rzl._o~~atle.alewin3b w tl g~a a,eC.
a~j
CI 17 z
r~l,
L fEC3 -d f h.I b b M1 p,b- h h I perate
'it EMP a,d
I
LatxRat — rstlerablyle,s[h3rat,pca . .e1 c;el
o
~~Jft '
a-f,
Lf.l.2e-t IYI~,,h 1Y .
~
f~~ •
...'.~u~.innnx~ct«vmai:smEreiBZ'. .
Iieehecio3;s::e.ole=
.antl:r.~ .fronc:~.;unlzeCcealer
-R.od
tun..cl.all
• h1a•k:tche~necuca.o ,etthroug~o h c .and .xm.e~, a~c . etcm.nm~e .ea..n
I
~~~::.~m:`~~P%~:. -1
GvaµhicSuI- 111 nt CaiEeriaMef-
a~c 3ddii,~~
v
❑ ❑ ❑
❑
❑
❑
❑
❑ ❑
I
n'i°~.fe~.'°~
~ai ri~
~
ai a.~
a~~
~
ea:~r
ae'e .~:n
~ae:.A:i~
-
11 -
~dr
p
_d~..aE. 1,x
e.3~
d
.
~.va2 :.va2
,
d 13
I! .~wtF ff ert.A .eanda.Efen=6 p... p
g ~y
HG •rz 5 nt
~ .
Scale of Benefits
Environmental improvements -
Cost Savings - Economic
Opportunities - Public Health
C.n 4:h. W N -1
C,31
N
.1
, , a1 . ~ -,:rr_•,,S'__F` rk„n8„~~x,~~ - ~
2
3n
4 Q
CD 4
O 0
c ~
CnD c) N
~
~ N
Q <
~
Q 4' O
~ (D <
C"o I (p y
> n ~
~ O ~
O ~
Q _7.
< ~
CD =
ou O
c ~
~ N
Q ~
~
dt
~
~i
.
~
,
0)
r
e
0
0
0
-0
LL
I
N
y
x
i
i
i
z
i
II
I
~i
~
I
N
a
s
j
o-
I
N
0 1
- i
i
I
N
Y
a
`
o
u
o J
c ,
Ir c~C~ ~1
FOCUS GOAL METRIC
AREA
STRATEGIES
IMPLEMENTATION
STATUS
1.
Provide Xeriscaping
and water
conservation
Reduce
Annual
classes
Water
total water
average
2.
Public information
household
campaign to
use
Wateruse
encourage
reductions in water
consumption
3.
And more...
-
T
Explorepartnerships
community
-
Impr~~~
~nuai
colleges
l~orlcfor~e _
accassib~lity
resident
2
f't~omoie regior~al
Development
tn green job `
parficipation
"
trdniw
-
training -
ia jab
oppnrtunihas - _ , -
training -
3.
Applyfot' ARRA
Green_ Jt3b #r_aining -
-
"
-grants_
Increase
Number of
active
community
Local Food
community
garden plots
2""
garden
3...,.
space
in use
nox
aE T
Measur'i'nc Average daily use per Denton resident is
,
72 gallons per day, slightly higher than the
Reduce total
national average but well below the regional
"
WCIt2f US2
and state average. Leairn i-nore about what
" -
k E Ee ^...s k k Y ks L.A oP k @ 4.,? LA k@ t,..A 4' Y E E 4_A e Vou 4✓ ak@ t,..A o k V
. .
BW @ @o@oYe wt,..£te@ co& &.Pe9 Y4.?tWo& &s
If"YIpfOV2
In 2010, employers listed less than 100 green
CICC2SSIblllty
jobs in Denton. Ciick here for wavs ~~~t vou
to green jobs
~~~~~~irDate in local areen iob trainina,
Increase local
In addition to the Denton Farmer's Market,
food available
the City provides 49 community garden plots
,
~
for residents. ' ~re~:o,e a;~ou~ ~~~;~a' ~~~e,~e
to Denton
s~ -
do':~~ ~oh~~~asse cor_,;mun;~~~ ~arden'na
~
residents
~
-
~nd ',ech :oca' ; oroduce :n DenlonF
Next Steps
Public Meetings - Apri 6thand 7th, 6:30pm at =
t-ie Civic Center =
Next Interdepartmental Team & Partners
-
Meeting for prioritizing strategies - ate
ne
u
May/ear y,..
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM: Jon Fortune ~
SUBJECT
Consider adoption of an ordinance of the Council of the City of Denton, TeYas accepting a
proposal and awardin~ a contract for a utility assistance pro~ram for low-income households to
Interfaith Ministries in an amount not to exceed $85,000; providing for the expenditure of funds
therefor; and providing an effective date. (The Public Utilities Board recommends approval4-0)
BACKGROUND
During the November 16, 2010 City Council meeting, members of the Council approved
revisions to the Code of Ordinances related to Denton Municipal Utility's credit and collection
policies. During the work session preceding the vote, Council asked Customer Service staff to
craft a strategy that would increase funding for the City of Denton's P.L.U.S. One (Prevent Loss
of Utility Service) pro~ram.
The P.L.U. S. One program is desigied to provide qualifying customers facing a temporary
financial crisis with the funds necessary to pay their past due utility bills. P.L.U.S. One is
currently funded through customer donations, and annual contributions have averaged $15,745
over the past five fiscal years. After discussions with liiterfaith Miiustries, who admiiusters the
funds on the City's behalf, staff learned that the demand for funds by qualifying customers far
exceeds the ainount being donated. In 2009, Interfaith Ministries estiinates that $56,834 in
funding was requested by approxiinately 362 qualifying fainilies. For 2010, an estiinated
$81,900 was requested by approYimately 455 qualifying fai-nilies.
Denton Municipal Electric's Community Relations and Utilities Customer Service have
atteinpted to bolster custoiner donations through several inarlceting initiatives. These efforts
have included the distribution of program pamplilets at public events, postings on the City
website, and billing inserts. lii addition, Customer Service provides citizens with opportuiuties
to subinit a one-tiine or ongoing donation when reinitting payinents through the inail, in person,
and over the phone. While a great deal of effort has gone into these cainpaigns, donations have
not increased substantially. As a result, staff believes that additional steps are warranted to
supplement the eYisting donations.
To avoid future shortages in funding for those custoiners in need, staff recoininends allocating
$75,000 in 2011 to meet the previously mentioned demand. Tlus amount will be in addition to
the donations that are received from customers for the PLUS One program. Funire aiuiual
allocations may fluctuate based on customer need, and as a result, staff will reevaluate the
allocation amount each year. The recent increase in late payment penalties from $10 to $20 will
provide the additional revenue used in tlus allocation. lii addition, $10,000 will be allocated to
liiterfaith Miiustries each year for the ongoing cost of resources and capital necessary to handle
the increased customer volume.
Agenda liiformation Sheet
April 5, 2011
PLUS One Program
Page 2
Staff recommends approval of an agreement with liiterfaith Miiustries in an amount not to
exceed $85,000. Included in this amount is $75,000 in funding to be administered through the
P.L.U.S. One prograin as well as $10,000 for additional adininistrative costs. The $75,000
allocation will be used to pay eligible eYpenses for qualifying customers. If the demand for these
services is siguficantly lugher than what is projected tlus year, the City Council may elect to
amend the level of funding in the budget. However, based on prior trends, staff is confident that
the level of fundin~ proposed will meet current demands.
Since tlus is a new prograin, staff recommends oiily a one year agreement. Following the iiutial
term, funding levels may be adjusted, and in addition, staff may consider an RFP for future
agreements beyond the initial year. If the City Council approves the provided Ordinance and
Service Agreement, staff will implement policy and procedural changes as outlined in the
Service Agreement begiiuung April 6, 2011.
RECOMMENDATION
Staff recommends the approval of the attached Ordinance and Service Agreement to increase
funding to the P.L.U. S. One program.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
The P.L.U. S. One prograin was iiutiated by Denton Muiucipal Electric and approved by the City
Council in 1983. liiterfaith Miiustries partnered with the City of Denton to admiiuster the
program in 1998.
On January 24, 2011, the Public Utility Board recommended implementation of the proposed
strategy and the allocation of late fee revenue to liiterfaith Miiustries to be admiiustered through
the P.L.U. S. One program.
On Febniary 15, 21011, the City Council recommended implementation of the proposed strategy
and the allocation of late fee revenue to liiterfaith Miiustries to be admiiustered through the
P.L.U.S. One program.
On March ?8, 21011, the Public Utility Board recommended tlus item for approval (4-0).
FISCAL INFORMATION
Deinand for charitable assistance toward utility invoices exceeded $56,834 in 2009 and $81,900
in 2010. $75,000 in Denton Muiucipal Utility late fee revenue will be allocated to liiterfaith
Miiustries to admiiuster through the P.L.U.S. One program. An additional $10,000 will be
allocated to cover the operational costs of administerin~ the additional fundin~.
Agenda liiformation Sheet
April 5, 2011
PLUS One Program
Page 3
EXHIBITS
1. Ordinance
Service Agreement
Respectfully submitted:
~
Bryan Langley
Chief Financial Officer
Prepared by:
Ethan C oY
Custoiner Service Manager
ORDINANCE NO. 2011-
AN ORDINANCE OF THE COUNCIL OF THE CITY OF DENTON, TEXAS ACCEPTING A
PROPOSAL AND AWARDING A CONTRACT FOR A UTILITY ASSISTANCE PROGRAM
FOR LOW-1NCOME HOUSEHOLDS TO 1NTERFAITH MINISTRIES IN AN AMOUNT NOT
TO EXCEED $85,000; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Manager has reviewed the proposal of Interfaith Ministries regarding a
Utility Assistance Program lcnown as the PLUS ONE Program which provides for utility assistance
for low-income households; and hereby recommends that the proposal of Interfaith Ministries is
appropriate for the administration of the Utility Assistance Program in the City, as proposed and
subinitted;and
WHEREAS, funding for the Utility Assistance Program will be provided by: (1) charitable
contributions made to the PLUS ONE program by citizens and (2) by an allocable poi-tion ofDenton
Municipal Utilities late payment penalty funds contributed to the Utility Trust Fund to be
determined by the City of Denton on a regular basis,
WHEREAS, the proposal of Interfaith Ministries approved herein shall be the successor to
the existing PLUS ONE Program, which is also administered by Interfaith Ministries; the Council
finds that this program is and will be beneficial to utility ratepayers and in the best interest of its
citizens; NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAlNS:
SECTION 1. The recitations contained in the preamble hereto are incorporated herewith for
all putposes.
SECTION 2. The City Manager is hereby authorized to execute and accept the "2010-2011
Service Agreement between the City of Denton and Interfaith Ministries" ("Agreement") for the
administration of the Utility Assistance Program for such services, which proposal is attached hereto
and is incoiporated herewith by reference
SECTION 3. By the approval and acceptance of the above Agreement, the City accepts the
offer of Interfaith Ministries, and agrees to fund the services in accordance with the terms and
standards as set forth in the Agreement.
SECTION 4. By the acceptance and approval of the above Agreement, the City Council
hereby authorizes the expenditure of funds therefore, in accordance with the Agreement.
SECTION 5. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
,
t ~
By:
2010-2011
SERVICE AGREEMENT BETWEEN
THE CITY OF DENTON, TEXAS AND
INTERFAITH MINISTRIES
This Agreement is made and entered into by and between the City of Denton, a
Texas municipal corporation, acting by and through its City Manager, pursuant to
ordinance, hereinafter refer7ed to as CITY, and Interfaith Ministries, 1109 North Elm,
Denton, TX 76201 a Texas non-profit corporation, hereinafter referred to as
CONTRACTOR.
WHEREAS, CITY has received certain charitable contributions and allocated a
portion of late payment penalty funds to help utility customers who face termination of
services due to financial hardship through the Utility Assistance Program; and
WHEREAS, CITY wishes to engage CONTRACTOR to cai7y out such project;
NOW, THEREFORE, the parties hereto agree, and by the execution hereof are
bound to the mutual obligations and to the performance and accomplishment of the
conditions hereinafter described.
1. TERM
This Agreement shall commence on or as of Apri15, 2011, and shall terminate on
Apri14, 2012, unless sooner terminated in accordance with Section 22 "Termination". A
two-year extension of the agreement may be granted upon approval of both
CONTRACTOR and CITY.
2. RESPONSIBILITIES
CONTRACTOR hereby accepts the responsibility for the performance of all
services and activities described in the Utility Assistance Program Guidelines attached
hereto as Exhibit A, and incorporated herein by reference, in a satisfactory and efficient
manner as determined by CITY, in accordance with the terms herein. CITY will consider
CONTRACTOR's executive officer to be CONTRACTOR's representative responsible
for the management of all contractual matters pertaining hereto, unless written
notification to the contrary is received from CONTRACTOR, and approved by CITY.
The CITY's Community Development Administrator will be CITY's
representative responsible for the administration of this Agreement.
3. CITY'S OBLIGATION
A. Limit of Liability. On a monthly basis, CITY will initially provide
CONTRACTOR with a set amount of funding equal to or less than the
amount of funding CITY has available in the Utility Assistance Trust Fund
Page 1 of 18
account. The Utility Assistance trust account holds funds that have been
contributed by citizens. Supplemental funding will be provided by CITY
using funds received through the collection of late payment penalties. The
amount of late payment penalty funds to be provided by CITY will be
determined by staff based on community needs as reported by
CONTRACTOR. The City Council will review the annual funding levels, if
any, on an annual basis beginning in April 2011. The annual funding amount
to be provided to CONTRACTOR is $75,000 to be allocated at a rate of
$6,333.33 per calendar month during the term ending Apri14, 2012. Funds are
to be distributed by CONTRACTOR to those utility customers who meet the
criteria of the Utility Assistance Program. On a quarterly basis, CITY will
review expenditure documentation and reconcile payments and expenditure
records. At any time, if CITY funds on hand are exhausted, CONTRACTOR
may submit additional payment requests to CITY. If excess funds are on hand
at the time of the annual review, CITY may elect to decrease the next year's
funding by the amount in reserve.
B. Measure of Liability. In consideration of full and satisfactory services and
activities hereunder by CONTRACTOR, CITY agrees that CONTRACTOR
can recover administrative costs from the funds subject to the limitations and
provisions set forth in this Section and Section 9 of this agreement.
(1) The parties expressly understand and agree that CITY's obligations under
this Section are contingent upon the actual receipt of contributions from
the utility customers of the CITY as well as the annual approval by the
City Council to allocate funds collected for late payment penalties. If
there are no contributions in the Utility Assistance trust fund account or
the allocation of late payment penalty funds changes for any month, CITY
shall notify CONTRACTOR in writing within a reasonable time after such
facts have been determined. Changes to contributions or funding for any
particular month shall not make the CITY liable for any costs that the
CONTRACTOR may incur for the adininistration of the Utility Assistance
program.
(2) It is expressly understood that this Agreement in no way obligates the
General Fund or any other monies or credits of the City of Denton.
(3) CITY shall not be obligated or liable under this Agreement to any party
for providing funds or provision of any goods or seivices other than to
CONTRACTOR.
4. COMPLIANCE WITH FEDERAL,
STATE and LOCAL LAWS
CONTRACTOR shall comply with all applicable federal laws, laws of the State
of Texas and ordinances of the City of Denton.
Page 2 of 18
5. REPRESENTATIONS
A. CONTRACTOR assures and guarantees that it possesses the legal authority,
pursuant to any proper, appropriate and official motion, resolution or action
passed or taken, to enter into this Agreement.
B. The person or persons signing and executing this Agreement on behalf of
CONTRACTOR, do hereby warrant and guarantee that he, she, or they have
been fully authorized by CONTRACTOR to execute this Agreement on behalf
of CONTRACTOR and to validly and legally bind CONTRACTOR to all
terms, performances and provisions herein set forth.
C. CITY shall have the right, at its option, to either temporarily suspend or
permanently terminate this Agreement if there is a dispute as to the legal
authority of either CONTRACTOR or the person signing the Agreement to
enter into this Agreement. CONTRACTOR is liable to CITY for any money it
has received from CITY for performance of the provisions of this Agreement
if CITY has suspended or terminated this Agreement for the reasons
enumerated in this Section.
D. CONTRACTOR agrees that the funds and resources provided
CONTRACTOR under the terms of this Agreement will in no way be
substituted for funds and resources from other sources, nor in any way serve
to reduce the resources, services, or other benefits which would have been
available to, or provided through, CONTRACTOR had this Agreement not
been executed.
6. PERFORMANCE BY CONTRACTOR
CONTRACTOR will provide, oversee, administer, and carry out all of the
activities and sei-vices set out in the Utility Assistance Program guidelines, attached
hereto and incorporated herein for all purposes as Exhibit A, and in accordance with all
other teims, provisions and requirements of this Agreement.
No modifications or alterations may be made in the Utility Assistance Program's
guidelines without the prior written approval of the CITY.
7. WARRANTIES
CONTRACTOR represents and wai7ants that:
A. All information, reports and data heretofore or hereafter requested by CITY
and furnished to CITY, are complete and accurate as of the date shown on the
infor7nation, data, or report, and, since that date, have not undergone any
significant change without vvritten notice to CITY.
B. Any supporting financial statements heretofore requested by CITY and
fuinished to CITY, are complete, accurate and fairly reflect the financial
Page 3 of 18
condition of CONTRACTOR on the date shown on said report, and the results
of the operation for the period covered by the report, and that since said date,
there has been no material change, adverse or otherwise, in the financial
condition of CONTRACTOR.
C. No litigation or legal proceedings are presently pending or threatened against
CONTRACTOR.
D. None of the provisions herein contravenes or is in conflict with the authority
under which CONTRACTOR is doing business or with the provisions of any
existing indenture or agreement of CONTRACTOR.
E. CONTRACTOR has the power to enter into this Agreement and accept
payinents hereunder, and has taken all necessary action to authorize such
acceptance under the terms and conditions of this Agreement.
F. None of the assets of CONTRACTOR is subject to any lien or encumbrance
of any character, except for current taxes not delinquent, except as shown in
the financial statements furnished by CONTRACTOR to CITY.
Each of these representations and warranties shall be continuing and shall be
deemed to have been repeated by the submission of each request for payment.
8. COVENANTS
A. During the period of time that payment may be made hereunder and so long as
any payments remain unliquidated, CONTRACTOR shall not:
(1) Use the funds provided for any use other than those provided for in the
Utility Assistance Program guidelines.
9. ALLOWABLE COSTS
A. Costs shall be considered allowable only if incurred directly and specifically
in the performance of and in compliance with this Agreement.
B. CITY's prior vvritten authorization is required in order for the following to be
considered allowable costs:
(1) CITY shall not be obligated to any third parties, including any
subcontractors of CONTRACTOR, and CITY funds shall not be used to
pay for any contract service extending beyond the expiration of this
Agreement.
(2) Out of town travel of CONTRACTOR.
(3) Any alterations or relocation of the facilities on and in which the activities
specified in Exhibit A are conducted.
Page 4 of 18
(4) Costs. or fees for temporary employees or services.
(5) Any fees or payments for consultant services payable to CONTRACTOR
or CONTRACTOR'S Consultants.
(6) Fees for attending out of town meetings, seminars or conferences.
Written requests for prior approval are CONTRACTOR's responsibility and shall
be made within sufficient time to permit a thorough review by CITY. CONTRACTOR
must obtain written approval by CITY prior to the commencement of procedures to
solicit or purchase services, equipment, or real or personal property. Any procurement or
purchase which may be approved under the terms of this Agreement must be conducted
in its entirety in accordance with the provisions of this Agreement.
A. Program administration costs recovered monthly by CONTRACTOR for
Utility Service Trust Funds made available by City equal to $14,000.00 per
calendar year, shall be paid at the rate of $1166.67 per calendar month during
the term ending Apri14, 2012.
10. MAINTENANCE OF RECORDS
A. CONTRACTOR agrees to maintain written records that will provide accurate,
current, separate, and complete disclosure of the status of the funds received
under this Agreement, in compliance with the provisions of this Agreement
and the Utility Assistance Program Guidelines, and with any other applicable
Federal and State regulations establishing standards for financial management.
CONTRACTOR's record system shall contain sufficient documentation to
provide in detail full support and justification for each expenditure. Nothing in
this Section shall be construed to relieve CONTRACTOR of fiscal
accountability and liability under any other provision of this Agreement or
any applicable law. CONTRACTOR shall include the substance of this
provision in all subcontracts.
B. CONTRACTOR agrees to retain all books, records, documents, reports, and
vvritten accounting procedures pertaining to the operation of programs and
expenditures of funds under this Agreement for a period of four years
following completion of the plan year.
C. Nothing in the above subsections shall be construed to relieve
CONTRACTOR of responsibility for retaining accurate and current records
which clearly reflect the level and benefit of services provided under this
Agreement.
D. Notwithstanding any other provisions of this Agreement or Utility Assistance
Progiam guidelines, at any reasonable time and as often as CITY may deem
necessary, the CONTRACTOR shall make available to, all of its records
pertaining solely to the matters only dealing with this Agreement, and not
Page5of18
otherwise and shall permit CITY, or any of its authorized representatives to
audit, examine, malce excerpts and copies of such records, and to conduct
audits of all contracts, invoices, materials, payrolls, records of personnel,
conditions or employment and all other data requested by said representatives.
11. REPORTS AND INFORMATION
At such times and in such form as CITY may require, CONTRACTOR shall
furnish such statements, records, data and information as CITY may request and deem
pertinent to matters covered by this Agreement.
Unless a written exemption has been granted by the CITY, CONTRACTOR shall
submit the most recent yearly audit conducted by independent examiners within ten (10)
days after receipt of such request from the examiners.
12. MONITORING AND EVALUATION
A. CITY shall perform on-site monitoring of CONTRACTOR's performances
under this Agxeement.
B. CONTRACTOR agrees that CITY may cany out monitoring and evaluation
activities to ensure adherence by CONTRACTOR to the Utility Assistance
Program guidelines which are attached hereto as Exhibit A, as well as other
provisions of this Agreement.
C. CONTRACTOR agrees to cooperate fully with CITY in the development,
implementation and maintenance of record-keeping systems and to provide
data deter7nined by CITY to be necessary for CITY to effectively fulfill its
monitoring and evaluation responsibilities.
D. CONTRACTOR agrees to cooperate in such a way so as not to obstruct or
delay CITY in such monitoring and to designate one of its staff to coordinate
the monitoring process as requested by CITY staff.
E. After each official monitoring visit, CITY shall provide CONTRACTOR with
a written report of monitoring findings.
F. CONTRACTOR shall submit copies of any fiscal, management, or audit
reports by any of CONTRACTOR's funding or regulatory bodies to CITY
within ten (10) days of receipt of each by CONTRACTOR.
13. DIRECTORS' MEETINGS
During the terms of this Agreement, CONTRACTOR shall cause to be delivered
to CITY copies of all notices of ineetings of its Board of Directors, setting forth the tiine
and place thereo£ Such notice shall be delivered to CITY in a timely manner, not less
Page6of18
than 72 hours prior to the meeting time, to give adequate notice, and shall include an
agenda and a brief description of the matters to be discussed. CONTRACTOR
understands and agrees that CITY representatives shall be afforded access to all of the
Board of Directors' meetings.
Minutes of all meetings of CONTRACTOR's governing body shall be available
to CITY within ten (10) working days of approval.
14. INSURANCE
A. CONTRACTOR shall observe sound business practices with respect to
providing such bonding and insurance as would provide adequate coverage for
services offered under this Agreement. CONTRACTOR shall be allowed a
reasonable time to obtain such insurance and bonding from the time of the
signing of the contract.
B. The premises on and in which the activities described in Exhibit A are
conducted, and the employees conducting these activities, shall be covered by
premise liability insurance, commonly referred to as "Owner/Tenant"
coverage with CITY named as an additional insured, within a reasonable time
of signing the contract. Upon request of CONTRACTOR, CITY may, at its
sole discretion, approve alternate insurance coverage arrangements.
C. CONTRACTOR will comply with applicable worlcers' compensation statu-es
and will obtain employers' liability coverage where available and other
appropriate liability coverage for program participants, if applicable.
D. CONTRACTOR will maintain adequate and continuous liability insurance on
all vehicles owned, leased or operated by CONTRACTOR. All employees of
CONTRACTOR who are required to drive a vehicle in the normal scope and
course of their employment must possess a valid Texas driver's license and
automobile liability insurance in the amounts and coverage required by law.
Evidence of the employee's current possession of a valid license and
insurance must be maintained on a current basis in CONTRACTOR's files.
E. Actual losses not covered by insurance as required by this Section are not
allowable costs under this Agreement, and remain the sole responsibility of
CONTRACTOR.
F. The policy or policies of insurance shall contain a clause which requires that
City and Contractor be notified in writing of any cancellation of change in the
policy at least thirty (30) days prior to such change or cancellation.
15. EQUAL OPPORTUNITY
A. CONTRACTOR shall comply with all applicable equal employment
opportunity and affirmative action laws or regulations.
Page 7 of 18
B. CONTRACTOR will furnish all information and reports requested by the
CITY, and will permit access to its boolcs, records, and accounts for purposes
of investigation to ascertain compliance with local, state and Federal rules and
regulations.
C. In the event of CONTRACTOR's non-compliance with the non-
discrimination requirements, CITY may cancel or terminate the Agreement in
whole or in part, and CONTRACTOR may be barred from further contracts
with CITY.
16. PERSONNEL POLICIES
Personnel policies shall be established by CONTRACTOR and shall be available
for examination. Such personnel policies shall:
A. Be consistent with CITY's personnel policies, procedures, and practices,
including policies with respect to employment, salary and wage rates, working
hours and holidays, fringe benefits, vacation and siclc leave privileges, and
travel, unless exceptions are approved in advance, by CITY; and
B. Be in writing and shall be approved by the governing body of
CONTRACTOR and by CITY. '
17. CONFLICT OF INTEREST
A. CONTRACTOR covenants that neither it nor any member of its governing
body presently has any interest, direct or indirect, which would conflict in any
manner or degt•ee with the performance of services required to be performed
under this Agreement. CONTRACTOR further covenants that in the
performance of this Agreement, no person having such interest shall be
employed or appointed as a member of its governing body.
B. CONTRACTOR fui-ther covenants that no member of its governing body or
its staff, subcontractors or employees shall possess any interest in or use his
position for a puipose that is or gives the appearance of being motivated by
desire for private gain for himself, or others, particularly those with which he
has family, business, or other ties.
C. No officer, member, or employee of CITY and no member of its governing
body, and no member of the Public Utility Board who exercises any function
or responsibilities in the review or approval of the undertalcing or carrying out
of this Agreement shall (1) participate in any decision relating to the
Agreement which affects his personal interest or the interest in any
corporation, partnership, or association in which he has direct or indirect
interest; or (2) have any interest, direct or indirect, in this Agreement or the
proceeds thereof.
Page8ofl8
18. NEPOTISM
CONTRACTOR shall not employ in any paid capacity any person who is a
member of the immediate family of any person who is currently employed by
CONTRA.CTOR, or is a member of CONTRACTOR's governing board. The term
"member of immediate family" includes: wife, husband, son, daughter, mother, father,
brother, sister, in-laws, aunt, uncle, nephew, niece, step-parent, step-child, half-brother
and half-sister.
19. PUBLICITY
A. Where such action is appropriate, CONTRACTOR shall publicize the
activities conducted by CONTRACTOR under this Agreement. In any and all
news releases, signs, brochures, or other advertising media, disseminating
information prepared or distributed by or for CONTRACTOR, the advertising
medium shall state that funding through the City of Denton has made the
project possible.
20. NON-RELIGIOUS ACTIVITIES
A. The CONTRACTOR will provide all services under this Agreement in a
manner that is exclusively non-religious in nature and scope. There shall be
no religious services, proselytizing, instruction or any other religious
preference, influence or discrimination in connection with providing the
services hereunder.
21. POLITICAL OR SECTARIAN ACTIVITY
A. None of the performance rendered hereunder shall involve, and no portion of
the funds received by CONTRACTOR hereunder shall be used, either directly
or indirectly, for any political activity (including, but not limited to, an
activity to further the election or defeat of any candidate for public office) or
any activity undertalcen to influence the passage, defeat or final content of
legislation.
B. None of the performance rendered hereunder shall involve, and no portion of
the funds received by CONTRACTOR hereunder shall be used for or applied
directly or indirectly to the construction, operation, maintenance or
administration, or be utilized so as to benefit in any manner any sectarian or
religious facility or activity, unless specifically authorized in writing by this
contract and ordinance authorizing Utility Assistance Program.
22. CHANGES AND AMENDMENTS
Page9of18
A. Any alterations, additions, or deletions to the terms of this Agreement shall be
by written amendment executed by both parties, except when the terms of this
Agreement expressly provide that another method shall be used.
B. CONTRACTOR may not make transfer from the funds provided in this
agreement to any other budget item or fund unless provided for in this
Agreement and Utility Assistance Program guidelines.
C. It is understood and agreed by the par-ties hereto that changes in the State,
Federal or local laws or regulations pursuant hereto may occur during the term
of this Agreement. Any such modifications are to be automatically
incorporated into this Agreement without written amendment hereto, and shall
become a pat~t of the Agreement on the effective date specified by the law or
regulation.
D. CITY may, from time to time during the term of the Agreement, request
changes in Exhibit A. Such changes shall be incorporated in a written
amendment hereto, as provided in Subsection A of this Section.
E. CONTRACTOR agrees to notify CITY in writing of any proposed change in
physical location for work performed under this Agreement at least thirty (30)
calendar days in advance of the change.
F. CONTRACTOR shall notify CITY of any and all changes in personnel or
governing board composition.
G. It is expressly understood that neither the performance of Exhibit A for any
program contracted hereunder nor the transfer of funds between or among said
programs will be permitted.
23. SUSPENSION OF FUNDING
Upon detei7nination by CITY of CONTRACTOR's failure to timely and properly
perform each of the requirements, time conditions and duties provided herein, CITY,
without limiting any rights it may otherwise have, may, at its discretion, and upon ten
(10) worlcing days written notice to CONTRACTOR, withhold further payments to
CONTRACTOR. Such notice may be given by mail to the Executive Officer and the
Board of Directors of CONTRACTOR. The notice shall set forth the default or failure
alleged, and the action required for cure.
The period of such suspension shall be of such duration as is appropriate to
accomplish corTective action, but in no event shall it exceed thirty (30) calendar days. At
the end of the suspension period, if CITY determines the default or deficiency has been
satisfied, CONTRACTOR may be restored to full compliance status and paid all eligible
funds withheld or impounded during the suspension period. If however, CITY determines
that CONTRACTOR has not come into compliance, the provisions of SECTION 24 may
be effectuated.
Page 10 of 18
24. TERMINATION
A. CITY may terminate this Agreement for cause under any of the following
reasons or for other reasons not specifically enumerated in this paragraph:
(1) CONTRACTOR's failure to attain compliance during any prescribed
period of suspension as provided in Section 21; or
(2) CONTRACTOR's violation of covenants, agreements or guarantees of
this Agreement; or
(3) Finding by CITY that CONTRACTOR:
a) is in such unsatisfactory financial condition as to endanger
performance under this Agreement; or
b) is delinquent in payment of taxes, or of costs of performance of
this Agreement in the ordinary course of business; or
(4) Appointment of a trustee, receiver or liquidator for all or substantial par-t
of CONTRACTOR's property, or the institution of bankruptcy,
reorganization, rearrangement of, or liquidation proceedings by or against
CONTRACTOR; or
(5) The commission by CONTRACTOR of an act of bankruptcy; or
(6) CONTRACTOR's violation of any law or regulation to which
CONTRACTOR is bound or shall be bound under the terms of the
Agreement.
CITY shall promptly notify CONTRACTOR in writing af the decision to
terminate and the effective date of terrnination. CONTRACTOR will refund any funds
not yet distributed less any administrative cost allowed by this Agreement within thirty
(30) days receipt of written notice of termination.
B. CITY may terminate this Agreement for convenience at any time. If this
Agreement is terminated by CITY for convenience, the termination shall be
made effective by the CITY giving written notice to the CONTRACTOR.
C. CONTRACTOR may terminate this Agreement in whole or in part by written
notice to CITY, if a ter-rnination of outside funding occurs upon which
CONTRACTOR depends for performance hereunder. CONTRACTOR may
teirninate this Agreement upon the dissolution of CONTRACTOR's
organization not occasioned by a breach of this Agreement.
D. Upon receipt of notice to terminate by CITY or by ter7nination of contract
under subsection C of this paragraph, CONTRACTOR shall return any funds
Page 11 of 18
not yet distributed less any administrative costs allowed by this Agreement,
within thirty (30) days of the termination.
E. Notwithstanding any exercise by CITY of its right of suspension or termination,
CONTRACTOR shall not be relieved of liability to CITY for damages sustained
by CITY by virtue of any breach of the Agreement by CONTRACTOR.
25. NOTIFICATION OF ACTION BROUGHT
In the event that any claim, demand, suit or other action is made or brought by
any person(s), firm corporation or other entity against CONTRACTOR, CONTRACTOR
shall give written notice thereof to CITY within two (2) working days after being notified
of such claim, demand, suit or other action. Such notice shall state the date and hour of
notification of any such claim, demand, suit or other action; the names and addresses of
the person(s), firm, corporation or other entity making such claim, or that instituted or
threatened to institute any type of action or proceeding; the basis of such claim, action or
proceeding; and the name of any person(s) against whom such claim is being made or
tlueatened. Such written notice shall be delivered either personally, by e-mail or by mail.
26. INDEMNIFICATION
A. It is expressly understood and agreed by both parties hereto that CITY is
contracting with CONTRACTOR as an independent contractor and that as
such, CONTRACTOR shall save and hold CITY, its officers, agents and
employees harmless from all loss or liability of any nature or kind, including
costs and expenses for, or on account of, any claims, audit exceptions,
demands, suits or damages of any character whatsoever resulting in whole or
in part from the performance or omission of any employee, agent or
representative of CONTRACTOR.
B. CONTRACTOR agrees to provide the defense for, and to indemnify and hold
harmless CITY its agents, employees, or contractors from any and all claims,
suits, causes of action, demands, damages, losses, attoiney fees, expenses, and
liability arising out of the use of these contracted funds and program
administration and implementation except to the extent caused by the willful
act or omission of CITY, its agents, employees, or contractors.
27. MISCELLANEOUS
A. CONTRACTOR shall not transfer, pledge or otherwise assign this Agreement
or any interest therein, or any claim arising thereunder, to any party or parties,
company or other institution without the prior written approval of CITY.
B. If any provision of this Agreement is held to be invalid, illegal, or
unenforceable, the remaining provisions shall remain in full force and effect
and continue to conform to the original intent of both parties hereto.
Page 12 of 18
C. In no event shall any payment to CONTRACTOR hereunder, or any other act
or failure of CITY to insist in any one or more instances upon the terms and
conditions of this Agreement constitute or be construed in any way to be a
waiver by CITY of any breach of covenant or default which may then or
subsequently be committed by CONTRACTOR. Neither shall such payment,
act, or omission in any manner impair or prejudice any right, power, privilege,
or remedy available to CITY to enforce its rights hereunder, which rights,
powers, privileges, or remedies are always specifically preserved. No
representative or agent of CITY may waive the effect of this provision.
D. This Agreement, together with referenced exhibits and attachments,
constitutes the entire agreement between the parties hereto, and. any prior
agreement, assertion, statement, understanding or other commitment
antecedent to this Agreement, whether written or oral, shall have no force or
effect whatsoever; nor shall an agreement, assertion, statement, understanding,
or other commitment occurring during the tei7n of this Agreement, or
subsequent thereto, have any legal force or effect whatsoever, unless properly
executed in writing, and if appropriate, recorded as an amendment of this
Agreement.
E. In the event any disagreement or dispute should arise between the parties
hereto pertaining to the inteipretation or meaning of any part of this
Agreement or its governing rules, codes, laws, ordinances or regulations,
CITY will have the final authority to render or to secure an interpretation.
F. For purposes of this Agreement, all official communications and notices
among the parties shall be deemed made if sent postage paid or hand-
delivered to the parties at the address set forth below:
TO CITY:
TO CONTRACTOR:
Community Development Administrator Condell Garden, Exec. Director
City of Denton Interfaith Ministries
101 South Locust Ste 500 109 West Sycamore St
Denton, Texas 76205 Denton Texas 76201
G. This Agreement shall be inteipreted in accordance with the laws of the State
of Texas and exclusive venue of any litigation concerning this Agreement
shall be in a court of competent jurisdiction sitting in Denton County, Texas.
IN WITNESS WHEREOF this Agreement has been executed on this the
day of , 2011.
CITY OF DENTON, TEXAS
A Texas Municipal Coiporation
Pagel3ofl8
By:
GEORGE CAMPBELL, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FO
ANITA ~URGES S, CITY AT''OI'~EY
By:
~
1NTERFAITH MINISTRIES
By: Cmdd& & tl_L~c~ ~/D/ ;
CONDELL GARDEN `
EXECUTIVE DIRECTOR
ATTEST:
~
L
By:
BOAWD SECRETARY
Page 14 of 18
EXHIBIT A
UTILITY ASSISTANCE PROGRAM
GUIDELINES
This utility funding program is set up to encourage utility customers to add a monthly
contribution amount to their utility bill or payment. In addition, Denton Municipal
Utilities may from time-to-time allocate an agreed upon amount of late payment penalty
funds to supplement customer donations. The funds will be used to provide financial
assistance to utility customers experiencing financial hardship and whose service is
pending termination or has been terminated for reason of non-payment. These funds are
first collected by the City of Denton and placed in a special Trust Fund designated solely
for this utility assistance program. The City of Denton then disburses the funds on a
monthly basis to the CONTRACTOR, who administers the program.
A. The following guidelines will apply to the use of Program funds to provide assistance:
1. Qualifying Denton Municipal Utility customers will be eligible for only
one payment during a twelve-month period, unless otherwise qualified and
designated as an extreme hardship.
2. Persons receiving assistance must be a City of Denton residential service
customer and have received a statement that reflects a previous balance,
indicating that the customer's utility service is in jeopardy of
disconnection.
3. Assistance may be used for short-term crisis intervention to restore or
maintain utility service.
4. Apparent consistent excessive utility usage will be a negative factor in
determining eligibility. These cases will be referred to the City of Denton
department for review prior to considering and/or providing Program
assistance.
5. The overall financial resources available to the applicant will be
considered in determining eligibility.
6. Program assistance will be in the foirn of payment inade or obligated to
the City of Denton for Denton Municipal Utility service only. There will
no disbursements other than to the City of Denton, Texas by
CONTRACTOR.
7. Priority will be given to households whose circumstances are as follows:
Page 15 of 18
a. Gross family income 65% or less of Area Median Income (AMI).
b. Electricity powered life-support systems are in use.
c. Serious illness exists with a member of the household.
d. Disabled or homebound or elderly residents age 65 years or above,
existing on a fixed income.
e. Small children of that household reside at the dwelling.
£ Recent emergencies such as home fire, layoffs from worlc, excessive
medical expenses, etc., have occurred and are beyond the applicant's
control.
8. Preferences will be given to families that meet the income guidelines, have
resided in Denton for at least six (6) months, and families who have not
received utility assistance within twelve months of the current application.
9. Although income is not the only criteria for determining eligibility, it will
seive as a strong indicator of need and ability to pay. All requests will be
treated on a case-by-case basis.
B. Following are the current guidelines for Program administration:
l. CONTRACTOR is required to provide monthly or quarterly financial
and/or beneficiary reports to the CITY and give a Program accounting to
the Public Utilities Board, not less than once per year if requested. The
annual report for the preceding calendar year shall be delivered to the
CITY no later than February 1, of each subsequent year that this
Agreement is in effect.
2. A portion of Program funds may be used to help cover Program
administration costs not-to-exceed the amount of the bid.
3. It is the responsibility of the Utilities Customer Service Depailment to
obtain the dollar amount donated by customers each month and deposit in
the Trust Fund. The Department shall also report the total amount of late
charges collected for the preceding month for accounting purposes.
4. The Community Development Division will provide the Contractor with
necessary infoirnation to allow the Contractor to provide Program
services.
C. Denial of Utility Assistance Trust Funds ("Trust Funds") to utility customer:
Page 16 of 18
Except in designated cases of "extreme hardship", the guidelines for the
distribution, use and administration of the Utility Assistance Trust Funds
provided by the City shall be distributed and or applied under these utility
assistance program guidelines.
2. In the event the Contractor does not approve the distribution or use of
Trust Funds to a utility customer and the customer requests a review and
or appeal of the denial, the Contractor shall first have the right to require a
written request from the customer in accordance with cunent policy
guidelines as may be established from time to time by the Board of
Directors of the Contractor.
3. In the event the Contractor does not approve the distribution or use of
Trust Funds to a utility customer after the review and or appeal of the
denial, the Contractor shall provide customer with a copy of this EXHIBIT
"A" of the Service Agreement and identify the applicable guideline used
for denial of utility assistance.
4. Quarterly reports submitted by Contractor to the City will include
information on number of clients denied assistance and the various reasons
for denial.
Periodically or on a case-by-case basis, the City may request a copy of the
Contractor's review and/or appeal file established for puiposes of the
City's Utility Assistance Program.
Page 17 of 18
EXHIBIT B
Qualifying Income Limits for Utility Assistance Program
Maximum Income Levels
Family
Size
1
2
3
4
5
6
7
8
Source:
Low Income
65% AMI - 50% AMI
$31,135 - $23,950
$35,555 - $27,350
$39,975 - $30,750
$44,395 - $34,150
$47,970 - $36,900
$51,545 - $39,650
$55,055 - $42,350
$58,630 - $45,100
$14,369 or Below
$16,409 or Below
$18,449 or Below
$20,489 or Below
$22,139 or Below
$23,789 or Below
$25,409 or Below
$27,059 or Below
U.S. Department of Housing and Urban Development
Very-Low Income
50% AMI - 30% AMI
$23,950 - $14,370
$27,350 - $16,410
$30,750 - $18,450
$34,150 - $20,490
$36,900 - $22,140
$39,650 - $23;790
$42,350 - $25,410
$45,100 - $27,060
Extremely-Low Income
<30% AM I
Effective: May 2010
Page 18 of 18
This page left blank intentionally.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Parlcs & Recreation
ACM: Fred Greene e`'r
SUBJECT
Consider a request for an eYCeption to the Noise Ordinance for the purpose of the Singing Oalcs
Church of Christ Coininunity Festival to be held on Sunday, May 22, 2011, froin 4:00 p.in. to
9:00 p.m. The event will be held in the church parlcing lot located at 101 Cardinal Drive. The
requestor is specifically aslcing for an eYCeption to the noise ordinance to allow amplified sound
on Sunday. An increase in decibels will not be needed. Staff recommends approval of the
request.
BACKGROUND
The Singing Oaks Church of Christ Church is hosting their fourth annual Community Festival
with food, bounce houses, games, and activities for all ages. The proceeds from the cariuval will
go to help Lee Elementary and Thomas Rivera Elementary Schools. The festival will include
amplified music for five hours on Sunday.
The church faces the vacant Piggly Wiggly grocery store on McILiiuiey Street; the areas north
and west of the church consist maiiily of residential neighborhoods.
PRIOR ACTION/REVIEW
City Council approved previous requests for an exception to the noise ordinance for the festival
in 2007, 2009 and 2010; there was not a request in ?008.
RECOMMENDATION
Staff recoininends approval of the noise exception request and be allowed to have ainplified
sound on Sunday, May 22, 2011.
EYHIBITS
L Letter of Request
Respectfully Submitted:
~~0 wi~.
Emerson Vorel, Director
Parlcs and Recreation Departinent
Prepared by:
~ m
Jaiue McLeod
Coininunity Events Coordinator
This page left blank intentionally.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Parlcs atid Recreation
ACM: Fred Greene
SUBJECT
Consider a request for an eYCeption to the Noise Ordinance for the purpose of performing music
during the 2011 Relay for Life to be held at the University of North Texas Fouts Field beginning
at 3:00 p.m. on Saturday April 16, 2011, until 6:00 a.m. on Sunday, April 17, 2011. The request
is for a variance in decibels (dBs) for an outdoor concert from 70 to 75 dBs and for amplified
sound on Sunday unti16:00 a.m. Staff recommends approving the request.
BACKGROUND
Relay for Life sponsored by the American Cancer Society and gives everyone in communities a
chance to celebrate the lives of people who have battled cancer, remember loved ones lost, and
fight back against the disease. At the Relay, teams of people will camp out at Fouts Field and
talce turns wallcing or running around a traclc. Each teain is aslced to have a representative on the
traclc at all tiines during the event. Because cancer never sleeps, Relays are overnight events and
are up to 24-hours in length. lii past years, the event began on Saturday moriung and concluded
at midiught.
PRIOR ACTION/REVIEW (Council, Boards or Commission)
This is the second request from Relay for Life to host an overnight event. The 2010 request was
approved by City Council.
RECOMMENDATION
Staff recommends approving the noise eYCeption request.
EXHIBITS
1. Letter of Request
Respectfully submitted:
&',,'W.-- m - 0 .i~.
Emerson Vorel, Director
Parlcs and Recreation Departinent
Prepared by:
Coininunity Events Coordinator
* + /
♦
RELAY
FOR LIFE
2011 Relay For Life Denton TX
April 16, 3:00 p.m. - April 17, 6:00 a.m. at University of North
Texas
Janie -
As discussed, the 2011 Relay for Life in Denton will be an overnight event this
year. We will be at Fouts Field on the UNT campus from 3:00pm Saturday, April
16t' until 6:00am Sunday, April 17th.
Please cansider this my request for an exception to the City of Denton noise
ordinances for the event. While I don't anticipate any problems, I just want to
make sure we're covered. Nothing is expected to be over 75 decibels.
If you have questions or need additional infoRnation, please feel free to contact
me at 972.459.1419 or 940.367.0990 (cell).
Teresa Dillard
Logistics Chair, 2011 Denton Relay
Denton Relay for Life Home Page
http://main.aesevents.org/site/TR?pg=entry&fr-id=32325
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Parlcs atid Recreation
ACM: Fred Greene SUBJECT
Consider a request for an eYCeption to the Noise Ordinance for the purpose of the fourth Aiuiual
Beanstoclc Music Festival, sponsored by Cool Bean Bar and Grill. The event will be held at
Cool Beans, located at 1210 W. Hiclcory Street, on Saturday, April 16, 2011, be~innin~ at 12:00
p.m. and concluding at 12:00 a.m. The eYCeption is requested for eYtension of the hours of
operation for amplified sound. Staff recommends approving the request.
BACKGROUND
Cool Beans Restaurant has submitted a request for this annual event featuring live music
provided by several (8-10) local bands. The event will be held on Cool Bean's outside declc and
parlcing lot.
PRIOR ACTION/REVIEW (Council, Boards or Commissions)
City Council has approved the previous two exceptions to the noise ordinance requests for
extended hours and for an increase in decibels for this event.
An eYtension on the decibels was not requested atid will remain the allowable 70 decibels.
RECOMMENDATION
Staff recommends approving the request for the extension of the hours of operation for amplified
sound.
EYHIBITS
1. Letter of Request
Respectfully submitted by:
~ ~ owj~.
Emerson Vorel, Director
Parlcs and Recreation
Prepared By:
~ m (I 4ZCIQ
Janie McLeod
Commuiuty Events Coordinator
Ashton Maxwell/Martin Brunco
Cool Beans Bar and Grill
1210 W. Hickory 51:,,
Denton, TX 7620:1.
Community Events Coordinator
Attn: Janie McLeod
City of Denton, Parks and Recreation
601 E. Hickory St.
Denton, TX. 76201
Re: exception to City Noise Ordinance and Request for Amplified Sound
Ms. Janie McLeod,
Please accept this letter as an official request for an exception to the city's noise ordinance and request
for an elevation decimal of amplified sound (the level will not exceed 70 as well as for an exceeded
amount of time (hours of sound will run from 12pm until 12am ),for our event planned on Saturday,
April 16,2011.
On April 16, Cool Beans would like to host our 4`h annual music event named Beanstock. After last years'
success we would like to continue on the tradition of opening our facilities up to Denton musicians,
patrons, residents and visitors. Our intentions are to once again incorporate our existing parking lot for
use as one stage and guest area as well as our existing deck. We are hoping to invite between 8-10
musical groups to provide entertainment. While our set list of bands is not yet available, we wi{I provide
a list at a later time. We will not be blocking any major arteries/streets before, during or after our event.
Because of the nature of our existing business, we will be serving food and alcoholic beverages (to of
age members only)with a current identification card,and doors open only to those individuals of age
(21+). We will provide on-site security at all major entrances/ exits, as well as roaming throughout the
entire event. We will only be using word of mouth and local/in-house announcements this year for
advertising. We will as well be contacting TABC, Denton Fire Department, and any other organization
necessary in order to make this years' Beanstock another success.
In the past years we have been able to provide the community with a safe environment to celebrate all
genres of music together, it is our hope that we all can make this event once again a success and even
better then the last.
If there are any questions or concerns regarding the details and /or planning of this event, please
contact us:
Busi ness: 940-382-7025
Martin Bruno:
Cell: 940-390-5413
Rebecca Lovell:
Cell: 940-358-7308
Ashton Maxwell:
Cell: 940-597-9770
Sincerely,
Ashton Maxwell
.1'~0~'wA
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Parlcs and Recreation
;
ACM: Fred Greene
SUBJECT
Consider adoption of an ordinance of the City of Denton, TeYas, granting the Denton Festival
Foundation, pursuant to Section 17-20 of the Code of Ordinances of the City of Denton, Texas,
an exception to the limitations imposed by that section with respect to hours of operation of an
amplified loudspeaker system; and setting an effective date. Staff recommends approval of the
request.
BACKGROUND
Denton Festival Foundation is requesting a renewal of the three-year eYCeption to the noise
ordinance for the Denton Arts & Jazz Festival, an aiuiual outdoor music festival scheduled in
Quakertown Park on the last Friday and Saturday in April until 12:00 midnight, and on Sunday
from 11:00 a.m. to 10:00 p.m. If the exception is granted, the Denton Festival Foundation would
not have to request a noise eYCeption for the purpose of the Denton Arts & Jazz Festival until the
year ?013. Tlus is the Denton Festival Foundation's tlurd request for a three-year variance to the
noise ordinance.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
Ordinance No. 21008-050 granted a three-year eYCeption that eYpired at the end of 2010. If
approved, this would be the second approval for a three-year noise exception for this event. City
Council approved the 2005 and 2008 requests for a three-year variance to the noise ordinance.
FISCAL INFORMATION
None.
EYHIBITS
L Letter of Request from Denton Festival Foundation
2. Proposed Ordinance
Respectfully submitted:
Emerson Vorel
Director of Parlcs and Recreation
Prepared by:
.
Janie McLeod
Coininunity Events Coordinator
F I " ~~W ~ t.. ~ ~W~
zi
~
~
d e s €txv fn .J,~fe,.;;~, 4an:i
'Denwo ~I, F a:=-~I o w`a
rru n oa t , o ini, I.n c.
Fe~~Illar~ 1-1, 20 11
Mayor I~ark. Bffro~~~~hs
C`itv c~~~~~~~~~ ~~~~I'D~.~rs
~ 15 f McK~ ~ ~
Denton~ ~ ~ xa.~ 76201
~ear Mayoi° BUrrough> and City CO~c1116.1,
'Iyhe ~~~~~ton A~~~s & Jazz Fest:i.val iS I°e~~~ICSt~~~~g a 3-~eal~
~~xc~~~~~~~~~ to the Nc~is~ Or~~~~~~~nce, r~~~~~ ~~~~ivaI
~~i-c J,"riday, Api°il 2~-.~~ ~~It~~~-daNr, Apt°il e30 ~~~~id SLa~~~~~~~~~ Ma~,~
21011. 'I'Ii,~ ~~~~~~~~~~i would COVell° 2011, 20 12 ~~~id 2013,
~`e ~:~i-c i.e~~~~~~sting tiie ~~x~;epi.~~~:i..i. ex~.e~~d. tiriliI I~:~;~~0 iiii
~ . . _
l_~'~°~cl~~~~ Lijic~ ~;~:~t~.~i°~~~~7 ~ ~~~id oi°~ SL~~~iday fi{om ~ M ai'll
~~lltil e~~.~ ]XII.
Thank Yr~~~~ f~~~° ~~o~~ei ~°~~~~sk~~e~-ati~~~~. ~~~~~..~l° SLI~~~~~~r~: f~~~° t~~~:~
~~enton Arts a~~~~~ ~~~~~ivaI is ~;~ve~:~tl~ a~~~~~•e~.i~~l~:~~a
~~~~~~~~~ly,
~
~
Cam~ ShortT Dir~~lot°.
~8-`3-4418
"Ole e~6),e? weea,~e a Mr,`;; eW cra,zox ~r got
C( )D AD`(rlobalAgendas Neighborhood Svcs 21111 Agenda Items Apri121111 Apri11 5 - 21111 PARD Arts and Jazz Festival 4-5-11 3-()RD-
Arts Festival elemption from noise ordinancedoc
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, GRANTING THE DENTON
FESTIVAL FOLJNDATION, PURSUANT TO SECTION 17-20 OF THE CODE OF
ORDINANCES OF THE CITY OF DENTON, TEXAS, AN EXCEPTION TO THE
LIMITATIONS IlVIPOSED BY THAT SECTION WITH RESPECT TO HOURS OF
OPERATION OF AN AlVIl'LIFIED LOUDSPEAILER SYSTEM; AND SETTING AN
EFFECTIVE DATE.
WHEREAS, pursuant to §17-20 of the Code of Ordinances of the City of Denton, TeYas,
the Denton Festival Foundation has made application to the City Council for an exception to the
provision of that saine section restricting the operation of ainplified loudspealcers from Monday
through SatiLirday after 10:00 p.m. and at atiytime on Sunday, in comiection with the Denton Arts &
Jazz Festival aiuiual event held at the Qualcertown Parlc, atid in coiuiection with said request, has
requested the exception to be granted on an ongoing basis for said annual event at said location the
last weelcend in April, 2011 on Friday and Sahirday until 12:00 inidnight and on Sunday froin 11:00
a.m. until 10:00 p.m., and the last weekend in April, 21012 and 2013 on Friday and SatLirday until
12:00 midlught atid on Sunday from 11:00 a.m. until 10:00 p.m.; atid
WHEREAS, upon prior application and approval by the City Council of the City of Denton,
TeYas, the Denton Festival Foundation has consistently demonstrated over the past 16 years ati
ability to responsibly operate ai-nplified loudspeakers in comiection with the Denton Arts & Jazz
Festival annual event held at Quakertown Park, at times past the hours defined in §17-20 of the
Code of Ordinances of the City of Denton, Texas, within the public interest and without inaterially
disnirbing persons of ordinary sensibilities in the immediate viciiuty thereof; and
WHEREAS, based upon this past history, the City Council of the City of Denton, Texas
finds that granting an exception for this annual event on an ongoing basis, subject to the restrictions
contained herein, would serve the public interest; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. Pursuant to §17-210 of the Code of Ordinatices, the Denton Festival
Foundation is hereby granted ati eYCeption from said section's 10:00 p.m limitation from Monday
through Sahirday and prohibition on Sunday, upon the operation of ainplified loudspealcers, subject
to the conditions listed below:
1. Tlus eYCeption is gratited oiilv in coiuiection with the operation of the Denton Arts &
Jazz Festival annual event at the Qualcertown Parlc, on the last weelcend in April,
2011 on Friday and Saturday until 12:00 inidnight and on Sunday froin 11:00 a.in.
until 10:00 p.m., and the last weelcend in April, 210121 and 2013 on Friday atid
Saturday until 121:00 midiught and on Sunday from 11:00 a.m. until 10:00 p.m.
C( )D AD`(rlobalAgendas Neighborhood Svcs 21111 Agenda Items Apri121111 Apri11 5 - 21111 PARD Arts and Jazz Festival 4-5-11 3-()RD-
Arts Festival elemption from noise ordinancedoc
The Denton Festival Foundation agrees to talce fu11 responsibility for ensuring that
the conditions of this exception are met, and to take all reasonable measures
necessary to avoid dishirbing persons of ordinary sensibilities in the immediate
viciiuty of the event.
3. The Denton Festival Foundation agrees to cease using ainplified loudspealcers at
12:00 midnight on Friday and Saturday and 10:00 p.m. on Sunday.
4. Under no circumstatices shall the aiuiual event employ the use of ai-nplified
loudspealcers past 12:00 inidnight on Friday or Sahirday or before 11:00 a.in. or past
10:00 p.m. on Sunday.
5. Under no circumstatices shall the aiuiual event employ the use of ai-nplified
loudspealcers that exceed 70 dba when ineasured froin the periineter of the source as
ineasured by an approved ineasuring instniinent.
6. Tlus ordinance coiifers no personal or property rights, atid may be amended,
modified, superseded or revoked in whole or in part at the will of the City Council of
the City of Denton, Texas, without any advance warning, hearing or coinpensation,
for any reason at all, or for no reason.
7. This ordinance shall be strictly constnied as an exception (yranted pursuant to § 17-20
of the Code of Ordinances of the City of Denton, Texas. The City of Denton, Texas
eYpressly reserves unto itself and all other persons any alid all legal remedies, civil
or criminal, relating to eYCessive noise in coiuiection with tlus atuiual event, alid
hereby disclaims any promissory or equitable estoppel which mi"'ht in any way
impede the pursuit of such remedies by any person.
SECTION Tlus Ordinance shall become effective immediately upon its passage and
approval, and expire three years hence, unless sooner repealed, modified or rescinded.
PASSED AND APPROVED tlus the day of ,?011.
MARIL A. BLJRROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
Page 2 of 3
C( )D AD`(rlobalAgendas Neighborhood Svcs 21111 Agenda Items Apri121111 Apri11 5 - 21111 PARD Arts and Jazz Festival 4-5-11 3-()RD-
Arts Festival elemption from noise ordinancedoc
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
r
~
BY:
Page 3 of 3
This page left blank intentionally.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Parlcs atid Recreation
ACM: Fred Greene
SUBJECT
Consider approval of a resolution allowing La MeYicana to be the sole participant allowed to sell
alcoholic beverages at the Cinco de Mayo Celebration on May 7, 2011, upon certain conditions;
authorizin~ the City Mana~er or his desi~nee to execute an a~reement in conformity with this
resolution; and providing for an effective date. Parlcs, Recreation and Beautification Board
recommend approval with a vote of 5 to 0. Staff recommends approval of the request.
BACKGROUND
The Cinco de Mayo Committee, made up of commuiuty volunteers and City staff, voted to
support the sale of alcohol at the event for the twelfth consecutive year. La Mexicana Restaurant
was selected to be the sole proprietor of this product for this year's event and will be responsible
for rental of the booth space, obtaiiung the temporary license, and securing the temporary permit.
The annual Cinco de Mayo Celebration event, held in Quakertown Park, is a Hispanic cultural
festival co-sponsored by the City of Denton Parlcs and Recreation Departinent. The event nins
from 10:00 a.m. to 6:00 p.m. in the park and the activities include a parade, local vendors,
cluldren's activities and entertaiiunent. There is a dance held in the Civic Center begiiuung at
7:00 p.m. until midnight.
The event continues to eYperience growth each year through commuiuty participation and the
use of local vendors and entertaiiunent. Previous year's event hosted approYimately 12,000
participants with 50 vendors and two entertainment stages. This will be the twelfth year that
alcohol will be sold at this event. There have not been security issues at the previous events.
RECOMMENDATION
Staff recommends approval of the resolution and agreement as submitted, wluch is consistent
with agreements with other co-sponsored events.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
Parlcs, Recreation and Beautification Board recoininended approval on March 7, 2011 with a
vote of 5 to 0.
Agenda liiformation Sheet
Cinco de Mayo - Sale of Alcohol
April 5, 2011
Page 2
EYHIBITS
1. Letter of Request
2. Parlcs, Recreation and Beautification Board Minutes of March 7, 2011
3. Resolution
4. Quakertown Park Agreement
Respectfully submitted:
~~Owi~.
Emerson Vorel
Director of Parlcs and Recreation
Prepared By:
Jaiue McLeod
Commuiuty Events Coordinator
i co de y
March 16, 2011
To the Mayor and Members of the Ciiy Council:
The Cinco de Mayo committee is requesting permission to sell
alcohol at the 2011 Cinco de Mayo event to be held on May 7,
2011 . La Mexicaiia restal►rant will provide and sell alcohol for this
ever►i held in Quakertawn Park and the Civic Center.
Youi°s truly>
Julia LoSoya
2011 Ciiic;o de Mayo Chair
P.O. Box 1572 L7enton, TX 76202 www.dentoncinco.org
Par1Ls, Recreation and Beautification Board
Minutes
March 7, 2011
Civic Center Communitv Room
DRAFT
Members present: Viclci BN,-rd, Alei Lieban, Janet Shelton, Datire Rovdey, Jemiifer Wages
Members absent: Cuol Brantlev, Derriclc Murrav
Staff present: Emerson Vorel, Bob Ticlaier, Iiathy Schaeffer, Juii Mays, Maiy Aukerman, Jasue McLeod
REGULAR MEETING
1. CALL TO ORDER - Both the Chairperson and Vice Chair N-, ere absent, so the consensus N-, as that Vorel
conduct the meeting and he called the meeting to order at 6:()1 p.m.
2. APPROVAL OF MINUTES OF February 7, 2011 MEETING: Ro-,-, 1eN- pointed out that his naine had
been spelled incorrectly in item 7, vhich vdll be corrected. Rol-dey made a motion to approve the minutes
as corrected, Lieban seconded and the motion casried N-6th a vote of 5-0.
3. AWARDS AND RECOGNITIONS:
None.
4. ACTION ITEMS:
Request From La Mexicana Restaurant to Sell Alcoholic Beverages at Cinco de Mayo -
McLeod told the Board that the Cinco de Mayo committee has requested that La Mexicana
Restaurant to be the sole participant allowed to sell alcoholic beverages at the Cinco de
Mayo Celebration on Saturday, May 7, 21011. The Cinco de Mayo Celebration, wluch
PARD co-sponsors, is held in Qualcertown Parlc.
This is the twelfth consecutive year that, the Cinco de Mayo Committee supports the sale of
alcohol at the event. La MeYicana Restaurant was selected to be the sole supplier of
alcoholic beverages at the event and will be responsible for obtaiiung the temporary license
and securing the teinporary perinit. Rowley aslced why this particular restaurant was chosen,
McLeod pointed out that not many restaurants offer to sponsor this type of event because of
all the steps they have to go through.
Staff recommended approval of the request as submitted, wluch is consistent with other co-
sponsored events.
MOTION: Wages made the motion to recommend approving the request from La MeYicatia
Restauratit to sell alcoholic beverages at the Cinco de Mayo Celebration in Qualcertown Parlc
on May 7, 2011. Shelton seconded the inotion and it carried with a vote of 5-0.
5. DISCUSSION ITEMS:
A. Parks and Recreation Budget - ILathy Schaeffer gave a PowerPoint presentation to give
the Board a brief overview of the department's budget. Among the points discussed were
the difference between the General Fund and Rec Fund and the ineasures talcen to reduce the
budget in Leisure Services and Aquatics to meet the City's request for a 1% cut for all
departments. Durinb the summer months, the Aquatics and summer camps will fill in excess
of?00 temporaiy/seasonal positions, mainly fi-om the Rec Fund.
Mays tallced about measures taken by Park Maintenance to reduce their budt"et, includint"
the loss of overtime. Lieban wanted to laiow the affect on operations with the cut in
overtime. Mays eYplained that some maintenance has been deferred and that it will
ultimately result in some areas suffering because of the lack of attention. Two Park
Maintenance positions are bein~ funded by CIP dollars.
Orgaiuzation charts for the entire department were presented to give the Board the reporting
stnicture, the makeup of each area and the number of frozen vacant position. Shelton wanted
to 1u1ow if the vacancies are due to attrition. Vorel explained that each vacated position is
evaluated as to the criticalness of its fiinction in the orbanization on a case by case basis.
Issues for the'Ol 1-2012 FY include:
• Point of Sales System
• Pay to use gyms at DISD
On the bribht side, Sales Tax Revenues have been up fi-om last year
6. OTHER BUSINESS:
A. Parks Department Projects Status Report
Ticlcner updated the Board on various projects on the list, includin~
Deratora BT•arach Rail Tr•ail Br•iclge Pr•oject - Lots of under~round utilities around the site of
the piers is malcin~ their placement more difficult. Bids are planned for late June.
NeighborhooclPcrrk De.sigll - Bids will be open on 3/10/11 for the SPC Ernest W. Dallas Jr.
Memorial Parlc; Owsley Park will not begin until summer camps conclude, around Augnist
15th; atid Park Maintenance is worlcing on the sidewallcs at Wheeler Ridge.
C,o1TUTnwity Deivloplnew Block (iraw Projects for Parks - Waiting on final approvals alid
release of the funding. The sinall shelter at Marlc Park is being priced, Qualcertown Park
trail and ADA access is in desi~n, as is the MLIL parlcin~ lot for ADA compliance.
Nor•tli Lakes Par•k Softball C'onzl)lex Plc~ygrouracl- The equipment has been ordered.
B. Public Art Committee Meeting Minutes Draft - Vorel stated that the poems project was
pulled from the 3/1/ll City Council agenda but the issues have been resolved and it is ready to
go to Council.
There is ati RFP being written to put the mural on the east wall of the Center for Visual Arts.
7. FUTURE AGENDA ITEMS:
A. Shelton aslced that the Park Foundation be discussed at the next Park Board Meeting,
particularly the fund raisers atid how the funds are disbursed.
With no fiirther iteins on the agenda, Vorel aslced for a inotion to adjourn the ineeting. Rowley inade
the motion to adjourn, Byrd seconded and the meeting was adjourned at 6:55 p.m.
11C01)AD1DepartmentslL.egallOur pocumentslResotutionsl111Cinco De Mayo alcohol setl.doc
RESOLUTION NO.
A RESOLUTION ALLOWING LA MEXICANA TO BE THE SOLE PARTICIPANT
ALLOWED TO SELL ALCOHOLIC BEVERAGES AT THE CINCO DE MAYO
CELEBRATION ON MAY 7, 2011, UPON CERTAIN CONDITIONS; AUTHORIZING THE
CITY MANAGER OR HIS DESIGNEE TO EXECUTE AN AGREEMENT IN C4NFORMITY
WITH THIS RESOLUTION; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City of Denton ("City") is the owner of the Quakertown Paxk a,nd
through the Park and Recreations Department co-sponsors a Cinco De Mayo Celebration at the
Quakertown Park; and
WHEREAS, the consumption af alcaholic beverages is allowed in the Quakertawn Park
pursuant to City of Denton Code, §22-32 (b); and
WHEREAS, the City Council fnds that it is in the public interest to select only one
vendor of alcoholic bevexages at the Cinco De Mayo Celebration; and
WHEREAS, Diana Cruz, doing business as La Mexicana (called "La Mexicana"), has
requested that they be the sole participant a.llawed to sell alcaholic beverages at thxs year's Cinco
De Mayo Celebration on May 7, 201 1; and
WHEREAS, the Parks, Recreation, and Beautification Board has recommended that La
Mexicana be the sole participant allowed to sell alcoholic beverages at the Cinco De Mayo
Ceiebration; and
WHEREAS, the City agrees with the recornmendation of the Parks, Recreation, and
Beautification Board; NOW, THEREFORE,
THE COUNCIL OF THE CTTY OF DENTON HEREBY RESOLVES:
SECTION l. La Mexicana sha11 be the sale participant allowed to sell alcoholic
beverages at the Cinco De Mayo Celebration on May 7, 2011 at the Quakertown Park upan the
following conditions:
1. They shall be responsible to obtain the temporary license and
permit for selling alcoholic beverages approved by appropriate
state agency;
2. They shall provide the security necessary for the sale of alcoholic
beverages;
3. They shall provide general comprehensive liability insurance from
a responsible carrier, with the City as an additional insured, in the
amount of $500,000.00;
4. Liquor/Dram Shop Liability in the amount af $250,400 per
occurrence far any event occurring on City-owned praperty where
alcohol will be provided ar served;
Page 1 of 2
11C0BAD1DepartmentslT.ega110ur pocumentslResolutions1111Cinco De Mayo alcohol sell.doc
They agree ta indemnify the City of Denton against any liability
incident to the selling of alcoholic beverages at the Cxnco De Mayo
Ceiebration.
SECTION 2. The Czty Manager or his designee is authorized to execute an agreement in
conformity with this Resolution, which shall be substantially in the farm af the agreement
attached hereto and made a part hereof by reference.
SECTION 3. This Resolution shali become effective imnediately upan its passage and
approval.
PASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
sY: .~/~i/./
Page 2 of 2
c:ldocuments and se#tings1I082814oca1 se##ingsltemporary internet fileslconEent.outlookl6xgk4de61cinco de nnayo cwWa.ctdoc
QUAKERT4WN PARK AGREEMENT FOR
THE CINC4 DE MAYO
STATE OF TEXAS §
COUNTY OF DENTON
This Agreement, made this siay of , 2011, by and between the
City of Denton, a municipai corporation, nereinafter referred to as the "CITY" and LA
MEXICANA, (called "LA MEXICANA").
WITNESSETH, that in consideration of ths covenants and agreemetrts herein contained,
the parties hereto do mutually agree as follows:
ARTICLE 1
GENERAL
The City grants to LA MEXICANA the exclusive privilege to sell alcoholic beverages,
subject to the exceptions and conditions hereinafter set forth, for the C1NCO DE MAYO on May
7, 2011, to be held at the Quakertown Park. Attached hereta and made a part hereof by is a copy
of the resolution passed by the City Council of Denton, Texas, authorizing this privilege. This
privitege does not extend beyond the daxe of the CINCO DE MAYQ set fnr the year 2011.
ARTICLE 2
SCOPE OF SERVICES
LA MEXICANA in order to exercise the privilege ta sell alcoholic beverages must
perform the following:
A. LA MEXICANA shall be solely responsible for the rental and payment For any bvoth
space necessary for the sale of a.lcoholic beverages at the CIlVCO DE MA'YO.
B. LA MEXICANA shall be solely responsible to obtain any temporary license and permit
necessary for the seliing af aleoholic bevera.ges at the CINCO DE MAY4.
C. LA MEXICANA shall be solely responsible far the abtaining and paying for any security
necessary for their sale of alcoholic beverages at the CIlNCO DE MAYO.
LA MEXICANA failure to do any af the above and to show proper proof of compliance
shall waive their right to exercise the privilege of selIing alcoholic beverages at the
CINCO DE MAYO.
ARITCLE 3
LOCAL RULES AND REGU LATION
LA MEX[CANA agrees ta abide by all municipal, county, state and federal laws,
ordinances, rules and regulations and specifically, without limitatiori, the Qualcertown Park Rules
and Regulations, to obtain aIl necessary and praper licenses, permits and authorizations, and to
compIy with the requirements of any duly authorized person acting in cannection therewith. LA
MEMCANA shall pay all taxes, if any, of every nature and descriptian arising out of or in aray
manner connected with the sale of alcoholic beverages.
LA MEXICANA wi11 exercise reasonable care and due diligence in their sale of alcohoiic
beverages at the CIlVCO DE MAYO.
ARTICLE 4
INDEMNITY AGREEMENT
LA MEXICANA shall indemnify and save and hold harmless the CITY arid its ofFicers,
agents, and empiayees from and against any and all liability, claims, demands, losses, and
expenses, ineluding but not litnited to, court casts and reasonable attarney fees incurred hy the
CITY, and including, without limitation, damages for bodily and personal injury, death and
property damage, resulting fram the negtigent acts or omissions of LA MEXIC.ANA or its
officers, shareholders, agents, or employees in the execution, aperation, or perfarmance of this
Agreement.
Nothing in this Agreernent shatl be constnted to create a liability to any person who is nat
a party to this Agreemern, and nothing herein shall waive any of the parties' defenses, both at
law or equity, to any claim, cause of action, or iitigation filed by anyone not a party ta this
Agreement, including the defense of governmental immunity, which defenses are heareby
expressly reserved.
ARTICLE S
INSURANCE
During the performance oFthe Agreement, LA MEMCANA shall rnaintain the follawing
insurance with an insurance cornpany lieensed to do business in the State of Texas by the State
Insuranee Commission or any successor agency that has a rating with Best Rate Carriers of at
least an A ar above:
A. Comprehensive General Liability Insurance with bodily injury limits of not less tba.n
$500,000 for each occurrence and nat less than $SOO,OtlO in the aggregate, and with
property damage limits of not tess tha.t $100,000 for eaeh occurrence and not less than
$ 100, 000 in the aggregate.
B. LiquorlDra,m Shop Liability in the arnount of $250,000 per occurrence for any event
occurring on City-awned property where alcohol will be provided or served.
CINCO DE MAYO Agreement - Page 2
C. LA MEXICANA sha11 furnish insurance certificates ar insurance policies at the C7TY' S
request to evidence such caverages. The insurance policies shall name the CITY as an
additionai insured an all such polieies, and shall contain a provision that such insurance
shall not be cance9ed or modified without written notice to the CITY and LA
MEXCCANA. In such event, LA MEXICANA shall, prior to the effective date of the
change or cancellation, serve substitute policies fumishang the same coverage.
ARTICLE G
NOTICES
All notices, communicaxions, and reports required or permitted under this Agreement
shail be personally delivered or mailed to the respective parties tay deposi#ing same in the United
States maiI to the address shawn below, certified maal, retwn receipt requested, unless atherwise
specified herein. Mailed notices shall be deemed communicated as of three (3) days' mailing:
To LA MEXICANA:
LA MEXICANA
Valernine Carmona
619 North Locust Street
Denton, TX 76201
To CITY:
City of Denton
City Manager
215 E. McKinney
Denton, Texas 76201
All nfltices shall be deemed effective upan receipt by the party to whom such notice is
given, or within three (3) days' maiIing.
ARTTCLE 'l
ENTIRE AGREEMENT
This Agreement, consisting af five (S) pages and exhibit, constitutes the complete
and final expression of the agreement of the parties, and is intended as a camplete and exclusive
statement o£ the terms of their agreements, and supersedes all prior cantemparaneaus offers,
promises, representatians, negotiations, discussinns, communications, and agreements whieh
may have been made in cannectian with the subject matter hereof.
ARTICLE S
SEVERABII.ITY
If any pravision of this Agreement is found or deerned by a caurt of campetent
jurisdietion to be inva.lid ar unenf'orceable, it shall be cansidered severable fram the remainder of
this Agreernent and shall not cause the remainder to be invalid or unenforceable. In such event,
the parties shall reform this Agreement to replace such stricken provision with a valid and
enforceable provision vvhich comes as close as possible to expressing the intention of the stricken
provision.
CINCO DE MAYQ Agreement - Page 3
AR'TICLE 9
DISCRIlVIINATION PROHIBITED
In performing the services requireci hereunder, LA MEXICANA shall nat discriminate
against any persan on the basis of race, color, religion, sex, national arigin ar ancestry, age, or
physical handicap.
ARTICLE 10
PERSONNEL
LA MEXICANA represents that it ha.s ar will secure, at rts awn expense, all personnel
required to perForm all the services required under this Agreement. Such personnel shall nat be
employees or officers of, or ha.ve any contractual relations with the CITY.
ARTICLE 11
ASSIGNABIGITY
LA MEXICANA shall not assign any interest in this Agreernent, and shall not transfer
any interest in th.is Agreement (whether by assignment, novation, or othervvise) without the pr.ior
written consent of the CITY.
ARTICLE 12
MODIFTCATIQN
No waiver or modification of this Agreement or of any covenant, condition, or izmitation
herein contained shail be valid unless in writing and duly executed by the party ta be charged
therewi#h, and no evidence af any waiver or modification shall be offered ar received in evidence
in any praceeding arising between the parties hereto out of or affecting this Agreement, or the
rights or abligations of the parties hereunder, and unless such waiver or madification is in
writing and duly executed; and the parties further agree that the pravisions af this section wili not
be waived unless as set forth herein.
ARTICLE 13
MCSCELLANEOUS
A. The follawing exhibits are attached to and made a part of thzs Agreement: (list exhibits)
Exhihit "A" Resalution No. .
B. Venue of any suit or cause of action under this AgreEment shall lie exclusively in Denton
County, Texas. This Agreement shall be construed in accordance with the laws of the
State of Texas.
C. The captions of this Agreement are far informatianal purposes anly, and shall not in any
way affect the substantive terms or conditions of this Agreement.
cnNco nE MAYO A~mcat- ~age 4
IlN WITNESS HEREOF, the City of Denton, Texas has caused this Agreernent to be
executed by its duly authorized City Manager, and LA MEXICANA ha.s executed this
Agreement through its duly autharized undersigned officer on this the day of
12011.
CiTY OF DENTQN, TEXA.S
GEORGE C. CAMPBELL, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS T4 LEGAL FORM:
ANTTA BURGESS, CITY ATTORNEY
BY:
LA MECICANA
gV. ~
VALENTiNE CARMONA
WITNES S:
BY:
CiNCO DE MAYQ Agreement Page 5
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Parlcs and Recreation
ACM: Fred Greene
SUBJECT
Consider approval of a resolution of the City of Denton, Texas approving the exhibition of
poetry as a public art proj ect; pursuant to the City of Denton Public Art policy approved by
Ordinance 21006-105, and funded with Hotel TaY revenues previously authorized and
encuinbered for expenditure to such purposes; and declaring an effective date. The Parlcs,
Recreation and Beautification Board recoininend approval with a vote of 6-1.
BACKGROUND
The Public Art Committee requested Ms. ILarla IL Morton, 2010 TeYas Poet Laureate, to create
25 poems hi~hli~htin~ Denton. The poems will cost a total of $2,500 and will be paid from the
2011 HOT Funds.
After the poems have been approved, artists will be selected and paired with a poem and aslced to
submit their artistic illustration of the poem. Each artist would be paid $500 for their illustration.
The poems and illustrations of the poems will be placed on display at the Center for Visual Arts
before being placed witlun City facilities.
RECOMMENDATION
Staff recommends City Council approve the Parlcs, Recreation and Beautification Board's
support of the Public Art Coininittees' recoininendation of ILarla K. Morton's 25 poeins.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
Public Art Committee made recommendation of artist on November 11, 2010.
Parlcs, Recreation and Beautification Board made recommendation of the concept on Febniary 7,
2011.
FISCAL INFORMATION
The 25 ori~inal poems and illustrations will cost $15,000. There is $34,862 bud~eted for Public
Art in HOT funds.
Agenda Inforination Sheet
?O11 Public Art Project - Poems and lllustrations
April 5, 20 11
Page 2
EXHIBITS
1. Public Art Committee Meeting Minutes of Noveinber 11, 2010
Parlcs, Recreation and Beautification Board Meeting Minutes of Febniary 7, 20 11
3. Resolution
Respectfully submitted: N~.
&'Mvq~ tA *
Emerson Vorel
Director
Submitted by:
Jaiue McLeod
Coininunity Events Coordinator
Public Art Conuluttee Mulutes
November 11, 2010
Civic Center Conference Room
Members present: Jo Williams, Joy Siegnund. Garol Collins, Carol Plullips, Robyn Lee, Justin
Rouhier and Margaret Chalfant. Meinbers absent: Billie Mohair, and Jaclc Davis. Staff present:
Einerson Vorel and Janie McLeod.
Chair Williams called the meeting to order at 4:04 p.m.
AppNOVCrl of Minutes of October 14, 2010 was made by Collins and seconded by Phillips. The
minutes were approved by a vote of 7-0.
DISCUSSION ITEMS
Poeyils to be selected for tlze 2010-2012 Pciblic Art Pi°oject
The subcommittee meinbers (Mohair, Chalfatit, Plullips alid Rouluer) reviewed and ralilced 20 of
the 25 poems for the illustrated book of poetry. The fu11 committee reviewed the remaiiung poems
and selected five more poems that will be included in the boolc.
Emerson said that there had been some concerns from the HOT Fund custodiali regarding the use of
the HOT funds to sell a book of poetry. He said that the HOT funds are to bring visitors into
Denton and the custodian did not think the book would fiilfill the purpose of the use of HOT funds.
He said he would revisit with the HOT Fund representatives and discuss purchasing the poeins and
illustrations but not have the works published in a book. The poems atid illustrations would be on
display in various city locations.
There inay be reinaining funds froin the purchase of the poeins. The Coininittee will need to
discuss other possible uses of the remaiiung funds.
Einerson will bring inore inforination to the PAC at the next ineeting.
ACTION ITEMS
AppNOVe,Velection of Poents foN 2010-12 Public ANt P~,oject
Phillips made a motion to accept the 25 poems recommended for the poetry selection. Lee
seconded the motion and it was approved by a vote of 7.0.
The poems selected are: The Last Raid, 1874, Clearing the Woods, Fun, Cast Iron, Lum and
Nancy, Qualcertown, Mary Ellen Taylor, Hiclcory Creelc, Marlcing the Trail, Recycling, IOOF
(1), IOOF (2), Fry Street, Fry Street Saints, Reclamation, March Wedding - The Little Chapel in
the Woods, UNT liispiration, First Lady Gowns, Armadillo Slcyline, The Street Beside the
Cainpus Theatre, Reginald and the CVA, Frenchy, Fathers and Sons: The Denton Record-
Chronicle, 1899-2010, Pinlc Cliinbers, Clearing Out the Irises, Meeting Mary George Billingsly
Sullivan. Small town bees: a poet's thank you to Denton, Texas (optional).
There being no further business, the meeting was adjourned at 4:48 p.m.
Approved with corrections 3/7/11
Par1Ls, Recreation and Beautification Board
Minutes
Febniary 7, 20 11
Civic Center Commuiuty Room
Members present: Carol Brautley, Viclci BN,-rd, Alei Lieban, Derrick Murray Janet Shelton, Datire Ro-,-,1eN-,
Jennifer Wages
Members absent: None.
Staff present: Emerson Vorel, Bob Ticlaier, Maiy Aukermaii, Jaiiie McLeod
REGULAR MEETING
1. CALL TO ORDER - Murray, Chairperson, called the meeting to order at 6: ()1 p.m.
2. APPROVAL OF MINUTES OF Januaiy 10, 2011 MEETING: Shelton made a motion to approve the
ninutes as presented, Wages seconded and the motion carried Nvith a vote of 7-0.
3. AWARDS AND RECOGNITIONS:
None.
4. ACTION ITEMS:
A. Request From Tejas Stoiytelling Association to Serve Alcoholic Beverages at Texas Storytelling
Festival - McLeod told the Board that the Tejas Storytelling Association has requested to be the
sole participant allowed to provide beer and wine at their annual Texas Storytelling Festival
fundraiser, the Talespiiuier Diiuier, on Saturday, March 121, 21011, in the Civic Center. Per
Ordinance, the Board has to malce recommendation to City Council for approval of all
requests for allowing alcoholic beverages in the Civic Center for events that are open to the
public.
Staff recommends approval of the request, wluch is consistent with agreements for other
events with alcohol held in the Civic Center.
MOTION: Shelton made the motion to recommend approving the request from Tejas
Storytelling Association to serve alcoholic beverages at the TeYas Storytelling Festival
fundraiser in the Civic Center on March 12, 2011. Rowley seconded the motion atid it carried
with a vote of 7-0.
B. 2011 Public Art Project - Vorel presented the proposed Public Art Project for the 2011 fiscal
year. The Public Art Committee requested Ms. ILarla K. Morton, 2010 TeYas Poet Laureate,
to create poems depicting the history of Denton. Of the poems she submitted, the
Coininittee chose 25 poeins for the project at a cost of $2,500, which will be paid froin the
?O11 Hotel Occupancy TaY (HOT) Funds. The poems are being submitted to the Parlc
Board for their recommendation to City Council for approval.
Pending approval of the project by City Council, artists will submit their portfolios and the
Public Art Committee will select and pair an artist to a poem for them to illustrate. Each
artist will be paid $500 for their illustration.
When completed, the poems with their illustrations will be temporarily displayed at the
Center for Visual Arts before being moved to various city facilities. It is the goal of the
Public Art Committee to asseinble all the poems and illustrations into a boolc that will be
available to the public.
It has been proposed that any remaining HOT Funds be used to create a mural on the east
wall of the Center for Visual Arts that faces the new train station on Hiclcory Street.
MOTION: Murray aslced for a motion to move ahead with the vote by the Board. Shelton
made a motion to accept the recommendation by the Public Art Committee atid to malce the
Boards' recommendation to City Council to approve the 2011 Public Art Project as submitted;
Lieban seconded the motion and it carried with a vote of 6-1.
5. DISCUSSION ITEMS:
A. Future Plans for Expansion Including the City's Capital Improvement Plan (CIP) - Vorel
ivanted to inform the Board of the various fiinding sources for projects undertalcen by the Parlcs and
Recreation Department (PARD). Fundiug comes from CIP funds, bonds, grants, Park Dedication
and Development fees, Certificates of Obligation, gas ivell revenues, CDBG Bloclc Grants and the
City's general fiind. Hov, and vhat is fimded by each source ivas eiplained in detail. Wages aslced
N-,hat the biggest need iu Parlcs is. Vorel ansv,ered that our 2009 Parlcs Master Plan identif~ied trails
as the number one request from citizens. Vorel sees a firture need for a nev, senior center as the baby
boomer population continues to age, more gym space, an indoor soccer facility, renoti-ation to the
Civic Center pool, and the need to lceep the Water Worlcs Parlc updated Nvith neN-, attractions to
compete with other facilities in the area. The neit CIP Bond election that ivill include PARD
projects is tentatiti-ely scheduled for the 2015-16 fiscal N-ear.
There are many projects that are in ti-arioiis stages of completion. Each month an update is giti-en of
cui7ent projects.
It «as pointed out that each ne« road« ay in Denton is no« required to have at least side« allcs.
Note: Byrd left the meetinb at 6:55 p.m.
6. OTHER BUSINESS:
A. Parks Department Projects Status Report
Tlus report Nvas included iu the Discussion Item.
B. Public Art Committee Meeting Minutes Draft - The miuutes of the Januaiy 13, 2011 Public Art
Committee Meeting are included in the paclcet.
7. FUTURE AGENDA ITEMS:
A. Roivlev aslced that a brief budget presentation be presented at the neit Parlc Board Meeting.
With no fiirther items on the agenda, Murray aslced for a motion to adj oum the meeting. Brantley made the
motion to adjourn, Wages seconded and the meeting was adjourned at 7:10 p.m.
s:lEegallour documentslresolutionsll llpubiic art resolution poetry.doc
RESOLUTION NO.
A RESOLUTION OF THE CITY OF DENTON, TEXAS APPROVING THE EXHIBITION QF
POETRY AS A PUBLIC ART PROJECT; PURSUANT TO THE CTTY OF DENTON PUBLIC
ART POLICY APPROVED BY ORDINANCE 2006-105, AND FUNDED WITH HOTEL TAX
REVENUES PREVIOUSLY AUTHORIZED AND ENCUMBERED FOR EXPENDITURE TO
SUCH PURPOSES; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, pursuant to the Public Art Policy of the City of Denton, Texas, enacted
pursuant to Ordinance 2006-145, the City Council has previously committed to the public
purpose of promoting the artistic and cultural heritage, uniqueness and well-being of Denton,
hath as a community and as a destination, by declaring its intention to develop, acquire, promote
and conspicuously display public art, upon the recommendation and endorsement of the Parks,
Recreation and Beautification Board of the City of Dentan, Texas; and
WHEREAS, tlie Parks, Recreation and Beautifzcation Board of the City of Denton, Texas
has reviewed and recommended the funding and promotion of an exhibition of original poetry by
the 2010 Texas Poet Laureate, and Denton native, Karla Morton, paired with the vvorks of local
graphic artists, all of which will be created araund the theme of capturing the history and
ianiqueness of Denton, and
WHEREAS, Section 35 1.101(a)(4) of the Texas Tax Code autharizes and encourages the
promotion of tourism and the convention and hotel industry, through the expenditure of hotel
occupancy taxes in support nf "the encouragement, promotion, improvement, and application of
the arts, including folk art, creative writing, painting, sculpture, phatography, graphic and
craft arts, and other arts related to the presentation, performance, execution, and exhibition of
these major art forms"; and
WHEREAS, the proposed exhibitian of this local art will be advertised and promoted
both inside and outside the City, ta attract visitors and tourists alike, to enjoy and experience the
unique artistic and cultural biessings af Dento:n, Texas; and
WHEREAS, the City Cauncil finds that all of the above-referenced policies, public
purpases, and statutory requirements axe satisfied and well-served hy the approval of the
recommended proposal; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION 1. Predicated upon the findings and the recommendations set forth in the
above recitals, the Council af the City of Denton, Texas hereby approves the recammended
proposal to fiuad with hotel tax revenues previously encumbered for that purpose, the acquisitian,
exhibition and promotion of the poetry of 2010 Texas Poet Laureate, and Denton native, Karla
Morton, paired with the works of local artists, all of which wili be created around the theme of
capturing the history and uniqueness of Denton, Texas.
SECTION 2. This Resolution shall becozxie effective immediately upon it passage and
approval.
PASSED AND APPROVED tliis the day of , 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATT4RNEY
y
~
D
This page left blank intentionally.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Transportation Operations
ACM: Jon Fortune ~
SUBJECT
Consider the adoption of an ordinance of the City of Denton, Texas, adding Section 18-36 of the
Code of Ordinances relating to vulnerable road users; by creating Section 18-36 to define
vulnerable road users and re-affirm the obligation of all operators of motor velucles to eYercise
due care in the operation of motor vehicles; providing a repealer clause; providing a savings
clause; providing a penalty not to exceed $200 for violations of this ordinance; and providing for
an effective date.
BACKGROUND
The purpose of a vulnerable road users or safe passage ordinance is to protect vulnerable road
users wluch are typically defined as a pedestrian, cyclist or an individual who must occupy a
portion of the roadway as part of their employment. Sixteen other states have passed vulnerable
road user laws to provide additional protection to non-inotorist using public roadways.
Additionally, the cities of San Antoiuo, Austin, El Paso, New Brauiifels, Edinburgh and Helotes
have passed local vulnerable road user ordinances.
As part of the March 1, 2011 City Council Worlc Session, staff received direction to revise a
draft ordinance that was provided as part of the Work Session back up to better define separation
distances between defined vulnerable road users and velucles. Council Meinbers indicated that
for the proposed ordinance to be effective, the ordinance should include langLiage establislung a
safe passint', distance of three (3) feet for cars and light tniclcs and six (6) feet for commercial
vehicles. Staff revised the ordinance to include the proposed definition as part of Section 1,
Paragraph (f).
PRIOR ACTION
The City Council reviewed the proposed ordinance as part of the April 5, 2011 and March 1,
?Oll Council Work Sessions. The Mobility Committee received briefings at the September ?010
regular ineeting and an executive session of the Mobility Coininittee was held on the proposed
ordinance as part of the October 12, 2010 ineeting.
FISCAL INFORMATION
The proposed ordinance establishes a$200 fine for violations. No inforination has been
generated at this tiine on the costs to enforce a proposed vulnerable road user ordinance.
Respectfully submitted,
Marlc Nelson
Transportation Director
s:Uegal\our documents\ordinances\11\safe passage-vulnerable road users-032511.docx
ORDINANCE NO.
AN ORDINANCE OF THE CITY QF DENTON, 1,EXAS, ADDING SECTION 18-36 OF THE
CODE OF ORDINANCES RELATING TO VULNERABLE ROAD USERS; BY CREATING
SECTION 18-36 TO DEFINE VULNERABLE ROAD USERS AND REAFFIRM THE
OBLIGATION OF ALL OPERATORS OF MOTOR VEHICLES TO EXERCISE DUE CARE
1N THE OPERATION OF MOTOR VEHICLES; PROVIDING A REPEALER CLAUSE;
PROVIDING A SAVINGS CLAUSE; PROVIDING FOR A PENAL'I'Y NOT TO EXCEED
$200 FOR VIOLATIONS OF THIS ORDINANCE; AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, bicyclists and pedestrians are allowed ta use the roadway by law in Texas,
but these users da not have the same physical pratection as motorists and are at greater risk of
injury ar death; and
WHEREAS, approximately 50 cyclists and 400 pedestrians are killed every year in
Texas; and
WHF,REAS, a safe passing ordinance pravides the foundation for an education campaign
oF tolerance and acceptance for "active" forms af alternative transportation, which furthers the
City's goals of promoting Dentan as a bicycle friendly community, as well as for the
enhancement of wallcable streets and neighborhoads; NOW, THERFFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION l. Chapter 18 "Motor Vehicles and Traffic" of the Cade of Ordinances of
Denton, Texas, is hereby amended by adding Sectian 18-36 regarding vulnerable road users.
Section 18-36 shall read as follows:
Sec. 18-36 VULNERABLE ROAD USERS.
(a) In this section, a"Vulnerable Road User" means a person utilizing the roadway for travel
including:
(1) a pedestrian, a runner, a physically disabled person, a highway construction or
maintenance worker, tow truck operator, a utility worker, or any other worker
with legitimate business in or near the road or right-of=way, or a stranded motorist
or passenger, or one assisting or providing aid to a stranded or injured motorist;
(2) a person on horseback;
(3) a persan operating equipment other than a motor vehicle, including, but not
limited to, a bicycle (including an electric bicycle), tricycle, hand-cycle, moped,
horse-drawn conveyance, skateboarder, rollerblader, roller-skater, or a person
operating a manual scooter, so lang as any such equipment is legally operable on
public streets; or
s:Uegal\our documents\ordinancesU 1\safe passage-vulnerable road users-032511.docx
(4) a person operating an electric personal assistive mobility device in compliance
with the following requirements:
a. A person may operate an electric personal assistive mobility device on a
residential street, roadway, ar public highway with a speed limit of 30
miles per haur or less only:
while making a direct crossing of a highway in a marked or
unmarkecl crosswalk;
2. where no sidewalk is reasonably accessible; or
3. when so directed by a traffic control device or by a law
enforcement officer.
b. A person may operate an electric personal assistive mobility device on a
path set aside for use by bicyclists or pedestrians.
c. Any person operating an electric personal assistive mobility device on a
residential street, roadway, or public highway shall ride as close as
practicable to the right-hand edge.
d. Except as otherwise provided by this section, provisions of this section
applicable to the operation of bicycles appiy to the aperation af electric
personal assistive mobility devices.
(b) In this section, a"motor vehicle" means a self propelled vehicle or a vehicle that is
propelled by electric pawer from overhead trolley wires. The term does not include an
electric persanal assistive mobility device.
(c) Pedestrians, runners, and physically disabled persons shail utilize a sidewalk when
reasonably available and accessibie or, if nane, shall travel against traffic as close as
practicable to the edge of the roadway.
(d) Vulnerable road users, as defined by subsections (a)(2), (a)(3) and (a)(4) above, shall
comply with the requirements for bicycles set forth as follows:
(1) Except as provided by subsection (2), a person operating a bicycle on a roadway
who is moving slower than the other traffic on the roadway shall ride as near as
practicable to the right curb or edge of the roadway, unless:
a. the person is passing another vehicle moving in the same direction;
b. the person is preparing to turn left at an intersection or onto a private road
or driveway;
Page 2
s:Uegal\our documents\ordinances\11\safe passage-vuinerable road users-032511.docs
c. a condition on or off' the roadway, including a fixed or moving abject,
parked or moving vehicle, pedestrian, animal, or surface hazard prevents
the person from safely riding next to the right cttrb or edge of the roadway;
or
d. the person is operating a bicycle in an outside lane that is:
less than 14 feet in width and cioes not have a designated bicycle
lane adjacent to that lane; or
2. too narrow for a bicycle and a motor vehicle to safely travel side
by side.
(2) A person operating a bicycle on a ane-way roadway with two or more inarked
traffic lanes may ride as near as practicable to the left curb or edge of the
roadway.
(3) Persons operating bicycles on a roadway may ride two abreast. Persons riding
twa abreast on a laned roadway shail ride in a single lane. Persons riding two
abreast may not impede the normal and reasanable flow of traffic on tlze roadway.
(e) An aperatar of a motor vehicle passing a vulnerable road user operating an a highway or
street shall:
(1) move to the left lane if the highway has two or more marked lanes running in the
same direction; ar
(2) pass the vulnerable roaa user at a safe distance.
( fl For the purpose of subsection (e)(2), when road conditions allow, safe distance is at least:
(1) three (3) feet if the operator's vehicle is a passenger car or light truck; or
(2) six (6) feet if the operator's vehicle is a truclc, other than a light truck, or a
commercial motor vehicle as defined by the Texas Transportation Code §
522.003.
(g) An operator of a motor vehicle that is making a left turn or a u-turn at an intersection,
including an intersection with an alley or private road or driveway, sha11 yield the right-
af-way to a vulnerable road user in ali circumstances in which the operator would be
requireci to yield right-of way pursuant to the traftic 1aw.
(h) An aperator of a motor vehicle may not overtake a vuinerable road user traveling in the
same direction and subsequently make a right-hand turn in front of the vulnerable road
I'age 3
s:\legal\our documents\ordinances\11\safe passage-vulnerable road users-032511.docx
user unless the operalor is safely clear of the vulnerable road user in light of a11
canditions impacting safety.
(i) An operator of a motor vehicle may not maneuver the vehicle in a manner th1t:
(1) is intended to intimidate or harass a vulnerable road user; or
(2) places the vulnerable road user at risk of unreasonable imtninent bodily injury.
(j) An operator of a mator vehicle shall exercise due care to avoid colliding with any
vulnerable road user on a roadway including public rights-of-way.
(k) A vulnerable road user on a roadway or public right-of-way shall exercise due care and
comply with all applicabie city ordinances and state statues. It is a defense to prosecution
under this section that at the time of the offense, the vulnerable road user was acting in
violation of the law.
SECTION 2. If any section, subsection, paragraph, sentence, clause, phrase, or word in
this Ordinance, or applicatian thereof ta any person or circumstances is held invalid by any court
of competent jurisdiction, sueh holding shall not affect the validity of the remaining portions of
this Ordinance, and the City Cauncil of the City oF Denton, Texas, hereby declares it would have
entered such remaining portions despite any invalidity.
SECTION 3. Save and except as amended hereby, all the provisions, sectians,
subsections, paragraphs, sentences, clauses, and phrases of the Code of Ordinances shall remain
in full force and effect.
SECTION 4. Any person found guilty of violating this Ordinance by a court of
competent jurisdiction shall be fined a sum not to eXCeed two hundred dollars ($200).
SECTION 5. This Ordinance praviding for a penalty shall become effective fourteen
(14) days from the date of its passage, and the City Secretary is hereby directed to cause the
caption af this Ordinance to be published twice in the Denton Record-Chranicle, the official
newspaper of the City of Denton, Texas, within ten (10) days of the date of its passage.
FASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
Page 4
s:Uegal\our documents\ordinances\11\safe passage-vulnerable road users-032511.docx
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
~
BY:
Page 5
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM: Jon Fortune ~
SUBJECT
Consider adoption of an ordinance of the City Council of the City of Denton awarding a Merchant
Services Contract to Elavon, liic. for a terin begiiuung June 1, 20 11 and ending May 31, 2016; authorizing
the City Manager to execute a Merchant Services Contract with Elavon, Inc. for credit/debit and checlc
processing services; authorizing the City Manager and other City employees to transact business with
Elavon, liic.; and providing an effective date. (Audit/Finance Committee recommends approval3-0)
BACKGROUND
On June 6, 2006, the City Council approved a depository and merchant services contract (Ordinance No.
2006-157) with Wachovia Bank, which included contracts with Nova Information Systems, Inc. ("Nova")
and Harbor Payments Corporation ("Harbor"). The contract with Nova was for credit/debit card and
checlc processing services. The Nova contract was eYecuted with automatic one-year renewals although
either party could terminate service with tlurty (30) days written notice. The contract with Harbor was for
internet gateway services in order to facilitate credit/debit card payments through the internet. The
Harbor contract was executed with automatic one-year renewals althou~h either party could terminate
service with tlurty (30) days written notice. Since the original eYecution of contracts with Nova and
Harbor, Elavon, Inc. ("Elavon") has acquired Nova and assumed the internet gateway service after the
liquidation of Harbor.
Currently, Elavon provides all credit/debit card and electroiuc checlc processing services, checlc
verification (all locations) and checlc guarantee services (Police Department oiily), and internet gateway
services for the City of Denton. These services are provided at seventeen (17) point-of-purchase
locations, seventeen (17) accounts receivable conversion locations, and three (3) internet payment
locations, which include interactive voice response or "pay by phone" service. Elavon provides a fully
hosted and single source software solution called, "Virtual Merchant." The fact that the City utilizes a
single software program, along with a single provider, allows for a number of efficiencies and economies
of scale. Elavon fully supports our existing hardware for credit/debit card and checlc processing, checlc
imaging, and deslctop printer, wluch the City purchased in 2006 and remains fully functional. However,
the City's desktop printer is an obsolete piece of equipment that may need to be replaced in the near
future. Staff is currently working with Elavon to assess that need and develop a recommended solution.
In consultation with the City's Legal Department, it was determined that merchant services are not
presently considered depository services as defined in the Depositories for Muiucipal Funds Act (TeYas
Local Government Code, Chapter 105). However, staff opted to solicit proposals in conjunction with the
Banlc Depository Services RFP as a best practice approach. While tiine reinains before the expiration of
the current automatic renewal, staff initiated a Request for Proposals ("RFP") on September 30, 2010 to
allow time to review and evaluate proposals. Furthermore, in the event the City selected a different
Agenda Inforination Sheet
April 5, 2011
Page 2
merchant services provider, staff would need ample time for conversion and implementation in order to
meet the May 31, 2 0 11 deadline.
On Septeinber 30, 2010, the City of Denton inailed and/or e-inailed an RFP for Merchant Services to
seventeen (17) prospective providers. A listing of those providers has been provided as part of the baclc-
up to tlus Agenda liiformation Sheet (EYlubit 1). The City advertised the RFP in the Denton Record
Chronicle on Septeinber 7t1i and 14t1i The due date for proposals was October 4, 2010, which provided
prospective providers approximately four (4) weeks to make inquiries regarding the RFP and have
sufficient time to submit a proposal. Wlule the City received a number of inquiries from prospective
providers during the four (4) weelc period, oiily four (4) institutions eventually provided proposals on
October 4t1i The four (4) bidders were Elavon, Wells Fargo Merchant Services, Chase Payinentech, and
First American Payment Systems. Staff made several inquiries to non-bidding institutions and most
responded that they were unable to meet the service requirements.
In order to fully evaluate each proposal within the context of the City's service needs, a cross-sectional
coininittee of staff ineinbers was asseinbled. The departinents/divisions represented were: Treasury,
Accounting, Utility Customer Service, Muiucipal Court, Parks, and Tecluiology Services. A total of
eleven (11) staff inembers comprised tlus committee. These staff inembers were provided with copies of
each proposal and were afforded sufficient tiine for review. To date, the coininittee has logged in inore
than thirty (30) hours throughout this process, including participating in three (3) days of presentations
from both banlcs and credit card processors.
On October 21 `t 22ic1 and 23ic1 staff afforded three (3) bidders that opporhinity to inalce a presentation to
City staff on their proposal and to demonstrate their various services and products. First American
Payment Systems was determined to be unable to provide all the services required and was not invited to
malce a presentation. Lilce the banlc presentations, these presentations served a useful purpose in that they
afforded both the bidding institution and staff an opportunity to inalce specific inquiries and also to clarify
any questions or issues in the RFP. It also afforded staff an opporhinity to listen to soine of the latest
products and trends in the merchant services industry, wluch may eventually lead to more efficient and
cost effective operational changes. Staff was particularly interested in each bidder's ability to provide e-
checlc or ACH conversion services for personal checlcs paid to the City.
On October ?8th, the staff committee met to discuss the three finalists and evaluated each based on the
following weighted criteria as disclosed in the RFP:
1. Lowest aggregate cost of inerchant services (45%)
Ability to perform the requested services (35%)
3. Agreement to points outlined in the RFP (20%)
A bid tabulation based on the weighted criteria has been provided as part of the baclc-up to this Agenda
liiformation Sheet (EYlubit ?
Based on staff's evaluation of each proposal, staff concluded that Elavon offers the City the best
combination of services and pricing to meet the City's varied operation needs. Elavon offers a number of
services that are critical to various daily operations, especially Utilities Customer Service, and the other
Agenda Inforination Sheet
April 5, 2011
Page 3
bidders were unable to provide similar or comparable services. lii most cases, products and services from
the other bidders would result in decreased services to customers or would result in eYCessive delays. For
example, only Elavon proposed to offer check conversion services while the other bidders were unable to
offer the service or failed to provide details on third party partners that could assist with providint', this
service. Checlc conversion services are a critical component of cash management for the City since it
increases the availability of funds, reduces the incidence of returned checks, and reduces staff time
dedicated to preparing banlc deposit slips and bags. This service was assigned a weight of 9% of the
evaluation criteria. Elavon scored the full 9% while the other bidders scored 0%. Three other exainples
in wluch Elavon scored the full weight assigned to criteria wlule the other bidders scored 0% are: (1)
demonstrated prior eYperience in providing similar services - 7%; (2) adherence to requirement of request
- 5%; and (3) service availability and proposed activation schedule - 5%.
Although Elavon scored the lughest of all bidders, there were two areas in wluch other bidders scored
higher. Those areas were: proposed fee schedule and timeliness of deposits into City's account. While
staff acknowledges the cost of doing business with Elavon is slightly higher than two other bidders, the
reason for this cost is attributable to a higher level of service since Elavon offers a full hosted solution that
does not require the use of modems or multiple logins. The products offered by the other bidders are less
eYpensive but the additional cost associated with staff time and inefficient processes far outweighs any
upfront savings. The other area is related to the timeliness of deposits. Since Elavon does not have a
third party agreement with our depository bank, Wells Fargo, the City will not receive next day funding of
tratisactions. liistead, transactions will fund in ? days, wluch will reduce the availability of funds and
potential interest income eariungs. Oiily Wells Fargo Merchant Services, a subsidiary of Wells Fargo
Banlc, could offer next day funding. Staff deterinined that the difference was not inaterial and did not
outweigh the fact that neither Wells Fargo Merchant Services nor the other two bidders could meet the
City's overall service needs.
Furthermore, remaining with Elavon will also defer the added expense of conversion and implementation
that would be required if the City chose a different merchant services provider. Below is a brief summary
of uiunatched services provided by Elavon:
1. Single Software Solution through Virhial Merchant - Provides staff efficiencies through single
login and eliminates need to navigate multiple software products.
Ability to View Live Batches - Provides staff with tool to immediately resolve customer
complaints and correct data entry errors before processing.
3. Enhanced Security - Fully hosted solution with ability to set various user levels, which improves
reconciliation of payments and safeguards customer data.
4. Services provided through Single Contract - Elavon does subcontract with a check processing
partner but the relationslup is seamless with the City. Other bidders required independent
contracts for unavailable services.
5. Single Point of Contact - Elavon serves as our single point of contact for all services.
6. Use of EYisting Hardware - Deferred capital eYpenditure to replace current equipment, with other
bidders could not utilize.
Agenda Inforination Sheet
April 5, 2011
Page 4
lii considering the price for credit card transactions, it is necessary to consider that the fees associated
with providing this service are comprised of Elavon's charge plus an interchange rate. The interchange
rate is the price charged by Visa, Mastercard and Discover, and represents approxiinately 99% of the fees
charged to the City. It is independent of Elavon and considered a pass-through charge. The Visa,
Mastercard and Discover interchange rates are updated every siY (6) months. Staff would lilce to note that
the City began accepting Discover Card payments on Febniary 1, 20 11 and after discussing awarding a
new contract to Elavon with the Audit/Finance Committee. This change has no impact on staff's
recommendation although the decision to accept Discover Card payments did include a$25,000
inducement checlc, wluch the City may use in the futiLire to offset the cost of replacing obsolete printers
used in conjunction with debit/credit card payments.
Since the City is currently charging a convenience fee for credit card payments over the internet in
Utilities Customer Service, the fees for tlus service have no budgetary impact on the City. However, the
use of conveiuence fees do prolubit the City from qualifying for reduced interchange rates. The current
convenience fee is $4.95 per transaction. On June 1, 2011, the City plans to discontinue the convenience
fee and anticipates a substantial increase in credit card usage both over the internet and at the point-of-
purchase. With that in mind, staff is already worlcing with Elavon to qualify the City for reduced
goveriunental and utility interchange rates and to identify other opportuiuties to miiumize the budgetary
iinpact to the City. A priine exainple, which is already anticipated to save the City approxiinately
$40,000 annually, is to automatically populate the sale tax field on transactions with a zero. This simple
but necessary step was identified by Elavon, who is the City's partner in managing credit card interchange
rates. Elavon will continue to assist the City in managing these interchange rates.
The remainin~ 1% in fees associated with credit card transactions represents Elavon's charge. A
comparison of current versus proposed pricing has been provided as part of the baclc-up to tlus Agenda
liiformation Sheet (EYlubit 3). This comparison only shows Elavon's proposed pricing since the other
bidders were unable to provide an acceptable level of service in order to meet the City's needs. It also
shows pricing for checlc conversion services. As reflected in Exhibit 3, Elavon's propose pricing shows a
?0% decrease for all credit/debit card transactions and a 121% decrease for check conversion. All other
pricing remains the same as currently being charged with the eYCeption of added charges related to
inonthly stateinents and software inaintenance. However, staff is already reviewing the possibility of
reducing those added charges by re-evaluating these services at various locations throughout the City. In
some cases, the benefit of the service may not outweigh the cost so staff will be discussing tlus matter
with City departments on a case-by-case basis. Since the City plans to discontinue the conveiuence fee in
Utilities Customer Service on June 1, 2011, Exhibit 3 includes projected volumes for point-of-purchase
credit/debit card transactions in Utilities Customer Service. These transactions are not currently offered
due to the conveiuence fee charged on internet payments. If the anticipated charges for these tratisactions,
montlily statements and software maintenance are backed out, staff would anticipate a reduction of
approxiinately $14,500 annually.
Agenda Inforination Sheet
April 5, 2011
Page 5
lii order to lock in the proposed pricing from Elavon, staff is proposing that the City eYecute a five (5)
year continuous contract. However, either party may terminate the contract with iunety (90) days written
notice.
PRIOR ACTION/REVIEW (Council, Boards or Commissions)
On November 16, 2010, the Audit/Finance Committee unanimously recommended approval to forward an
ordinance awarding a five (5) year contract to Elavon, Inc. for merchant services to the City Council for
consideration.
EXHIBITS
1. Listing of Prospective Merchant Services Providers
Banlc Bid Tabulation
3. Pricing Comparison
4. Ordinance (Merchant Services Contract & Elavon's Proposal on CD)
Respectfully submitted:
~
Bryan Langley
Chief Financial Officer
Prepared By:
~ ~
~
\
Antonio Puente, Jr.
Assistant Director of Finance
Certified Payments
Chase Paymentech
Elavon
ElectronicTransfer, Inc.
First Data (dba, Wells Fargo MerchantServices)
FiS (formerly, Link2Gov Corporation)
Flagship Merchant Services
Go Emerchant
Got Merchant
Merchant Accounts Express
Merchant One
Merchant Warehouse
MiRand Card Services
Paymentus
Synergetic Processing Services, Inc.
Teleworks, Inc.
TheTransaction Group
Exhibit 1
MERCHANT SERVICES
IIST OF PROSPECTIVE MERCHANT SERVICES PROVIDERS
RFP #4578
13740 Midway Rd., Ste. 702
Dallas
Texas
14221 Dallas Parkway, Bldg. #2
Dallas
Texas
One Concourse Parkway, Ste. 200
Atlanta
Georgia
3107 E. Mission
Spokane
WA
2645 International Parkway#101
Virginia Beach
VA
3924 Spencer St.
Keller
Texas
20 City Square, Second Floor
Charlestown
Mass
1 Mall Drive, Ste. 515
Cherry Hill
NewJersey
3421 Highpoint Drive
Denton
Texas
3131 South Vaughn Way, Ste 350
Aurora
Colorado
524 Arthur Godfrey Rd., 3rd Floor
Miami Beach
Florida
2 International Place, Fourth Floor
Boston
Mass
59 Kramer Lane
Sanger
Texas
3455 Peachtree Rd NE, Sth Floor
Atlanta
Georgia
25115 West Avenue Standford, Ste. A-107
Valencia
California
1080 South Main Street
Blacksburg
VA
4621 1st South
Jacksonville Beach
Florida
75244
75254
30328
99202
23452
76244
02129
08002
76210
80014
33140
02110
76266
30326
91355
24060
32250
Exhibit 2
MERCHANT SERVICES BID TABULATION
RFP #4578
POINTS
CHASE
WELLS FARGO
FIRSTAMERICAN
CRITERIA
ALLOWED
ELAVON
PAYMENTECH
MERCHANTSERVICES
PAYMENTSYSTEMS
TOTAL POINTS EARNED
100
93
32
36
9
1. Lowest aggregate cost of inerchant
services.
45
41
13
14
9
II. Ability to pertorm the requested
services.
35
32
13
16
0
III. Agreement to points outlined in this
request.
20
20
6
6
0
Point of Purchase (POP) -17 Locations
Check Verification
Credit Card - All Others
Debit Card - All Others
Accounts Receivable Conversion (ARC) -17 Locations
Check Verification
Credit Card
Point of Purchase (POP) - Police Department Warrants only
Check Guarantee
Credit Card
Debit Card
Accounts Receivable Conversion (ARC) - Police Department only
Check Guarantee
Credit Card
Internet Credit Card Transactions
Municipal Court
Utilities Customer Service (Billing)
Building Inspections'
Library2
E-Check (Municipal Court, Customer Service & Building Inspections)3
Point of Purchase
Accounts Receivable Conversion
Miscellaneous
Chargebacks
Refunds - CrediUDebt Cards
NSF Billing Services
Customized Reporting
Sub-Total - Current Fees
New/Additional Fees
Credit Card - Utility Customer Service (Projected)°
Debit Card - Utility Customer Service (Projected)°
Returned Checks
ECS Minimum Bill Fee
Monthly Statement Fees (per MID)
Virtual Merchant - Monthly Maintenance (per MID)
Grand Total -All Fees
PRICING COMPARISON
RFP #4578
C
urrent
12 Month Averaqe
Elavon Pricinq
Dollar
Item
12
Estimated
Volume
Volume
Fee per Item x
Mo. =
Annual Cost
$
1,300,000
6,000
$0.17 x
12 =
$
12,240.00
$
255,000
3,500
0.15% x
12 =
$
4,590.00
$
109,000
440
0.15% x
12 =
$
1,962.00
$
1,100,000
850
$0.17 x
12 =
$
1,734.00
$
80,000
400
0.15% x
12 =
$
1,440.00
$
2,500
8
$0.18 + 1.98% x
12 =
$
611.28
$
15,000
30
0.15% x
12 =
$
270.00
$
2,100
4
$0.65 x
12 =
$
31.20
$
1,500
20
$0.18 +2.2% x
12 =
$
439.20
$
15,000
35
0.15% x
12 =
$
270.00
$
100,000
400
0.15% x
12 =
$
1,800.00
$
3,000,000
12,500
0.15% x
12 =
$
54,000.00
$
-
-
0.15% x
12 =
$
-
$
450
35
0.15% x
12 =
$
8.10
$
-
-
$0.00 x
12 =
$
-
$
-
-
$0.00 x
12 =
$
-
$
1,000
5
12.00 x
12 =
$
720.00
$
-
-
0.00 x
12 =
$
-
$
-
-
0.00 x
12 =
$
-
$
-
-
TBD x
12 =
$
-
$
80,115.78
$
1,200,000
5,100
0.00% x
12 =
$
-
$
200,000
1,000
0.00% x
12 =
$
-
$
-
5
0.00 x
12 =
$
-
$
-
-
0.00 x
12 =
$
-
$
-
45
0.00 x
12 =
$
-
$
-
45
0.00 x
12 =
$
-
$ 80,115.78
Proposed
Elavon Pricinq
12
Estimated
Fee per Item x
Mo.
= Annual Cost
$0.15 x
12
= $
10,800.00
0.12% x
12
= $
3,672.00
0.12% x
12
= $
1,569.60
$0.15 x
12
= $
1,530.00
0.12% x
12
= $
1,152.00
$0.18 + 1.98% x
12
= $
611.28
0.12% x
12
= $
216.00
0.12% x
12
= $
30.24
$0.18 +2.2% x
12
= $
439.20
0.12% x
12
= $
216.00
0.12% x
12
= $
1,440.00
0.12% x
12
= $
43,200.00
0.12% x
12
= $
-
0.12% x
12
= $
6.48
$0.15 x
12
= $ -
$0.15 x
12
= $ -
12.00 x
12
= $ 720.00
0.00 x
12
= $ -
2.00 x
12
= $ -
x
12
= $ -
$ 65,602.80
0.12% x
12
= $
17,280.00
0.12% x
12
= $
2,880.00
3.00 x
12
= $
180.00
25.00 x
12
= $
-
5.00 x
12
= $
2,700.00
5.00 x
12
= $
2,700.00
$ 91,342.80
'Payments made through CRW Tracklt but processed/funded through Elavon.
ZPayments made through PayPal but processed/funded through Elavon.
3New payment option anticipated with beginning of new contract with Elavon (Dollar/Item Volume unknown).
S:\Legal\Our pocuments\OrdinancesU I\Merchant Services Contract Ord-Elavon.doc
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON AWARDING A
MERCHANT SERVICES CONTRACT TO ELAVON, INC. FOR A TERM BEGINNING
JUNE 1, 2011 AND ENDING MAY 31, 2016; AUTHORIZING THE CITY MANAGER TO
EXECUTE A MERCHANT SERVICES CONTRACT WITH ELAVON, INC. FOR
CREDIT/DEBIT AND CHECK PROCESSING SERVICES; AUTHORIZING THE CITY
MANAGER AND OTHER CITY EMPLOYEES TO TRANSACT BUSINESS WITH
ELAVON, INC; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City of Denton has solicited, received and tabulated proposals for the
merchant services contract for a term beginning June l, 2011 and ending on May 31, 2016; and
WHEREAS, the City of Denton has received a proposal for merchant services from a
merchant services processor desiring to provide credit/debit and check processing services as
requested in the proposals; and
WHEREAS, after such opening, the City Council found, on the basis of the request for
proposals, that Elavon, Inc. has submitted the proposal offering the most favorable terms and
conditions to the City for the provision of such services; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. Elavon, Inc. is hereby selected to provide credit/debit and check processing
services beginning June 1, 2011 and ending May 31, 2016. The City Manager, or his designee,
is authorized to execute a merchant services contract with Elavon, Inc., substantially in the form
of the attached contract.
SECTION 2. The contract, including all attached exhibits, shall be attached hereto and
made a part hereof, and the same is hereby in all things approved and accepted. The City
Manager, or his designee, is hereby authorized to execute any other documents and agreements
on behalf of the City that are consistent with the services authorized by the contract.
SECTION 3. The following officials: City Manager, Assistant City Managers and the
Chief Financial Officer, are hereby authorized to transact business with the above listed
institution regarding credit/debit and check processing services for the City of Denton.
SECTION 4. The City Manager is authorized to make the expenditure of funds and fees
and take the actions as indicated in the attached contract and exhibits.
SECTION 5. This Ordinance shall become effective immediately upon its passage and
approval.
S:\Legal\Our pocuments\Ordinances\11\Merchant Services Contract Ord-Elavon.doc
PASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY: c,~f./~
Page 2
MERCHANT SERVICE5 CONTRACT BY AND BETWEEN
CITY OF DENTON, TEXAS AND ELAVON, INC,
PROPOSAL NO. 4578
THIS CONTRACT ("Contract") is made and entered into this day of A.D.,
2011, by and between Elavon, Inc. a corporation, whose address is One Concourse Parkway, Suite 300,
Atlanta, GA 30328, hereinafter referred to as "Elavon," and the CITY OF DENTON, TEXAS, a home
rule municipal corporation, hereinafter referred to as "City," to be effective upon approval of the Denton
City Council and subsequent execution of this Contract by the Denton City Manager or his duly
authorized designee.
For and in consideration of the covenants and agreements contained herein, and for the mutual
benefits to be obtained hereby, the parties agee as follows:
1.
SCOPE OF SERVICES
Elavon shall provide all labor, supervision, materials and equipment necessary for the processing
of payment transactions. These products and services shall be provided in accordance with Elavon's
Proposal in response thereto, a copy of which is attached hereto and incorporated herein for all purposes
as EYhibit "A". The Contract consists of this written agreement and the following items which are
attached hereto and incorporated herein by reference:
(a) Payment Device Processing Agreement ("Agreement") and any applicable Schedules
(EYhibit "A-1")
(b) Elavon's Proposal. (Exhibit "A-2");
(c) Insurance Requirements. (Exhibit "B");
(d) Form CIQ - Conflict of Interest Questionnaire (Exhibit "C").
These documents make up the Contract documents and what is called for by one shall be as
binding as if called for by all. In the event of an inconsistency or conflict in any of the provisions of the
Contract documents, the inconsistency or conflict shall be resolved by giving precedence first to the
written agreement then to the contract documents in the order in which they are listed above. These
documents shall be referred to collectively as "Contract Documents,"
II.
TIME OF COMPLETION
Non applicable.
III.
TERM OF CONTRACT
stated.
The term of this Contract shall be five (5) years from date of contract execution unless otherwise
(City of Denton, TX) Attachment A- MERCIIAN"I' SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
IV.
WARRANTY
Elavon warrants and covenants to City that all goods and services provided by Elavon, Elavon's
subcontractors, and agents under the Agreement shall be free of defects and produced and performed in
a skillful and workmanlike manner and shall comply with the specifications for said goods and services
as set foith in this Contract and the Agreement and the Proposal attached hereto and incorporated herein
as Eshibits "A-1 and A-2". Elavon warrants that the goods and services provided to City under this
Contract shall be free from defects in material and workmanship, for a period of five (5) years
commencing on the date that City issues final written acceptance of the project.
V.
PAYMENT
Payments for Elavon's fees due hereunder shall be made to Elavon following City's acceptance
of the work and within thirty (30) days of receiving Elavon's invoice for the products and services
delivered.
Elavon recognizes that this Contract shall commence upon the effective date herein and continue
in full force and effect until termination in accordance with its provisions. Elavon and City herein
recognize that the continuation of any contract after the close of any given fiscal year of the City of
Denton, which fiscal year ends on September 30th of each year, shall be subject to Denton City Council
approval. In the event that the Denton City Council does not approve the appropriation of funds for this
Contract, the City will provide Elavon with siYty (60) days written notice of such termination, and the
Contract shall terminate at the end of the fiscal year for which funds were appropriated and the parties
shall have no further obligations hereunder, except that the City will continue to be responsible for
Chargebacks, returns, adjustments and other amounts related to Transactions processed prior to
termination as further described in Exhibit A-1.
VI.
PROTECTION AGAINST ACCIDENT TO EMPLOYEES AND THE PUBLIC
Elavon shall at all times exercise reasonable precautions for the safety of employees and others
on or near the work and shall comply with all applicable provisions of Federal, State, and Municipal
safety laws. The safety precautions actually taken by Elavon and the adequacy thereof shall be the sole
responsibility of the Elavon. Elavon shall indemnify City for any and all losses arising out of or related
to a breach of this duty by Elavon pursuant to paragraph VIII. INDEMNIFICATION and paragraph
IX. COMPLIANCE WITH APPLICABLE LAWS set forth herein.
VII.
LOSSES FROM NATURAL CAUSES
Unless otherwise specified, all loss or damage to Elavon arising out of the nature of the work to
be done, or from the action of the elements, or from any unforeseen circumstances in the prosecution of
the same, or from unusual obstructions or difficulties which may be encountered in the prosecution of
the work, shall be sustained and borne by Elavon at its own cost and expense, except for those losses or
damages set forth in the Agreement, Exhibit A-1.
(Ciry of Denton, TX) Attachment A- MERCFIANT SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
VIII.
INDEMNIFICATION
Elavon shall release, defend, indemnify, and hold the City, its elected officials, officers and
employees harmless from and against all claims, damages, injuries (including death), property damages
(including loss of use), losses, demands, suits, judgments and costs, including attorney's fees and
eYpenses, in any way arising out of related to, or resulting from (a) Elavon's breach of the Contract, or
(B) Elavon's negligence, gross negligence or willful misconduct.
In the event the City is a named party to a suit arising out of the subject matter of this Contract,
the City shall have reasonable input into the selection of defense counsel to be retained by Elavon in
fulfilling its obligation hereunder to defend and indemnify City. City reserves the right to provide a
portion, or all, of its own defense at its own eYpense; however, City is under no obligation to do so. Any
such action by City is not to be construed as a waiver of Elavon's obligation to defend City or as a
waiver of Elavon's obligation to indemnify City pursuant to this Contract. Elavon shall retain defense
counsel within fourteen (14) business days of City's written notice that City is invoking its right to
indemnification under this Contract. If Elavon fails to retain counsel within such time period, City shall
have the right to retain defense counsel on its own behalf, and Elavon shall be liable for all reasonable
costs incurred by City.
IX.
COMPLIANCE WITH APPLICABLE LAWS
Elavon shall at all times observe and comply with all Federal, State and local laws, ordinances
and regulations including all amendments and revisions thereto, which in any manner affect Elavon or
the work, and shall indemnify and save harmless City against any claim related to or arising from
the violation of any such laws, ordinances and regulations whether by Elavon, its employees,
officers, agents, subcontractors, or representatives. If the City observes that the work is at variance
therewith, the City shall promptly notify Elavon in writing.
X.
VENUE
The laws of the State of TeYas shall govern the interpretation, validity, performance and
enforcement of this Contract, The parties agree that this Contract is performable in Denton County,
TeYas, and that exclusive venue shall lie in Denton County, Texas.
XI.
ASSIGNMENT AND SUBLETTING
Elavon agrees to retain control and to give full attention to the fulfillment of this Contract, that
this Contract shall not be assigned or sublet without the prior written consent of City, and that no part or
feature of the work will be sublet to anyone objectionable to City. Elavon further agrees that the
subletting of any portion or feature of the work, or materials required in the performance of this
Contract, shall not relieve Elavon from its full obligations to City as provided by this Contract.
Notwithstanding the foregoing, the City recognizes that Elavon may use third party contractors for a
portion of its services, and agrees to such use as provided in Section ll(b) of the Agreement, Exhibit A-
1.
(City of Denton, TX) Attachment A- MERCIIAN'I' SERVICES CONTRACT with INS & CIQ Elavon 03.221 I FINAL
XII.
INDEPENDENT CONTRACTOR
Elavon covenants and agrees that Elavon is an independent contractor and not an officer, agent,
servant or employee of City; that Elavon shall have exclusive control of and exclusive right to control
the details of the work performed by Elavon hereunder and all persons performing same on behalf of
Elavon, and shall be responsible for the acts and omissions of its officers, agents, employees,
contractors, subcontractors and consultants; that the doctrine of respondent superior shall not apply as
between City and Elavon, its officers, agents, employees, contractars, subcontractors and consultants,
and nothing herein shall be construed as creating a partnership or joint enterprise between City and
Elavon.
XIII.
INSURANCE AND CERTIFICATES OF INSURANCE
Elavon shall procure and maintain for the duration of the contract insurance coverage as set forth
in the Insurance Requirements marked Exhibit "B" attached hereto and incorporated herein by
reference. Elavon shall provide a signed insurance certificate verifying that they have obtained the
required insurance coverage prior to the effective date of this Contract.
XIV.
HINDRANCES AND DELAYS
No claims shall be made by either party for damages resulting from hindrances or delays from
any cause during the progress of any portion of the work embraced in this Contract.
XV.
AFFIDAVIT OF NO PROHIBITED INTEREST
Elavon acknowledges and represents it.is aware of all applicable laws, City Charter, and City
Code of Conduct regarding prohibited interests and that the existence of a prohibited interest at any time
will render the Contract voidable. Elavon has eYecuted the Conflict of Interest Questionnaire, attached
and incorporated herein as Eshibit "C".
XVI.
SEVERABILITY
The provisions of this Contract are severable. If any paragraph, section, subdivision, sentence,
clause, or phrase of this Contract is for any reason held to be contrary to the law or contrary to any rule
or regulation having the force and effect of the law, such decisions shall not affect the remaining
portions of the Contract. However, upon the occurrence of such event, either party may terminate this
Contract by giving the other party sixty (60) days written notice.
XVII.
TERMINATION
City may, at its option, with or without cause, and without penalty or prejudice to any other
remedy it may be entitled to at law, or in equity or otherwise under this Contract, terminate further work
(City of Denton, TX) Attachment A- MERCHANP SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
under this contract, in whole or in part by giving at least sixty (60) days prior written notice thereof to
Elavon with the understanding that all services being terminated shall cease upon the date such notice is
received.
XVIII.
ENTIRE AGREEMENT
This Contract and its attachments and the documents incorporated therein embody the entire
agreement between the parties and may only be modified in writing if executed by both parties.
XIX.
CONTRACTINTERPRETATION
Although this Contract is drafted by City, should any part be in dispute, the parties agree that the
Contract shall not be construed more favorably for either party.
XX.
SUCCESSORS AND ASSIGNS
This Contract shall be binding upon the parties hereto, their successors, heirs, personal
representatives and assigns, as further described in Section 15(e) of the Agreement, Exhibit A-l.
XXI.
HEADINGS
The headings of this Contract are for the convenience of reference only and shall not affect in
any manner any of the terms and conditions hereof.
XXII.
RIGHT TO AUDIT
The City shall have the right to audit and make copies of the books, records and computations
pertaining to this agreement. Elavon shall retain such books, records, documents and other evidence
pertaining to this agreement during the contract period and five years thereafter, except if an audit is in
progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are
completed and resolved. These books, records, documents and other evidence shall be available, within
10 business days of written request. Further, Elavon shall also require all subcontractors, material
suppliers, and other payees to retain all books, records, documents and other evidence pertaining to this
agreement, and to allow the City similar access to those documents. All books and records will be made
available at Elavon's offices. The cost of the audit will be borne by the City unless the audit reveals an
overpayment of 1% or greater. If an overpayment of 1% or greater occurs, the reasonable cost of the
audit, including any travel costs, must be borne by Elavon which must be payable within thirty (30)
business days of receipt of an invoice.
Failure to comply with the provisions of this section shall be a material breach of this Contract
and shall constitute, in the City's sole discretion, grounds for termination thereof. Each of the tertns
"books", "records", "documents" and "other evidence", as used above, shall be construed to include
drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or
prepare a final printed document.
(City of Denton, TX) Attachment A- MERCHANT SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
XXIII.
NON-EXCLUSIVE CONTRACT
This Contract is non-eYClusive and nothing contained herein shall be construed so as to prevent
the City from granting other like or similar rights, privileges and contracts to any other person, firm or
corporation.
(City of Denton, TX) Attachment A- MERCHANT SERVICES CONT'ItACT with INS & CIQ Elavon 03.22.11 FINAL
IN WITNESS WHEREOF, the parties of these presents have eYecuted this agreement in the year
and day first above written.
ELAVON, INC.
BY:
Date:
Name:
Title:
Elavon, Inc.
7300 Chapman Highway
Knoxville, TN 37920
CITY OF DENTON, TEXAS
BY:
CITY MANAGER
DATE:
DEPARTMENTAL APPROVAL
APPROVED AS TO LEGAL FORM
ANITA BURGESS, CITY ATTORNEY
-
~
BY:
.
DA~ °4*Z %?a /f
(City of Denton, TX) Attachment A- MERCIIAN'I' SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
CITY OF DENTON
INSURANCE REQUIREMENTS FOR CONTRACTORS
Bidder's attention is rizrected to the insasrance reqarirements belotiv. It rs liigltly recommended
that bidtlers confer witli their respective insitrance carriers or brokers to determine in advance
of Bid scibmission tlte avazlability of insuraiace certifrcntes and endorsements as prescribed
and provided herein. If an apparent low bidder fails to comply strictly wrtl: the insatraface
reqzrirements, tTiat bid(ler may be rHsqualifred front award of tlae contract. Upon bid awnrd, all
insitrance requirements shall become contractiral obligatzons, which the successful bidder
shall laave a darty to ntaintazn tliroarghoiit the course of this contract.
STANDARD PROVISIONS:
Withoart limiting any of the other obligations ot- liabilities of the Contractor, the Contractor° shall
provide and maintain until the contracted work has been completed and accepted by the City of
Denton, Owner, the minimarm insitrance coverage as indicated hereinafter•.
As soon as practicable after notification of bid awarcl, Contractor shall file with the Purchasrng
Department satisfactofy cer-tificates of insZtr•ance, containing the bid mtmbef• and title of the
project. Contractot• may, Zrpon written request to the Purchasing Depar•tment, ask for-
clariftcation of any insitrance requirements at any time; however, Contractors are strongly
advised to make szrch reqZrests pr•ior to bid opening, since the insatr•ance req2rirenients may not be
modified or waived after bicl opening unless a tivritten exception has been submitted with the bid.
Contractor slzall not commence any tivork or deliver any material until lre or slae receives
notifzcation that tlze contract ltas been accepted, approved, and signed by tlae City of Denton.
All insitrance policies proposed or obtained in satisfaction of these requirements shall comply
with the follotiving general specifications, and shall be maintained in compliance with these
general specifications throughout the dur-ation of the Contract, or longer, if so notecl:
• Each policy shall be issued by a company authorized to do business in the State of
TeYas with an A.M. Best Company rating of at least A-.
• Any deductibles or self-insured retentions shall be the eYClusive responsibility of
contractor.
• Liability policies shall be endorsed to provide the following:
• Name as additional insured the City of Denton, its Officials, Agents,
Employees and volunteers.
• That such insurance is primary to any other insurance available to the
additional insured with respect to claims covered under the policy and that this
insurance applies separately to each insured against whom claim is made or
suit is brought. The inclusion of more than one insured shall not operate to
increase the insurer's limit of liability.
(City of Denton, TX) Attachment A- MERCHANT SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
e Cancellation: Tlze City requires 30 day tivritten notrce slzorild any of the
policies described on the certifzcate be cancelled before the arpircrtiota date.
• Should any of the required insurance be provided under a claims-made form,
Contractor shall maintain such coverage continuously throughout the term of
this contract and, without lapse, for a period of three years beyond the contract
eYpiration, such that occurrences arising during the contract term which give
rise to claims made after expiration of the contract shall be covered.
• Should any of the required insurance be provided under a form of coverage that
includes a general annual aggregate limit providing for claims investigation or
legal defense costs to be included in the general annual aggregate limit, the
Contractor shall either double the occurrence limits or obtain Owners and
Contractors Protective Liability Insurance.
• Should any required insurance lapse during the contract term, requests for
payments originating after such lapse shall not be processed until the City
receives satisfactory evidence of reinstated coverage as required by this
contract, effective as of the lapse date. If insurance is not reinstated, City may,
at its sole option, terminate this agreement effective on the date of the lapse.
(City of Denton, TX) Attachment A- MERCHANT SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS:
All ins2rf•ance policies pf•oposed or obtained in satisfaction of this Conh-act shall additionally comply
with the following marked speciftcations, and shall be maintained in compliance tivith these adclitional
speciftcations throztghout the datration of the Contract, or longer, if so noted.•
[X] A. General Liability Insurance:
General Liability insurance with combined single limits of not less than $1.000.000.00 shall
be provided and maintained by the Contractor. The policy shall be written on an occurrence
basis either in a single policy or in a combination of underlying and umbrella or excess
policies.
If the Commercial General Liability form (ISO Form CG 0001 current edition) is used:
Coverage A shall include premises, operations, products, and completed
operations, independent contractors, contractual liability covering this contract and
broad form property damage coverage.
• Coverage B shall include personal injury.
• Coverage C, medical payments, is not required.
If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO
Form GL 0404) is used, it shall include at least:
• Bodily injury and Property Damage Liability for premises, operations, products
and completed operations, independent contractors and property damage resulting
from explosion, collapse or underground (XCU) e:cposures.
• Broad form contractual liability (preferably by endorsement) covering this
contract, personal injury liability and broad form property damage liability,
[X] Automobile Liability Insurance:
Contractor shall provide Commercial Automobile Liability insurance with Combined Single
Limits (CSL) of not less than $500,000.00 either in a single polipy or in a combination of basic
and umbrella or excess policies. The policy will include bodily injury and property damage
liability arising out of the operation, maintenance and use of all automobiles and mobile
equipment used in conjunction with this contract.
Satisfaction of the above requirement shall be in the form of a policy endorsement for:
• any auto, or
• all owned, hired and non-owned autos.
(City of Denton, TX) Attachment A- MERCHANT SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
[X] Workers Compensation Insurance
Contractor shall purchase and maintain Worker's Compensation insurance which, in addition to
meeting the minimum statutory requirements for issuance of such insurance, has Employer's
Liability limits of at least $100,000 for each accident, $100,000 per each employee, and a
$500,000 policy limit for occupational disease. The City need not be named as an "Additional
Insured" but the insurer shall agree to waive all rights of subrogation against the City, its
officials, agents, employees and volunteers for any work performed for the City by the Named
Insured. For building or construction projects, the Contractor shall comply with the provisions
of Attachment 1 in accordance with §406.096 of the Texas Labor Code and rule 28TAC 10. 110
of the Texas Worker's Compensation Commission (TWCC).
Owner's and Contractor's Protective Liability Insurance
The Contractor shall obtain, pay for and maintain at all times during the prosecution of the work
under this contract, an Owner's and Contractor's Protective Liability insurance policy naming the
City as insured for property damage and bodily injury which may arise in the prosecution of the
work or Contractor's operations under this contract. Coverage shall be on an "occurrence" basis,
and the policy shall be issued by the same insurance company that carries the Contractor's
liability insurance. Policy limits will be at least combined bodily injury and property damage per
occurrence with a aggregate.
Fire Damage Legal Liability Insurance
Coverage is required if Broad form General Liability is not provided or is unavailable to the
contractor or if a contractor leases or rents a portion of a City building. Limits of not less than _
each occurrence are required.
[ ] Professional Liability Insurance
Professional liability insurance with limits not less than per claim with respect to
negligent acts, errors or omissions in connection with professional services is required under this
Agreement.
[ ] Builders' Risk Insurance
Builders' Risk Insurance, on an All-Risk form for 100% of the completed value shall be
provided. Such policy shall include as "Named Insured" the City of Denton and all
subcontractors as their interests may appear.
(City of Denton, TX) Attachment A- MERCI-IAN'I' SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
[ ] Commercial Crime
Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside the
premises, burglary of the premises, and employee fidelity. The employee fidelity portion of this
coverage should be written on a"blanket" basis to cover all employees, including new hires.
This type insurance should be required if the contractor has access to City funds. Limits of not
less than each occurrence are required.
[ ] Additional Insurance
Other insurance may be required on an individual basis for extra hazardous contracts and specific
service agreements. If such additional insurance is required for a specific contract, that
requirement will be described in the "Specific Conditions" of the contract specifications.
(City of Denron, TX) Attachment A- MERCfIANT SERVICES CON'IRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
ATTACHMENT 1
Worlcer's Compensation Coverage for Building or Construction Projects for Governmental
Entities
A. Definitions;
Certificate of coverage ("certificate")-A copy of a certificate of insurance, a certificate of
authority to self-insure issued by the commission, or a coverage agreement (TWCC-81,
TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance
coverage for the person's or entity's employees providing services on a project, for the
duration of the project.
Duration of the project - includes the time from the beginning of the work on the project
until the contractor's/person's work on the project has been completed and accepted by the
governmental entity.
Persons providing services on the project ("subcontractor" in §406.096) - includes all
persons or entities performing all or part of the services the contractor has undertaken to
perform on the project, regardless of whether that person contracted directly with the
contractor and regardless of whether that person has employees. This includes, without
limitation, independent contractors, subcontractors, leasing companies, motor carriers,
owner-operatars, employees of any such entity, or employees of any entity which furnishes
persons to provide services on the project. "Services" include, without limitation, providing,
hauling, or delivering equipment or materials, or providing labor, transportation, or other
service related to a project. "Services" does not include activities unrelated to the project,
such as food/beverage vendors, office supply deliveries, and delivery of portable toilets.
B. The contractor shall provide coverage, based on proper reporting of classification codes and
payroll amounts and filing of any overage agreements, which meets the statutory
requirements of Texas Labor Code, Section 401.011(44) for all employees of the Contractor
providing services on the project, for the duration of the project.
C. The Contractor must provide a certificate of coverage to the governmental entity prior to
being awarded the contract.
D. If the coverage period shown on the contractor's current certificate of coverage ends during
the duration of the project, the contractor must, prior to the end of the coverage period, file a
new certificate of coverage with the governmental entity showing that coverage has been
extended.
E. The contractor shall obtain from each person providing services on a project, and provide to
the governmental entity:
1) a certificate of coverage, prior to that person beginning work on the project, so the
governmental entity will have on file certificates of coverage showing coverage for all
persons providing services on the project; and
(City of Denton, TX) Attachment A- MERCHANT SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
2) no later than seven days after receipt by the contractor, a new certificate of coverage
showing extension of coverage, if the coverage period shown on the current certificate of
coverage ends during the duration of the project.
F. The contractor shall retain all required certificates of coverage for the duration of the project
and for one year thereafter.
G. The contractor shall notify the governmental entity in writing by certified mail or personal
delivery, within 10 days after the contractor knew or should have known, of any change that
materially affects the provision of coverage of any person providing services on the project.
H. The contractor shall post on each project site a notice, in the text, form and manner
prescribed by the Texas Workers' Compensation Commission, informing all persons
providing services on the project that they are required to be covered, and stating how a
person may verify coverage and report lack of coverage.
1. The contractor shall contractually require each person with whom it contracts to provide
services on a project, to:
1) provide coverage, based on proper reporting of classification codes and payroll amounts
and filing of any coverage agreements, which meets the statutory requirements of Texas
Labor Code, Section 401.011(44) for all of its employees providing services on the
project, for the duration of the project;
2) provide to the contractor, prior to that person beginning work on the project, a certificate
of coverage showing that coverage is being provided for all employees of the person
providing services on the project, for the duration of the project;
3) provide the contractor, prior to the end of the coverage period, a new certificate of
coverage showing extension of coverage, if the coverage period shown on the current
certificate of coverage ends during the duration of the project;
4) obtain from each other person with whom it contracts, and provide to the contractor:
a) certificate of coverage, prior to the other person beginning work on the project; and
b) a new certificate of coverage showing eYtension of coverage, prior to the end of the
coverage period, if the coverage period shown on the current certificate of coverage
ends during the duration of the project;
5) retain all required certificates of coverage on file for the duration of the project and for
one year thereafter;
6) notify the governmental entity in writing by certified mail or personal delivery, within 10
days after the person knew or should have known, of any change that materially affects
the provision of coverage of any person providing services on the project; and
(City of Denton, TX) Attachment A- MERCHANT SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT B
7) contractually require each person with whom it contracts, to perform as required by
paragraphs (1) -(7), with the certificates of coverage to be provided to the person for
whom they are providing services.
By signing this contract or providing or causing to be provided a certificate of coverage, the
contractor is representing to the governmental entity that all employees of the contractor who
will provide services on the project will be covered by workers' compensation coverage for
the duration of the project, that the coverage will be based on proper reporting of
classification codes and payroll amounts, and that all coverage agreements will be filed with
the appropriate insurance carrier or, in the case of a self-insured, with the commission's
Division of Self-Insurance Regulation. Providing false or misleading information may
subject the contractor to administrative penalties, criminal penalties, civil penalties, or other
civil actions.
K. The contractor's failure to comply with any of these provisions is a breach of contract by the
contractor which entitles the governmental entity to declare the contract void if the contractor
does not remedy the breach within ten days after receipt of notice of breach from the
governmental entity.
(City of Denton, TX) Attachment A- MERCIIANT SERVICES CON"IRACT with INS & CIQ Elavon 03.22.11 FINAL
EXHIBIT C
CONFLICT OF INTEREST QUESTIONNAIRE FORM CIQ
For vendor or other person doing business with local governmental entity
This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session. OFFICE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a Date Received
person doing business with the governmental entity.
By law this questionnaire must be filed with the records administrator of the local government not
later than the 7th business day after the date the person becomes aware of facts that require the
statement to be filed. See Section 176.006, Local Government Code.
A person commits an offense if the person violates Section 176.006, Local Government Code. An
offense under this section is a Class C misdemeanor.
1 J Name of person who has a business relationship with local governmental entity.
J
F~ Check this box if you are filing an update to a previously filed questionnaire.
(The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business
day after the date the originally filed questionnaire becomes incomplete or inaccurate.)
31 Name of local government officer with whom filer has an employment or business relationship.
Name of Officer
This section, (item 3 including subparts A, B, C& D), must be completed for each officer with whom the filer has an employment or other business
relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary.
A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the
filer of the questionnaire?
0 Yes ~ No
B. Is the filer of the questionnaire receiving or likely to receive taxable income, other than investment income, from or at the direction of the
local government officer named in this section AND the taxable income is not received from the local governmental entity?
0 Yes 0 No
C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer
serves as an officer or director, or holds an ownership of 10 percent or more?
1:1 Yes F-]No
D. Describe each affiliation or business relationship.
41
_J
Signature of person doing business with the governmental entity Date
Adopted 06/29/2007
(City of Denton, TX) Attachment A- MERCIIAN"I' SERVICES CONTRACT with INS & CIQ Elavon 03.22.11 FINAL
- ~~7
Elavcin
(City of Denton, TR) PAl'NIENT DEVICG PROCESSING AGREENIENT v.l I.OLIO dtd 03.29.1 I PINAL
PAYIVIENT DEVICE PROCESSING AGREENIENT
This Payment Device Processing Agreement ("Agreement") is entered into as of the Effective Date by and among the
entity identified below as the Merchant (together with any affiliated entities listed on Schedule B to the Agreement), referred to
collectivcly as the "Nlerchant," Elavon, Inc. ("Elavon") and A'Iember, as designated on the Merchant Application, and
includes the following Terms of Service (the "TOS") and all Schedules and other attachments to the Agreement, and all
Schedules and othet- attachments to the Agreement as may be added from time to time, each of which is incorporated in full by
this refcrence. The Agreement governs the Merchant's receipt and use of the Processing Services.
PAYNIENT DEVICE PROCESSING SERVICES ELECTED BY iVIERCHANT. Merchant elects the following
Payment Device Processing Services as described in the Agreement (including all applicable Schedules) and subject to the
additional terms and conditions of the applicable provisions of the Merchant Operating Guide (the "MOG"):
0 TOS, General Provisions and the MOG
~ Scliedule A, Schedule of Fees
0 Schedule B, Affiliated Entities
~ Schedule C, Merchant Application
(Laige Relationship)
❑ Substitute Form W-9 (required for U.S. entities)
❑ Substitute Form W-813EN (required for non-U.S
entities)
Pavment Device Processing Seivices Available to
Nlerchants Generallv (check desired Processine Services):
N Credit Card Services
~ Debit Card (signature-based) Services
~ Debit Card (PIN-based) Services
❑ Bill Payment (Pinless Debit) Services
❑ DCC Services
❑ Wireless Set-vices
❑ Contactless Set-vices
❑ Schedule D, Electronic Gift Card Services
~ Schedule E, Electronic Check Services
❑ Schedule J, Processing Services for Convenience Fees
❑ Schedule K, Enterprise Billing Solutions Services
❑ Schedule N, Internet PIN-Based, Debit Card Services
Pavment Device Processine Services Available to
Merchants Oueratine in Certain Merchant Cateeories
(check desired Processine Services):
❑ EBT Services
❑ Hospitality Services
❑ No Signature Required Program Services
❑ Scliedule F, Petroleum Services
~ Schedule I, Processing Services for Government
Entities and Tnstitutions
Pavinent Device Processine Set-vices Available to
Merchants Oneratine in Certain Jurisdictions (checl<
desired Processine Setvices):
❑ Schedule G, Processing Set-vices in Canada
❑ Schedule H, Processing Seivices in Puerto Rico
IN WITNESS WHEREOF, the parties hereto have executed the Agreement.
TAE CITY OF DENTON, TEXAS, ELAVON, INC.
on behalf of itself and eacli of the affiliated entities
identified on Schedule B(the "MERCHANT"): By:
By: Name:
Name: Title:
Title: Date:
MEMBER
By:
Name:
Titie:
("Effective Date")
,
ElaV011
(City of Denton,'I'X) PAYMENT DEVICG PROCESSING AGREEt~/IENT v.11.01.10 dtd 03.29.ll PINAL
TERNIS OF SERVICE
amounts due to Elavon or MemUer under the
Agreement) may be available as soon as the next
SeCtloll A- General Provisions Applicable to All
banking day after the banking day on which Elavon
Services
and Member process the Transactions. Regardless
of where Merchant maintains its DDA, Merchant
1) DEFINITIONS; RULES OF CONSTRUCTION.
aclcnowledges and agrees that Elavon and Member
Capitalized terms used in the Agreement and in any
may use either "direcP" (ACH debit autliority
applicable Schedule shall have the meanings ascribed to
pursuant to which Chargebaclcs, returns,
such terms in the Glossary set forth in Section B of this
adjushnents, fees (subject to Section (A)(5)(a)),
TOS or in such Schedules. All Sdiedules are expressly
fines, penalties, assessments from the Payment
incorporated in their entirety and made a pait of the
Networlcs and other amolmts due to Elavon or
Agreement. Captions in the Agreement and in the
Member under the Agreement are debited from the
attached Schedules are for convenience only and do not
DDA) or "net" (pLu-suant to which Chargebaclcs,
constitute a limitation of the tenns in the Agreement.
returns, adjustments, fees (suUject to Section
Singular terms shall include the plural, and vice versa,
(A)(5)(a)), fines, penalties, assessments from the
unless the context otherwise requires. The word "day"
Payment Networks and other amounts due to Elavon
shall mean "calendar day", unless specifically stated
or Member under the Agreement are netted from
othenvise. In the event of a conflict between the terms of
Transaction proceeds) methods to recover any
Section A- General Provisions, and any applicable
amowlts owed by Nterchant to Elavon or Member
Schedule, the terms of the applicable Schedule shall
under the Agreement. To the extent required,
prevail.
Merchant authorizes and appoints Elavon or
2) ACCEPTANCE OF PAYNIENT DEVICES.
Member to act as Merchant's agent to collect
Nlerchant shall deterniine in accordance with the
Transaction amounts from the Customer, the Issuer
Payment Network Regulations and the Agreement which
or the Customer's financial institution.
types of Payment Devices and Processing Services it
i) Deposits. Nlerchant agrees that the Agreement
will agree to accept as a fonn of payment from its
is a contract of financial accommodation within
Customers by selecting the applicable Processing
the meaning of the Bankruptcy Code, 11 U.S.C.
Services on page 1 of the Agreement and/or on the
Section 365, as amended fi•om time to time.
appropriate Schedule. The terms and conditions for the
Merchant acknowledges that its obligation to
acceptance of the applicable Payment Devices and
Elavon and Meinber for all amounts owed
Merchant's use of the Processing Services are set forth
under the Agreement arises out of the same
in the Agreement and in the Merchant Operating Guide
transaction as Elavon's and Member's
(the "MOG"), incorporated herein by this reference and
obligation to deposit funds to the DDA and
located at our website
such amoimts are owed in the ordinary course
https:iiwww.merchantconnectcom%CWR\Veb!pdf,'MOG
of business.
_Eng.pdf. Each Schedule to the Agreement shall be
ii) Provisional Credit. Merchant acknowledges
governed by the TOS and the applicable provisions of
that all credits for funds provided to it are
the MOG, as well as by the terms set forth in the
provisional and subject to reversal in the event
Schedule.
that Elavon and Member do not receive
3) TRANSACTIONS.
payment of corresponding settlement amounts
a) Merchant Compliance. Merchant must comply
from the Payment Nerivorl<s. Merchant further
with all the requirements under the Agreement.
acknowledges that all credits are subject to
Merchant must also comply with the procedures set
adjustments for inaccuracies and errors
forth in the MOG and any other guides, manuals, or
(including rejects) and Chargebacks in
rules provided in writing by Elavon fi•om time to
accordance with the Agreement and the
time.
Payment Nerivork Regulations, whether or not a
b) Settlement of Transactions. Subject to the other
Transaction is charged back by the Issuer or
provisions of the Agreement and subject to
Customer. Merchant authorizes Elavon or
Merchant's compliance with the terms of the
Member to initiate reversal or adjustment (debit
Agreement and the Payment Network Regulations,
or credit) entries and to initiate or suspend such
Elavon and Member will process Transactions daily,
entries in accordance with the Agreement as
and if Merchant maintains its DDA with Member,
may be necessaiy to grant or reverse
provisional credit for Transactions (less recoupment
provisional credit for any Transaction.
of any Chargebacks, returns, adjustments, fees
Cardholder credits issued by Merchant to PIN-
(subject to Section (A)(5)(a)), fines, penalties,
Debit Cards wili not be subject to this delay.
assessments from the Payment Networks and other
iii) Chargebaclcs. Merchant agrees to accept for
Chargeback, and will be liable to Elavon and
EldVUl1
(Ciry of Deuton, T\) PAYblEN'I' DHVICE PROCESSING AGREEMEN7'v.1 I.OLIO dtd 03.29.11 F[NAL
Member in the amount of any Transaction
disputed by the Cardholder or Issuer for any
reason under the Payment Network
Regulations. Merchant authorizes Elavon and
Member to offset fi-om funds due Merchant or
to debit the DDA or the Reseive Account for
the amount of all Chargebacks. Merchant will
fully cooperate with Elavon and Member in
complying with the Payment Network
Regulations regarding all Chargebacks.
iv) Original Translction Receipts. Under no
circumstances will Elavon or Member be
responsible for processing rehims, refunds, or
adjustments related to Transactions not
originally processed by Elavon and Member.
c) DDA and ACH Authorization. Merchant will
establish and maintain with Member (or with
another ACH participating financial institution) one
or more DDAs to facilitate payment for
Transactions. Merchant will maintain sufficient
ftunds in the DDA to accommodate all Transactions
contemplated by the Agreement and all
Chargebacks, returns, adjustments, fees, fines,
penalties, assessments from the Payment Networl<s
and other payments due under the Agreement.
Merchant irrevocably authorizes Elavon, Member,
and their respective autharized vendors and agents
who provide seivices under the Agreement at
MerchanYs request, to initiate ACH debit and credit
entries to the DDA or the Resetve Account for any
products or services requested by Merchant in order
to make payments to or collect payments from
Merchant due under the Agreement. The foregoing
authorizations will remain in effect after termination
of the Agreement until all of Merchant's obligations
to Elavon and Member have been paid in full.
Elavon and Member have the right to delay, within
their reasonable discretion, crediting the DDA with
funds related to Transactions in order to investigate
any Transactions related to suspicious or fraudulent
activity or funds for Transactions for which Elavon
or Member have not received funding from the
applicable Payment Networks. Elavon and Member
will endeavor to investigate or process any delayed
Transactions expeditiously and will endeavor to
notify Merchant if any Transactions are delayed for
more than forty-eight (48) hours. Elavon has the
right to rely upon written instructions submitted by
Merchant requesting changes to the DDA. In the
event Merchant changes the DDA, the ACH debit
and credit authorization established hereunder will
apply to the new account and Merchant shall
provide Elavon and Member such information
regarding the new DDA as they deem necessary to
effect payments to and from the DDA as provided
under the Agreement. It may take Elavon up to ten
0) business days after Elavon's receipt of a written
notice firom Merchant to reflect in its system any
change to MerchanYs DDA.
d) Depository Institution. Merchant authorizes its
depositoiy institution to grant Elavon and/or
Member access to any and all information or records
regarding the DDA reasonably requested by Elavon
and/or Member to debit or credit the DDA and to
otherwise exercise their rights under the Agreement
with respect to the DDA.
e) Asserted Errors. It is the responsibility of
Merchant to reconcile the statements regarding
Transaction activity received from Elavon, any
Payment Networl<, and any third party vendors with
the statements Merchant receives for Merchant's
DDA. Merchant must promptly examine all
statements relating to the DDA and promptly notify
Elavon and Member in writing of any errors in the
statement Merchant received from Elavon.
Merchant's written notice must include: (i)
Merchant name and accoimt number; (ii) the dollar
amount of the asserted error; (iii) a description of
the assetted enror; and (iv) an explanation of why
Merchant believes an error exists and the cause of it,
if known. That written notice must be received by
Elavon within ninety (90) days of the date of the
Elavon statement containing the asserted error. If
Merchant fails to provide sucli notice to Elavon
within said ninety (90) days, Elavon and Member
shall not be liable to Merchant for any errors
Merchant assetts at a later date. Merchant may not
make any claim against Elavon or Member for any
loss or expense relating to any asserted en-or for
ninety (90) days immediately following Elavon's
receipt of MerchanYs written notice. During that
ninety (90) day period, Elavon (i) will be entitled to
investigate the asserted error, and Merchant shall
not incur any cost or expense in connection with the
asserted error without notifying Elavon, and (ii)
notify Merchant of its proposed resolution of the
asserted error.
4) SECURITY INTERESTS, RESERVE ACCOUNT,
RECOUPNIENT, AND SET-OFI+.
a) Security Interests. Deleted pursuant to Schedu(e I.
b) Reserve Account.
i) Establishment. With notification to Merchant,
Elavon may establish a Reserve Account in the
Reserve Amount upon the occurrence of a
Reserve Event for the purpose of providing
security and a source of funds to pay Elavon
and Member for any and all amounts that may
be oeved by Merchant hereunder. Elavon and
Member shall have sole contro) of the Reserve
Account.
ii) Reserve Amount. The Reserve Amount is
equal to the aggregate dollar value of: [(average
% credits to processing volume during the same
period + average % Chargebacks to processing
volume during the same period) multiplied by
E11VOT1
(City of Denton, TX) PAYYIENT DEVICE PROCESS[NG AGRF.Eb1ENT v.l I.01.10 dtd 03.29.11 FINAL
four] muiltiplied by [average monthly
processing volwne] plus [one month's average
fees] pius days delayed delivery multiplied
by the average day's processing volume]. For
pw-poses of this calculation, the number of days
delayed delivery means the number of days
behveen the date on which the Cardholder's
Payment Device is charged and the date the
product is shipped to the Cardholder (if the
goods are being shipped) or the date the
Cardholder receives the product or setvice.
Fin•ther, for purposes of this calculation, Elavon
will determine, in consultation with Merchant,
the applicable period considering factors such
as Merchant's Transaction volume and
seasonality.
(A) Reserve Event. The following will
constitute Reserve Events: (a) fraudulent
activity in any monthly period that equals
or exceeds one percent (1%) of Merchant's
average monthly volume over the
preceding rivelve (12) month period, (b)
Chargebaclcs in any monthly period that
equal or exceed one percent (1%) of the
total dollar value of incoming items to
Elavon, (c) Elavon's reasonable belief that
a Nlerchant not approved by Elavon to
engage in delayed delivery transactions has
accepted deposits but has not delivered the
goods ar services, (d) the commencement
of a Bankruptcy Proceeding by or against
Merchant, (e) fines or assessments imposed
or reasonably eYpected to be imposed by
the Payment Nerivorks, ( fl the occurrence
of a material adverse change in Merehant's
financial condition, (g) assignment of the
Agreement by Merchant in violation of
Section 15(e), and (h) revocation,
termination or non-renewal of any
guaranty, indemnity agreement, letter of
credit or any other Alternate Security
provided in connection with the
Agreement, if applicable.
iii) Funding. Elavon and Member may fund the
Reserve Account (in each case up to the
Reserve Amount) by any one or more of the
following means.
(A) Elavon and Member may require Merchant
to deposit funds into the Reserve Account;
and/or
(B) Elavon and Member may deposit into the
Reserve Account funds they would
otheiwise be obligated to pay Merchant.
iv) Use of Funds in Reserve Account. Elavon or
Member may, without notice to Merchant,
apply funds in the Reserve Account against any
outstanding amounts Merchant owes under the
Agreement except for Elavon's fees. Also,
Elavon or Member may debit the Reservc
Account to exercise their rights under the
Agreement including, without limitation, their
rights of set-off and recoupment to collect any
amounts due to Elavon or Member. FLn-ther,
Nterchant agrees that Elavon or Member may
be required to send funds in a Reserve Account
to a third party in response to a tax levy or other
court order.
v) Termination of Reserve Accowit. Funds held
in the Resetve Account shall remain in the
Reserve Account, and shall be used only to pay
amounts due to Elavon and Member (except as
otlierwise provided in the Agreement and
except for Elavon's fees), until the Merchant
has paid in full all amounts owing or that may
be owed under the Agreement, including all
Chaigebacks, returns, adjustments, fees, fines,
penalties, assessments fi-om the Payment
Networlcs and any other payments due under
the Agreement. In no event shall Merchant be
entitled to a return of any funds remaining in
the Reserve Account before one hundred eighty
(180) days following the effective date of
tennination of the Agreement. Notwithstanding
the foregoing, if Elavon and Member determine
that the Reserve Event that gave rise to the
establishment of the Reserve Account has been
sufficiently cured, Elavon and Member may, in
their sole discretion, ternlinate the Reserve
Account and/or release funds fi-om the Reserve
Accotmt prior to the termination of the
Agreement.
vi) Alte►•nate Securily. In lieu of or in addition to
establishing and funding a Reserve Account,
Elavon may, in its sole and absolute discretion,
accept an alternative form of security
("Alternate Security") far the puipose of
providing a source of funds to pay Elavon and
Member for any and al] amounts owed by
Merchant. Elavon retains the right, at any time,
to reject Alternate Security previously accepted
by Elavon and/or to require funding of a
Reserve Account so that the amount of funds
held in a Reserve Account, taken together with
amounts represented by any Alternate Security
accepted by Elavon, equal the Reserve Amount.
c) Recoupment and Set-off. Elavon and Member
have the right of recoupment and set-off. This
means that they may offset any outstanding or
uncollected amounts owed to them hereunder
(except for Elavon's fees, which are provided for in
Section 5(a)) from: (i) any amounts they would
othenvise be obligated to deposit into the DDA; and
(ii) any other amounts they may owe Merchant
tmder the Agreement. Merchant acknowledges that
in the event of a Bankruptcy Proceeding, in order
for Merchant to provide adequate protection under
9
ElaVO11
(City of Denton, Ta) PAYt'YtEN'1' DEVICE PROCESSING f\GREGMEN7' v.l IA L10 dtd 03.2211 PINAL
Bankruptcy Code Scction 362 to Elavon and/or
Member hereunder, Elavon and NlemUer tnay
require the creation of a Reservc Account and either
of them shall have the right to offset against the
Resetve Account for any and all obligations
Merchant may owe to Elavon and Member, without
regard to whether the obligations relate to
Transactions initiated or processed before or after
the initiation of the Bankruptcy Proceeding.
d) Remedies Cumulative. The rights conferred upon
Elavon and Member in this section are not intended
to be exclusive of each other or of any other rights
and remedies of Elavon and Member under the
Agreement, at law or in equity. Rather, each and
every right of Elavon and Member under the
Agreement, at law or in equity is cumulative and
concurrent and in addition to every other right.
5) PROCESSING SERVICES; FEES; OTHER
AlVIOUNTS OWED; TAXES. Elavon and Member
will provide Merchant with Processing Services in
accordance with the Agreement. Merchant will
compensate Elavon and Member for Processing Services
as indicated on Schedule A, Schedule of Fees, and in any
other Schedules executed by Elavon, Member and
Merchant.
a) Fees. Merchant will pay Elavon and Member fees in
the ordinaty course of business for all Processing
Services, supplies, and equipment in accordance
with Schedule A, any amendment to Schedule A
and any additional application or setup form(s) or
schedules provided by Elavon and Member in
writing to Merchant Such fees will be calcidated
once each month for the previous month's activity.
Elavon will send Merchant an invoice reflecting the
fees due, which Merchant must pay within thirty
(30) days of the invoice date. In addition to all other
available remedies, Elavon and Member may offset
any outstanding or uncollected amounts that are
more than ninety (90) days past due from (i) any
amounts they would otherwise be obligated to
deposit into the DDA and (ii) any other amounts
Elavon or Meinber may owe Merchant under this
Agreement.
b) Research. In addition, Merchant will pay Elavon at
its standard rates for research as set forth on
Schedule A including, but not limited to, research
required to respond to any third party or government
subpoena, levy, garnishment or required reporting
on Merchant's account.
c) Change of Fees. The fees set forth in the Agreement
and any additional application or set up form will not
be amended by Elavon for the Term of the
Agreement except as provided in Schedule A or to
pass through to Merchant increases in interchange,
assessments, or fees imposed by a third paity.
Notwithstanding the previous sentence, the Card
Processing Fees set forth in Section III of Schedule A
may be adjusted during the Term in Elavon's or
Member's discretion, without further consent or
agreement fi-om Merchant, to pass through any new
fees imposed upon Elavon or Member by any third
parties (including any Payment Network) in
connection with the Processing Services.
d) Other Amounts Owed. Merchant will promptly
pay Elavon or Member any amount incurred by
Elavon or Member attributable to the Agreement,
including, without limitation, Chargebacks, returns,
adjustments, fees, fines, penalties, assessments
(including all fines, penalties, or assessments by the
Payment Nerivorks as a result of Merchant's
Transaction processing), and any other payments
due under the Agreement. Elavon or Member may
offset these amounts from funds otherwise owed by
Elavon or Member to Merchant or may debit these
amounts fi•om Merchant's DDA or Reserve Account
by ACH. In the event such offset a- ACH debit does
not fully reimburse Elavon or Member for the
amount owed, Merchant will promptly pay Elavon
or Member such amoimt upon demand. Elavon will
charge interest on all imcollected amowits owed to
Elavon or Member that are inore than thirty (30)
days past due at a rate equal to the lesser of (i) the
product of the uncollected amounts and the then-
current Federal Funds Rate plus 10% (calculated
and computed on the basis of a 365-day year), or (ii)
the maximum daily rate of interest permitted imder
applicable law.
e) T1ses. Merchant is also obligated to pay all taxes
and other charges imposed by any governmental
authority on the goods and services provided under
the Agreement excluding the income taxes
attributable to Elavon or Member. If Merchant is a
tax-exempt entity, Merchant will provide Elavon
and Member with an appropriate certificate of tax
exemption.
6) ACCURACY OF INFORMATION;
INDEMMFICATION; LIMITATION OF
LIABILITY.
a) Accuracy of Information. See Schedule I.
b) Responsibilities. See Schedule I.
c) Limitation of Liability. Merchant acknowledges
that fees for the Processing Services provided to
Merchant by Elavon and Member are very small in
relation to the funds advanced to Merchant for
Transactions and consequently Elavon's and
Member's willingness to provide these services is
based on the liability limitations contained in the
Agreement. Therefore, in addition to greater
limitations on Elavon's or Member's liability that
may be provided elsewhere, any liability of Elavon
and Member under the Agreement, wllether to
Merchant or any other paity, whatever the basis of
the liability, will not esceed, in the aggregate, an
amount equal to the fees paid by Merchant to
Elavon and Member during tlte last twelve (12)
months, exclusive of fees and variable costs
Ela-von
(City of Denton, T,l') PAYNIENT DEVICE PROCESSING AGREEIviENT v.l 1.01.10 dtd 03.29.11 FINAL
incurred by Elavon and Member to process
Transactions, such as Interchange costs,
assessments, and fees imposed by a third party. In
no event will the parties, or their agents, officers,
directors, or employees be liable to any other party
to the Agreement for indirect, exemplary, punitive,
special, or consequential damages.
d) Pe►•fo►•mance. No pat-ty hereto shall be liable for
any failure or delay in its performance of tfie
Agreement if such failure or delay arises for reasons
beyond the control of such party and without the
fault or negligence of such party.
7) REPRESENTATIONS AND WARRANTIES;
COVENANTS.
a) Nlerchant Representations and Warranties.
Merchant represents and warrants to Elavon and
Member the following as of the Effective Date:
i) Information. Merchant is validly existing and
duly organized under the laws of the
jurisdiction in which it was formed with all
necessary authority, qualifications, licenses and
registrations necessaty to conduct its business,
in all jurisdictions where Merchant coiiducts
business, in compliance with all Laws and
Payment Nerivorlc Regulations. All written
information provided in tlle Merchant
Application, in the bid process if applicable, the
assumptions in Schedule A or any other
document submitted to Elavon or Member is
h-ue and complete and properly reflects the
business, financial condition and ownership of
Merchant in all material respects.
ii) Authority and Power. Merchant and the
person signing the Agreement on Merchant's
behalf have the power to execute and perform
the Agreement. Tlle person executing the
Agreement is duly authorized to bind Merchant
and each affiliated entity identified in
Schedule B to all provisions of the Agreement
as if each affiliated entity had executed the
Agreement, and such person is authorized to
execute any document and to take any action on
behalf of Merchant which may be required by
Elavon to carry out the Agreement. Furthei•, the
signing and/or performing in accordance with
the Agreement will not violate any Law, ar
conflict with any other agreement to which
Merchant is subject.
iii) MasterCard MATCHT" System and
Consortium Merchant Negative File.
Merchant has never been placed on the
MasterCard MATCHT"' system (formerly
known as the Combined Terminated Merchant
File), or been named to the Consortium
Merchant Negative File maintained by Discover
or, if it has, it has disclosed this fact to Elavon
in writing.
iv) No Litigation. There is no action, suit, or
proceeding pending, or to Merchant's
knowledge, threatened that would reasonably
be expected to materially impair N[erchant's
ability to carty on Merchant's business
substantially as now conducted or which would
materially and adversely affect MerchanYs
financial condition or operations.
b) Nierchant Covenants. Merchant covenants the
following to Elavon and Member during the Term:
i) Compliance with Laws and Payment
Nerivork Regulations. Merchant will canply
with all Laws and Payment Nerivork
Regulations.
ii) Business Use. Merchant is obtaining and using
the Processing Services from Elavon and
Member for business purposes only and to
facilitate lawful business Transactions between
Merchant and its Customers. Merchant will not
submit Transactions for processing to Elavon or
Member fa• any businesses, tnaterially different
products, or methods of selling other than those
set forth in the Merchant Application without
the prior written consent of Elavon. Nlerchant
also acknowledges that the DDA into which
debits and credits are made is being used for
lawful business purposes only.
iii) Transactions. To the best of MerchanYs
knowledge, all Transactions are bona fide. No
Transaction involves the use of a Payment
Device for any puipose other than the payment
to Merchant or a return or adjustment related to
such payment. No Transaction involves a
Cardholder obtaining cash from Merchant
unless aliowed by the Payment Network
Regulations and agreed to in writing by Elavon.
All Transactions will be accepted at entities
pi•operly identified to Elavon and Member on
Schedule B attached hereto.
iv) Responsibility for Actions. Merchant is
responsible for any violations of this
Agreement that result from the actions of or
failure to act by Merchant's officers, directors,
employees, agents, Value Added Servicers,
btisiness invitees, and those of any other Person
who, with or without Merehant's consent or
cooperation, obtains access to information
related to Transactions from Merchant or access
to systems under Merchant's control, but
excluding all actions or failures to act to the
extent attributable to Elavon's or Member's
breach of the Agreement, negligence or willful
misconduct.
c) Elavon and Member Representations and
Warranties. Elavon and Member, each on their
own behalf and not on behalf of the other, represent
and warrant to Merchant the following as of the
Effective Date of tlle Agreement:
~~1)
EI'c1VOr1
(City of Denton,'C\) PAYN4ENT DEVICE PROCESSING AGREEMENT v.l I.01.10 dtd 03.29.1 I FINAL
i) Liformation. Elavon is a corporation validly
existing and organized under the laws of the
State of Georgia. Member is a banking
association validly existing and organized in the
United States.
ii) Corpornte Power. Elavon, Member and the
persons signing the Agreement on behalf of
each of them have the power to execute and
perform the Agreement. The persons executing
the Agreement are duly authorized to bind
Elavon and Member, as applicable, to all
provisions of the Agreement and such persons
are authorized to execute any document and to
take any action on behalf of Elavon and
Member, respectively, which may be required
to carry out the Agreement. Further, the signing
and/or perfonning in accordance with the
Agreement will not violate airy Law, or conflict
with any other agreement to which they are
respectively subject.
iii) No Litigation. There is no action, suit, or
proceeding pending, or to Elavon's or
Member's knowledge threatened, which if
decided adversely would impair Elavon's or
Niember's ability to carry on their business
substantially as now conducted or which would
adversely affect Elavon's or Ntember's
financial condition or operations.
d) Elavon and 1Vlember Covenants. Elavon and
Member, each on their own behalf and not on behalf
of the other, covenants to Merchant the following
during the Term:
i) Compliance with Laws and Payment
Network Regulations. Elavon and Member
will comply with all Laws and Payment
Network Regulations including the
requirements of the Payment Card Industry
("PCI") Data Security Standard, as applicable
to them and their respective systems, for the
Processing Services provided under the
Agreement. The Merchant may review
Elavon's current PCI compliance status on the
Payment Network websites as available.
ii) Responsibility for Actions. Elavon and
Member are responsible for any violations of
this Agreement that result from the actions of or
failure to act by their officers, directors,
employees and agents; but excluding actions or
failures to act to the extent attributable to
MerchanYs breach of the Agreement,
negligence or willful misconduct.
8) AUDIT AND INFORMATION.
a) Audit.
i) Elavon or Member Audit. In the event that
Elavon or Member reasonably suspects that
dhey are subject to a financial or reputational
risk due to Merchant's actions or omissions,
Merchant authorizes Elavon and Member to
perform an audit or inspection of Merchant's
operations to confirm compliance with the
Agreement upon reasonable advance notice and
at Elavon's or Member's expense. Nterchant
agrees to cooperate, in good faith, with any
such audit conducted by Elavon or Member.
ii) Data Comp►•omise, Security, and Payment
Nehvorlc Audit. In addition to Merchant's
obligations under Section 13(e)(i), in the event
of a known or suspected data compromise,
security incident, the occwrrence of suspicious
activity, or otherwise if required by the
Payment Networks, Merchant will obtain, at the
request of Elavon, MemUer or any Payment
Network, and submit a copy of a forensic audit
from a qualified incident response assessor of
the information security of Merchant's business
at MerchanYs expense. Merchant acknowledges
and agrees that the Payment Nehvorks have the
right to audit Merchant's operations to confirm
compliance with the Payment Nehvork
Regulations.
b) Information.
i) Authorit,y. Nlerchant authorizes Elavon and
Ntember to malce, upon receipt of the Merchant
Application and from time to time, any business
credit or other inquiries they consider
reasonably necessary to review the N(erchant
Application or continue to provide Processing
Services under the Agreement. Merchant also
authorizes any Person or credit reporting
agency to compile infonnation to answer those
business credit inquiries and to furnish that
information to Elavon.
ii) Financial Information. See Schedule I.
iii) Merchant Information. Merchant agrees that
any information about Merchant or any of its
principals, affiliates or agents that is provided
to Elavon or Member on the Merchant
Application or otherwise obtained by Elavon or
Member in connection with the Agreement may
be (A) used by Elavon and Member, and their
respective affiliates, agents and referral
partners, (i) in order to provide the Processing
Services and related functions to Merchant and
to respond to any further application for
services, or (ii) for administrative purposes; (B)
disclosed and shared for reporting purposes to
credit rating agencies, in accordance with the
Payment Network Regulations, to Issuers and to
the financial institution where the DDA is
maintained; (C) used or disclosed in the course
of any actual or potential sale, reorganization or
other change to Elavon's or Member's
business; (D) collected, used and disclosed as
required or permitted by Law (e.g., for tax
reporting or in response to a subpoena); and (E)
retained for such periods of time as required by
7
Elavon
(City of Denron,'Px) PAYMENT DEVICL PROCESSING AGREGi~,IENT v.I 1.01.10 dtd 03.29.1 I FINAL
Elavon and Ntember to perform their
obligations and exercise their rights under the
Agreement.
c) Customer l(lentification. To help the government
fight thc funding of terrorism and money laundering
activities, federal law requires all financial
institutions to obtain, verify, and record information
that identifies each Person who opens an account.
Accordingly, Merchant must provide cettain
information and identifying documents to allow
Elavon and Metnber to identify Merchant.
9) FRAUD 1VIONITORING. Merchant is solely
responsible for monitoring its Transactions. Elavon and
Ntember are under no duty to monitor Merchant's
Transactions for fraudulent or other suspicious activity.
10) BUSINESS CONTINUITY.
a) Nlerchant. Merchant is solely responsible for all
Transactions and Transaction Receipts until such
time as the Transaction Receipts have been received
and validated by Elavon. Merchant will maintain
sufficient "Uaci(up" information and data (e.g.,
Transaction Receipts or detailed repoiting) with
respect to Transactions and will provide such
information and data to Elavon or Member upon
requcst in order to reconstruct any infonnation or
data lost due to any malfimction of MerchanYs or
Elavon's or Niember's systems. Elavon is under no
duty to recreate lost Transactions or Transaction
Receipts Lmless such loss results from Elavon's
breach of the Agreement.
b) Elavon and Nlember. Elavon is required, pursuant
to federal banking regulations, to establish,
maintain, and test an effective and comprehensive
business continuity plan (`BCP"). Elavon and
Member maintain BCPs that are commercially
reasonable within the industry for the Processing
Services. Elavon and Member will continue to
adhere to their respective BCPs and will modify
those plans fi•om time to time to meet the objectives
and requirements of their respective businesses.
11) THIRD PARTIES.
a) Products or Services. See Schedule I.
b) Third Party Contractors. Merchant acknowledges
and understands that Elavon or Member may use the
services of third party service providers in
connection with the performance of their obligations
under the Agreement, including airy Schedule to the
Agreement. Except as otherwise provided in the
Agreement, Elavon and Member shall be
responsible for the performance of their obligations
hereunder norivithstanding any use of or delegation
of any responsibility to a third party service
provider.
12) TERM AND TERNIINATION.
a) Term. Unless terminated as set forth below, the
Agreement, including all Schedu(es hereto executed
as of or following the Effective Date, will remain in
effect for the Term, as defined on Schedule A,
Schedule of Fees, following the Effective Date set
out on page 1 of the Agreement.. If Mercllant
processes Transactions beyond the Terin, then the
terms of the Agreement shall govern such
Transaction processing.
b) Termination.
i) By 1Vlerchant.
(A) The Agreement may be terminated by
Nterchant effective at the end of the Temi
by providing written notice of an intent not
to renew to Elavon at least ninety (90) days
prior to the expiration of the then current
term.
(B) The Agreement may be terminated by
Merchant if any of the following conditions
remain uncured thirty (30) days after
Merchant provides Elavon and Member
written notice of the existence of the
condition:
(1) Elavon has failed to pay Merchant an
undisputed amount owed to Merchant
under the Agreement; or
(2) Elavon or Member has failed to
perform a material obligation under
the Agreement.
ii) By Elavon o►• 1VIembei•.
(A) The Agreement may be terminated by
Elavon or Member effective at the end of
the Term by providing written notice of an
intent not to renew to Merchant at least
ninety (90) days prior to the expiration of
the then current term.
(B) The Agreeinent may be teniiinated by
Elavon or Member if, after providing sixty
(60) days written notice, any of the
following conditions remain:
(1) The occurrence of Excessive Activity.
(2) The acceptance of Card Not Present or
Convenience Fee Transactions without
proper disclosure to Elavon and
Member in the Agreement or an
amendment to the Agreement.
(3) The failure to pay Elavon or Member
any amount Merchant owes Elavon or
Member.
(4) The failure by Merchant to perform a
material obligation of the Agreement.
(C) The Agreement may be terminated by
Elavon or Member immediately upon the
occurrence of one or more of the
following:
(I) The occurrence of a material adverse
change in Merchant's financial
condition.
(2) The garnishment or attachment of
Merchant's deposit accounts with
Nlember, Alternate Security, the DDA,
the Reserve Account, or any of
Elavoiz
(City of Denton, T\) PAl'N[F.NT DEVICE PROCESSING AGREENIENT v.l 1.01.10 d[d 03.29.11 FINAL
MerchanYs property in tlie possession
of Elavon or MemUer.
(3) The commencetnent of a Bankruptcy
Proceeding by or against Merchant.
(4) Any representation, warranty or
covenant by Merchant is false or
misleading in any material respect as
of the date made, or becomes false or
misleading in any material respect at
any time during the term of the
Agreement.
(5) Any Payment Network requires
Elavon or Ntember to terminate the
Agreement or cease processing
h-ansactions for Merchant.
(6) Any change, not approved by Elavon,
that constitutes a material change in
the types of goods and services
Merchant sells or in the methods by
which Merchant sells them, or- any
change that results in Merchant's
violation of Elavon's or Member's
underwriting policy.
(7) Assignment of the Agreement or a
change in control of Merchant without
Elavon's evritten consent.
(8) Revocatioti, termination or non-
renewal of any guaranty, indemnity
agreement, letter of credit or other
Altemate Security executed in
connection with the Agreement, if
applicable.
The parties' rights of termination under the Agreement
are cumulative. A party may exercise its terniination
riglits with respect to an individual Schedule to the
Agreement or the participation of any affiliate without
terminating other Processing Services or Schedules,
provided that any termination of the Agreement in whole
shall automatically terminate all related Processing
Services and Schedules. A specific right of termination
in this section shall not limit any other right of the party
to terminate the Agreement or any Schedule expressed
elsewhere.
c) Notice of Termination.
i) Notice of termination by Merchant, Elavon, or
Member must be given in writing. Termination
shall be effective on the date specified by the
written notice; provided, however Merchant
agrees that closing MerchanYs account with
Elavon may take up to thirty (30) days
following Elavon's receipt of written notice of
termination. In those limited instances where
Merchant's account is reinstated by Elavon
foliowing termination by either Merchant or
Elavon in the Term, all of Merchant's
obligations under the Agreement are likewise
reinstated.
d) Action upon Termination.
i) Accotmts. All obligations of a party regarding
Transactions processed prior to termination will
survive tennination. Funds related to
Transactions processed prior to termination
may be placed in a Reserve Accotmt until
Merchant pays all amounts IVterchant owes
Elavon or Member or for which Merchant is
liable under the Agreement Merchant must
maintain enough funds in the DDA following
termination to cover all Chargebacks, retin-ns,
adjustments, fees, fines, penalties, assessments
from the Payment Nerivorks and other amounts
due under the Agreement for a reasonable time,
but in any event, not less than 180 days from
termination.
ii) Eqttipment. If Merchant's equipment is leased,
Merchant is obligated to honor the tenns and
conditions of Merchant's leasing contract. If
Merchant's equipment is owned or supplied by
Elavon, Merchant must retun-n all equipment to
Elavon and pay Elavon any amoLmts Merchant
owes for such equipment within thirty (30)
days.
iii) Early Termination Fee. Deleted pursuant to
Schedule I.
13) CONIPLIANCE WITH LAWS AND PAYIVIENT
NETWORK REGULATIONS; NIATCHTM AND
CONSORTIUNI 1VIERCHANT NEGATIVE FILE.
a) Compliance with Laws and Payment Network
Regulations. Merchant, Elavon and Member agree
to comply with all applicable Payment Network
Regulations, including all requirements applicable
to obtaining authorization for ACH debits froin or
charges to a consumer account, as applicable, and
with any policies and procedures provided by
Elavon or Member. Merchant, Elavon and Member
further agree to comply with all Laws applicable to
the selected Processing Services, including without
limitation, Laws related to: (i) Payment Devices; (ii)
electronic fund transfers; (iii) confidential treatment
of information; and (iv) the Fair and Accurate Credit
Transactions Act of 2003 (FACTA), including its
requirements relating to the content of Transaction
Receipts provided to Cardholders. Merchant will
execute and deliver to Elavon and Member all
documents they may from time to time reasonably
deem necessary to verify MerchanYs compliance
with this provision.
b) Privacy Laws. In addition to Section (A)(14)(b),
each party hereto must take all commercially
reasonable steps to protect the confidentiality of
Cardholder and Transaction information and shall
establish and maintain physical, technical and
administrative safeguards to prevent unauthorized
access by third parties to such Cardholder and
Transaction information and in a manner that
complies with applicable Laws, induding without
~Yl
Elavon
(City of Denton, T\) PAYn9EN'I' DLVICE PROCESSING t\GREENIENT v.l 1.01.10 dtd 03.29.1 I F[NAC.
c)
d)
e)
limitation the federal Health Insin-ance Portability
and Accountability Act, the federal Gramm-Leach-
Bliley Act, FACTA or other applicable privacy
laws.
MATCHTD1 and Consortium 1Vlerchant Negative
File. Merchant acknowledges that Member and/or
Elavon is required to report Merchant's business
name and the name of Merchant's principais to the
MATCHT°I listing maintained by MasterCard and
accessed by Visa or to the Consortiwn Merchant
Negative File maintained by Discover, if applicable,
pursuant to the requirements of the Payment
Network Regulations. Merchant specifically
consents to Elavon's and Member's fulfillment of
the obligations related to the listing of Merchant in
such databases, and Merchant waives all claims and
liabilities Merchant may have as a result of such
reporting.
Securit,y Progrlm Compliance. See Schedule I.
Data Compromise.
i) Notice anct Investigation. Merchant
acknowledges and agrees that Cardholder data
and bank account information obtained by
Merchant in connection with any Transaction is
the property of the financial institution that
issued the Fayment Device or holds the
Customer's accoLmt. Merchant must notify
Elavon and Member within riventy-four (24)
hours (and if notice is given orally, it must be
confirmed in writing within the same twenty-
four how- period), if Merchant knows or
suspects that Cardholder Data, Customer
information, or Transaction information has
been accessed or used without authorization
fi-om Merchant, Merchant's Agents or systems
within Merchant's or its agent's control (a
"Data Incident"). The notice must include: (a) a
detailed written statement about the Data
Incident including the contributing
circumstances, (b) the form, number and range
of compromised account information, (c)
specific account numbers compromised, and (d)
details about the ensuing investigation and
Merchant's security personnel who may be
contacted in connection with the Data Incident.
Merchant must fWly cooperate with the
Payment Nerivorl<s, Elavon and Member in the
forensic investigation of the Data Incident.
Within seventy-rivo (72) hours of becoming
aware of the Data Incident, Merchant must
engage the services of a data security finn
acceptable to the Payment Nerivorks and/or to
Elavon and Member to assess the vulnerability
of the compromised data and related systems.
Merchant must provide weekly written status
reports to Elavon and Member Lmtil the forensic
audit is complete. Merchant must promptly
furnish updated lists of potentiai or known
compromised account nLimbers and other
documentation or information that the Payment
Nerivorl<s and/or Elavoii and Member may
request. In addition, Merchant must provide all
audit reports to Elavon and N[ember, and such
audits must be completed to the satisfaction of
the Payment Networl<s and/or of Elavon and
Member. If Merchant fails to supply the
forensic audits or other information required by
the Payment Networks and/or by Elavon and
Member, Merchant will allow Elavon or
Member to perform or have performed such
audits at Merchant's expense.
ii) Preservatiou of Recor(is. In the event of a
Data Incident, Merchant must take immediate
steps to presetve all business records, logs and
electronic evidence relating to the Data
Incident Merchant shall cooperate with Elavon
and Member to rectify, correct and resolve any
issues that may result fi-om the Data Iiicident,
including providing Elavon and Member with
(and obtaining any necessary waivers for) all
relevant information to verify Merchant's
ability to prevent future data incidents in a
manner consistent with the Agreement.
iii) Liability for Data Incident. Without waiving
any of Elavon's and Member's rights and
remedies, Merchant is liable for all fraudulent
h'ansactions related to any Data Incident and all
costs Elavon or Member incur as a result of
such Data Incident, including any fees, fines,
penalties and/or assessments by the Payment
Networks, claims from third parties, a(1 costs
related to the notification of Cardhoiders or
Customers and cancellation, re-issuance of
Payment Devices (including underlying
accounts), farensic investigation, and PCI DSS
review far a report of compliance.
iv) Elavon Data Compromise. If Elavon suffers a
data incident and Cardholder, Customer, or
Transaetion information has been accessed
from Elavon, its employees or agents, or
systems within Elavon's control, then Elavon
will follow all applicable Payment Networlc
Regulations with respect to such data incident
including providing the required reporting and
forensic audits to the Payment Networks.
14) USE OF TRADENIARKS; CONFIDENTIALITY;
PASSWORDS.
a) Use of Trademarks. Merchant may use and dispiay
the Payment Nerivorl<s' marl<s, and shall display
such marks in accordance with the standards for use
established by the Payment Networks. MerchanYs
right to use all such marks will tenninate upon
termination of the Agreement or upon notice by a
Payment Nerivork to discontinue such use.
Merchant's use of promotionai materials provided
by the Payment Nerivorks will not indicate, directly
10
ElaVOri
(City of Denton, T\) Pt1YIvIBN'I' DEVICE PKOCESSING AGREEMENT v.11.01.10 dtd 03.29.11 FWAL
or indirectly, that such Payment Nerivorks endorse
any goods or services other thau their own and
Merchant may not refer to any Payment Networks in
stating eligibility for Merchant's products or
services.
b) Cmitidentialit,y.
i) Cardholder avd Transactio►i Information.
Merchant, Elavon and Member shall, at all
times, protect the confidentiality of Cardholder
and Transaction information in accordance with
all applicable Laws and Payment Network
Regulations. Merchant, Elavon and Member
must maintain Cardholder and Transaction
information for such time periods as may be
required by Laws and the Payment Network
Regulations and thereafter destroy, in a manner
that will render the data unreadable, all such
media that they no longer deem necessary or
appropriate to maintain. Further, Merchant,
Elavon and Niember must tal<e all steps
reasonably necessary to enstu•e that Car•dholder
and Transaction information is not disclosed to
unauthorized parties or otherwise misused.
Merchant may not retain or store magnetic
stripe or CVV2/CVC2/CID data after
authorization for any purpose, induding record
I<eeping or additional authorization processing.
ii) Banlcruptcy. In the event of failure or other
suspension of Merchant's business operations,
including any Bankruptcy Proceeding,
Merchant must not sell, transfer, or disclose any
materials that contain Cardholder or
Transaction infoimation to third parties.
Merchant must:
(A) Return this information to Elavon, or
(B) Provide acceptable proof of destruction of
this information to Elavon.
iii) Confidential Information Generally. Each
paity acknowledges that during the Term of this
Agreement, a party may disclose certain
Confidential Information to the other party. Each
pariy agrees to protect the other party's
Confidential Information from unauthorized
disclosure, publication, or dissemination with the
same standard of care and discretion it employs
with similar infor-mation of its own, but in no
event less than reasonable care, and shall not use,
reproduce, distribute, disclose, or otherwise
disseminate the other party's Confidential
Information, except in connection with the
performance of its obligations under this
Agreement. Each paity recognizes that the
disclosure or unauthorized use of Confidential
Information will injw-e dhe Disclosing Party.
Each party further recognizes and agrees that
the injury that the Disclosing Party will suffer
for any actual or threatened breach by the
Receiving Party of the covenants ar agreements
contained herein cannot be compensated by
monetaty damages alone, and the Receiving
Paity therefore agrees that the Disclosing Party,
in addition to and without limiting any other
remedies or rights which it may have under the
Agreement or otherwise, shall be entitled to
equitable relief to the extent authorized,
including injunction and specific performance.
The Receiving Patty fw•ther agrees to waive
any requirement for the securing or posting of
any bond in connection with such equitable
remedy. The obligations of non-disclosure
provided hereunder shall continue during the
terni of the Agreement and (i) with respect to
Confidential Information that does not
constitute a trade secret, for a period of three
(3) years thereafter and (ii) with respect to
Confidential Information that rises to the level
of a trade secret under applicable law, for such
period of time thereafter as the information
shall retain its stahts as a trade secret under
applicable law, and no less than three (3) years
thereafter.
c) Passwords.. See Schedule I.
d) Proprietary Interest. Merchant has no interest
whatsoever, including, without limitation, copyright
interests, franchise interests, license interests, patent
rights, property rights, or other interest in any
services, sofrivare, or hardware provided by Elavon,
unless specifically agreed to in a separate license or
use agreement between Merchant and Elavon.
Nothing in the Agreement shall be construed as
granting Merchant any patent rights or patent
license in any patent which Elavon may obtain in
respect to Elavon's services, software, or
equipment. Merchant will make no attempt to
duplicate ar othenvise ascertain the components,
circuit diagrams, logic diagrams, flow charts, source
and object code, schematics or operation of, or
otherwise attempt to reverse engineer any of
Elavon's services, equipment, or software.
e) Actions upon Termination. Upon the request of
the Disclosing Party or upon the termination of the
Agreement, the Receiving Party shall promptly
return all Confidential Information and all copies of
such Confidential Information in the Receiving
Party's possession w' in the possession of its agents
and/or will deliver to the Disclosing Party, desh•oy
or irreversibly erase, as the Disclosing Party shall
request, all originals and copies prepared by the
Receiving Party or its agents or prepared for the
Receiving Party's use containing or reflecting any
Confidential Information of the Disclosing Party. In
tlie event a dispute arises beriveen the parties in
relation to the Confidential Information (or a part
thereof) or the Agreement, the Receiving Party may
retain a copy of such Confidential Infonnation (or
part thereof) as, in the Receiving Paity's discretion,
:
ElaVOn
(City of Denton,'1'\) PAYNIENT DEVICE PROCESSiNG AGREEbIENT v.11.OL10 dtd 03.29.1 I FINAL
reasonably exercised, is necessary for its defense of
the dispute and its retention and use of such
Confidential Infoi-mation shall continue to be
subject to the terms of the Agreement.
fl Disdosure of Confidential Information. In the
event that the Receiving Paity and/or its agents
become legally required or compelled (by
deposition, interrogatory, request for documents,
subpoena, civil investigative demand or by any
similar process or court or adminish-ative order) to
disclose Confidential Information, then the
Receiving Party shall provide the Disclosing Party
with prompt prior written notice of such legal
requirement so that the Disclosing Party may seek a
ptrotective order or other appropriate remedy and/or
waive compliance with the terms of this Section 14.
In the event that such protective order or other
remedy is not obtained, and regardless of whether
the Disclosing Party waives compliance with the
tenns of this Section 14, the Receiving Paity agrees
to diselose only that portion of the Confidential
Information which the Receiving Party, as advised
by the writteii opinion of counsel, is legally required
to be disclosed and to erercise best efforts to obtain
assw-ances that confidential treatment will be
accorded such Confidential Information.
15) NIISCELLANEOUS PROVISIONS.
a) Entire Agreement. See Section XVIII of the
Contract.
b) Jw-isdiction and Ve►iue; Governing Law. Deleted
pursuant to Schedule I.
c) Eticlusivity. Deleted pursuant to Schedule I.
d) Construction. Any alteration or strikeover in the
text of the Agreement or any Schedule thereto will
have no binding effect and will not be deemed to
amend the Agreement. The headings used in the
Agreement are inserted for convenience only and
will not affect the interpretation of any provision.
The language used will be deemed to be the
language chosen by the parties to express their
mutual intent, and no rule of strict construction will
be applied against any party.
e) Assignability. The Agreement may not be assigned
by Merchant, directly or by operation of law or by
change in control of Merchant, without the prior
written consent of Elavon. If Merchant,
nevertheless, assigns the Agreement without
Elavon's consent, the Agreement will be binding on
the assignee as well as Merchant. Elavon will not
transfer or assign the Agreement without the prior
written consent of Merchant, provided that such
consent shall not be required for (i) the assignment
or delegation to an affiliate of Elavon, or (ii) the
assigiunent or delegation to any Person into or with
which Elavon shall merge or consolidate, or who
may acquire substantially all of Elavon's stocl< or
assets.
f) Notices. Any written notice to the other palty under
the Agreement will be deemed received upon the
eariier of: (i) actual receipt; or (ii) five (5) business
days after being deposited in the United States mail,
or (iii) one (1) business day after being deposited
with a nationally recognized overnight carrier. Such
notices will be addressed to the MerchanYs last
address shown on the records of Elavon, or to
Elavon at 7300 Chapman Highway, Knoxville, TN
37920.
g) Banl(ruptey. Merchant will immediately notify
Elavon of any Banlcruptcy Proceeding initiated by
or against Merchant. Mer•cllant will inchide Elavon
on the list and matrix of creditors as filed with the
Bankruptcy Court, whether or not a claim may exist
at the time of filing. Merchant acknowledges that
the Agreetnent constitutes an executoiy contract to
malce a loan, or extend other debt financing or
finaneial accommodations to, or for the benefit of
Merchant, and, as such, camiot be assumed or
assigned in the event of MerchanYs banlcruptcy.
h) Customer Cmitact Merchant authorizes Elavon
and Member to contact Merchant's Customers or
their Issuer if Elavon or Member determines that
such contact is necessary to obtain information
about any Transaction between Merchant and a
Custotner.
i) Telephone Recording. For quality assurance and
training purposes Merchant authorizes Elavon to
monitor and record telephone conversations at any
time. The decision to record any conversation shall
be solely in Elavon's discretion and pursuant to
applicable Law.
j) Communication with Merchant. Merchant agrees
that Elavon and Member may provide Merchant
with information about their services including,
without limitation, information about new products
and/or services by facsimile, telephone, mobile
telephone and/or electronic mail.
k) Amendments. Except as otherwise provided in the
Agreement, amendments to the Agreement shall be
in writing and signed by the parties.
Notwithstanding the foregoing, Elavon and Member
may aniend or modify the Agreement, to the extent
such changes are required by or attributable to
changes in the Payment Network Regulations or
other Laws, upon written notice to Merchant.
Elavon or Member will inform Merchant of such a
change in a periodic statement or other written
notice, and such change will become effective not
less than thirty (30) days following the issuance of
the notice. Notwithstanding the previous sentence,
changes to fees authorized by the Agreement will be
effective upon notice to Merchant, unless a later
effective date is provided.
1) Severability and Waiver. If any provision of the
Agreement is found to be invalid, illegal or
otherwise unenforceable by a court of competent
12
Elavo l'n
(City of Denton, T,l') PAYMENT DEVICE PROCESSING AGREEb1ENT a.l I.O1.10 dtd 03.29.11 FINAL
m)
il)
o)
P)
jurisdiction, the validity, legality and enforceaUility
of the remaining provisions of the Agreement shall
not in any way be affected or impaired thereby if Hle
essential tenns and conditions of the Agreement for
each paity remain valid, legal and enforceable.
None of the failure, the delay by any party to
exercise, or the partial exercise of any right under
the Agreement will operate as a waiver or estoppel
of such right, nor shall such amend the Agreement.
All waivers requested by a party must be signed by
the waiving party.
Independent Contractoi•s. Elavon, Member, and
Merchant will be deemed independent contractors
and no one will be considered an agent, joitit
venturer, or pattner of the other, unless and to the
extent othenvise specifically provided herein. The
Agreement has been entered into solely for the
benefit of the parties hereto and is not intended to
create an interest in any third party.
Stu•vival. All of the obligations of each party hereto
that by their nature should survive termination or
expiration of the Agreement in order to achieve its
pLn-poses, including, withottt limitation, Seetions 3,
4, 5, 6, 7, 10, 12, 13, 14, and 15(b) of the TOS, shall
so sw-vive and remain binding upon and for the
benefit of the parties hereto.
Counterparts; Facsimile Signatures; Deliver,y.
The Agreement may be signed in one or more
coumteiparts, each of which shall constitute an
original and all of which, taken together, shall
constitute one and the same agreement. Delivery of
the various docimlents and instruments comprising
the Agreement may be accomplished by a facsimile
transmission, and such a signed facsimile or copy
shall constitute a signed origina(.
Force Majeure. Elavon and Member shall not be
considered in default in performance of their
obligations to the extent such performance is
delayed by force majeure affecting their ability to so
perform. Force majeure shall include, but not be
limited to, hostilities, restraint of rulers ar peoples,
revolution, civil commotion or riots, strike, lockout,
epidemic, accident, fire, flood, earthquake,
windstorm, explosion, lack of or failure of
telecommunication facilities, regulation or
ordinance, demand or requirement of any
government or governmental agency, or any court,
tribunal or arbitrator(s), having or claiming to have
jw•isdiction over the subject matter of the
Agreement or over the parties hereto, or any act of
God or any act of government or any cause whether
of the same or different nature existing now or in the
future which is beyond the reasonable control of
Elavon and Member.
Section B - Glossar,y
16) ACH Rttles: The NACHA Operating Rules and
Operating Guidelines, which govern the interregional
exchange and settlement of ACH transactions.
17) Agreement: The Payment Device Processing
Agreement, induding the TOS, MOG, any Schedules,
attachments, exhibits, addenda, the Merchant
Application, amendments, or additions as perniitted
under the terms of the Agreement.
18) Alternate Security: The security described in Section
(A)(4)(b)(vi).
19) American Express: American Espress Travel Related
Services Company, Ine.
20) ACH: Automated Clearing House.
21) ACH Network: The funds transfer system governed by
the ACH Rules. The ACH Network allows participating
depository financial institutions to clear interbank
entries electronically.
22) Banlcruptcy Proceeding: With respect to a Person
means (i) that the Person or any subsidiaty of such
Person shall: (a) commence a voluntaiy case under the
Bankruptcy Code of 1978, as amended, or other federal
Uankruptcy laws (as now or hereafter in effect); (b) 61e
a petition seeking to talce advantage of any other
applicable laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts or any other similar
consetvatorship or receivership proceeding instituted or
administered by any regulatory agency or body; (c)
consent to or fail to contest, in a timely and appropriate
manner, any petition filed against it in an involimtary
case under such bankruptcy laws or other applicable
laws; (d) apply for or consent to, or fail to contest in a
timely and appropriate manner, the appointment of, or
the taking of possession by, a trustee, receiver,
custodian, liquidatar, or similar entity of such Person ar
of all or any substantial part of its assets, domestic or
foreign; (e) admit in writing its inability to pay its debts
as they become due; (fl make a general assignment for
the benefit of creditors; (g) make a conveyance
fraudulent as to creditors under any applicable ]aw; or
(h) take any action for the purpose of effecting any of
the foregoing; or (ii) that a case or other proceeding
shall be commenced against the Person or any
subsidiary of such Person in any court of competent
jurisdiction, or through any regulatory agency or body,
seeking: (a) relief under the Bankruptcy Code of 1978,
as amended, or other federal bankruptcy laws (as now or
hereafter in effect) or under any other applicable laws,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition, or
adjustment of debts; or (b) the appointment of a trustee,
receiver, custodian, liquidator or the like of such Person
or of all or any substantial part of the assets, domestic or
foreign, of such Person or any other similar
conservatorship or receivership proceeding instituted or
administered by any regulatory agency or body.
23) Card Not Present: The processing environment where
the Payment Device is not physically presented to the
13
--11
ElaVOn
(City of Denton,'CX) PAYMEN'P DEVICE PROCESS[NG AGREEMENT v.l 1.01.10 dtd 0329.1 I FINAL
Merchant by the Cardholder as the form of payment at
the time of the Transaction. Card Not Present includes,
but is not limited to, Mail Order, Telephone Order, and
Elech-onic Commerce Transactions.
24) Card Present: The processing environment where the
Payment Device is physically presented to the Merchant
by the Cardholder as the form of payment at the time of
the Transaction.
25) CardUolder: (i) the individual in whose name a
Payment Device has been issued; or (ii) any individual
who possesses or uses a Payment Device and who
puiports to be the person in whose name the Payment
Device was issued or who pw-ports to be an authorized
user of the Payment Device.
26) Cardliolder Data: One or more of the following data
elements pertaining to a Cardholder's accoumt: card
number, Cardholder name (if applicable), card account
activity, Cardholder account balance, and/or such other
data applicable to the Merchant's card program.
27) Chargebaclc A Transaction disputed by a Cat•dholder
or Issuer pursuant to the Payment Nerivork Regulations.
28) Confidential Information: All information or items
proprietary to any party to the Agreement, of which
another party to the Agreement obtains 1<nowledge or
access as a result of the relationship formed as a result
of the Agreement, including, but not limited to, the
following types of information and other infonnation of
a similar nature (whether or not reduced to writing):
scientifiq technical, or business information, product
malceup lists, ideas, concepts, desigis, drawings,
techniques, plans, calculations, system designs,
formulae, algorithms, programs, software (source and
object code), hardware, manuals, test procedures and
results, identity and description of computerized
records, identity and description of suppliers, customer
lists, processes, procedures, trade secrets, "know-how,"
marketing techniques and material, marketing and
development plans, price lists, pricing policies, and all
other financial information.
29) Convenience Fee: A fee charged by Merchant for an
added convenience to the Cardholder far the use of a
Payment Device in a Transaction in accordance with the
Payment Nerivork Regulations.
30) Credit Card: A card or device associated with a
revolving line of credit that may be used to purchase
goods and services from Merchant or to pay an amotmt
due to Merchant. A"Credit Card" includes any of the
following cards or devices that are associated with a line
of credit extended to the Person to whom the card or
device is issued: (i) a Visa card or other card or device
bearing the symbol(s) of Visa U.S.A., Inc. or Visa
International, Ina (including Visa Gold cards); (ii) a
MasterCard card or other card or device bearing the
symbol(s) of MasterCard International Incorporated
(including MasterCard Gold cards); (iii) a Discover
Network card or other card or device bearing the
symbol(s) of Discover Nehvork; or (iv) any card or
device bearing the symbol of any other Credit Card
Association.
31) Credit Card Associations: (i) Visa.; (ii) MasterCard;
(iii) American Express; (iv) Discover Network; (v)
Diners; (vi) JCB; and (vii) any othei• organization or
association that hereafter contracts with Elavon and/or
Member to authorize, capture, and/or settle Transactions
effected with Credit Cards or- signature-based Debit
Cards issued or sponsored by such organization or
association, and any successor organization or
association to any of the foregoing.
32) Customer: A client of Merchant who elects to conduct
a payment Transaction with Merchant through
presentation of a Payment Device (including a
Cardholder).
33) Debit Card: A card or device bearing the symbol(s) of
one or more EFT Nehvorks or Credit Card Associations,
which may be used to purchase goods and services from
Merchant or to pay an amount due to Merchant by an
electronic debit to the Cardholder's designated deposit
account. A"Debit Card° includes (i) a card or device
that bears the symbol of a Credit Card Association and
may be used to conduct signature-based, offline debit
Transactions; and (ii) a card or device that Ueais the
symbol of an EFT Network and can be used to conduct
PIN-based, online debit Transactions.
34) Demand Deposit Account (DDA): The commercial
checking account at a financial institution acceptable to
Elavon and Member designated by Merchant to
facilitate payment for Transactions, Chargebacks,
rettrrns, adjustments, fees, fines, penalties, assessments
from the Payment Networks and other payments due
under the Agreement.
35) Diners: Diners Club International Ltd.
36) Disclosing Pnrty: The party providing the Confidential
Information to the other party direcdy ar indirectly (via
one or more third parties acting on beha(f of and at the
direction of the party providing its Confidentiat
Information).
37) Discover: DFS Services LLC.
38) Discover Nehvork: The payment network operated and
maintained by Discover.
39) EBT Card: A card utilized for electronic benefits
transfers.
40) ECS Association: Visa (in its operation of the Visa
POS Check Service), NACHA and any regional ACH
association or nerivork, the Federal Reserve (in its
processing of ACH entries or Demand Drafts or other
legal replacements or substitutes for a Paper Check,
including under the Check Clearing for the 2151 Century
Act or under applicable provisions of the Uniform
Commercial Code), and any other organization ar
association used by Elavon and/or Member in
connection with the ECS that is hereafter designated as
an ECS Association by E(avon from time to time.
41) EFT Networks: (i) Interlinlc Network Inc., Maestro
U.S.A., Inc., STAR Nehvorks, Inc., NYCE Payments
Network, LLC, PULSE Network LLC,
14
1
ElaVCin
(Cit), of Denton, T\) PAYNfENT DEVICE PROCESSING AGREEViF,NT v.l I.01.10 dtd 03.29.11 FINAL
ACCEL/Exchange Nerivork, Alasl<a Option Services
Corporation, Armed Forces Financial Networl<, Credit
Union 24, Inc., NETS, Inc., and SHAZAM, Inc.; and (ii)
any other organization a- association that hereafter
autharizes Elavon and/or Member to authorize, capture,
and/or settle Transactions effected with Debit Car•ds,
and any successor oiganization or association to any of
the foregoing.
42) Effective Date: The date set forth in the signature block
of Elavon on page 1 of the Agreement.
43) Elnvon: As applicable, Elavon, Inc., a Georgia
corporation, and any affiliate or subsidiary of Elavon,
Inc. that provides Processing Seivices to a Merchant
related to Transactions. Elavon is a registered member
service provider of each Member. Elavon may also be
refen-ed to as "Servicer" in the Agreement, the MOG or
other documents provided to Merchant in connection
with the Processing Services.
44) Electronic Check Services (E CS): The service offering
by Elavon pursuant to which Transactions effected via
an ACH Payment Device are presented for clearing and
settlement by or through an ECS Association.
45) Elech•onic Commerce Transaction: A Transaction that
occurs when the Cardholder uses the Internet to mal<e a
payment to a Merchant.
46) Electronic Gift Cai•d (EGC): A special stored value
card provided by Merchant that is redeemable for
merchandise, services or other Transactions.
47) Excessive Activity, : The occurrence, during any
monthly period, of Chargebacks and/or Retrieval
Requests in excess of one percent (1%) of the gross
dollar amount of Merchant's Transactions or returns in
excess of two and one-half percent (2.5%) of the gross
doflar amount of Transactions.
48) Interchange: The clearing and settlement system for
Visa, MasterCard and, where applicable, Discover
Credit Cards and Debit Car•ds, where data is exchanged
between Elavon and the Issuer through the applicable
Payment Network.
49) Issuer: The financial institution or other entity that
issued the Credit Card or Debit Card to the Cardholder.
50) JCB: JCB Intemational Co., Ltd.
51) Laws: All applicable local, state, and federal statutes,
regutations, ordinances, rules, and other binding law in
effect from time to time.
52) Nlail Order/Telephone Order (MO/TO) Translction:
For MO, a Transaction that occurs when the Cardholder
uses the mail to make a payment to a Merchant and for
TO, a Transaction that occurs when the Cardholder uses
a telephone to make a payment to a Merchant.
53) NIasterCard: MasterCard International Incorporated.
54) 1Vlember: The sponsoring Member designated on the
Merchant Application or on a particular Schedule
hereto, as applicable. Any Member may be changed by
Elavon at any time and the Merchant will be provided
notice of same.
55) Nlerchnnt: The entity set out in the first page of the
Agreement and the affiliated entities listed on Schedule
B attached hereto, jointly and severally. Entities may be
added to Schedule B by substituting a new Schedule B
that is in writing and signed by all paities, and Merchant
may add additional accounts or locations that are owned
by Merchant without the need to execute a new
Schedule B.
56) 1Vlerchant Application: The Merchant Application
attached hereto as Schedule C and any additional
document containing inforination regarding Merchant's
business that is submitted to Elavon and Member in
connection with Merchant's application for Processing
Services, including documents submitted by Merchant
as a part of the bid process, if applicable.
57) 1Vlerchant Operating Guide (MOG): Elavon's
operating manual that prescribes rules and procedures
governing Transactions and MerchanYs use of the
Processing Services. The MOG may be amended from
time to time by Elavon in its sole discretion, which
amendments will be effective upon notice to Merchant.
58) NACHA-The Electronic Payments Association: The
national association that establishes standards, rules, and
procedures governing the ACH Nerivork, including the
ACH Rules.
59) Payment Device: Any device or method used for the
purpose of obtaining credit or debiting a designated
account including a Credit Card, Debit Card, and any
other financial h-ansaction device or method, including
an Electronic Gift Card, check (whether converted into
electronic form or used as a source document for an
electronic fund transfer), EBT Card, stored value card,
"smart" card, or other device created to be used for the
purpose of obtaining credit ar debiting a designated
account, that is now or hereafter effected through
Transactions with Merchants.
60) Payment Network: Any Credit Card Association, EFT
Nerivork, ECS Association, governmental agency or
authority, and any other entity or association that issues
or sponsors a Payment Device.
61) Payment Network Regulations: Individually and
collectively, as the context may dictate, all rules and
operating regulations of the EFT Networks, Credit Card
Associations and ECS Associations, and all rules,
operating regulations, and guidelines for Transactions
issued by Elavon fi•om time to time, including, without
limitation, all amendments, changes, and revisions made
thereto from time to time.
62) Person: Any individual, firm, corporation, business
trust, partnership, governmental agency or authority, or
other entity and shall include any successor (by merger
or otherwise) of such entity.
63) POS Device: A teiniinal, software or other point-of-sale
device at a Merchant location that conforms with the
requirements established from time to time by Elavon
and the applicable Payment Nerivork.
64) Pirocessing Services: The Payment Device processing
services and other related products and services received
by Merchant pursuant to the Agreement.
15
ElavQil
(City of Denton, T\) PAYMBNT DEVICE PROCESSING AGREEMEN'I' v.l 1.01.10 dtd 03.29.11 FINAL
65) Receiving Party: The recipient of Confidential
Information from the other party directly or indirectly
(via one or more third parties acting on behalf of and at
the direction of the other party).
66) Reserve Accowit: The account established pursuant to
Section (A)(4).
67) Reserve Amount: The amount established pursuant to
the calcidation set forth in Section (A)(4).
68) Reserve Event: The events designated in Section
(A)(4)•
69) Retrieval Request: A request initiated by a Cardholder
or Issuer that requires the Nlerchant to produce a legible
copy of the Cardholder's signed Transaction Receipt
within a specified period of time.
70) Servicer: See "Elavon."
71) TOS: These Tenns of Service and all additions,
amendments, modifications and replacetnents to the
TOS, as applicable.
72) Transaction: Any action beriveen a Cardholder using a
Payment Device and a Merchant that results in activity
on the Cardholder's account (e.g., payment, purchase,
refund, or rettmi).
73) Transaction Receipt: The paper or electronic record
evidencing the purchase of goods or services fi-om, or
payment to, a Merchant by a Cardholder using a
Payment Device.
74) Value Added Servicer: Any entity that stores,
processes, transmits or accesses Payment Device data or
Transaction data on behalf of Merchant or that provides
sofrivare to Merchant for transaction processing,
storage, or transmission, except to the extent such
services are perfonned by the entity in its capacity as an
agent of Elavon performing Elavon's obligations under
the Agreement.
75) Visa: Visa U.S.A., Inc.
16
Elavcin
(City of Deuton, TX) PAYMENT DEVICE PROCESSING AGREENIEN"1' v.l I.01.10 dtd 03.29. I I FINAL
SCHEDULE A
SCHEDULE OF FEES
[Separately Provided]
Schedule A
SCHEDULE A- SCHEDULE OF FEES
I I. ASSUMPTIONS / MERCHANT PROFILE
Legal Entity Name
ICity of Denton, TX
Business Segment
iServices_Governm
ent
Category Description
IGovernment Services-Not Elsewhere Classifie
MCC
9399
Multiple MCCs?
INo
~
Locations
I Multiple
Initiai ContractTerm (yrs)
IS
I
Date Fees Last Updated
IJune 1, 2006
I
Annual Volume
Average Ticket
Annual Transactions
VISA
1 1
16,250,614 I$ 189.32 I
85,837
MasterCard
11,292,799 j$ 189.32 ~
59,649
Discover
I $
- I $ - (
0
American Express
I$
- - I
0
JCB & Diners
I$
- I$ - I
0
PIN-Debit
I$
586,305 I$ 189.32
3,097
Checks
I$
24,457,592 I$ 189.32
129,187
EBT
I$
- I$ -
0
Other
I $
- I $ -
0
Total
$
52,587,310
277,769
ACCOUNT IMPLEMENTATION & MAINTENANCE FEES
!
Merchant Fee
Application Comments
Account Set-Up & Implementation Fee
I Waived I
I Per Relationship ~
Application Fee
I Waived 1
IPer Relationship I
Rush Fee
I Waived ~
I
Monthly Statement Fee
1 $ 5.00 1
IPer MID I I
Supply Fee
I Pass through
! I
Terminai reprogram Fee (per unit)
I Waived
I I
Onsite Training
I Quote
Per Day 1 I
Research Fee
I Waived
Per Hour I
Other Fee
~ Waived
~
Per Unit ~
01. CARD PROCESSING FEES
~
PricingType:
IPass-Through
~
I AII Visa, MasterCard, Discover and debit network authorization and Interchange fees, assessments, dues and other fees and charges are passed to
Merchant at cost. Servicer Transaction processing fees include:
Auth Fee
Settle Fee
Settle Fee
Visa
I$ -
I$ - I
0.1200%
MasterCard
I$ -
I$ - I
0.1200% '
Discover
I $ -
I$ - I
0.12001/0
PIN-Debit
I$ -
1 $ - I
0.1200%
Billing Method: Gross
Interchange, assessments, and dues will be assessed on ail Visa, MasterCard, and Discover settled volume.
Servicer may adjust Merchant's pricing if (i) Merchant's annualized Visa/MasterCard/Discover average ticket or volume falis below projections by more
than twenty percent (20%), or (ii) Merchant's Visa/MasterCard/Discover average ticket or volume for any month falls below fifty percent (50%) of such
Visa/MasterCard/Discover average ticket or volume for any month falls below fifty percent (50%) of such Visa/MasterCard/Discover average ticket of
volume during the same month the previous calendar year.
iIV. AUTHORI2ATION FEES - Servicer ,
Telecom Method
I
N/H
Additional Fee for Telecom
I$
-
American Express
I $
-
Diners
I $
-
JCB
I $
-
EBT
I $
-
Other Card Type
I$
- I 0.0000% I
Other Card Type
I$
- I 0.0000% I
Voice (VRU) Authorization
I$
0•75 I
Voice Authorization with Address Verification
I$
0.90 I
Operator-Assist Authorization
I$
1•25 I
Bank Referral Authorization
$
4.00 1
Other Auth Fees
~ $
- I
I V. OTHER TRANSACTION PEES & SERViCES I
ELAVON PROPRIEI'ARY & CONFIDEPLrL41. Page 1 of 4 Schedule Pnnted On: 7:02 PM 3/29/2011
SCHEDULE A- SCHEDULE OF FEES
Batch Header Fee (per occurrence)
~ N/A
AVS Fee (per occurrence)
~ N/A
ACH Fee (per occurrence)
~ N/A
ACH Returned Item Fee (per occurrence)
~ N/A
FedWire Settlement (per acurrence, where available)
~ N/A
Chargeback Fee (per occurrence)
12.00
Monthly Minimum (per location)
25.00
Monthly Minimum Start Date
~ 6/1/2011
Other Fee
~ N/A
Other Fee
~ N/A
~VI. UPTIONALSERVICES
A. ReQorting
Merchant Connect Basic
Setup Fee
Waived
Monthly Fee
~
~
Waived
Merchant Connect Premium
Setup Fee
Waived (
Monthly Fee 1 User
Waived I
2-5 Users
Waived I
6-10 Users
Waived I
11+ Users
Waived I
B. Foreign Networks & Gatewavs
Using a third parry network or gateway below requires Servicer to add an additional fee per authorization. For foreign networks, this is a separate
authorization fee, and for gateways, this Servicer fee will be added to the Servicer authorization fee noted in Section IV.
Dial IP IP SSL
❑ TSYS Acquiring Solutions (Vital) Foreign Network
❑ ADS Foreign Network
❑ BuyPass Foreign Network
❑ Global (Mapp or NDC) Foreign Network
❑ FDMS (Envoy or Nashville) Foreign Network
❑ MerchantLink Gateway
❑ Other
C. Equipment/Soflware
I Purchase
Equipment Type Price/Unit Monthly Fee Application
lHVpercom l7 Plus I$ 599 ( I$ - I IPer Unit RDM60001 I$ 365.00 ( I$ - I IPer Unit
Epson T20 Printer I$ 225.00 I I$ - 1 IPer Unit
Virtual Merchant I$ - I I$ 5.00 I IPer MID
I# - I I$ - I I
I$ - I I# - I I
~ I$ - I I$ - I I
Notes: 1) Shipping and hand ing fees are included in the equipment price. 2) All newly purchased equipment from Servicer is warranted for one year
from date of purchase. Servicer will replace defective equipment. Merchant will pay a$35/unit swap fee for the shipping and handling of the
replacement equipment. After the first year, merchant wiil be quoted a new equipment cost based on market pricing. 3) Merchant owned equipment is
not warranted by Servicer, but Merchant may purchase new equipment at market pricing from Servicer. 4) See additional pricing sheet as needed.
ELAVON PROPRIETARY & CONfIDENiIAL Page 2 of 4 Schedule Printed On: 7:02 PM 3/29/2011
SCHEDULE A- SCHEDULE OF FEES
0I. VALUE ADDED PRODUCTS
Electronic Check Service
A. Service Level and Processing Fees:
Conversion with Guarantee***
Guarantee Ratel 2.200%I
Per Transaction I$ 0.180 '
Conversion with Verification
Per Transaction*I $
0.150 I
Conversion with Veri£cation and Coilections**
PerTransaction*I $
0.150 I
Conversion Oniy
Per Transaction*I $
0.150 1
Conversion Only with Coilections**
Per Transaction*1 $
0.150 1
Combination Service (Select any two)
Conversion with Guarantee***
Transactions from
0
to 2,500
Guarantee Rate1 2.200%I
Per Transaction 0.180 ~
Conversion with Verification
Transactions from 0
to 2,500
PerTransaction*I $
0.150 I
Conversion Only
Transactions from 0
to 0
PerTransaction*I $
- I
Returns Management*** Per Returned Iteml $ 3,000 1
*The Per Transactlon fee applies to the original ECS transaction, voids/reversals, declines, and to any resubmissions of returned Items.
**Collectbns servke opdons are not available for WEB, TEL, PPD, or CCD Transactions
*"No retum or resubmission fees appty to re[umed conversion with guardntee transactlons
~VIII, PCI
All merchants must comply with the requirements of the Payment Card Industry Data Security Standards ("PCI DSS'). Elavon requires Level 4 merchants
(determined based on transaction volume) to validate PCI DSS compliance on an annual basis, with initial validation to acur no later than ninety (90) days
after account approval. Merchant will be charged either the Annual PCI Fee or the Annual Administration Fee described above. Annual PCI Fee, based on
connectivity, number of inerchant locations and then-current cost to Eiavon of the services, will be charged to merchants that use the services of the qualified
third party assessor with whom Elavon has partnered. Elavon will waive this fee in year one, charging the fee in subsequent years on or about the anniversary
date of account approval. Annual Administration Fee of $35 will be charged to merchants that use the services of another qualified assessor and attest to PCI
DSS validation on the website designated by Elavon. Any merchant that has not validated PCI DSS compiiance within ninety (90) days of account approval, or
in subsequent years on or before the anniversary date of account approval, will be charged a monthly non-compliance fee of $25 until Elavon is provided with
validation of compliance. Merchant may be eligible for Data Breach Coverage following account approval and PCI DSS compliance validation. See the PCI
Compliance
Program Overview for coverage details and conditions. These rates are subject to change with a thirty (30) day notification,
PCI Compliance Validation Process: Complete your Payment Card Industry Data Security Standard (PCI DSS) validation. Visit our PCI website,
http://pci.elavon.com, for education and tips on protecting cardholder data. You can also connect with our VisaO and MasterCardO accredited Qualified
Security Assessor (QSA) and Approved Scanning Vendor (ASV).
JIX. TERM
Term:
Term of five (5) years
The early termination fee is equal to the sum of (i) the rolling twelve month volume multiplied by the settlement fee percentage; and (ii) sum of the monetary
authorization and settlement per item fees multiplied by the rolling twelve month transaction count. This figure is then multiplied by the number of years in
the Initial Term, multiplied by a factor of one hundredth (0.01), and then multiplied by the number of months remaining in the term based on the month of
termination notification.
MERCHANTACKNOWLEDGEMENT
Si9nature:
ELAVON PROPRIETAAY & CONFIDEMIAL Page 3 of 4 Schedule Printed On: 7:02 PM 3/29/2011
SCHEDULE A- SCHEDULE OE' FEES
Name:
Titfe:
EIAVON PROPRIETARY & CONFIDEMIAL Page 4 of 4 Schedule Printed On: 7:02 PM 3/29/2011
Ela on
SCHEDULE B
AFFILIATED ENTITIES
Check one:
Elavon Payment Device Processing Agreement (v.l 1.01.10)
X Merchant named on page 1 only, and all locations will operate under Federal Tax ID Number
❑ Merchant named on page 1, with Federal Tax ID Number and the following affiliate(s) (a
separate Form W-9 or Form W-8BEN, as applicable, must be submitted for each entity identified below):
Name
MERCHANT, on behalf of itself and each of the ELAVON, INC.
affiliated entities identified above:
By:
Name:
Title:
By:
Name:
Title:
Date:
Tas ID Number
(Schedule B "Effective Date")
MEMBER
By:
Name:
Title:
Schedule B
ElaVCOl1
(City of Denton, T,\') PAYD4EN'I' DBVICE PROCESSING AGREEMENT v.l 1.OI.IO dtd 03.29.1 I 11NAL
SCHEDULE C
NIERCHANT APPLICATION (LARGE RELATIONSHIP)
[Separately Provided]
Schedule C
` ..a . ~ . ' + . . ~ .
MerchanUCorporate Name (as described in the Agreement- individual DBA's will be obtained primary Website:
during the implementation phase):
www.cityofdenton.com
Cit.y of Denton
Contact: Antonio Puente Phone Number: (940) 349-7283 Ext.
Address: 215 E. McKlnney Use a Physicai Street Address - NO P.O. BOY I
I Incorporation Data:
Address2: Federal Tax ID:
State
City: Denton I State: TX I Zip Code: 76201- I Year
When any affiliated entities will be covered bv the A¢reement, enter the entitv name(s) 1nd Federnl Tas ID(s) on Schedule B, ~
Member: E Elavon, Inc.
❑ U.S. Bank National Association
❑ Key Bank, National Association (if selected, then all references to Elavon in the Agreement shall mean Key Merchant Services, LLC, a joint venture
between Key Bank, National Association and Elavon, Inc.)
❑ Public Corporation ❑ Closely Held Carp ❑ Sub S Corp ❑ Sole Proprietor
Business / ❑ General Partnership ❑ Limited Partnership ❑ Limited Liability Company
Organization Z Government ❑ Transit Authority z Utility ❑ Public/Private Consartium
Type:
❑ College/LTniversity ❑ Health Care ❑ Religious ❑ Non-Profit Charitable or Social
Markallthatapply ❑ Other (Assn/Estate/Trust)
TaX EXeT11pt: 0 NO 0 YES (if YES, State Tas Exempt documentation will be required for each Entity and State where a location processes)
The Snancial statements provided by Nlerchant must be in the name of the entity identified above.
IFthe flinancial statements are in the name of another entity, then additional underwriting requirements will apply.
Financials: ❑ Publicly Traded (symboi ) Z Government/Institutional Organization (ieoniine, provide website: ~
(notation required) ❑ private (3rdParty Audited required) ❑ Bank Provided
Description of Product/Services - please be specific:
Government and utility services
Processing 0 Retai140% ❑ Restaurant 0% ❑ Lodging 0% ❑ Pay at Pump 0%
Environment(s): 0 Mail Order 10% ❑ Telephone Order 0% ❑ Supermarket 00/o
Total must equal 100 %
0 Internet 50% Transactions accepted through a website requires that specific security/policy requirements be met in order to process.
Card Types:
Vlerchant shall determine in accordance with the Payment Network Regulations which type(s) of Credit Cards and Debit Cards it will agree to accept as a form of
payment from its Customers. The card types include Visa Credit, Visa Debit, MasterCard Credit, MasterCard Debit, and Discover (JCB, DI, CUP).
0 E11VOri Point of Sale ZTerminals -
Vetworlc: Solution(s): ~ VAR-T01eWO1'ks
❑ OYl1Cr: (markal(thatapply) ❑ ElavonSofrivare- ElavonCertified: ❑ YES Ocert rending n NO(List ocherNecwork)
anvArrcEn nErosi'r rxoGRANi ELECTiov I❑ DO elect to participate in the Advance Deposit Service Program
THIS IS LIbIITED TO HOSPITALITY NICC'S ❑ DO NOT
(Checlcing Accounts only) Submission of bank documentation is required for all DDAs submitted, and we may confirm any data directly with the bank.
Merchant App Large Relationship (USA v 02.10.11)
E1av n
(City ofDenton, TX) SCHEDiJLE E v11.01.10 dtd 03.22.11 FINAL
SCHEDULE E
ECS SERVICES
This Schedule E supplements, is made a part of and is subject to the terms and conditions of the Agreement.
ELECTRONIC CHECK SERVICES ELECTED BY MERCHANT. Merchant elects and agrees to the following Electronic Check
Services as pad of the Payment Device Processing Services, as such Electronic Check Services are described in this Schedule E and in the
Electronic Check Services Merchant Operating Guide (the "ECS MOG"):
~ Electronic Check Services General Requirements and the ECS MOG
Check Conversion - Service Levels (check desired ontions): ACH Processina* - Service Levels (check desired ontions):
El Conversion with Guarantee (check all that apply):
Z POP' ❑ BOC' 0 ARC3
Z Conversion with Verification (check all that apply):
0 POP' ❑ BOCZ 0 ARC3
❑ Conversion with Verificarion and Coilecrions* (check all that apply):
❑ POP' ❑ BOCZ ❑ ARC3
❑ Conversion On(y (check all that apply):
❑ POP' ❑ BOCZ ❑ ARC3
❑ Conversion Only with Collecrions* (check all ihat apply):
❑ POP' ❑ BOCZ ❑ ARC3
1 Point ofPurohase entries
2 Back Office Conversion entries
3 Account Receivable Conversion entries
*A separate collections agreement is required.
Imaee Ontions (check one):
El POS with Image
❑ Cash Office Image (COI)
❑ Centralized/Enterprise Image (CI)
❑ Outsourced Image (OI)
❑ Not Applicable - ACH Processing
❑ Schedule E-1, ECS Additional Services Supplement
❑ Exhibit A to Schedule E-1, Fees for Additional ECS Services
❑ Eshibit B to Schedule E-1, Hold Check Agreement
❑ ACH Processing with Verification (check all that apply):
❑ Internet-Initiated Entries (WEB/CCD)
❑ IVR-Initiated Entries (TEL/CCD)
❑ Customer Service-Initiated Entries (TEL/CCD)
❑ Recurring Entries (WEB/PPD/CCD)
❑ ACH Processing Only (check all that apply):
❑ Intemet-Initiated Entries (WEB/CCD)
❑ IVR-Initiated Entries (TEL/CCD)
❑ Customer Service-Initiated Entries (TEL/CCD)
❑ Recurring Enhies (WEB/PPD/CCD)
*Entries drawn on business accounts must be classified as CCD (Corporete Credit or Debil
regardless of initiation channel.
Deliverv Method (check all that anroiv):
❑ Visa Online
EnCircle Direct Online
❑ Visa Batch
Z ECS / ACH Batch
❑ Hosted Enterprise Batch
❑ Enterprise Billing Solutions (Schedule K required)
Capitalized terms used and not othenvise defined in this Schedule shall have the meanings ascribed to them in the Agreement or the ECS
Rules (including in the ECS MOG and the ECS Primer). Escept as the context requires othernise herein, the terms "ECS" and "Electronic
Check Services" include both electronic check conversion and Automated Clearing House (ACH) Transaction processing.
IN WITNESS WHEREOF, the parties hereto have executed this Schedule E to the Agreement.
THE CITY OF DENTON, TEYAS,
on behalf of itself and each of the affiliated entities identified on
Schedule B to the Agreement (the "MERCHANT"):
By:
Name:
Title:
ELAVON, INC.
By:
Name:
Title:
Date:
(Schedule E "Effective Date")
MEMBER
By:
Name:
Title:
Schedule E
E1a n
Section A- Electronic Check Services General
Requirements
In the course of its acceptance and use of ECS,
Merchant represents, warrants and covenants the
following:
1)
2)
3)
4)
5)
6)
7)
8)
Merchant shall comply with and be bound by (a) the
ECS Rules, including the ACH Rules, the ECS MOG
and the ECS Primer, and (b) Laws, including, but not
limited to, the Check Clearing for the 21S` Century Act
and Regulation CC, Article 3 and Article 4 of the
Uniform Commercial Code as in effect in the
applicable state(s), the Electronic Fund Transfer Act
and Regulation E, and the Fair Credit Reporting Act
as amended by the Fair and Accurate Credit
Transactions Act. The current version of the ECS
MOG is located at our website
httt)s://www.merchantconnect.com/CWRWeb/Electro
nicCheckService.do.
Merchant shall pay the fees for ECS as set forth in the
Schedule A, Schedule of Fees, to the Agreement, as
such Schedule of Fees is supplemented or modified by
any eYhibits or attachments to this Schedule.
In the event Merchant accepts for ECS any payment
that is ineligible for ECS as specified in the ECS
MOG for any reason, such Transaction is subject to
Chargeback. Merchant may be liable for the amount
of the Transaction and any actual damages related to
or arising out of processing a Transaction that has
been charged back.
Merchant shall cause a Check Reader/Imager to be
readily available for use at all Merchant locations at
which Merchant accepts Paper Checks for ECS
processing.
Merchant must use commercially reasonable
procedures to verify the identity of each Customer that
presents a Paper Check or Customer ABA Routing
Number and account information for ECS processing.
Merchant shall be solely responsible for providing
Customers with notifications and disclosures in
connection with ECS, including, but not limited to,
posting all point of sale signage and distributing all
Customer takeaways and all notices and disclosures
required to be provided under the ECS Rules and
Laws.
Merchant may use the ECS only in connection with
the presentment and acceptance of a Paper Check ar
Customer ABA Routing Number and account
information for ECS processing in payment for goods
or services sold by Merchant, or in payment for an
obligation owed to Merchant, and only in compliance
with the ECS Rules. Merchant shall be the sole user of
the ECS, and Merchant may not resell or otherwise
transfer any portion of ECS (or any associated
information) in whole or in part to any other Person.
Merchant represents and warrants, with respect to all
ECS Transactions submitted for processing by
(City ofDenton, TX) SCHEDULE E v11.0110 dtd 03.22.11 FINAL
Elavon, that (i) the Customer has duly authorized the
debiting or crediting of the Customer's account for the
amount of the ECS Transaction in accordance with
Laws, (ii) the Transaction represents an obligation or
right of the Person who is tendering the Paper Check
or submitting the Customer ABA Routing Number
and account information for ECS processing, and (iii)
the ECS Transaction is far merchandise actually sold
or rented, for services actually rendered, or for the
actual amount due and owing from the Customer to
Merchant or from the Merchant to the Customer, in
each case for the actual price of such merchandise or
services (including tax) or for the actual amount due
and owing to Merchant or the Customer, as applicable.
Merchant represents and warrants that no portion of
any ECS Transaction involves any element of
Merchant's extension of credit.
9) Merchant is responsible to Elavon for any Transaction
charged back by Elavon or its agent in accordance
with the Agreement, including the ECS MOG, and for
any fines, penalties and assessments of the Payment
Networks incurred as a result of Merchant's non-
compliance with Laws or the ECS Rules. Merchant
agrees to immediately pay to Elavon or its agent (by
means of debit or set-off initiated by Elavon or its
agent, submission of payment by Merchant, or
otherwise, at the sole option of Elavon), an amount
equal to the amount of any ECS Transaction that is
stopped, not settled, or charged back, as well as any
related fees and charges.
10) Merchant must fully cooperate with all parties in the
resolution of Customer disputes, as well as
Chargebacks, returns, adjustments, representments,
and errors in accordance with the ECS Rules and
Laws.
11) All of the representations and warranties made to Visa
as a Merchant pursuant to the Visa POS Check
Service Operating Regulations and all of the
representations and warranties an Originating
Depository Financial Institution or a Third Party
Sender is deemed to make on behalf of an Originator
pursuant to the ACH Rules shall be deemed
representations and warranties Merchant makes to
Elavon and Member upon Merchant's submission of
an Item or a Transaction for ECS processing.
a) Merchant acknowledges Visa's right to terminate
or limit its relationship with Member or to
terminate the Visa POS Check Service at any
time. Merchant further acknowledges that Visa
may permanently prohibit Merchant's
participation in the Visa POS Check Service in
the event of (A) fraudulent activity, (B)
presenting a Transaction that was not the result of
an act between Merchant and a Customer, (C)
presenting a Transaction as a Customer-present
Transaction where the Customer was not present
at the point of sale or Merchant accepts
previously voided Paper Checks, (D) repeated
Schedule E
Ela'von
violations of the Visa POS Check Service
Operating Regulations, or (E) any other activity
that may result in undue economic hardship or
damages to the goodwill of the Visa POS Check
Service.
b) Merchant has satisfied all of the Merchant
standards and obligations set forth in the Visa
POS Check Service Operating Regulations and
the Originator standards and obligations set forth
in the ACH Rules as of the Effective Date of this
Schedule and shall continue to satisfy such
standards and obligations during the Initial Term
and any Renewal Term, as applicable.
12) Merchant is responsible for and will ensure that all
information, including MICR data and payment
amounts, are accurately captured from a Paper Check
in accordance with the applicable ECS Rules, and that
all such information and Customer ABA Routing
Number and account information for ECS processing
are accurately reflected in the related Item Merchant
sends to Elavon for processing through ECS.
Merchant will not submit for clearing or settlement
any physical Paper Check unless and until Elavon and
Member have processed and settled a Chargeback to
Merchant with respect to any Items created from such
Paper Check.
13) Merchant will not disclose to third parties any
information related to ECS Transactions including,
but not limited to, Customer ABA Routing Number
and account information, driver's license number,
telephone number, or social security number except as
specified in the Agreement, including the ECS MOG.
Merchant shall keep all such information confidential
and secure, in accordance with the Agreement and
Laws.
14) Merchant does not have the right to use ECS data far
any purpose other than to support the ECS itself.
15) Merchant must treat all ECS documents, including,
but not limited to, the Agreement, including the ECS
Rules, the ECS MOG and ECS collateral material or
related guides, as confidential and proprietary
information and must protect it with the same degree
of care as Merchant would protect its own confidential
and proprietary information and as further specified in
the Agreement.
16) Merchant's Agreement and use of the ECS may be
terminated immediately by Elavon for failure to
comply with the terms of this Schedule, the
Agreement or Laws.
17) Merchant assumes full responsibility for, and agrees to
indemnify and protect Elavon against, any losses
suffered by Elavon as a resuit of Elavon complying
with Merchant's directions in submitting or
resubmitting any Item for processing. Further,
Merchant assumes full responsibility for the alteration
of any Item made at Merchant's direction prior to
resubmission by Elavon of the Item for processing.
Merchant wili not request or direct Elavon to modify
or alter any Item, or to submit or resubmit any Item
(City of Denton, TX) SCHEDiILE E vl 1.01.10 dtd 03.22.11 FINAL
for processing, where Merchant knows or should
know that such modification, alteration, submission,
or resubmission is not permitted by Law.
Section B - Glossary
18) ABA Routing Number: The ABA number that
uniquely identifies the bank that hoids the Customer
account to be debited or credited through ECS.
19) Authorization: A process where a Drawee Bank,
processor, or Authorizing Agent approves a
Transaction, including as specified in the Visa POS
Check Service Operating Regulations.
20) Authorizing Agent: A third party designated by
Elavon to provide approvals and declines for
Transactions.
21) Batch: The total of the Transactions processed since a
MerchanYs last settlement.
22) Chargeback: For purposes of this Schedule,
"Chargeback" means (i) a sales Transaction disputed
by a Customer or an Item not in compliance with
Conversion with Guarantee warranty provisions or
ECS Rules; (ii) for all Service Levels other than
Conversion with Guarantee, the face amount of any
Item that is returned by the Drawee Bank or an ECS
Association to Elavon unpaid and that is ineligible for
resubmission to the Drawee Bank or the ECS
Association, including any Item returned for non-
sufficient or uncollected funds after the third
presentment; and (iii) far all Service Levels, an Item
that is not in compliance with Merchant's obligations,
representations and warranties under the Agreement or
this Schedule.
23) Checlc Reader/Imager: A device certified by Elavon
that electronically captures the MICR line and/or an
image of the Paper Check.
24) Check Replacement Document: A Demand Draft,
Photo-In-Lieu, or Substitute Check.
25) Demand Draft: A negotiable instrument drawn on the
Customer's checking account that is created from
transaction data included in an Item and that does not
bear the Customer's signature but that is authorized by
the Customer and is able to be processed via standard
check processing methods.
26) Drawee Bank: The financial institution where a
Customer maintains a checking or other deposit
account (i) on which a Paper Check that serves as the
source document for an Item is drawn, or (ii) as to
which a Customer provides the ABA Routing Number
and account information for use in generating an Item.
27) ECS Primer: The detailed information relating to
ECS processes and implementation provided by
Elavon to Merchant, which must be used by Merchant
in conjunction with the technical specifications and
certification requirements provided by Elavon to
promote integrated point of sale system connectivity
and integration between Merchant and Elavon.
28) ECS Rules: Means (a) all applicable rules and
operating regulations of or applicable to the ECS
Schedule E
Elav n
Associations, (b) the ECS MOG, and (c) the ECS
Primer, in each case including without limitation, all
amendments, changes, and revisions made thereto
from time to time.
29) Item: An electronic file or entry representing a
Transaction that is created from (i) the information
captured by Merchant from a Paper Check using a
Check Reader/Imager, or (ii) Customer inputs of ABA
Routing Number and account information, that is
forwarded by Merchant to Elavon or Member in
accordance with the Agreement.
30) MICR: The magnetic ink character read line encoded
on a Paper Check that contains information about the
Customer's checking account, including the ABA
Routing Number and checking account number.
31) Paper Check: A Customer's paper check presented to
Merchant for payment to the Merchant, which ctieck
will serve as the source document for Items.
32) Photo-In-Lieu: A photocopy of a Paper Check, other
than a Substitute Check.
33) Substitute Checlc: A draft that includes images of the
front and back of the original Paper Check and that
may meet the requirements for a"Substitute Check"
under the Check Clearing far the 215` Century Act and
related regulations.
34) Visa POS Check Service: Visa's proprietary check
clearing product which utilizes the VisaNet network to
offer direct checking account access to authorize, clear
and settle consumer checks drawn on banks
participating in this service.
35) Visa POS Check Service Operating Regulations: A
set of specifications, guidelines, and principles defined
by Visa that govern the operation and flow of
information for transactions participating in the Visa
POS Check Service.
(City of Denton, TX) SCHEDiTLE E v11.01.10 dtd 03.22.11 FINAL
Schedule E
E~~ ol l (City of Denton, TX) SCHEDiJLE I v.03.18.11 dtd 03.29.11 FINAL
SCHEDULEI
PROCESSING SERVICES FOR GOVERNMENT ENTITIES AND INSTITUTIONS
PROCESSING SERVICES FOR GOVERNMENT ENTITIES AND INSTITU'ITONS. Merchant elects and
agrees to accept the Payment Device Processing Services far government entities and institutions, as such services are further
described in this Schedule and the E:chibits hereto, and subject to the terms and conditions of the applicable provisions of the
Agreement. Except as expressly modified pursuant to this Schedule, all terms and conditions of the Agreement, including all
other Schedules to the Agreement, remain in full force and effect and shall govern the relationship among the parties to this
Schedule I.
Elavon Fee Collection Model (check one):
❑ Direct Debit
❑ Compensating Balances (when available)
~ Monthly Net Settlement
❑ Invoice (when available)
Capitalized terms used and not otherwise defined in this Schedule I shall have the meanings ascribed to them in the
Agreement or in the Merchant Operating Guide ("MOG"), which is incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Schedule I to the Agreement.
THE CITY OF DENTON, TEXAS, ELAVON, INC.
on behalf of itself and each of the affiliated entities
identified on Schedule B to the Agreement (the By:
"MERCHANT"):
Name:
By:
Name:
Title:
Title:
Date:
(Schedule I "Effective Date")
MEMBER
By:
Name:
Title:
Schedule I
~
Elavon
Ci
fD
TX
SCHEDLTLE I
03
18
1 I d
d 0329
11 FINAL
(
ty o
enton,
)
v.
.
.
t
.
Section A- General Provisions Applicable to A❑
action taken by Elavon ar Member with respect to
Merchants under this Schedule
the DDA or Reserve Account in accordance with
the Agreement, or (C) any breach by Merchant of
1) Fees. Elavon and Member will be compensated for
any obligation under this'Agreement. Merchant
the Processing Services provided under this Schedule
will not make any claims against Elavon or
as provided in the Agreement as such Agreement may
Member for any liabilities, claims losses, costs,
be modified by this Schedule.
expenses and demands of any kind or nature,
2) The following provisions hereby replace the like-
arising out of or in connection with any of the
numbered provisions of the Agreement or are hereby
foregoing suits, claims, losses, demands or
inserted or deleted from the Agreement, as indicated,
damages."
for Merchants operating under this Schedule.
e) Section (A)(6)(b)(ii) Elavon Responsibilities. is
a) Section (A)(4)(a)(i) Security Agreement. is
revised to read as follows:
deleted.
"ii) Elavon Responsibilities. Elavon will be
b) Section (A)(4)(a)(ii) Perfection. is deleted.
responsible for and will at its own expense defend
c) Section (A)(6)(a) Accuracy of Information. is
itself against any suits, claims, losses, demands or
revised to read as follows:
damages arising out of (A) Elavon's breach of the
"a) Accuracy of Information. Merchant must
Agreement, or (B) Elavon's negligence, gross
promptly notify Elavon in writing of any material
negligence or willful misconduct."
changes to the information provided in the
f) Section (A)(8)(b)(ii) Financial Information. is
Merchant Application, in the bid process if
revised to read as follows:
applicable, or otherwise in the Agreement,
"ii) Financial Information. Upon the request of
including, without limitation, any additional
either Elavon or Member, Merchant will provide
location or new facility at which Merchant desires
Elavon and Member audited financial statements
to use the Processing Services provided under this
prepared by an independent certified public
Schedule, the form of entity, change in control,
accountant selected by Merchant, or if Merchant
material changes to the type of goods and services
is audited by a governmental authority, then
provided and/or payments accepted, and how
Merchant will provide financial statements from
Transactions are completed (e.g., by telephone,
such governmental authority. Within one hundred
mail, electronic commerce, or in person at
twenty (120) days after the end of each fiscal year
MerchanYs place of business). The notice must be
(or in the case of a government entity, when
received by Elavon at least ten (10) business days
available), Merchant will furnish Elavon and
prior to the change. Merchant will promptly
Member, as requested, a financial statement of
provide any additional information reasonably
profit and loss for the fiscal year and a balance
requested by Elavon. Merchant will be
sheet as of the end of the fiscal year, each audited
responsible for all losses and expenses incurred
as provided above. Merchant shall also provide
by Elavon or Member arising out of Merchant's
Elavon and Member such interim financial
failure to provide proper notice or requested
statements and other information as Elavon ar
information for any such change, and will not
Member may request from time to time."
make any claims against Elavon or Member for
g) Section (A)(ll)(a) Products or Services. is
any losses sustained by Merchant as a result of
revised to read as follows:
such failure. Elavon may immediately terminate
"a) Products or Services. Merchant may desire
the Agreement upon a material change to the
to use a Value Added Servicer to assist Merchant
information in the Merchant Application if such
with its Transactions. Merchant shall not utilize
change is not approved by Elavon. Elavon has
any Value Added Servicer unless Merchant has
the right to rely upon written instructions
disclosed such use to Elavon previously in
submitted by Merchant to request changes to
writing, and unless such Value Added Servicer is
Merchant's business information. Merchant may
fully compliant with all Laws and Payment
request written confirmation of Elavon's consent
Network Regulations. Any Value Added Servicer
to the changes to the Merchant's business
used by Merchant must be registered with the
information."
Payment Networks prior to the performance of
d) Section (A)(6)(b)(i) Merchant Responsibilities.
any contracted services on behalf of Merchant.
is revised to read as follows:
Further, as between the parties to this Agreement,
"i) Merchant Responsibilities. As between
Merchant will be bound by the acts and omissions
Merchant, Elavon and Member, Merchant will be
of its Value Added Servicer and Merchant will be
responsible for, and at its own expense, defend
responsible for compliance by such Value Added
itself against any suits, claims, losses, demands or
Servicer with all Laws and Payment Network
damages arising out of or in connection with (A)
Regulations. Merchant will be responsible for any
any dispute with a Customer, Cardholder or any
loss, cost, or expense incurred in connection with
third party relating to any Transaction, (B) any
or by reason of Merchant's use of any Value
ElGI Y 6l l (City ofDenton, TX) SCHEDULE I v.03.1811 dtd 03.29.11 FINAL
Added Servicer. Neither Elavon nor Member is
arise from MerchanYs use or misuse of such third
responsible far the Value Added Servicer, nar are
party passwords."
they responsible for any Transaction until Elavon
k) Section (A)(15)(b) Jurisdiction and Venue;
receives data for the Transaction in the format
Governing Law. is deleted.
required by Elavon.
1) Section (A)(15)(c) Exclusivity. is deleted.
h) Section (A)(12)(d)(iii) Early Termination Fee.
3) In addition to the termination rights set forth in
[DELETED]
Section (A)(12)(b)(i) of the Agreement, Merchant
i) Section (A)(13)(d) Security Program
shall have the following termination right added to the
Compliance. is revised to read as follows:
Agreement as Section (A)(12)(b)(i)(C):
"d) Security Program Compliance. Merchant
"C) The Agreement may be terminated by Merchant
must comply with the requirements of the
in the event that sufficient legislative appropriation is
Payment Card Industry (PCI) Data Security
not available, provided that Merchant gives Elavon
Standard (PCI DSS) including the Cardholder
and Member sixty (60) days notice prior to
Information Security Program (CISP) of Visa, the
termination."
Site Data Protection Program (SDP) of
MasterCard, the Data Security DISC Program and
Section B- Elavon Fee Collection Models
the PCI DSS regulations of Discover Netwark,
and the security programs of any other Payment
4) Direct Debit Fee Collection Model. If Merchant
Netwark as to which Merchant accepts a Payment
elects the Direct Debit fee collection model on page 1
Device, as applicable, and any modificafions to,
of this Schedule I, Section (A)(5)(a), Fees, of the
or replacements of such programs that may occur
Agreement remains unchanged and in full farce and
from time to time (collectively, "Security
effect.
Programs"). Upon request, Elavon will provide
5) Compensating Balances Fee Collection Model. If
Merchant with the respective website links to
Merchant elects the Compensating Balances fee
obtain the current requirements of the Visa,
collection model on page 1 of this Schedule I, Section
MasterCard, and Discover Network Security
(A)(5)(a), Fees, of the Agreement is hereby replaced
Programs. All Value Added Servicers from
with the following provision:
whom Merchant procures services must comply
a) Section (A)(5)(a) Fees. Notwithstanding any
with the requirements of those Security Programs,
provisions of Section (A)(3)(b) or Section
Merchant, and not Elavon or Member, is
(A)(3)(c) to the contrary, with respect to the
responsible for MerchanYs own actions or
collection of fees by Elavon and Member,
inactions, those of Merchant's officers, directors,
Merchant will pay Elavon and Member fees in the
shareholders, employees and agents, including
ordinary course of business for services, supplies,
any Value Added Servicer (collectively,
and equipment in accardance with Schedule A,
"Merchant's Agents"). Merchant shall be
any amendment to Schedule A and any additional
responsible for any liability, loss, cost, or expense
application or setup form(s) provided by Elavon
resulting from the violation of any of the Security
and Member in writing to Merchant. Such fees
Program requirements by Merchant or any of
will be calculated once each month for the
Merchant's Agents."
previous month's activity. Elavon will send
j) Section (A)(14)(c) Passwords. is revised to read
Member an invoice reflecting the amount of fees
as follows:
due, and Member will enter such amount in
"c) Passwords. If Merchant receives a password
MerchanYs compensating balance calculation.
from Elavon to access any of Elavon's databases
Member will pay Elavon such amount, on
or services, Merchant will: (i) keep the password
Merchant's behalf, within thirty (30) days.
confidential; (ii) not allow any other entity or
Alternatively, Elavon may net out the fees due
person to use the password or gain access to
from any funds due Merchant under the
ElaVon's databases or services; (iii) be
Agreement.
responsible far all action taken by any user of the
6) Monthly Net Settlement Fee Collection Model. If
password that obtained access to the password
Merchant elects the Monthly Net Settlement fee
from Merchant; and (iv) promptly notify Elavon
collection model on page 1 of this Schedule I, Section
if Merchant believes Elavon's databases or
(A)(5)(a), Fees, of the Agreement is hereby replaced
services or Merchant's information has been
with the following provision:
compromised by use of the password. If Merchant
a) Section (A)(5)(a) Fees. Norivithstanding any
receives passwords from a third party for products
provisions of Section (A)(3)(b) or Section
or services related to Transaction processing,
(A)(3)(c) to the contrary, with respect to the
Merchant must protect such passwords in the
collection of fees by Elavon and Member,
manner required by such third party and be
Merchant will pay Elavon and Member fees in the
responsible any losses, costs, or eYpenses that
ordinary course of business for services, supplies,
and equipment in accordance with Schedule A,
Ela on (City ofDenton, TX) SCHEDLJLE I v.03.18.11 dtd 03.29.11 FINAL
any amendment to Schedule A and any additional
application or setup form(s) provided by Elavon
and Member in writing to Merchant. Such fees
will be calculated daily and will be offset by
Elavon and Member against amounts owed by
Elavon and Member to Merchant for: (i) on the
first day of each month for the prior month's
Processing Services, and (ii) following the first
day of the month for fees and other amounts owed
to Elavon and Member pursuant to Schedule A
that are not available or reasonably calculable as
of the last day of a particular month. In the event
that the funds owed by Elavon and Member to
Merchant on the first day of a calendar month are
insufficient to offset amounts Merchant owes to
Elavon and Member for Processing Services
provided during the prior month, Elavon and
Member may offset any unpaid balance owed by
Merchant against future amounts Elavon and
Member owe or will owe to Merchant until
MerchanYs financial obligations are fuily
satisfied.
7) Invoice Fee Collection ModeL If Merchant elects the
Invoice fee collection model on page 1 of this
Schedule I, Section (A)(5)(a), Fees, of the Agreement
is hereby replaced with the following provision:
a) Section (A)(5)(a) Fees. Notwithstanding any
provisions of Section (A)(3)(b) or Section
(A)(3)(c) to the contrary, with respect to the
collection of fees by Elavon and Member,
Merchant will pay Elavon and Member fees in the
ordinary course of business for services, supplies,
and equipment in accordance with Schedule A,
any amendment to Schedule A and any additional
application or setup form(s) provided by Elavon
and Member in writing to Merchant. Such fees
will be calculated once each month for the
previous month's activity. Elavon will send
Merchant an invoice reflecting the fees due,
which Merchant must pay within thirty (30) days
of the invoice date. In addition to all other
available remedies, Elavon and Member may
offset any outstanding or uncollected amounts
that are more than ninety (90) days past due from
(i) any amounts they would otherwise be
obligated to deposit into the DDA and (ii) any
other amounts Elavon or Member may owe
Merchant under the Agreement.
Section C- Government/Public Institution Service Fees
8) Government/Public Institution Service Fees.
Merchant will not charge either a Convenience Fee or
a Government/Public Institution Service Fees without
e:cecution of additional Schedules as necessary.
Elavon
SeptetYlt7C;[' 3 0,201 0
City of Dento»
Purchasii7g Depart►nent
90 1-B Te;xas Stt°eet
Detiton, Texas 76209
ile: Elavon's Response to RFP 114578 for Mereliant Ser-vices
131avon wishes to tllank the C;ity of Denton foi• the oppoY•tunity to pat•ticipatie in yoar nierchant services
proposal process. We t•ecognize the steatebic impoi~tance oF buildirlg a stt-on~ aiid h~asted relationship
with the City of Dentotr ancl seek to continue ancl build upori the retatioriship we alreaciyhave witli the
City of Denton.
Ovei- the past sevecal years Elavon has assisted the City of Derlton in esta6lishing the City as a leader aiid
iriilovator in t'he Govel•nment Merchant PaytYient space. Throug(1 our work wi'th Custome,r Service,
Mutlicipal Couiis, Emily Fowler Library, Btrilding Inspections aiid others we have pr-esented youl•
constitttents with f•eliable payment processirig channels by implenierltit7g the ability to allow inter•tiet
pay«ients a9, these departments. As an crcgatiizatiou, we aitit to corltiriually extencI Icmg terrn partnerships
by provrding a high quatity, flexible aiid f•eliabte ser-vice, at tnarket conipetitive prices.
Flavon is pi-oposiiig to provide the City processiilg services throEigli fhe same resourc;es as we c(o today;
however, we are also providing irifortnation oi1 adciitiona} sex•vices to nieet the specific reqliirements
outlined by the City of Denfiaii ir1 the RPP.
E?lavoii Iias extensive k►iowledge aiid experienue in suppot-titig ttie ptiblic sector iri today's etlvi►•oriment.
Buitcileci with our uiiparalleled ctistonier seevice aiid 24/7 technical sapport, Elavon's public sector
paymerit solutions comprise a powerfal st.iite of tools that tivill enable your agency to offer yattr
constituetifs a variety of paynzent options anel address tlle uriiqGte chalfenges you face ir1 matlagitig the
bUSI[IeSS Of gOVeI"(1111eYIt. At the e11d Of the blIS1IleSS ddyy Wlletl y0U1' b7tGl1e5 llaVe becll ClOSed 311C1 Settledy
ottr busiliess day is still eoutinuijlg. With our dual data centers that are load balaneed to et7sui•e 100%
Liptime and internal oi7going prouesses to ensui°e timely pcocessing aiid settleiiient, Elavorl is well
positionecl Yo rneeti aiid exceeri the neecls, requirements aiid processirlg challenges Yhat face the City of
Denton on ariy given day.
Elavon has beei1 providitrg merchant services since 1991. More than 1ii1i11ion clietlts worldwide trast. us
Yo c;f'ficiently and, securely ti7anage tlieii• payments busiiless. We process inore thaii $200 'billton ir1
payments annually, maki37g tis the fourth largest payment pracessor iri the I.Inited States.
~
Elavon
We look foa-ward to fu►'ther cliscussions wit}1 youe o►';aiuzation and hope you find our' response
inf'ormative and compelling. Siiqli(d you have any questions regarding our respoiise, please clo not
llesitate to cotitact «s.
Erin Davis Lisa Whaleii Aiixiette Slidge
C,lient Executive Die•ector, Client Relations St', 17irector, C;lietit Retations
800-725-1244, ext. 5066 402-933-0150 678-731-5902
11230 C",arf- Ct 16305 Valley St One Concourse Paelcway Ste. 300
Wic}iita, KS 67209 C)rnaha, NE 68130 /Ltlanta, GA 30328
SincerLly,
Ci•iol Davis
Elavot7, Clierit Exeuutive
E avon
Merchant Services Proposal for:
Purchasing Department
RFP 4578
Request for Proposal
For Merchant Services
Presented By:
Erin Davis
Elavon Client Executive
Toll Free: 800-725-1244 ext. 5066
Direct: 316-260-5109
Fax: 316-260-5961
Email: erin.davis@elavon.com
K N
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
Table of Contents
4.0 PROPOSAL CONTENTS 3
4.5 References 4
5.0 MERCHANT ACCOUNT REQUIREMENTS 7
6.0 TECHNOLOGY REQUIREMENTS 26
7.0 REPORTING REQUIREMENTS 31
8.0 OPERATIONS AND TECHNICAL SUPPORT REQUIREMENTS 32
10.0 CONTRACT SPECIFICS AND MISCELLANEOUS INFORMATION 36
Attachment:
Attachment B
: Pricing Proposal
Appendix:
Appendix A:
Addendum Form
Appendix B:
Sample Agreement
Appendix C:
Exceptions
Appendix D:
Sample Reports
~ 2
' ~ ' Elavon
F,lavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
4.0 PROPOSAL CONTENTS
In order to be considered, all proposals must include the following:
4.1 Cover Letter
The first page of the proposal must be a cover letter providing an overview of the
company's service and any special considerations. Please provide the names, titles,
inailing addresses, phone numbers and e-mail addresses for at least two coinpany
representatives that may be contacted for questions on this proposal.
Please see sectzoil 1- cover letter.
4.2 Responses to Requirements
All requirements contained in this Request must be responded to in the same order as
they are shown. Use the same numbering scheme and respond to every requirement.
For questions that do not apply to the proposed program, use "Not Applicable" after
the paragraph number.
Oirr i-esp«nse full()rh5 these gl_litlelirzes.
4.3 Supporting Documentation and Other Attachments
All inforination that supports the answers for the questions must be included in the
appropriate section and labeled with the corresponding requirement number.
Additional material may be submitted at the end of the proposal.
P?ease see ;\-pperldice;s.
4.4 Pricing
All pricing inust be described in coinplete detail including Discount Rate, all fees,
and charges, including the processing of refunds. Explain how the rates and charges
are calculated and where, if applicable, volume discounts apply. Please specify if any
monthly oi annual fees or minimum discount fees will be charged and explain the
purpose of these fees and charges. Clearlv identifv whether or not izovernment and/or
utilitv discount rates have been utilized or exblain the reason whv a more economical
discount rate was utilized.
l'lease see altaclaed prici~ig cIocttriie,iitso
~ 3
~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
4.5 References
Tluee references must be submitted for similar programs launched within the past
tluee years. Each reference must include a brief project description, the companylcity
naine and address and the name, title, and phone nuinber of an individual who can
spealc lcnowledgeably about the project.
Deborah Cowgei• 5eitz
Coinmonwealth of Virginia P:: 804.225.2647 Existing Elavon client.
Department of the Treasuiy F:: 804.225.3478 Recently received notification
Cash Management & W::www.trs.vireinia.Qav of RFP acceptance fi•om client.
Investments
Banlcing and Merchant Card
Services
l01 North 14t11 Street
James Monroe Building - 4th
Floor
Richmond, VA 23219
Brian Celey-Butlin Elavon client since 2005. We
Assistant Treasurer P: 916-874-6368 have worked with client on
Sacramento County multiple projects throughout
700 H Sh•eet Room 1710 the relationsliip. Inciuding ECS
Sacto, CA 95814 eYpausion, RFP development,
Intercliange analysis that
resulted in savings to client.
Grace Presto Elavon client since 2005. ECS
Deputy Treasurer P: 951-955-3965 expansion for Health Services,
County of Riverside PCI initiatives for Superior
4080 Lemon Street Court Division, certification of
Riverside, CA 92501-3609 POS system.
4.6 Proposed Contract
Bidders will be required to execute, if awarded the merchant services contract, the
documents attached as Attachinent "A" - Merchant Services Contract, unless bidders
note in their proposal exceptions to the terminology in such attachmeiit. This contract
will be considered a draft from which to develop the final contract with the City of
Denton.
['(ease see; iippetidis, L_ l-~.xceptions.
4
~ f Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
4.7 Transition/Implementation Schedule
The implementation plan for this system is critical to the success of this program.
Please provide detailed inforination regarding the prograin launch, including the
project timeline (milestone dates) for implementing and transitioning from the City's
current provider to your institution. Please detail any one-time implementation costs.
Oiie «f tlie inaiiy heiic,tits to t11e C'Ey Of I)ellto~rl i11 clItxOsiIlg tO c011tilMe })!•OccssitI~~ fII
partnership vith 1-?[a,,oti is tlie l'cict tliat the Cii,Y' mI1 i1<~t be re(Iiiii-eci its go ihroqgh thc
tiiiie colIstIlning and swiietfflies co~stly i~~ipleinerIta€i«zz proces5.
FIowever. slicstxld tlte C'ity cCccicle tt7 c€ioose a rIew soILzti{~Il iliat e\~o,•[cs ort1 F:Iavori"s
t1etworIc. we \~vill form,ide iinplemcrttatioii seI•viCes as OLItlin_ed M this sectiotl.
L;lavorl recogiifzes that aIl iiie;rcliaiits are diffe7•ejit regaY-diii, tlieir i~~ipder7ieiitatiol)
171ai1s ailcl tzmetialiics. For Earge InCZcha1its slfcl1 as the C ity, we have a E'lieIIt
SO{ctti«n IiiipleDteilt.ati«Ii taroEip (USIG} t« uversee tlie irnpIeinentat3ulI process. Fronn
this gro~uP ar1 .Impleinentatioii Project Leacler NviI1 he a5signcd to Ymir c~~nit)aDyto
irtiatiage the iinpleriiewatioj-i pj•ocess. Resporisihilitics iflClude w«rkirib wit1~ W1..11,
teclzliical teain and ow, J7rOdLzc;t Inana~)elnellt grotxp, 11-1ariagirio; the certiiicatio~u.
iestitig, €inpleii€eijitahori, aiicf 1)osi~-F2nplenneriCati«~l 1)rocess.
I1iitiall\, a, ci,ntel-ence \\i1i he [ield iIIc;ILidin- aII parties ti~ ctiscUss tlie so~ltrtioii(s) aticl
estatilish clieiit expectatioiis IiOr i1ie iinpleilieritatioii process. Weekly iiieetiitgs %%i[1
he 1ield ~\-itfi tlie clietit, h«lcfin,) clisctFSSiuiis 4ni the pro,ject praoi•ess a11d amissLies that
ma}iIeed to be adciressecl.
I'lle itnpleinerItatioii t.iiiielralne will be cietcr«iiiiecl at t1ie tinie Of the iiiitial clieiit
interaetioli. Several fact(ors wil€ deterniiiie tI1is tiiiiefian-ie. suClI as. revieWi172) and
tulderstailding tlie neecfs oi' a.Il partic€pants. II'EiIi iriiplenle7itation will be cnnsiderecf
uCoscd oii[v after akill iiioiith ei1el re\riew arid aUcCif are comipiefecl. nt tlie tilile that
ail aspects lzavc bceii \~a1idated Li1i ffltrociUGtMrI anct trazisitioii to aCIicrIt Stippcprt
Speci_alist t<, offer otigoxillb sLrp}ort \\/ili take place.
1'l1e ti)] lt>\,%, iiig 1-ir<rN~ide.s a layoLtt of the typica( project pliaseS Lzpc3II V,~hicll tlIC IlrOjWscliedriie is depe~idew. AcliWifies \\,itliin phascs are 1•eiietitive. aiid «NTerlap.
Initiatioii Formal kicli-«ff of an i1ii1.)leinejitatit~~I project \~,ith all pro~{ect
participams. Wor•kii-Il-, t<>geffier F~ith the I;1a\,«ii tealn_ thi5 is a coI(ab«rati\e 1irocc:,s
to achicve the z7losf cffic.ielif Illaiiiiitig arid integraiiESn Of tlle l'rOcessing sO[Ltii0fl.
~ 5
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
Btisixiess RequiremeYit DefinEfioii Icient.itic;ation csl tlie processiiig sulutions and
reporting rec~I-Hrements acc~~rc(ing to the C'it~'"s icleiitilied zreeci. fii addrtimi, c1•eatic}?l
A' tlie appr(}j)r•iat~e tLizictional support layol;t will he accumplislleci \fliicli inc[udes
ideIit:it%irIg tCle p()st-~)roctEkc;(iom <soritaci.s at botft ilie C'itv and Elavt~~i fiir ()n-gorftig
sul)pnrt.
Analysis A~~~~ ~~~sign 1)e1al[ed rcele\}u~ ()t' al[ aspct:ts {,f the cEient"s cxistin;
praccssing sO(iIti(mis. L)etailed }-v~_~p«sal c}fa net~c1ietit })rocessim, en-,Jro«mell~ (lZ~tt
\\-ill accc~~~iplisl~ t[ie clieiit`s ic1eiiti[iecl iieec~s. 1,1lis it~ulLtdes gatlrei-il1g c~i` a11
informati~~n relatec4 to ci-eatioli ot'inercliant accotljits mi the L1m;<,n svsteiii.
~~~~~~ioii - E)c\Te1olm-iient arrd deiivcry of a€l teclinr>Iogy I•elatec! t~~ cliems ne\,,,
processing envirt,nmetit.
Testiiig -FnsLxrirl" tllat resLcEts of the project are ineetirig the stateci/approml Elmon
anc[ Carcl Associatioii recluir~i-nents, e.g.: PADSS cei-titicatir~ii„ ELavt,ti 1i«st plat1'611il
certiticatif,ll~ e(u.
At hla\ ozi «=e emplov .-Wbite Box "I,csliiig,. al:d t~ogcthel• we re-\ie« your ~)rt41le all(i
ureate scripts to~ exercise tlie cucfe sc> that we can m.eet the ol)eraliona1 vals Eul, iIie
"'Itv. E(m;on cz•eates test IDs azlci cundithms tlic emir«nment t~~ re[lect proc(uction
traftic, a11«wiiig y«ur cc+de to resImicl accorciingl%~.
( 3nce we h,ave the ii7essagitig in parallel. we aCso veri1~v illat tlle settlellielit Iiie
C<~rltaills tEle reclUired data clements tt~ seCLire the best intercliange i-ate. Tlze
settlement -flle is interrogatecl ag1iai5t the VisalMaater("ard eelits ill (>ur test.
C11-6ronillcnt and we screeri the tile i`«i• cotiteaiE. f«rmat, and cletcrmine w(iere it
~11.ialifies. ( )nce we are in ao;reenient that we hm,e tlie tile wIiere it i2eeds to be. tl~~
Cocte is loclced anc1 vve schectule a prodt:fution/validati<,n rL«i. We Ita\e v~~~i run afieN~ -
transaction saCes alld retLirris tlil•rnt(1,11-i the new inferface to cunfiz•m all oi the
c[esc;ript«rs ai•c as eYpected Linc[ tlzat actLEa1 'Lltcaiif'i~~tiull is c«nssstent Witl7 ~,vhat We
Saw in test.
P~llot -1iiitiat sott-pi•odclctto~n release tt7 a select: ii(xriilier «t Iocati«ns to (esf proc[uct in
a }lrc7cCt{Cti(Al c~IVir011111eIIt~, iiZCluciing iiiitial ~alidalicrl~i ofIntercbarigc ~i Ma1 ific3tion.
Cgeneral lZetease -Expanciec! imegration of tlie rec;hnical and bEisiness suli,(r<lils
thtotz~1~E~~~t E1~e ~'it~~'s E~i•~;ai~izati(~~~.
(`losing - Form.alized accel)tancc of aii implemcntatiE>~~ anicl ensure it is I,rf>ubi-ot to ail
E}rclelIN cOIIclUsMII, t() 111clrECfe 1~oi•iiialize(i 1imid-«t'f €o the {_`lient ke?adions tean) all(I a
:T«st ~~lorteiii."
0
~
6
~ § Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
Resotii•c~~s fi°oni the Citv of I)e~~~on
. Designatect Pi•oject 1Vlanager (o oversee e0;re process
. TecEinical ~~erso»nnel. II/c«clilig ~;r«tEp_ tE' clalahase -r()L€p
. re~
isur~,;'Finance per5otlnel
. Pz•iniary Ccrrptsrate asid Btisines5-le\-ei contacts
.Cuntacts 1,01, ungaing pxosi.-I)roclUctiMrI p2•ocessing iieeds fl7at iiic[it<ic repoffing and
firiancial r~~taing iiietlzods.
.
• Anzerican C?xpress coniac;t
. Discover coiitact
Resotig•~~s froiii I+,1avoii;
. Iniplementation C're,ject NIa«ager
. Salittloils En0neerand ['rodLict teani
. Certiiicatpo~n tealii
. hiterprise teani tu stEpport conneativit\/
.C1ient L.xectrfive anci C"lient ReEat€«ns teanl
5.0 MERCHANT ACCOUNT REQUIREMENTS
The City desires checlc, credit card and debit eard services for the purpose of collecting
payments for 21 merchant accounts (point of purchase and/or accounts receivable
conversion) and 3 internet accounts (Utilities, Municipal Court and Building Inspections).
It is critical that the Merchant provide complete and accurate processing for MasterCard
and Visa card transactions accepted by the City of Denton in compliance with Payinent
Card Industry (PCI) standards. The City only accepts MasterCard and Visa. In order to
minimize the risk of fraudulent check transactions and minimize resources spent on the
collection of retui-ned (NSF) checks, it is critical the Merchant provide check verification,
check guarantee and checlc conversion services. The City's Library payments are made
tlirough PayPal but must be processed/funded tluough the selected Merchant. Face-to-
Face, phone, mail-in, integrated voice response (IVR), e-checlc and web transactions will
be handled at the City of Denton.
Attaclunent A contains the City's average merchant services activity over the past 12
months. Using Attachinent B, please indicate the cost of providing each of these services
on a per-item basis. If appropriate, identify other services not listed and their associated
costs. Any service not appearing or that does not have a fee indicated on the Proposal
Form will be considered to be free of charge in the merchant services contract. Please
attach a sample monthly stateinent.
1'fcasc se.e 1'ricifi~ T~r«}~cssal i~~ .41lac11~~ic~=~t fi.
1~~or atnE~nt11[N, sanrp[e Stat~inen1 ivporl, please see,kppendix I).
~ 7 Z-1
~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.1 List any other applicable credit card charges, including information on discount rates,
government rates, and MasterCard/Visa utility rates, also monthly maintenance,
statement, software and minimum transaction fees. Only the credit card charges
listed on Attachlnent B and in this section will be acceptable in the monthly credit
card statement.
}:lavon's pricing is (lepclldciit ttpt~7i interchange at2cl otlici- iees iniposcd 4;n all creclit
card }7rocessors bt~ Visa. ivla:;terCarc{. aiic[ 4rt(ier t(~lrd parties. tda~on wil( pass
thro.~,Eg1i to the ,nercliarit al1 sLIclI increases iriillosecl h~, 011rd parfie.s, €1px>n ti-vi-itteii
iiotiLe to tlie t7ierc;tian1 of tlie inLreased tee.
All fees inclucled on Attaclwae«i B are strictiv Flavon fees arici dt7 nE,t iIIc[«de
associa(ion lritercllange i•ales. I'iease see c;UITe111 ititerchange gr•icf iiicILic1ed t,=Jtli
Attachnlent 13.
5.2 Please describe how mail-in and phoned credit card transactions, and e-checlc will be
handled.
As the McLi7nbenl_ Have>n \.Nil! ;;njitilicte to proc;css \-()ttr iitai1-izi alid telepli«iie crec(i1
card transactions ancl e-cliect< trarisactiotis iti the sanie inaEnier as %ve do tod3y.
5.3 Describe in detail how the City of Denton's processing program will be operated on a
day-to-day basis. Provide transaction flow diagrams whenever possible.
E1_avtn lias htrilt redUrlciallc\- iiit~o its transactioi1 auffiorizing and pr«cessing svstem
%~,lncli regtz[arly acIneves 99.8°io Lrptime aricC exteilcls peace o('iiiii1ct d«ring pealc sales
scasoiis. Hawn's I[' hackboiie allt,«S Lis i« Etsc packet s\7,/1tci-ting uP' dafa for
inaxinitrni speed_ efficieiic;G, and reliability.
Tlle processing erivirotiiiiieiit at L.davoll Lises a fauit toIe.rant strattls ijiii'astruchire that
providcs the necessary 1-cdLandailcy recluii•ed sn t1iis irzdUstrv. E'Iie 1?lavon i.i•c>iit cild
processing systeilis are coniprisecl of EtSad balanced StratrIs V scnics cttnit,Llters.
focrit:ed in mu dif('ereiit cfties. Tiie SErafiUS systeiiis are a harclt-4tzre-based !'afilt
toleraiit sr%steni Lisi~ig dtcplexed Eiarcl,.Vare coiiipcsrietats to eristire s}stein int~grity an(1
tiilinter3'2ilitecl availal,iEiiN'.
is arcli3tecti-tre resL€[Es in a tiblit[y co~tpIed operating s} sten1 e1it~•ironniei;t thaf
requii-es no speuial prr;bral~~~~~ing tecliiiiques or slcills t« aclixeve !-',I«lt tot!erarice.
AdditiEriial sywtenx cr~iiijioiieiits stiCh as processc,rs, 2~~~~~iory aii(:l (1isk drive;; uan be
ad:liseci mt!~oat tal:€ng tlIC St'stefll c10Wtl. BUilt iII CI1eclciI1g arld diagno>stic aicl_s a11ow
ti,c sN~steiit tt7 aE1t0171,1€ical1y diagjias~ and isE,[aEe 4-aztlty s~,stenn corripolzerits anci
reinove theiiz 1-i-f}iii ser~ice. The StratLis ( "A.U (CUsto>nier ~~ssistance E "enter} Inonitors
the systern 24 I10tIi•s pe:r clay ("Or Iiardwaru ('ail1-pres. Siiicc thc sy7sterii actLtalfy (IOcs
c Verll 7t[lilig t«ic;e ( in para[lel ) a siligle con~tp«nerit tailttre does iif~t degracle tlle s~stern.
~ 8 Z1)
€ ; Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
Al1 madmnes j-tiii tlle s~ine VOS 5trMlss peOffietard, oj)erafitig s~steirE. Tra?isactilmi
autlIfWizLItivtI, seitlemetit; wici clcari~~ig apipIicatiwis are processed 'M tllc SlMWs
eliv i rotmieiit.
'I,lic folf(mim~ cl7a1-ts (lescriiie t1ie a~ttht>I•izai~ie>i1 t~iitl setlieiEieiit ~~,rE.>~:ess.
A'ti~~ ~~~~.~.Ji'01~:~.~~1~~.~.~sj-l
s
~
m p =w
4030
;T '
.~dife'111'e'll !..=.~~rJ.~~.~.~.~
410
r 0
-M.-Jk
CDO
~
~ • -
CAk3Dh10LDER
cARoIioLdER
e
MERCHANT'S DDA
(GHECI<INC7 AGC7']
0
9
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
T[ie L'()PI()"~Ing di1gram oLttliiies EIaFott`s Nrsrtl~ An iericn l~~ansa(Awn s%~steti-is.
77
~ ~ ti , . . . . . ~ .
Elavon/NA
Transaction
Systems
Overview
( BATCH I
~ massirens \
I
. vFTo
DMZ Server
C T .
II~~~fl(~~fl'
~!I Illl~illll!
SFTP
C:D VISA/MASTERCARD
qA~1EX /DISCOV ER
AccessNova
FDC
Iol
Dala Hub
=
I
ET~-
=
Elevon MPS
Clearing / Seltlemenl
n ~ ~
Volce DlelTerminel
Inlernet ~
Hosl-to-hosl
Elavon Nelwork
Wireless
ARANTA HL18
^S' .
J 0 ~ IP/Freme IP/Frame
AUiHORIZATIONINTERFACES:
_ - VISA/MASTERCARD
AMEX /DISCOVER
STRHTUS EGC/ECS/DEBIT j
AUTHlCAPNRE
LEARINGIN ERFACES~
ACS
DATA WAREHOUSE
101
~s:.....~
ANhorized Users
C:c
MERCHANTCONNECT
~
Enrolled Merchanls
FOREIGN NETWORK
(Yilal, Global
KNOAVILIE Hl1B
SFTP or
C:D
r-- O
/ DMZ Server
STRATUS
AUTH / CAPNRE
SF7P
I1--11
~
~
=n B
Dala Hub \
I
AEP/Eclipse
ER
I
En-
\
~
B
NDI
117
fnT......9
ARMS
1101
~
~ ~10
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.4 Identify all subcontractois to be used for these services and what procedures will be
used to monitor quality.
F1adoii is oize ofthe lew processurs \-vit(1iii the flidustrx,; tllat per1~)r1iis iiif~st bai,,kca~~cl
prc7cessiiig 1I_ii-ictions ffl-E~~(Wse. These l'Einctio~tls inclLtde a1E baiiIccarcl Hiteruhange aiicl
scttleiiieiit ~~~~c~cessir1~, cx~;e}~lar=ii i~eiri 1~aiidliiig (iec.. ~•etr•ievaf r~qtG~sts alld
chargebauks), accot.tliting arid bi[liiig, i-epc,rtitig, al?d slatetiieiit 171•udUCAWII, fielvv CCIa'cI
acceplcsi• fflI_pleiiiemati(iiis ajid trafflH2g, aiicl eLts1:0111el' se7-vlce. W"e cll«o>se tob iwt Lxse
third-part,~ processi~ig \-eiidurs fa,r these key fulictioi2s su iliat «e tii_av Iiave direct
co,i-ta'oI of thcse ei-itical 1»roc;e5ses, \Nhich tcarislates iiito hetter servicc for yotz. orll.
i;liefll, I( shOU,cl he iioted tliEit based ozt titlicrt.e recJUireH1C11ts of eacli <Ff 01,11• GLtstolliers.
we I2aw~e €he ai,ility tu Litilize uer'tairi appruved l1iit-d party% pr•oviciers. I'he Lise 01` suulI
Lhird party provicters will 1ae re\iewed ori r1 caseal7-,-case ~asis.
t~~ir EEectr«riic C`:lieck Sco.ice E1~(.'S) is a pr«prietary pmdtict f,L1111 ori E1avoll"s
platt'Orm. At ille c«re o['tlie prot(Elct is 1he VI,'-'~A POS Cizeclc Sei-vice allowiilg access
to inore than 35 million clleclci~ig accotints. E[a~~~~i partnerecl witli ErIC'irc1e, t11e third
large.st chcc;k -eIararitcc cu~~ipaz-oy iii (JIc irct«stry with Over 2~ year•s eXpcrieHC'e, as t,~ir
tl2ird-part-~atitlic~i-izi~ig agent tc> de!iver t11is prodttcr.
SIioLtlcl the ~_`ity [)e interested iri Havt>n's Ctzterprise Billing Sz~1Uli011 (l?t3S) as
p1•cserited I21 OL2r ki"E' I•esPx,HsC. it is offerecf iii partiiership witI1 'I~raiisactis IrYC.. \\liich
J)rovides Ft3S as a[lesste<f so>itware senicc. EBS payitleiit processiiig the01-1gh
["rarisactis Is ilitegratecl witlr Elavori"s co,i-e processes arid SLIJ)pOrt iiffrastructure. As a
eiiclor of ElaFoWse Tralisactis is IieIct to the saD!e Service Lek e6 Agreeinerits iSLAsl,
data secex61y, aiicl disaster recOvc~'N,' rCyUircI)1eI1ts that I'1av«ii is lie[cC to I,N- its c1iclits.
Any veiidor~ ivlatioiisfiips we bring si7ro L:IaG°ori a1ld sUpport c(irecf1y Iiave tiei•vice
keve4 Agi-eeiiieilts (SL.A) ancE ttlese are part of'tlle cotitract agreermieiits sigilecl with
tkie vei)clor. "I~Eiesc varzclepeiidi~i-) tipc~~i rciatioiiship aii(:l servicc(s) otterecl. Wlleii
SLAs aa•e ii«t beiii,; tiict h%,, the veridor. that a;reeineiit is iii l,reach aiict is l1aiicIle:cl
ac;co~~c~iIlgk .
5.5 Explain what baclc-up procedures will be established in the event of a problem at the
City of Denton or with the merchant provider.
F1moii ]las tiesi-iiecl a1id operaie5 a Iti~1ily reliable platfi77•~ii wilh 1«cati€~ris i~~ k\()
differeiit [i.S. c;itics. l~.ia\(sWs fiet,,%()ri( riiairitains ixm productioii s%stcr)7s aii<I (iiic
G(WtT(etek separate; test s-,,sterii to e,IsLIE'c tlzat deVel01111Eelit alicE tes~~~ig ha\e tio>
iIIII)act 011 Pr()C€LIctitpn s\sleills.
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Seivices October 4, 2010
1"Lrri1ier, to ei1stire uoi-tiplete sec€'viLy alld redufl1c1a1!c~', EIa\()ds prr,cessH-ig sites are
tizllv recl~inc[aW and a7•e eacli capahle of processii1g I00'1% «t' tl2e c«riipaity`s Riortilal.
tralisactimi ~oluire. Edavcsrr cOctld cor-it}-i[etely lose one clata celiter vifthoelt any
i~-iterrtipfiopl €1E set-vlce. l•k1so. Elavoii-s aetworlc rotEl.es traiisac;tif~ti.s thrvtigh twQ,
Lo~I~-ip1ere9\1' separate telecoimmznicatioris zietwf~rks to~ elI5«IV cWIsistellt c[iat-t,p
cwuiectwlls.
Shc>idct the ("it,;liave isscies with yOWr 1)()Mt ofsale sol«fiol-Is tflat yOU C~j rrelItiy UsC.
Yotar C'lieiit [Zeiatioiis Tearii \~i&I he a-%-ailah!e t« wtsrk \4ith ;OU tO (lisutlss oj)ti;)rIs with
Wcr. Elavori operates a 24 x 7x 365 caEl celite~~ iri Krtoxville, Tcriiiessee 60,• \;nice
a~~th~~~•izat~~~~~.
Ei` ari Elavon sL1l)j)0Fted tUMMal nialfiinctioxis. \-\-e yeiieral[y cari overflight
replacelnert7t tei•iiiiizals to octi• clieiits ti,r iiezt clav de6kerv. Y~~ar ('lieiii: SLipp~~rt
Sj)ecial,ist %-,111 tiuork 'vvith tlie City i~i orderii-ig the reptaceirieiit eqt1*nr11eI2t.
5.6 Merchant capability to meet the following requirements for internet, POP, ARC, and
e-check must be detailed in the proposal.
5.6.1 AAVS and CVVI verification is required.
'lavoii stIpP«I-ts 7-isk rri7alagerriel2t arid fi~aUd prG~,entioii seI•~iCes ;;LIGh Lls
AVS, C'VV2 (Visa). (`I1) (1)isc;o~ver/AMI'.XP, aricl CW2 (Nlastert•("aed) i~'(W
carci not I)resertt traiisactiaxis.
5.6.2 Daily settleinents based on Central Standard Time. Funds must be
available the same, preferred, or next day. Deposits to the City's
depository account must be made daily and must reflect daily batch
settleinent totals.
F'Li7icfs (-Or Visa. MastcrCard. artd I)isctxvert• WansactioPiis are sc7it vla A.C'iI
ai2cl are gerteralk' availali€e iiext ciav, depencliri~4 oji the depository I,anlc's
AC'F~ ~~iricEov\5, ~)roviclccl Elze 4ile is a•eceivecl at ~I_a\o1i before 9:00I1NI
CST. Elav«n wi[1 clepusit fLincls to~ an,yDDA accotrtit tl2at is lirilcec[ vsa the
"ederal C~ eservc ba7iIc il2g sVsWrll.
Ailiea•ican Fzpress viif he i1aiio1lecl accur(ling to llie c«jiiract ihe ("€t\has €~1
i)lace vt.Ith tfi;s assf~ciati(,ii. Efa~~oti is an a~)~)rovecl scii.leiiieiit aricl hiil;Mg
}7or0%,iclci• of,~~~-tericari I:tPresS s!I«L11(:[ 011r ~fflitUal co,ntt-acts allEr%af`6a° iis to
<:lirectEy ac;tIt11re Ariiei•ican FxpreSS transactioii act€; itNT tr-or tlic; Cfltv.
C # 12
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
I)a; s ttlat the Fedez`al GE,verniffienE is ~iot (,pe1-t (;xecicellds and ~ecferal
IiolidaF~s) will inipact votir settlenaem iiiites. SatUrcLay arid SEUlc[av activi~tv
%,,ill typically bc clcpositcd on Mt~nday as separate dep«sits. If a Fecleral
holiclay laricjs oii a 1,LisillesS (lav. typica1l) fixrafIs ~E-ill be dep«sEted to vOin'
I}1)/1 t!,_t 16flov, in~ htisiizess cfa~ .
5.6.3 Must provide on-line reporting services allowing viewing capabilities of
all transactions by merchant number. Service must allow exporting and
downloading of all transactions for the City.
Elavon \vorlcs ~Nith oLir cLtstoxulers 'to> proviclc ilie ini-orMaiioll l7cc;essar~~ toz
cOns«[ic{ate anc{ nianage settleiiieiit artci tt'atisact€on da~tathroiibh adkariced
c«StOil7 repOriing systetiis desigiiec1 tcs tiieet their specilic i,eeds. Data can
be salrninarizecE or detailect throt-~gh a varietv c7f!?ierarefiles - ti•orn Chain,
tu rcgzoii, t~~ dcpartnient a»d t<~ inc[ividtia( (,1tch. Iritebrat,ion \vith
enterprise svste11is lielps i-ecitxce hirrie speiai- on overaIi accotxntino
1'Luictioiis. Yott c,an even «rcler tlle data 'N-oLi iieed to analyze
qtLalilied!cIIICILialified iWercIlalige traiisao;tiortis as tvell as tr~~ chart tlie
~~~ipact ot`de,wn;raelcs oii vOUr b0tt4~111 lilIc.
Ontine E~~~ort~~~ ~ Suppoi°t TooIs
mollitOx• ~,Offl, accOEflit aroaric1 the~clock fn7ni aiiv Weh bz•0\Vse1' r.hrough
Ei;!W,on's online ac;L«LIiIt aLCCss i«o6s, YE,U uan access a11 iIie Hilor~~imi«n
VOLI need to xnanabe ~_0lxr electronic; payniea2t activity anci o[,tain critical
ini-bi-rriation that can have a hig iiiipact Ern \oree hott~~rn liiie. Gain ihe
bei2etits of real-tinle CLIst~lHer service~ ~',1111()Ut hming tEi pick LIp tlxe
piionc.
()tu• reparting tou1s enat7le yoii t« ci~splay rec;ent cleposits, vie\N
cIlargebacks and retrM..~a1 requests, aucess c;Ustorner SUPP«Ft. a11c1 mo~rt-e i~~ a
cOnVe111ent., secltre cm.ironnient.
Basic «nIiIIc aCcOL1111 ac;ccss is Ii•ee io~ afl L;la\on Merchant c«s101sAlers.
~{OUr aucESUttt contes 11h a s~~igle lo~-c,~~ t4~ a~;ccss In~-i~~~~~iatii~~~ i-4)~~ a siiigPe
Me~'Cllatlt Iocation. Yr~U call Vie,dN €il) i() six rnonths 4 past staterlieiits,
chargehac;k aii(i re€rie~ai t•epr;rting. as ;veii as batch reporting tror tr}) to 30
c~ays E'f settfed hatch acti\=ity. Yott can als« 4i»Ic fx> rep<,rt sites 1101' uLsl•
F1ec17•oiZic Gfi~ftC"ardand Rectronic t'hecIc Set-x~ice Prs,granis.
[~iillanced irzformalion is a%~ailable tlZt•t~~igh tlie Ili°~~~~uni ac€°~~s 'lev~l of
k'lerchan tCo€l iiect. our iltos1. cor~ipreheiisi\,e. ~,ersatile rcpurtittg so>Ittlivli.
YotE can access a year's ~\orth a,l repot•ting irifi,r7natinn oll 1n1_14i1-I'le
~,I~;~•c~l~l~t [[)y (NI[I)s} aiid "ctril( dovVli" itttt, data tE} \ic%\,, hatchcs ()i.
tt'ai7sauti(iais grotcped h~r' carc! 1y pe or (,aich r•eterence nc~inber. I Iiera?•chical
reporfing alio\,\-s ()ti i=., aggregatc, lata lirmfl~~ ~twItil-oie EouiiiOlls.
~ 13
s Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
Reports cazr be c1~>wifloadeci iii(o X1_S alid C'SV t4wiiiats. Deiiios are
aeailable f>tiliiic a€::
oll ~L~~II I/Lzcci ti irit1,,;!ser~, ice-sLIPp('I't/1-c}7«l~ti~ig-aalal\ti(;s.CtspY
5.6.4 Must provide chargeback information by e-mail, fax and/or on-line
application.
1,11,wtl can Uo,Ilt:i~~~~~ to pt'oOcle the City with chargel7ac:I{ tio7titicatiotis ~,ia
1'aY ifthat is (IIe preferrecd inetiioci. A[s<<. Flavoii recenelrrelease(t nllliize
C:ase N1anageinelit OCJN,1}. Oeir fleu% r0i,L1st (_?nll1-iE tool 1-01, merc11a11ts to
inat7age clis{)utcs, a11OWi~l", 60r elect~roiiic; suhuiissiori ot~ retrie\-aC and
chargebaclc respc>~tses aiicl supporfiFig ciLzette iiianageii1ci2C. worlct1mvmanagezlielit, ailcl reporting. 'TIIe ()(_'M s«ltttio7l proN°icfes a select:ir~ii Of
lcey feature,s clesigiiccd tu adiiress Olir Llieiits' 7•c;tiuirernents.
,Qjtncrnrrcrrll~~ Ilf<ri2(rge I'our ff%rarlt,flow
Mariagiiig c}iargcl-Iac(cs aricl rci~i-ie,vals cati be a clifficLalt, cuniiksirlg, and
htirdetisoliie part «t pa\'iiielit proccssitig. Maifecl or fiaxecl ilofificatiORs
o1`tetl (,et iiiisplace<I, merlo«,Ised, or fi>rbu(te». resulti~i,), €ii witieuessar\
losses f'E7I• yo~~~- IDUsHIess. L:la,,oo's 0jllMe C'ase iVlanabejiielit E()("Iv1)
soltttio~2l allows ;<<}tt to casil~~ rcceivc, -6ee~. t•espEfiitl to,, arlcf Iiiaiiagc alE
~'t~LW clIaz•gehtIck aE-ocl rcirieval activit\fllroug}~i ocsr otalille
1VIercl1ant('«1t!1eCt Pre)11it€111 7•epOrt1»g tO«I.
Wit1i ttic aclvarwccl iec1111014=g~,° csf OLII' ()('M sOItxti«11, Wu l)avc t[lc
tlclilliiity tE, direLt iimv uases af•e LlancilecE. cl5>>iariiicatly Inariage mw(zflow,
anci stre,a«ililie res})(!nses. OCII4 is a coinpreheiYSi\--e ~tic,rlslluw
inanagenieiit so1utiozi i12at_ allows you to p7•io~ritize and niana~;e case
ac;tivity. Kc\, eEeitieiits oi' the cliargebaclc aiId retric\,al proccss are
'Wto~ffiatCd, allt7wi~Ig ~011 tk) redLzce «rt' e[iziii~iate paj)er. si%,e ti1iie, uti(ize
Pel•sollI)el 111ore etficientlN" aiid it~ipi-ttve the <7eerall 1)rofitabil€t~- of \-our
htisitiess. I~i aciditioii. ()C`N1 l~eatures a brr~acl select~~~~l of reports tu
c1TwiN-eh iiiarlage ~-~~ct~• actiN-ities wd ilieasuce resu(ts.
VVi[li ()CM, all i~doniia~tiE)ii is stored saP'elti, M l;la~~oi7's secLire data ceiiter-
prm,idHag \°<nL witil access to the cr>riip[ete liistE~~~~of all cases 11ic1 am
rclatcd dc>CttMc11lat101:1 ntflHic. Etur siatc-o1=t1ie-art soltttlon 1`cattErcs adail\
sLeF11171arc° Ot` case acti~•it~ as welI as Ult~~inated alerts tfiat allr,NN,r g'ou to
111titlitu~, wur cases basec1 Ort prelere~ices yoEl set, incittdiitg Ilcw
cliargehac;k a~id retz•ie%°a[ cases, stattIs 4apclat:es. liigli 47alLte aMOMItS. ailcl
case agiiig.
14 ~
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
F'dexdlile ff,eurlr,flosv Mrifttrgeariertt
(3f'1l4 giVes ~~()L! EIie HeYibili(y Im clireet bo\,v ti~~~~~ir cases are iiaiicIleci arid
the v isibilit%to ii-iEtmt«r cases t(uougfiout tIiei"lI iecNcle.
.Dyiiamica11y~ tiiaziage yott~~ ~~orkfl~~\~,~ tE, hetter (,rgaiilze aiid matia,;e
cases rA,1liCe iiieetilig regulato,rFcfeacllmes--automatecf erii.all
I ~~rt~ticat€c~ils anc~ aler~ts il1i~>rm y«L~ ~vlicii cases i•eacli ~~;ertaiii ~~o;~its isE
the a-im,, process, abo,~e a particular dollar lc,,el c>r v,-bcri acldjt_iomal
itif'Oi°matimi i s reEjUired.
.C'reate (itteLies aiid assi~;» cases 17ased on a %arietNof Ice`,, predelimed
attribtrtes--f•om reasmi codes arlct carcl tvpes, t« tl~e age of' cases ni•
irarisautimi ai~~~~utIts.
. Pri~~rii;rc cases based mi tlleir potefitia1 to be detelidecl. the imomit ot
tlle c;(iargc;backe or ot11er tactors.
. Assi~~i Wo1-Ic CIuetLes based on uase \,~E,rIcers' Icilopwlecige ur experience -
precieiirted role-based Liser pro~ii(es alEow v«U to~ easi[\~ rilanage usez
etititleiiieiits, iizcELtdiilg t4e ability t(i assigii tiirictions and pro,,ide acc:ess
t« various levels af reportirl;.
Streamlira~,~(I Itespostse Allrrrrrrgentent
t)LIl4 Offers aUto t.ext optiorIs, sucEi as case ~~~imber or mie1-cilarit 1T)-to
IIclP y«u gericrate specitic resp«risc lettecs. YtsU a1s« ha\e tliP ahilit-,to
SeEect assistec[ respotise ittles basecl E~~i partFc;u€ar i;riteriaa irsclLItIili_g reasm~
code. rtiiorietary amoU11t, type of card, €_\pe a,f case. allc! 131e Illiliill'ILIIiI Or
maYitl2L1111 case a~~ioitiits.
'11ie assisted res1mise i-tiies will atttomaticaIk- attacl1 vour respollse 'ettel's
to a- specific Lase ~,~~~i[e ~t is \ ~~ai~i~~~ tt~ L,e ~~ev~ie~~ed.
,'fec°tive IIZ~~orfilrg
( )t'M also uffers a hroac€ selectiori of repc}i-ts i« prm ide liiIi vlisibilit; micl
liclp effec;tivcly rt,)ar~a,,,c y«ur casc actiF-itie,s. Rcpcrrts caii eajigc 1rom a
simple listiiig to a specitic tiltei-ed report 1>-\date. loc;ati(m, Garcl t,,, pe, case
11,). cinci a riumber «f' otlier ci•ite.i-ia. YOLI o;alz e\-ery c1ri1I I'urtber iiito a
specitic case f~~r ail i7i-deptli [t>r>Ic at ±Ize bistory, inC1LIWEii1g auiiulls talcerl
arIcl i•es2ilts acbictic;d. OCM a(Em\:s \,()Li toa export thc rcport data to~ otber
cliterpriye sc1`stcms in a variety of'fol•~~lat~s iIIc1tIC[ialg XI_S, l'[)I1. USV, arici
IX'F.
0
15 ~
; Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.6.5 Must provide internet gateway service.
Yes, Elavoii sUpP011s hiteniet gatcway pr«e;ess0lg. We ~~111 c;~~~i'tifitte t(~
saq)port tlle Ulty`s ci.ti,re7il su4lai011 `dfftUalN[erufaalii:. (Ri.[le!• nloEiOl?s are
available; s[zott(:t tlie Cit~ he irtltert•estecf H-, alteniatke solut~(Als.
5.7 Notification to payer of the dollar amount of all payments and obtain the payer's
approval (electronic or otherwise) of such charges prior to initiating credit and/or
debit authorizations.
'1'h is is pr~~~ic~ecl tc~cta~ tl~tO>L1~11 tlie ("ity"s Te[eu~P~rlc sQ)[Ltti~~n tl~at is it~te~t•~te~1 ~it1~
-viirWalN4crchar-It. We can cc~i-i[ifflLIe 10 sua)jx0rt ihis soluiioii as ~ve (lo tuc[aG.
Adc(itioiialiy we caa offer tllis through Ou1- d,iEi I7•cse1~1011eilt sofutiosl), 14,11tel•p-orise
Billillg Sr>ILIti011 (ET3S).
~lavE~ti's E7iterprise T3illittg Soh.ititIns (EF3S) pCatronii is a 1ii11y Iio~stecl weh hased
sc~ILitioi7 that eliniinates dic nceci t61, the t`ity to piti-chasc 11ardwacc 01• sc,ffivaF,e l~«r
ii-Iterfacing tt7 EE`sS. f)Ut• h«sted. I'(] Le\eE Orle sE~iuti0ia a11«vs tlle City to
tllillilllize costs assoc;iate<i with carci-ctata seuciritv coiiZp(iaitce pro~a~atils. All ~;arc~
data is i~z-ujicatecl aiicl rliaiiagec't t`td~~~ Aithitl 01,11, st;,ctirc eliNir«illitelit.
EB~ vvill allcml tlze City tr7 1)mvide its C(.Oistittxellts the aE,ilitv to iz2alce tax
payiiierits aricllor otl1er €ypes ot` payi-I-Ierits «ifline eEectrE~iiicdll~. 0L11• secUre,
1ic7sted, mialti-ch_am2c( hill p1•esentniei-it wcf payiiicnt I)Iatlonii ~Nil1 ciiah1e flle f'itx-
tc~ ctel~la~~;~ a s~~[Eitioll cJE~Iclcl~ari~I ~;(ist~ c('(~ectivelv w(~~ic a11~~wijig tl~c "'it~', if ~t
wishcs, the ahilit~y to inaiiage the coii5titue,iit eYi)e6ei-Ice tkrottgholat the electrotiic
11111111" an(i pavinent lifec\ cle.
EI3,',+ is a It~lfy-117te-ratec! :;«[Eitioii that pe«vic[es fo~r accel7tailce +)f pa\~i-iei-its via
iriterrict, ali HiteLgratecE vErice respcrose Lirlit (fVI~}, anc[ a clistoiiier serNi~e pot-ta1
tliat al1mus ttie C:ity 'Lo taIie pa\ineiits ti'0111 Ca~IIstituents M a call cei-Iter or baulc-
csffIce ewiroiiiiietit. 1'oii-it-fFfasale pa~me:Lits E01 F)e sUPpOri-eci thFOUgh tI1c sante
hitcgrated p[adi,nii. a(1()e\-fflg 1~Or ai iiil ie~~ot' eiectrctiLie reccivables throLtgh a
1•0hL1st 5et A'011liIle rc:I)crrts arlcl ~-eal-tii7ie rerili'ttcii?ce rq)ortin-.
tilioLi1d the CitNhe ffl~terested H-i 111oFe 111i-vl-rllatiotl 011 this 1»%1,cl~ICtt k;riM Davis.
% OUr ('lieM E;xCcLIti"C'. will he hal,p\,~ €u pro\ i~~c \ot.t \\ittl c[efails.
5.8 Provide payers with confirmation of payment transactions electronically.
i 1iis is prmislerl t«claNEhroug"t, \m11• sysie11I Emith VirtualN'[ea-t;halit.
Aikiiti<,mi61y, we La1i IsrE7\-i(Ie 'tllts sU~ice t1EFc>U0;11 mir so~1titittri ~BS.
0 -1
16 : ~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.9 Electronically transmit all card transactions to the appropriate card processing
center, in real time, as the transactions occur, and balance and reconcile
electronically captured transactions on a daily basis.
`i "es. 1d~t~Voll k.FVi1i c011tiflUe ta, v<ork wit1i the ct.irrerit prf,cess to~ Piancile t[1e
(_`itv's tz•ci,risactioiiw appropriaiek,.
5.10 Retain credit authorization logs and transaction records for such period of time as
required by applicable law and the rules, regulations and operation procedures of
the respective card organizations, and records shall contain the following
information: transaction type, date and time of transaction, City account number,
and card's account number and expiration date, card holder's name, dollar amount
of transaction and approval code.
NlercIZant('-=miiect"s I'rei-i-IiMM leve1 will Il«ld b;swnical iiifot-ji1ati~~~i f(ii-
apprt-~~xffliately oile ( I) war. Also. you cari contact y«tir (_'I[eiit Stippor( Speciallst
anct reqEiest CZlstr;rical data. FE.avafiz's Ct.ist~~~itcr Scrvice 1•epi•eseritati ves Ilave the
capal,ility' to acccss otfliiie traiisactioila[ bEstory tlp t<, o»ne yeat- Ii~~~i-i-I the clate of the
i.ran5actiori. \Ar'e also are ab1e tt~ retrieve t~ff1liie Mf<,~~~ina€rwn via E~~~if researtlh
depalt.inent tliroi ig1z tise oi arcN-IiN eci rLportirig.
E:la~~oii i•ctaitis trarisaclioii data foi• aIl7ia,irI7~~~~) ot`seNcn (7) years.
511 Provide City of Denton with logos, graphics, and other appropriate marlceting
materials for citizen communication in English and Spanish.
F11v«li wil[ pr«vic1e tIte E"ity «f Dentoli F\,lit12 iriatenals to eiisLtl•e curiiplfarice wit[i
t:be AssociaEiom a11ci NACITt1 guidelilles.
5.12 Provide City of Denton with inonthly reports (in a mutually agreed upon format)
sununarizing use of the services for the applicable reporting period. Sample report
must be included in this proposal.
i'cs. 3-:la~oii \,\iI9 c;olitilittc t<~ pro%ide t11e City ol, I)ellt«il F011 r~Iolltlllti- reports.
I'lease see Apl)c~idix 1) foi• sa,:~iple repw,•ts. 6~I aclcfiiiori, FrM I)a-\is. \c~~ir E_'licnt
Execlitive, ~\ill be mail_ahle tc~ ~~orIc widi tl~e Cily iII de\elEql>i~)gcttstt}s)I reports, Il'
Ileeclecl.
5.13 Provide IVR and internet payment service in both English and Spanish.
()LIr EBS soxPLiti(lll prWides IVR sLt})pOrt iII ElIg1is1) L11Ic1 S-palldsb.
~ 17
~ ~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.14 Explain how the Merchant will handle any copy requests or chargebaclcs for the
City of Denton.
proprietary chargchack s\sieiii callect A1)lt1' (ALitaziiate~~ lAspute
1Z_esO[Uthffl Pr()cessir21)) is used tEa wotrlc chai-eback and reirew~al aci.it,itv. hD10 is
a sing!e poilit ()f eiitry systerri huris,ing tiata relafeci to e~~ch c[ispute. Elavoiz
§~~ipierllclliccf this s%,steil) ill 2001 aiici Ilas siizce iiiadc scvcral c11aiigcs aiid
eiiharicc;iiicw:s ts> a;;sist 'HI Elic dispttte ~)rt>cess:
. At.itu Decisioii I'Lillctlona1it\has heeii integ•ated ffl~~} fhe svsteiii [7asect «i-i
associati(~~i rebulatioils l-oi• speuitic rt•easo1z codes. '1Iiis lE)gic; al(m-o-s the s,rstciii
tti eletez~~-imic if itciiis slioLtld l7e i•e2it•eseiitetl t<~ iIZe isstiilig baA ~ir debited t(x
the ziierchant.
• A proprietauti 1=acsiYrlile clralt is Elsed to izi1riI9 c«p~- I'etricval recIUests vdiefEever
1xissib[e anc! Hi co1~ipIiance ,tiith associatiori r-ules to iiiiliiiiiizc the rniriiber <sS'
recILIe,sts t« the iricrcharit. [f the recILtired clata eleiizejits are availahle, aizd It is
r,vithiii assaciatio»i rliles, the reclE.zest is aLrtr>2natically 1iE11illed. II' original
drafis are reqUirec[. a1~eqUest Wi11 be seiit tu tllc rncrchant. A7iv retrieva[
rc(Ia.icst tllat is fiot rcspondecL tf> Ilv t1ie mercliant hcf0,re the 2Sth claN= is auto-
ltiIfil6e,cl tvith a facsiti7rt(e c(i-aft. This is azi atteIIII)t t~~ ~)r0teGt Ot«• ~~lerchtzri?s
!i-c>n1 exposI-Ire and lower costs.
. . . . .
• 11~i Auto Fas teafUre IS bEiilt lrlto the syste7ii ai[nwiab laY rzot:liicati~,n. (fl' a
chargehack oi- t•etrieval to be setit to the inerchaiit the sair1e da\i€ is reccitvccl.
t(~ereby ;ivi~~g ottr Inerchants iZiui-e tiriie to res}7aiici.
. Tlie s~steiii generates a 15-dao i-e1iiiniler iiotice lor all oLitstauYdilig reirieval
reclrxests f~~- merchallts set up witli the ALit« F'ax t`eatt-ire. T1iis ji0~ti[icat101i cali
bc chartged tu 59 10, or• 21 da,sa;; reqtlestecl.
. ()Litgoing notiticatit~ils arc bar-coclecl, a1l()wfflb autc-irIc[elfflg fi) the
app1•opriate case tr~ occLnr wliezi reteiriied wifh ti-ie mercllant resp«r-Ise. Hiis
ezpectites the chargehaclc process a11c1 altows the charbebacl{ rel7resel-Itaf ives to
review aild wf.,rlc the riiercliarit i-espciiises i-Itt€cker.
Additjaonally, \ve tiv(wid welco~riie t(ie Opj)txrtUllltV 1() &ScLIss aN„t11 the Ci1~~~ OtIr IIe;~
()iiIine to«l i-iwr riiercharIts to fie[~ ~nanage dispUEes. allowing i'Or eEectrt,,r:Ic
s«11711issiorl e>f retrie~al and chargchau(< rc;spc}i-ises ai7cl sUj-)p()J-tirlg tJLIecie
niai.ageiiic;17t, wo.~rl(flow imawagenieiA, wid rel)trrtifig, l'lease Sec sec~~(,,i1 5.().4 i'sr
1110re cietads on this too~1.
5.15 Identify all subcontractors to be used for these services and what procedures will
be used to monitor quality.
As stateci in sectiofi 5.4. EIa\a}it is mie o1 the ie~\, 111,0cessors ~:\Tithill tlie 17I(A€rs1r\-
that }7e1°1-01•~1-is illost harilccard I)rocessir-ig tilllciia-~sls i~~-hotfse. 4,Ioese (itricti(srI5
HIcl«de all harIIccarc! itIterchatigc ali(:I scitleti-ietit PrOce,ssill;, eYCe~~~i~~rr itei,-~
hat"(1lili, (i.e._ ~•etrie\ a1 ~•eclEteSts ~zio~~ ~;~1~xr~;chauI<s}. a~;~;~,tIA-~tilI~; ~~1l~I hiElitI~,,
~ 18 i'~~
~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
1•el.)ort1rig and statenie~~~ 11rodi-tUfiol), ~~ew c3rd acceptor inipPenienl~ations and
Erafflirig, anci uLis1.0111er seVice. We c110ose 10 1101 eise third-party pz•uuessir)g
vendors ft», these kev functions soy ihat we ina,,1?aYe direct coiitro1 of'these critical
processes. tivlllVli tratislates into bcttcr serN-ice ff~r ' yo€€, otir clic!lt. 6t slioLlIcl be
iio>ted t1-tat based oii LillicILIe reqtiiret~ierlts t>!` eacla Erf ~alr L(iste~nier•s, wc; have the
al,ilit\ t() tEtiiize certaffl al)pro~~ed tlilrcf part~ I-iruvicle,rs. The Lise ol'sEic1i tl-ilrd j)art,v
pr~~ idlers mll he t•e\, iewed 4~n a case-b~~-case basis.
OzK1- Ez.Ieuron ic C`I7eclc Ser\ice is a prcfI)rietar,,' pI-OCILtGt 17€Ii It 0 11 Idmon`s })Iatfonn.
!1t tlie core ot` tlle proclUct Es the VIgA ['t ~S CIacclc SerN ice a11u\'~'ing access
~~iore tliati 75 rntllEon uheckffl(; accUc11its. Ela\-oi€ parEnered tvil1i Er-iCircle, the
tliirc! Ial'gcst C11ec1-, guaY'antCc conipariy izl €1~ie, H,cltistry \vifl1 ()N-ct- 25 years
eYpet-ieiic;e, as ()Ur t17ii-tl-liark'y atif110Fizilig agellt to~ de[iVer f[!is procl«ct.
SliuLilct tl~e OtY be intei-estec[ in Ela~on"s Ent.er~)rise Tiilli~~~ S0l1-01i0E) (FBS~ as
IlresClitec[ in oLIr [U}' response, €t is offcrecl in 1)ajuership vvitli '!'ransactis Ini;...
v,1iiLlt prmic[es CB`i as a Ilostecl softNvare serv;ce. EF3S pavniei7t processing
throEtg1i I,ransactis is iiitegrate(i Mtfi Ela~~~~n's Coee })I-ocessCs al7(I suPp«rt
in trastri EC:(tire. As a~~endo,r of E[avon's Ti-azisactis is (ielcl io the sanie SLAss data
scciIritN°. and disasterr•ecovery rccIiIirc~ncI1ts tliat I:l<x\mi is fz~ld t« (,v its cIiciits.
Ariy\,~endor relalionsbips we 17ring irito FI~~~ori a~id s!ipl)ort d=rectl~ [iave Serr'ice
Level tlgreeiilerits (SL.f1) a1icl tlie;sc are pazt of the coi1iraul agi•eetiteizts sigiied
\vitli ihc vcvtdur. 'lliese vary dcpenc[ing L}~)011 relati«22s1iip arict scr~ice(s) offiered.
\1J1-len SLAs are rzot beitig itiet i7y the venclor, tliat agree~)-ient is in l,reacl~ ~~i-id is
12andlecl according€y.
5.16 List any other applicable checlc or credit/debit card service charges. Only the
charges listed above and in this section will be acceptable in the monthly fee
stateinent.
I'Icasc scc attaLl~~~-lent (i 601, a11 l,"Iavoii c1ia1•~es.
5.17 Check Verifieation. Provide a service that uses negative and activity data, in
addition to other tools to issue a response code baclc to the City enabling the City
to determine whether to accept a check. Please describe the services available.
~N'itl1 I?la\oil`s EIcufrosriic C`}iecl< Set°vice (ECS), l,,e ol:f:er %al•ious oliti«lls..
itiGItGCEiiig eEectroilic c1ieclK cE~mersion ~Nitli verl.Cication. Witli this option, the
1)aner cl7ec1z is aaiix~e2-tcd irito att electrotiic transactir»n, a~)d f-~('S %erifies tliat the
cIiecl< is -`g«t»t... I'1ie tifcrcliatit retaiiis the risl( 4}f rco-Ernecl iteiiis for all
t~ansactimts tCuat are proc:es4ed. ,Ndcliti<>i)al oj)tioz)s are describet:[ in seLtiopzi S.lt).
ol 19
. , Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.18 Checlc Guarantee. Provide a service that uses negative and activity data, in
addition to other tools to issue a response code back to the City enabling the City
to determine whether to accept the check. Checks approved through this service
will be backed by the Merchant. Please describe the services available.
A'ith ot~r EC'S c11eck g~iarajitee optiori. tlle paper clieck is comerted iiilt~ ali
eiec;tiviZic trazisacti«~~. aticf ihe c12ccIc ariifrt_Lm rs ptiarajitcc.cl. No More paj)e~~~~orL
M« MFSre ct,llecti~~t-os. The guat°antor assttine;~ ~~~sk to,t• all CIL1a11fiec€
iran stlc;tiOtes i)rocessecl.
5.18.1 The City of Denton is to receive 100% of its checlc collections. Return
checlcs will be the responsibility of the Merchant. Explain how retui7i
checks will be handled.
()rlcc tlic elicck tratzsactioris arc appr«vcd. F[a~~orl assUu,Ies i•isk aricl
receivable. For a1i LILIalitied clieck trarisacti{~i-is pr«cessed by tlie City
Lirlcler oiir CLieclc Giiarantee prt~grani, ilie ~_'itv "vi11 receiN,e 100°% of its
clieck transactiE>1is in riett dav settletrielits. The Citv M[I not be itrvoived
iti thc retLirii clieck process f~~r tlicse tra7isauti«iis. I'lie Cit~, is reqL.zired ti,
ohtafl'1 clieck writer rlailie. acldress, ph«iiu nUinber, and uriver"s lice~rse
nr.1rt11ber in orc~er tE} gaaralltee cliecl<s. Checks \%,itholtttIlis Hif(Irrilatioll are
sUbjeUt to char~ebacls.
5.19 Check Conversion. Provide a service that converts paper checks into
electronic iteins at the point of purchase and accounts receivable environment,
and initiate a direct ACH deposit of funds into the City's account. Explain the
services available.
Elavon has beeii ari it111ovatk,e leader in cle,,e1opitig ailcl cieliti enil~~
. ~
clleclc c«mersion aiicl prt7cessitig sei•vices. We offert• a~,ariety ot`
apj)l•uaclies a»ct sci,vicc 1e,,els. based LIp011 c(ieiit tieccl. t;diicli ai[ows Lis
tt? process atici -v71vert via°tual[v tz~~~type r>t clieck at thc poiiit ot` SaIe. W'e c!e[iver
sez-N ices ill conjtkl7ciiotl <Nith hwh the VisciNet POS Checl< SerNice ti~~~~iict,vorIc and
tllr(iti-h arl iritegratecl a11i~~ice E~,itli DWircle Checlc SerN,ices.
Cliec.k C;t~ar~~u Rd~~~~
~~~~ect I)DA (Visa 'i'~S (-1iccIt l: C'oiistijiier clieclcs t[ra\.\r11 orl Visa 110S
particip,atii-i-; i.,arllcs are rorrteci to, t[lerr haMI< eIIsLIri~l(l that ilie 1`Ltaic(s al•e aNailahie.
lllis I•eCYLices the t-islc tN;pically assf aciate;d witli clieck acce}~€alice. Rea1-iitiie
ac.cess tk~ iii(ire th_aiz ')5 ai7illio,i1 conisE.cn~rer• ac;coLzllis riatiom,,-ide \vith access to z>\,et.
~(szi. 0 t~i` tlic [_~~~A's xti tlie [I.~^;. I~ir~ect. [)I~r1 A~;cess 1~az~Ics iiicltEde: t I.S. i~3a~~ic,
Barik of Aiiierzca, State I;I1IP10yees' C'redit ('€iioz,. Si.iiic«ast Sc.IiEx,Is Fecieca1
f `recfit I iiiioi). NaN-\ 1'ecteral "'redit E iiiioii9 BB&T. a1i(I I'irst Naii(nial BaiiIc
t t111afta. _
; 20
~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
ACH Ne€worlc; Cunstinier cliecks drawri t}x:i m~i-inI)articipati~ig baillcs acc
pr0>cessecl ~ia ACH. Tlze ACH iietwoxr[z ts a saie i-elrabfe s°,steiil tkseci by buncirec]s
Of tliotisailds of compamcs fo~r l)irect I)ep«sil r.}t` payro6l aiict b-~ tlie Fecterat
gc»erimnerit toi• berietits paymeiits, sL€c1i as Soc;i~~ SecLtrity. E'lIC AC'f l sYsccm is a
closecd, private oetworlc tba( is not accessihle !o €1ie geiieral pub1fc.
Cliceic ~~epfiacement De~cuments: Business, c0rporatc. aticl c,mvcmcricc ciicclcs
are e[ectronica11y captured aii(I recreated as "lieclc 1ZepIac;emeWL)ouumelits
EC'I:Ds). These CRC)s i-tiii t[irE,ligli the tracfitiumal I,anking s,stem ir) amircIance
with ilic C'hcck C`lcariiig Ac;t fo~r tlie, 21st Cewttr~ , also> knoj\=am as "CliecIc 21
Iegis(atioll.
Ims~~~lm Optior~s
Our Eleciroiiic Cliec;k Service (EC;S) sEIPports Yeal-?itne Mid batV11 C~~~l VGI-;;rtff1
metfi«clti for botl7 po int-ot=puruhase aud accuiiiits recei~~able co1-iversi«rl
Iit•occssiiig eriviroa-iments. As evicleiiced beCows tlicre are ~~~~~~ICrOLIs cO,M(-)ii-latiMIs
of set-viLes:
1'oint-of-Purchase (Pt~P) C'olavep sion
l liis 1vocess oecurs M a clieck preseittlco,nsumer presc?-it c~-tvinmiriciit. 'I'be c1ieclc
is passecl ilUOugh tlle POS s~stem foi- cum,ersiori aiici is approN°ecf or c{cc;iffleci,
«ith tlie cuided uheo.;lc liaiiclecr 17ack to~ tlie Gtrs10111U. SeEtlerIleot OcCUrs
clccti-«tiically, wkth ttiticls clcpositcd to tlIe I)LISiliCss accM-111t. u~sua[ly witbiii 244X
Iiotits.
Ae:a:otiYits Re~~ivaNsie C"onvc;t°sicaii (ARC}
ARC; is Lised t~~, u(teclc g)resei-itlc«rlsLzrIler absCIIt tra~~~,101011s, Micc;b are; t}pical of
recci\ral,le p~~,rments, mait ardcr purd-lases ai.ict campames tliat operate irti a dro~p_
b<>x ellvircmmer1t. '1'licse; busEHtesscs wa«t the cfficierzcy (rf electr«ilic; processiaig t«
reclLcce c«sts ailcl impro\,c the (iiiieliiiess of dcp«sits. E`;ist<~mers are pro.;
icled a
mutice expIaimi-ig fhat cliecks \-\i1I be processed electl•oriiually, Tdavc~~i ofiers a
C:OnsLtJI7er 011it ~Mt tcatUrc tO assist: ~~oU in iii_airitai7tiiig a clatabase Of c(,IIsUMeFs
,Mio 1-lavc rcque5tcd tlieii- checl:s iZot be clcctr(mica!kT Lom-e;rtect.
C~~sh ~~~~ice ljnagi~ig, (Cf)I}
(`()I is the preclec;essdr for Bac1: Office (.'ot~~~ersiotz. M-licli Nr'\-( `I~A~ RLtEes
ifill) (emeii tcc[ itr n✓Ia1•c[l r~~, 2-007. Iii its presei-it ro}rm, Ct fl al[m\s ll1a~ f7ri to~
prro,ide the \,erIEicatiotii aiad co>nversimn fimcli<>tis M Iarte I,y reacliii- thc MWIL
IiIIe 4111 tlle Cbcc;lc Lzsi~lg ~'irttf CUITe11t 1'~S MICIZ teclmf~~~~gyy tlze~i utiliziff7g
hard\-\are LItici stpftware ii7 tt1e EaacIc-t,ftice to i~~~age aiI checlcs. Tlzis stslutifxti offiers
(lie ahilit.\ to zttilize llte Visa POS' rails oe acfiecic in-pagc to electroriic;a11y comcrt
all uliecks, m111 t~~e ol>tl«ais tor Guaraittec Qr UollectiMIs_
~ 21
r ~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
~~~sourced Im~~~ilig
Lilse the C;( )I optiori. c[ieclc iniagiM~ is pe~~ti~t~li-~ec~l sE~l)araF~;ly' t~•~)iii e€ect~~Etiri~~;
atdtl~o~rizatir,ri anct clearili,;. I-c~~~~e~,e~~. ff~I uei~tral (~s~;atio»i aii E~;~awr1
processing site perfo~i~i-iis tfze clieck Mtagiiig iiisC~eact ~1~e,~~l~t• blcic (01ice.
Servia:e L,evels
C'ot~~~ersion wifli Guare~~~~e
TIre paper Lhecls is corwerted iiito, aii electroiiic 'Lraiisaciiopiit a1icl tEie check allnow-it
is gitararit~cd. No7 1ii<~rc j)apc~~~~~rlc, Mt 11,101'e C(,Ilecti~~iis, 'l'lic bmrantor assi.ir)ies
tlle r15k for ci1l qrialitiecl trarisactiotis 1-voLes:;eci.
C~nversion witln ilerificatiopi
Tl1e paper chec(c is convertecl ifflto~ aii elcc;tr4iiiic; transacl~i~~i-i. azid hCS ~erifies that
the check is "bc~od... Tlie incrcl7anf rctaffls t1ie risdc ol' rcairi-ied rie-iiis ~~<)r aIl
trajlsact€~i-is 1hat are }7rocessec!_ hiclUde5 NSI' Sercice Feafttl-C'`,
C'onversiopi ivitli ~eriF~cation Co1lections
Tl7is option offcrs aIl thc advartitages ()i~ ~omersir>71 ar-ici verificatioii. while
eliiiiiiiltij1g the need tOr rr1crchaiits t<x 1)crfo>~~~~i crsllccti(iiis. 'l'lic irici-Llzaiit retaitis
tlte rislc «ji rc:tunied itei2iy. hut E(_"S atito1iiaticalk, Iiaiiclle5 all i71oiietan, rel:tirlieci
il:eiiis. IizclLic4es NSF `;ervice Feat(€re"~.
C'oriver°sion Oii1y
'I'11e pal)cr chec!< is com-Grted into aii electroiiic ti-alisactiuir mith i)7i71fflia1
Valiciati«11 a,r cILztheliticatioii. The iIierc1lant relaMs tlie risk ~sf rewriied ite,izs t=()t• a11
traiisaclions (Ilat a1e processeci.
Custom Com1~inaticsn
C'tzstorii-desigziecl risic ~~rogranris arc avaiiabie, ut,ns€stfli_g of az~~~ ~~inbiriatioia oi'
the above servzces, tribgerecf hy aprccictc;i•iiiine(l doilar threslEold. Tlze tiiei-clialif
rt•etaiiis tlle rislc c& los5 oii retLirlie(I clleclcs, c{epeiiciiiig tipoii the sE)ecilie
co1nbinatioii ancf ci(_,llar fliresfiolcxs seiec;tecl.
'1`NSF Sei-vic°e Feattii-c
Fcrr al€ ser\-4i;e le;\-els eYCIwfiri~; C~?Ea~•~ii~tcc, E~'S ,a~il( ~~esti[,ii~it aii NSI~ tr~alisaLtx{~ii..
aric1 o~-ice cEeared_ tNi1l e1edro»tica[k- co1Cect the i-e(atec! serNice tee Frotn €I2e
coastiiaier's 1)DA alicl Iiwd t4ie iZierchant's ~~~~~Lfflt.
5.19.1 Explain the check conversion process and any requirements for the City in
handling or ietaining voided or electroiucally proeessed checks.
1llea.se see e;liarts t_;il flhc ixig 'page.
~ 22
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
ECS Point-of-Sale with Image Transaction Process
(POP) V=SaNer
~
~
•
.
'
Edits and
`f e s `t
SWipes check
Receives funds
validates trans.
through imaging
faster, within 2448
R Forwards to
Presents check.
device
which
hours.
'
drawee bank or
Signs receipt.
,
converts it to an
$
a
non-participating
Gets check back.
electronic transaction,
%
trans to EnCircle
like credit or debit
Electronic
Retums check and
Check Service
E»~irle
copy of signed receipt
to customer.
Processes the
transaction just like
a credit rard.
Automatically uploads
batch and checK (mages.
Manages funding to
merchant.
Makes non-
participating '
check exception
decision, formats
the transactions
for settlement
and sends to
ODFI
IIIIII
DDA bs
CoRSUm r chec k drawn o
parUcipa~ing banks are rou{~ed
directly to the drawee bank.
.~III
r~€?+ r .~n
Con - sumer checks drawn on
non participating banks are
processed via the ACH network.
lffim
_ ~ a + .g~~ ~s c..tq•
Business, Corporate and
cornenience checks are re
created as (CRDs) and
processed through the traditional
banking system.
Receivable r '
(ARC)
Electronic
Check Servic:e
EnCircle
~
~
Consumer checks on-non
participating banks
processed via ACH
ARC Checks only processed
ACH
Makes check
exception
decision, formats
the transactions
for settlement
and sends to
ODFI
~
a ~ d.
. ~
Business, Corporate and
convenienoe checks are
re-created as (CRDs) and
processed through the
traditional banking
system.
~ 23
- ~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.19.2 Must provide daily settlement of the City's transactions in accordance
with the City's approved procedures and time periods. Cash receipts in
the settlement account must reconcile with the submitted batch report each
day.
1'IIc C'iWs ~~-('})ec1c traiisactiotis will l7e Iiwiclled iil the sa~i-ie ti~~~ich-aoies
arid imwiiei- as oLttli]1ec1 fi~)~ c~-ctlit al-id clehit tnaaISactiMIs.
IZeponi~-ig will be ff«\~Kled 1iir rec€~~-Ici1ia€fr~i-I parp«ses. S'110L€1d there he a
clisVivpanc}-, -\ooirt- C:(ient SLtppar~ Specialist mll de()rt,k \-~-Jtli ~)€.c oii
rVs01ttti 011.
5.19.3 Describe the service's repoiting capabilities. Must have the capability of
providing daily batch reports by cashier and location reference number.
This i•ep«rtiii, ~uill he ~~\ailab(e it' tlle ~'~t~cuiltiz~LWs 10 Ltse
Vi 11txa l Merul tajit.
5.19.4 Explain how returned checks will be handled if the City chooses to use
checlc verification or the checlc guarantee services listed above.
('EIe !•Ctt11-12s Iiailcl[ing I)r()cess beconies a ctio~ice ot'thc
ri AIC retUnMs are nianaged tlirotigh fa:la~«2i"s clearnig accow-it
_ReiEreler~ ~~emrriaas fraartcral~~~ whole tlrrougIr the errtire cfearirr~
(tfrrC resuhaatis.sion processa
, No i-eftims are c;liargec( baUk to 1-etai[Cr U11ti1 al[ 1)t,ssill(e
resttbIllission atteiiipts ha~,e hcen conipletec[ antl tlie iter)) is
deeniecl fataE.
~I;[avori iZial~ages alt I•eWuTs ltaiiciliiig aiici restihrilissiE~~~s otrtsidc of
1•etai(ff`s aceOu11t, tisfli-g establisEiecl hUSiness i-tiies.
Atil~i-iiIiis(ratk,e ReWms:
~ ACH iteins that caiiiio~t post clLIC t4, M(CfZ tI7isFcacts,
t1C'I 1 foriiiZtti3igr etc.
~ A1L/Ai-Iy Rett1111s iiiay be seiit trp CoIlec11011s as I•CcIuM,LCi:
~ Mmie;Car~, ReIL11-11s (NS1~,, ACcOL111t C'EOsed, e1c_)
24
~ . ~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
5.20 Red Flag Act Rules and Fair & Accurate Credit Transactions (FACT) Act.
City's utility staff are required to receive annual training for compliance with the
FTC's Red Flag Act Rules. Indicate if the Merchant is able to offer local training
to City staff in the areas of cash handling, identity theft prevention or counterfeit
detection.
The Merchant is required to coinply with the Red Flag Rules and the FACT Act.
The Merchant must ensure that all nonpublic personal customer identity
information provided by the City remain confidential by maintaining safeguards
for the information received. The Merchant will not disclose or use such
information for any purpose other than is reasonably necessary to fulfill the
purpose for which such information was provided by the City or as otherwise
permitted by applicable law. A signed service provider aclcnowledgement form
must be completed in conjunction with the Merchant Services contract.
E'AC"TA and the rtiles ciu iiu~ applv t:o iiZercliant accc7wits as diev are Ilot
collsiderec[ coverecl acCt3LEn€s. However. Ela\()rt ctues pro-actiNely reviev.° creclit
reports 1oi- FAC:'I'A alert.s.
Flavoti E~il[ agree to~ }~~~ovicle traflIirzg as outliiiec€ basecE c~~i mtit:tra( agree1i,icii1 (sf°
iiiaterial alicl scllecittle.
5.21 Identify all subcontractors to be used for these services and what procedures will
be used to monitor quality.
LdavE,ii is one of rlle ievi processors Nvitliiii the i11clListry that pe~~rorliis iiiost
batiIccard pr•occssHig f-tiriaoiis ffl-hotise. i'llese liulc;tioiis i71c[ude a1( harlkcard
i[itcrcliange alid settlufiieiit proces5ing. eYCeptWii iterai l2ailcflffl~ Ei.e., retrieval
re(Iuests ancl c4largebaclcs}, rze;cuFE11tir~g aiici billiilg, reportd1g anct stateiiieiit
prodt«timi, new carcl acceptor iinplet,ientatioiis ancl trai11i7ig. al-id clcstonner
scrvicc. We CllO«se t0i 110t LIsc tliird-j)arty procc.s:;i~~g veiid<~t•s t~oz• tilese key
fuizctiotis sz~ that vve iiiay liave r.iirect coritrc~l ot t(lese cri1ic.al prucesses, «Aic1l
tralislal~es iilto better 5er4ice t~ol' v~~~LL OtIr Clie?It. it slit>€sld I7e iioiecl that hased on
tinicItie reLIUiremeWs «t eac€i c~~ ~~t.o• customers. \ve have tlie al7ility tE, Lltilize
certaffl zppY•uvecl third pat-ty proN iders. 'I'[ic tisc; 4>1- sLiClI tlllr'd Pai-ty prwx iclcrs \vill
be revicwed oti a ca5e-h\ --case basis.
OtEr Lle~truriic C(ieclcSer~ice Is a 1)roprietar~° ~)Ft,ClttGi: heiilt o,ii E1avosii's pIa&;rxil.
At t1ie LQre ol- tl~c proclUct Is thc Visa PE3S Chcclc Service all<~~~:ffl- access to iii{~rc
t1iati '35 inr[liori cIieckilig aCGOLIMs. FImoi1 }7artiiered F,~itb 4?tW=rcle. tE-ie tliircl
largest cliecic gz«1'aiitee coriipatiN~ ir-I f~iie iridusir~~ \017 mer 25 Nears experieliLe. as
otti- tbird-party autb«riziii~ ~~~;eiit [o il
~ eli~.et~ tziis j)t~t~c~€I(°t.
~ 25
~ - ~ E avon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
ShOL11d 111C City he H teresteci in Elavozi`s E1lterprise BiIIi~lg SoItrtrozl (EBS) as
preseWecd M mir RRP respc)nse, it is o41e?•ed iii j,arl:nert-sbip Ait1i 1Cransactis I~ic..
°,~,(iicfi p x~~~~,~~cta~ ~;[-3S as a iz~3sted s~=ft~~~a.re se~•\ ice. ~:I~`~ pa~riiietrt 1»•<~cessi~~~
tIiro2ig11 Iralisac;tis is ii1tegrateci wit(i F.Imon's core ~~~,ocesses al-ici stlj7Port
inlrastI'lictLcrC. i1s a veiidor (&Efa~-oii"s 1'ransacEis is Iie[d t<, tlie sanie SL„,,s. clata.
sec«Fity, alicl clisast~errecn%~er_y reciaireji6eiits ihat FIa~o7l is lielc( to bd~ its clieiils.
vei1t~~»~ re~Iatio3l7sili}~s ~-ve h~•ill~ i1ltE_~ r.!a~(111 all(1 sLIJ)port ciircetk; lia\~e ~enice
i,e\°el A,,recniezits (S1_As) and i1iese are })art of' tfie ccsiitracl ageenielits sl,,i~ed
w?th the s,-enclor. Tllcse N arv depeiid,in-; Lipa~~ relatioiis1ill) an~! serviue(s) «ffei-ccl.
Vv'lle~i SE_As l)e~z~g iiiet !ay tl~c vert~clc~rt~. t~lat agre;c?iiciit is ipl [~~•eacli ai~d is
liaticilec1 aLct>rditigIN,
6.0 TECHNOLOGY REQUIREMENTS
It is critical that the systein installed at the City of Denton be a fully hosted system,
incorporates current technology and fully integrates with our existing web processor and
provides smooth and efficient transaction processing. Describe the type of equipment
and support to be provided. Merchant must be able to fiilly integrate into the City's
existing software via an Application Prograin Interface (API) set up by Teleworlcs, an
outside technology firm contracted by the City.
6.1 System Requirements
6.1.1 Point of Sale processing terminals for handling checlc verification and
batching and debit or credit card authorizations are to be connected to
existing Microsoft Windows-based desktop coinputers tluough standard
peripheral connections, such as COM or USB (Preferred). The terminal
peripherals would utilize software present on the coinputer, either an
installed software client or a web-browser-based control interface, to
conununicate via the internet with the Merchant's host systein for
purposes of communicating transaction information at the point of
purchase. Client software would provide for receipt printing of ail
transactions, with capability to re-print receipts if necessary. Software
interface must be capable of handling both card-present, and card-not-
present transactions, along with checlc conversion, and associate each with
the coi7 ect fee schedule.
1;1a~oil is t•ec;01n111ellcli~l_~,, the citN' c;«ntil2tic tisi~ig the eqtlil)lllellt wtl l.ise
to,clay tr~ process 011 oEli• ~~~[Wol•Ic. PleaSe Iiote t(iat the 1Z1a11LttaCtUreI• oftlie
1 rirltet' 900 lias disC0t1fi11tIed iiialc€ttg t1tis prHiter. Tliere1'ol'e, Ollce
stIJ,I,I_yis ciepleteclq the Cik itim ileecI to ~~~~~i-~'ert to ajio,tlier prMter. NKe
v,iil \,,rsrIc Mit~l VOLk s1101_11d tli-is hec«tiic i-ieccssarN,.
~ 26
~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
6.1.2 Transaction data would need to be captured and cataloged according to the
following hierarchy: City of Denton » Departinent » Location »
Operator » Batch ID. Reporting capabilities would need to be provided
to allow the City to research and reconcile transactions passing tluough
the Merchant. This reporting should be web-based, and accessible in real-
time. Transaction data should be captured either locally on City provided
database and hardware platforms or remotely at the Merchant's location as
long as reporting needs are effectively met.
Yes. L la:m,~ wiI i CO fliitI Lie tE, proN, ide the C'itv vvitli oii1iiie report•ti~-ig oi
traiisactif~~i data as ~vc do toclad. M€rc;lian~(.'otwcct iii1orxllatioll is
prm,icied M SectiE~ii 5.6 aiic! 5a~~iple rep<:i•ts are [E3c;ated M ApperidiY r).
Additi{~nallv, for lar~e iiiercliaiits vuitli iiiulti~alc ~~ist~-il~liti~~ii t~~~iaiiriel~; t~r
cotiipIcx rcportin~ 1iic~~a~-e;liics tllat ~~ec~cti€~c spccia(izecl i-e~~ortiiig
capahilities. L1avoii`s f1(_`S (AtIto~riiated Ctist<siiier ScrN ice) data
repc»•ts pr«vicle detail ~,vllicb is easity exportable to eXteriial app[icatiuAls
for acEclitiotial clata iiiaiiagcnieiit a1itl repol•1ing.
Vv'it~li ACS, yoti cais easilv retrieve tletailect reports vitli c(ata fol• it€ziltip€e
loc;ati«irs. i7iclttding traiisaction activitt. statciiieri4 c€etail_ alid carc€ type
(lisi:uY•v. TlIe File, f«rtllat is providecl ir7 Appe77(1ix D.
A1so. it the C.'itv nceds a truk, custoslii approacli.. I'lla~oll prmicles eYC€Usive
t•eporf.ing soltxtions tluoUb11 E7UF FOcLIs s~-sic°zII. Worlc mtli \0etr C[ieirtt
EYectt(ia~e, Frii1 L3avis, to c[eterYizirie tlie Mk;t Liata yuti ileect. sLich as a
coMparis«n of c]ualitied ai1c[ MICItla[ifiec! Hiterubarigc trt-acIsactioiis. cliarti2lu,
1101K v«u niav be ctowiigradi~~g ovel- tiiiie.
6.2 Point of Purchase Equipment
The City prefers that bidders utilize the following hardware/software currently
owned and deployed tluoughout the City: RDM711F (dual sided check scanner
with credit card inagnetic reader), Verifone PIN Pad 1000SE, and Verifone
Printer 900.
If bidders require different hardware/software, please list any hardware/software
requirements for this service and the costs to replace existing hardware/software.
Please list financing options or other replacement considerations bidder rnay
desire to propose to the City. City prefers one piece of equipment that processes
checks and credit cards. Below are the hardware/software requirements the City
prefers if eurreilt hardware/software cannot be utilized:
i "es, EJa%«ri «i[1 be a)-rlc; to, c~~imi-lite stipportie)g the exisiirig ecitlipi2icitt as
0E01illecf: tbe RDT\'I7Eti 11, E~eadci; Ve7-iF«iic['iNl-)~ici
m
r ; 27 ~
~ i Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
l1ri0er 900. as statecf_ i,-,lease it0sic that tlle 11zat1 LrraCtLtrer ot t11e Primer 9(I0 I,as
c1is(;Uf1tiI.Lled inalcilig tliis prlmer. Tfiereilor•e, once otcr stiE)pl~ is de;pleted, the C_`it~
may ileed to c(iilvert t« ali«tllei• priritet•. We ,\I11 -~x,«r1c wit1) v0Li s1iottIc.I (Elis
1)eC0111c flcLCSSary.
6.2.1 Debit/Credit Card Terminal - Industry standard hardware utilizing 3-
traclc inagnetic stripe reader, integrated PIN pad and display unit with
COM or USB (Preferred) connectivity to interface with current Microsoft
Windows-based desktop coinputer. Terininal would have the ability to be
placed within the customer's reach for transaction processing so as to
afford the customer the added security benefit of card retention. Ter7ilinal
display would be prograinmed with all relevant customer prompts and
responses so as to minimize cashier instruction.
Yes. ElaN,on wiil colltiJILcC 10 scIPpc>rt proccssing fo>r tlie Citv \~Jith ~()Ur
RDM70 1 i F terniiilals.
6.2.2 Checlc Processor - Industry standard hardware utilizing horseshoe bend-
style checlc processor with COM or USB (preferred) connectivity to
interface with current Microsoft Windows-based deslctop computer.
Processor inust perform MICR capture, two-sided checlc ilnaging, and
endorsement of the itein in one pass. After the itein is processed, the
cashier would be proinpted to enter the dollar ainount of the item and
other City required data for completion of the transaction.
Yes. l:1a\,u~l \Nil] cumitl€fe to sUpP0t•tprucessiii~, itor the CitNi ~mtli ymur
F~DM701 (F teriiiiiials.
6.2.3 Receipt Printer - Industry standard thermal printer hardware using
Parallel, COM or USB (preferred) communication to connect to current
Microsoft Windows-based deslctop computer. Printer should use 3"
standard two part paper rolls, and may incorporate automated feed cutter
(preferred) or tear off strip. Receipt would provide the following
infoi7nation for a11 transactions: (1) credit cards - City logo, departinent,
address, phone nuinber, operator, transaction date and tiine, card holder's
name, last four digits of card used, transaction amount, approval code,
other City required data, and siguature line and (2) checlcs - City logo,
depaitment, address, phone number, operator, transaction date and time,
checlc number, transaction amount, approval code, and other City required
data.
1da~~~~i ~~%iIC comir)LIC tt} suI)}NIN N Oltr CLH-reiitpri0ers. I-~o\xx\er. as state(l,
pIeas~ ~iote tliat tlle MafIL11i'lCtill•e~~ o(' t(2e 1'rillfe~' 9010 12as disLol-€nlic€ed
111al6l1g tlais prititer. I~I1ercforee oz)ce o~irs~ipp1y is &plcte<.i, tl-ie ('ity iiia5~
i-teecl 'Lo} comert ttr ariotlicr j,rinter. Wc ~,1€I1 ti~~ork vmli ~-()U sliould tlais
beGteii'1e 11eCeSSaPv'.
0
28
~ ~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
6.3 Software Updates
6.3.1 The City expects that software "bugs" will be addressed within a
reasonable and fair time frame under the basic maintenance agreeinent
held with the Merchant. A software "bug" is defined as a glitch, anomaly,
or other reproducible condition that materially affects the proper operation
of the software as designed, and prevents the City from using the software
as intended.
SIioLild at1 isSele OccLu• With a sol`tevare 1»V(€1_1ct trt~rii I-;lato7i. we \,vi11 \uc~rlc
t« retiiedv tl2e si1u,1t1c',t2 M aIfflield, iiianncr. YOur• C'iieiit ExecittIti~C. LI.riII.
Dmis. ai7ct rE>Llr Clie«t Sttpp01-f Specialist. I_iHidsey A%[iiLe. u\,iII he
available to~ Iielp the C'ilti' dtfl-illl_~ tlie 1)rocess t-%ith Upclates ~,n a 7•egL11a1•
basis.
6.3.2 The City may request additional features or functionality during the
duration of the contract. City and Merchant will agree whether these
enhancements constitute a material change above and beyond what is
covered under the standard maintenance agreeinent for the software. In the
event that the changes represent a billed-for service, the City will have the
option to purchase the enhancement, and incorporate the ongoing support
for that enhanceinent as part of the standard inaintenance agreement.
F(aGoii tIgFees t(y tllis E•ecIuireriietit.
6.3.3 Merchant is responsible for ensuring that their software functions on
current mainstream desktop computers. This includes hardware not to
exceed 4 years in age, and the cuiTent public release of the Microsoft
Windows desktop operating systein for business and professional use with
all required security patches installed. If the client software is deployed in
a browser, it must be coinpatible with the current retail release of
Microsoft Internet Explorer with all required security patches installed. It
is the Merchant's responsibility, under the terms of the maintenauce
agreement, to resolve issues arising from the appiication of critical
Microsoft patches that may interfere with the proper operation of the
Merchant's software.
As tlie Ot~\zs Gi.~ITc)'ItIV j»'00c;ss€«g tflrOttgll «Lrr poiiit of saie solL1601).
Vit-W,I1Mercfiam, F=X \01E coiitimie to s}tter this 1~rodftct to tlle Cit~,~.
V'H-wallli!ercl,axit is a co~nipEete. }iostect payA7icritsO1LItit~n frW Face.-to-i-~kce
w1Cl e°Ct,22221'fel'Le f1`tldlStlcfltliiS. L',&Sv1tt ECSC a11d eLEl2it>!"[14cal.
v'irtua1mercll_allt efficientlv allcl C()st-elfcct~i\,c[y pr4>cesses ~~a,\wez)ts
~ 29
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
%IF1d Sttt1'eC~b°,' El£lvt1t7, t1llYlttlllZli4g VC)!!L' C~tlfi3 SeCE[t'1~~~' Li11Ci ~1SSf?U(ili~;t}t"l
~:o~~1plia~~ce corTC;el'ns. . _
VirtualMerchant ca:ti be c}Lric:lcly atlct easil~awcesscc[ I-rf-,iii aii~- IIC' ith aii
[ntcrnet (;rriinec;tWfl usi,ig a sccure Ioghi, ii« harciware specificati~~ns.
aet~vczrIt iiifrastrLtdLire, rrr se~l'tware iiistallati~~~-t recltiired.
6.3.4 City is expected to have access to new releases of software free of charge
under the terms of the annual maintenance agreement.
EIav()it agrees to t1liS reqU«renieiit. VirtttallVlercliant as Uttrrentl~Usecl C?v
tize Cit\, c[iiiiiiiates Fees f_Or sf3ttWai•C Lrpgi-aclcs. iie,~,;rePedses. alld
technica1 supptsrt. as tIlese are ai1 proN icleci as part o1'tlie lii,stec€ serN ice
bt'eat1~' reciucitlg tlle tE~tal ~;«st ()t~~V~~11~::I~sI~€p
6.4 Telephone Lines/Internet/Preferences for selection
6.4.1 None of the peripherals used in any solution will use a conventional
telephone line to process transactions; all transactions will be handled over
the Internet. In the event that Internet processing is unavailable,
transactions wili be queued for processing at such time as Internet
connectivity is restored. This queuing process inay be manual, or
integrated into the software (preferred). Provide an explanation of how
face-to-face credit card transactions can be authorized and then processed
later in the merchant software?
VirtUalMerchant. utti-rent1v cxsect l,\ the City, is an Ijiterllet processilig
soIutioti. S1toLG1d t11e riced t4> ohtairi an acG€hurization and liitcr~iet.
process,ing is ziot avai1abIe. ~lavEjii operates an iii-Izotise t,all cei-iter M
Kiioxville. Teiu-Lessee i`oi• v«ice aUtfi0rizati0ii.
li`€:he (_'ity iieecis I() ca11 tiq N-(Iice atsthorizatfoii. [Iie 6'i[v \'~-oukl:
I)ia1 the wgue authorizath)zi !r,ll-fi~cc iiiixnher. l-Cie [VR sN'stc;7i~ N0I
iniswer Uz~i-iiec(iateEN.
The mercliaiit will ei-iter the Mercharit N~~inber. card iiLmibLr, card
eYpiratWn ciZte. ancl afflOU111, ilifr~ 1.he IVI~ s~steiii. 'T'he sNsteri7 \\-iCf dial
OEEt and ~'Ou ttiiil typically reccivc arespoiise (l-0111 tlle Iss«itIg haiilc iwI
less fltan mte seco~tid.
i. Tf the isstiiflg I->a~~Ii t•ecILlil~es a celc~~ral ~;ail. tlieii t~~e ,~sie~•c(iaiit ~r~EZ~Rid be
. t~rt•ansterrec to aji ()pcra({~r. I Ize a\ erage i-espoiise twri,e f(}r aii cpperat(,r is
5.7 sec«7ids.
~ 30
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
6.4.2 Preference will be given to vendors demonstrating the ability to fully
integrate all non-cash transactions regardless of collection method: in-
person POP, call center POP, self-service paytnent lcioslc, e-government
transactional website, e-check, and interactive voice response pay-by-
phone. Currently, the City offers kiosk, web, and phone payinent options,
and is looking for the ability to integrate the POP capabilities.
I;Ia=,e,ii c3fters Li \at•iet,' ()r approacf-Ies aiid ser: Icc, 1eve(s. I)asec[ uj)or) chertt
~ieed, %NIiich aI laws tis t4~ pr«ccss allcl cr,~iverE \ioc<aiz~aw,' t\pe t~`4 cl.ieclc at
the poirit 4 safe= We cleIivet• set•~ices i'll c011jLu1Uti~~~1 with tiie
ti'isaNet I'0SChccIc ~e~~~•ic~ irat~~e~.v~~rlc ~itd th~~~.>,f~1~ a~~ itltegr•atcd aili~~icc
wit11 ~~iCti•cle 'I_'1ieclc ScrT, iucs.
We catl pr(,vxc3e checlc processiiig fo~r rill 4 t1~e uptitszis IistecE as we Ltt~
today, Ait12 the exccpti~~~i 01` VirtUa4Merc[1aw ct(ies jiot currei1tlV provide
AC`II processiYlg via tC1e, [iitcriiet. IInwever., t12is is ~)n «t.ir roadiiiap fi,~'
VH•lLiaIMere;liaw fOr release bv JtlI-Ie srI`2(}1 1.
7.0 REPORTING REQUIREMENTS
The City of Denton will require on-line access to daily funding notices, exception items
and weekly and month-end suminary reports. One hard copy of each repoi-t must be sent
to the City of Denton by U.S. mail to the attention of the Treasury Manager. The daily
funding notice; must also be faxed or e-mailed each day. The City of Denton has a tiered
account structure and reports and transaction information must be accessible within each
tier.
For this proposal, describe the contents and distribution frequency of all of the reports
that will be provided to the City of Denton. Sainple reports must be included in the
proposal.
1?laV017`s sE>ltttictrIs t-0Ft'ep0t•tit1g arc:
~ Merc(ZarItCmtrIect -()itlMeReportfflg'F(it~l
'1'liis tuul sE2p1~orts dclivcr•N ()i`awh. settiertiieiit, cliargc(,ack, ilItel•Chaalgc tlUaliP`iuatwrla
at3,just-~~tet~ti"~~ej~:ci. f3iic~ adc(iti€riia1 ~~ep«rtiti~ ~ia ~>iiliiic it7~~ls tExr \~ie\-%fflg arId/()r
eYpartilig.
N4erchalIt('()rIl-Iect Preiiii~~~~~i reports are typically a\~adahIe:
, ~ettleci ansautiuii I)ata - 2 ho}urs atfci, Scttlcirieiit
QLtalil~lcati('Q! Data- 24 liw_irs attersettler7mit
, ~i£el~C,ll~t;tiiS - til`C~ ~lt[~;il~f',SS ~~tl\' tt( C~1L illt7t1~~1
~ r~tIf~~rllat~e~~ ~'tIstErli~er ~;c~~\ ice (;~C`~) - ~;$~C[' file,
At_.S sLI})p0rts clcJiverv ot' aLitll, settCeii?eiit„ char~;ehzcl~, ~3~fjUstiliel1i;'reject, 'aricl
additiWiia1 repo~rtHig Gia ra~\~ data tiles. ~(_'S 4!ata is t\pica1ly avai(al,~e fl,,e iielt
111orrlint'hN10:00a.111. I'~'ST.
k~
~ 31 i~
~ ~ E avon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
~ 13111iiig Stateiiieiits
, . .
h. .
il~~~;es ()1 stateiiieiits are ar,~al1a1~Ie ~%1tl1r11 1'epc»•tzI1~; s~~, ~t1t~01ts asl(1101' ~~ka Iiard c~~ilw, at~
~~~~~~erciiant alid1«,r c~~rj)orate tadtain) le~els.
S110tild tliis 110t be sHtfiCiellt i~)r tlie C'ity. %;ve %,~iI1 rec11.111e 1i€etllff (lisct€ssiMI t« f'tjl?~~r_fflclet•stam( yocrr reqLtireiiierils.
8.0 OPERATIONS AND TECHNICAL SUPPORT REQUIREMENTS
The processing system provided must be fully automated and easy to use. Describe in
detail how the program will be operated on a day-to-day basis. Identify the
subcontractors to be used for these services and what procedures will be used to monitor
quality. Additionally, explain what back-up procedures will be established for each item.
Include the activities listed below in your description.
8.1 Supplies/Equipment
It is critical that the Merchant provide the City of Denton with the necessary
equipment and supplies for this program. Describe the entire process in detail;
include:
81.1 What equipment/supplies will be needed
8.1.2 Who should order them and how
8.1.3 From whorn and where they are to be ordered
8.1.4 What tiine schedules should be used for placing orders
8.1.5 Provide complete pricing
As \ve arc rec«rrI1zm~Ciling thc Cit~~ C<,Iltill«e td~ Use thc cq€6j)r-iie1It that N~s>u 1trcady
(iave iri pla(;e. fliesc i•eciriire2iie2its doiio~t apl)ly. I'otl-Ie ('itv`s acL\alitagery VE,Lz %\II(
nr~t lia\'e to be co~a,,cemed \-~itli ()rderiiig ecjEIiI)i~~~i-It, scltcdttlilig of cle[i verv a~id
traiiiin~;, E~r pl~rcl~<~si~ig iie~~ ecjL~iI)a11?I1t.
8.2 Error Detection
It is important that the Merchant does everything possible to identify errors for the
City of Denton. Describe actions the Merchant will take to identify and correct
ei7 ors? Include how different errors will be handled such as interchange rates,
late daily settleinents, etc. Also include methods for notifying the City of Denton
of these errors and advise what level of support front line custodians will be
provided during all business hours.
E41t.,'oIl CtAltttlUalkr" 1t1i11iClOI'S ()itl" I71'(CeSS[Il'y S`,':itClllS atld j-)t"oaGj1t'C1y 11€)i:Ei1e5
affec'uc~ ~CCOt111f~s as iieeclecl tt~ eiisi.kre iiiiliiiiial itizpaut to~ tlleir abiliiv t() I,r()cess
tra7lsadiolis. kra~(Ws sLIcli as iate dafl'v se~ttlciiictit ar1d Hrte-Cl1a1)ge crr()ts mll bc
q1iiclclN- idc~"tiiied a~idrecl IfflcslecE, The C`itN4 Dckitmi E~ i11 C011titlUe to~ be
32
Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
supt)arted hNaClierlt `-,UpPorf Specialist as a€Ia\-to-day uwitacE a1ic1 aChe,rit
Executive as a- slratebic ~~arti~er tc, ei1s~~~~~e all expcctati(zT~s ~ire (~et~~~ i2iet. i'~;1_}errors that tlie CiE"sJicoulcf identif~ caiz tlieii bc brOUght to the atteiit~~~) 4 tl2e
C'Iiciit SECpport Spccia[ist. 'I,Iiis inclidiclt.Gal wi1E t1hen upclate ihe Cit~regidarl~Lilltil
resolUti011 is reaclied.
8.3 POP Signage
Identify the requirements regarding point of sale signage and formats for inail-in
forms. Please describe as much of this information as possible.
PIc1se sce saiiipie beEow. 'I'liis language is the sanie that tl~c C.it,y ~0I llccci to}
HIC;lude In a l,illin~ state~~ietif oi, p<~st ca~~~~ setlt ko c~€stt~n~er f~~i- ,~R~' (c~trcl~~~~!c{er
li«t present } Processing.
When yau provide a check as payment, you authorize us either
to use informatioq from your check to make a one-time electronic
fund transfer from your account or to process the payment as a
check transaction. Funds may be withdrawn from your account
as soon as fhe same day and you wiii not receive the check back
from your financial institution. If your payment is returned due to
insufficient funds, you authorize us to make a one-time electronic
fund transfer from your account to collect a fee as allowed by
s#ate law.
AL $30 LA` $25 or 5% OH* $30 or 10%
AK $30 ME $25 OK $25
AZ $25 MD $35 OR $25
Af2 $25 MA $25 PA $25
CA $25 MI $25 RI $25
CO* $20 or ZO% MN $30 SC $30
CT $20 MS $40 SD $40
DE $40 MO $25 TN $30
Fl.* $25 or 5% MT $30 TX $30
GA'` $30 or 5% NE $25 1JT $20
H) $30 NV $25 VT $25
ID $20 NH $25 VA $35
IL $25 NJ $25 WA $40
IN $20 NM $25 WV $25
IA $30 NY $20 WI $25
KS $30 NC $25 WY $30
KY $26 ND $30 DC $25
*Pee is dol(ar amount or percentage of check face vafue, whichever is greater.
This fnformatlon is not intended to be legal advice and is subJect to change,
For inquiries, please cail 800-310-6107. Nov Postos Rev1207
, 33
-Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
8.4 Chargebacks and Copy Requests
The City of Denton expects to maintain transaction copies. Please explain
requirements that must be followed regarding these receipts and the penalties for
not doing so. Explain how the Merchant will handle any copy requests or
chargebaclcs for the City of Denton. The City of Denton expects the Merchant to
fully represent its position in the event of any type of dispute with one of the card
compauies.
The c,ard assoc;ia[itisis retlisire cxiei~c1iants t4) i-etaiii trt~i-isactimi recei})ts IiVfil 12 to
18 2i1(ii1(1is, clel)erlclii)~ t~n ~;~~i-c€ l~raiic~. Not 1ixllc~~~i~~tg tlze ci~•aft t,etc~~ti«ri
1-iit7cfrar-lzes c(>tiId rest€It irl charge(,aclts t« w?~ic(i t~le iiier•c(iaiit ca~~~iot re5l,«i-icl.
As o~~e Of k1m,•or-i"s Nationa? Accowits_ \'(ai ~-v611 cniitim.te to iiaN~e a C`[iet7t ScII)pOrt
'-4pccialist t~~ ~~ork euit-1l VoUr s[af't oiz ctav-to-da~~ issUes. YOU,' ('liclIt Su}3I)e~IJ
SpGCialisi will (;(,iifii1€ie tc~ bc -wtit• ~)ritii.arti coriitact ti~t• c~iargef)aclis.
Ela%,vzi"s Cliargehack 1?cpartmetit 1-iz•ocesses aii a\,era~;e (7f5`~.~)E~E~ ~;1~~tr~;el-+acl~s 1~e~•
aiic}iit1i at-lt$ 23.00) ivtricN-al rc(JUCsts ~)cr tii~»ith. Aii average retricEaf f-LiEFiiliirc7tt
t•ate of 99.5% is iiiaiotailteci. Sit~~~ 2004 ~~~e EEavoii C1~argeback Depaa•~~~~ent
laas heeri rec~giiizec6 lsv Visa foi° itiaiiitaaiiie~g the liigitest r~triev~l ft~lfi1~iiieiit
i-atea Havon's (_'Iiacgeback 1>c;j)artmeW is ai,[c to~ Iiatidle approYiiiiately' 15°~I) to
DO°%E, c,f` cliargebaclcs witliulit it-lerc[-lant iaiv~~kcii)eiit. I'h?s iiicaiis ibwer
c17argebacIcs te~~~ ~.~L11- c«S10111ers a~icl alower oz,-crall cost ot' carci accept~i-ice.
.
C' . .
harge 7~lclcs tlLIt rec1€11re c!«ULMIeIItatiozi 6-011i tihe ISstt1n1; I,ai-il< a1e processed
ivitliiffl a11 average ut 10 claN~5. C'hargehauks tliat ci« iio~t reciwre (1octii)ie0atiam
tiA,i7) tlle issL61111 11<111k ffl~e ~~~-UCesScCl Mtlli~i ciii merage apf 5 clays. (I,'ads as of
i?/'1 I/09.)
A prFFprietary cIi,arbeE7rlclc systeili cal(eci rNDRI) EAtitolliate(.i Displite IZesoititi()17
I'i-ocessiiig) is tiscd €f> Nmd< cIZarlchaclt ar-id rc(i-ieaal acti\ity. ADM' 's a si~il-le
Poilit of, elltn~ s'-steill Il«€isi~ig clata i-elate~ to cach c1ispLEte. F[avoli inlpleillelited
this systerl7 ill 2001 alid has silzcc iriade se~.erEll Jianges Lliic1 elihaliueiiiems to
assist ill tlic (:dis~)Hte p>tVCess:
0 AtJo 1)ecisio7i f'LErictiori.a[it~' lias hecii the systeii1 t-slsec! (,ti
assucial.imi I'egLt[LIti(}rIs 4=~W sl)ecitic reasc>ll codes. Tllls 1ogic allo\,~s the
s~stel)l t~~ (1cl:errltilie it' Itert~)s sl~(Ailcl be rcj)eesewcd iE, the dssLii~~g haiik ort~
cl, ehited w tlle ;-lte~,citaot.
34
~ ~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Seivices October 4, 2010
* 1pruprietar;• facsimile draf't is Used tu f~~'ifi(1 cop}I•elrieVal I•e(jtzests
~\,hciic~vr possible afid in uoiiipIiancc vvitli associatioii i-L1Ces tt~ iiaio)ffllize
tlie Mfflibcc t,t reclLtests to the riiet-c;llaiit. Ii' thc re(Itiffed data clciiiei-I1s ace
a\ai[ah1e, aric( it is assucialiorI rli6es. ille rcClUest is a«tomaticall~tul~tille(E. ~f oril,;iiial clralts are recitxireci, aFeclUest vO~(€ he setit to tlle
I)Icrchallt. retriei aE reqticst ({lat is iZ(?t resp«iidcd tt) hN tEie ri-iercharIt
bel-rOrc iiic 25i:h c(ay is aLEt0-tu1111led tNith a tticsimile ciraEt. 'I'liis is aii
atteriipt f_o> proteci ot~~~ ~~~erchatlfs 1'r(Ir1I expUsLO'e a~ld 10,Ver CO;;ts.
* A~i ALitr~ Fax teatLire is I,u,i1t €fito~ tlie systeiii alh)Nnriii; t-ax iz(ptilicatioji (J`a
chargehac[c ol• retrie\-a( tt~ be seiit Eo the iizei-clialit the satlle ~la~it is
received, tfiet•eh\ -;i~M- utir nierc;hants ~~wre tinie ttz respomi.
* The sNsteiii ge~~erates a 15-c(av i•eiiiiilder ii«tice 4or a11 01-ststaiIcliIlb
retrievaC requests fi)r 111erCharits se~ ~ip with the A€It« T'ax feature. This
tioti1ication cari he uhaltged to S, C Er, or 21 days as reclUesteci.
* Olitgoiiig iiotiticatio7is are liar-cocied. aitf>;N ini) aLrto~-iI)CIeXizag t4~ the
appropriate case to occtir whcn retUNIeCI vith tlie 7rIerchant rcspotisc. I'1?is
expeditcs the chargel,aclc process ancl a11ows thc; cIZargel,ack
representat:ives t« re\-iev,° a~id ~~orIc tlze ii7ercliailt 1•espo]Ises cIEtickc7•.
8.5 Training and Reference Manuals
It is the Merchants responsibility to ensure that the City of Denton staff is
thoroughly trained before the program launch will be considered final. Describe
the requirements for installing and using the equipment. Include explanations of
time, slcill, and resource requirements. Describe any inanuals, videos, or other
materials that will be provided; if possible provide samples.
As thc itiLt~~~ihem. trtiHiitig ~\iil iio~i lse recItlirecl tirlless ihc Cit.\' clecicles tc>
sriipieiiieit1 rIC\\, serviues Or J)t•()cEEtds.
8.6 Escalation Procedures
Indicate what procedures are in place in the event that a problem with the program
needs to be brought to the attention of the Merchant's inanagement. This applies
to both the conveision process and for situations that may occur once the program
is fully operational.
F«r eSE:alateef issttes. (Pti1•~~ik), ~~~~noia( l,«si7Iesti IIOEtr•s, sllot€1(i ttle 0t\hme aii '
IssUe.
-\-011 ti1M.IId c;<?r).tact v<7ur assib3zed <'11eli# `~~ipp«rt Spcciaiist ((_`SS) ()I'(SS '6'cat ;I
k4atiage1•, e~~hu \\iII coWact 'L1ie a~~~~~~)priate peISo3iweL .~~I adEJiti~~ria1 esca[zin'E}11
patl~ available tr} 't(ie ("ii~- VIOtFld be tlie CIi~~m I~"Xec.titive w2d thc C:lieilt [~ekatiolls
I > irector-
35 i'
0 -
; Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
issLtes tliat uccttr aIter no»niial (,ttsirtess tiu[.irs, the C;it,, ~,vii4 ha\ e (M csption o.E
c,aIIing FIa~~oii's 24i7/365 (ielpdesk or the (iii-call CI?eiit `~LIPpOOL Specialist. 14
cscalatio~i is rcc}LiiE•ccf ti•oiii the lie.(pdeslc, thc sEiPPOI't J)e7's~~~l Mil escaiat~e ilIc isstte
to tlie ixiaiiage~- nii duty. F[ie ~ilanaber wilI cotitact the oii-c;all (`Iierit S~zppc}rt
SpcciaCist. TIie ('lieiit Stipp«rt Specaalist wi11 esca(ate t<> ihe appr«priale
1)crsoilnel.
10.0 CONTRACT SPECIFICS AND MISCELLANEOUS INFORMATION
10.1 Periodic Review
The City of Denton may require a review meeting at least once every month to
evaluate the working relationship between the City and the Merchant Services
provider. The objective will be to address any problems and to seelc a responsible
solution. More frequent meetings may be called if necessary.
~N"cs. Elm o1i agrees to this recl Eiirei7ieiii.
10.2 City Council Action
The final appointment will be made by the City Council of the City of Denton.
F(m'ori tiIidei~sta2ids this re~~~~lreri~ieiA anct proccss.
10.3 Designation of Individuals
Upon being awarded the contract, the Merchant provider shall designate, in
writing, an individual to be the official contact person for all correspondence.
The City of Denton shall do the same.
Yes_ the Uit\~ :ui(} comifitte tt~ 1lwc aii assigtic(i ~`liciit I-:xectim~cu as weI1 as a.
((e(_(icalecl Clielit SUPp~~11 Specialist.
10.4 Program Launch
Program launch will occur with installation of tlle equipment and coinpleted
training of the City of Denton staf£ These activities should have ininitnal impact
on day-to-day operations of the City of Denton and should be in coordination with
the implementation of a new bank depository. Unless emergency work is
required, any on-site work must be scheduled at least two days in advance.
Business hours are 8:00 a.m. to 5:00 p.m. Monday through Friday.
/-~s kla\f}ii is the Hictliiihcnt, ollc 01' tl-Ie 111ailt' lMIcf€ts t=~ cc~liti;luilIg
reiationsliil) %\~itIt t.ls, is t(le ficiut tllat itxif,lelllel~itatioll Vlif( txot be re(Ittired. `~~lmild
l]ie deten)iMe to, a(ld aiiea~ser°\ice aiicE!L,~~~ I)rodl,ct, \%e l"ill %%itlz \otl ifl
~ 36 i~
~ Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
1.lie iinple,rnentafiuji «fthe sen, ice. ~uic1/~~r prociE€ct so as to IZave ai,tiiiiinal iillpae;f
Oll ~ Lzl' clay-to-clay opera(imis.
10.5 Contract Term
The terin of the agreement will be for a five (5) year period. However, the City of
Denton retains the right to cancel this Agreement with 90 days written notice and
prefers a dynamic rate structure with the ability to match marlcet pricing.
We a~;ree t`t tlic fi \,e (5} year terr~i o 4`0~e -a-,reeriient,,~-itl) 90 cia~s writteii iio~tice.
Ela\-«ti wi11, ttpx.,~i reqi tesi (FE~~lic i•eqi Eestor Li11d \ erificatzon hy Fpro~i(Ie tlle
reclLiestrn• ith fli c belietiis z,i'an~ ~~lore =:a\,ura[) le terrlis it as. c,r iiego~tiates. v4iit(i
az7v or-allizatr(,ll \~El ~ase; c~i~~ct~e~~tstanccs ati~~( ~~~~el~ati~xris. iiicltta?iig ~E~(tii~ie ati~~ t;lie
cs~1'l:ratlsactitsit processtiig. are SU!7starltrall~• t.l~~ S2111C as tllESse Oftlle rec'lE€es1:Or.
10.6 Non-Exclusive Agreement
The agreement granted will not be exclusive, and nothing contained in it shall be
construed so as to prevent the City fi•oin granting other like or siinilar rights,
privileges and agreements to any other person, firm or coi-poration.
Ag1•ee.
10.7 Venue
For purposes of determining venue and the law governing the agreement granted,
services to be perforrued under said agreement are performed in the City and
County of Denton, Texas. Any suit or dispute regarding said agreement shall be
decided and settled in a State or Federal court of competent jurisdiction sitting in
Denton County, Texas for State courts, and sitting in the Federal Eastern District
of Texas, Sherman Division, for Federal courts.
Agrce.
10.8 Right to Audit
The City shall have the right to audit and make copies of the boolcs, records and
computations pertaining to this agreement.
I:la~~oii Mll J-,rM ICIe tfIe t-e(JUestor, c(tirflio; €~Ioniial [,ttsiIIess 110Firs, V.1111 W 1e,1st teFi
da\~s J7rior wr;ttcll 11(fticc, at ti,.e rec;tiesfia•°s, expe7isc, slrl,ject to E1a~,oii 's st:a~idal•ci
sectirHN'r po6icies. a~)plicat,(e 1<i,w\°s aii(l Pa\ iiic,tit ~Iet~~,,or(< kegLl1alit,l`)s, aiICI M) 1110re
thazl MIce anIlLialk, t~i€(l reuOW(Is all<l i,lti.~rinaiioii liertaillitl-; to tz•ansactiorls
prEFcessecl iiiicler the Fla\~crii r-~grecrrlew_, 1Iov:e,er. dt€e IE> tl;e se.isim,e ria(tire «t
tlic I'll tfrrzt-1,tti0t1 pt`<sceSSed. F~«t~raF~ uarltlz,f Pcrerlit t1)C Uit~~ or° atiNaatic; tt~ lia\"c:
Eirif'cttcrcd acces5 to EIa=,r,=)"s I7()()lis a1Ic[ t~ecr:
.rds.
~ 37
~ 4 Elavon
Elavon's Response for the City of Denton, RFP 4578, Merchant Services October 4, 2010
10.9 Banking Relationships
It is required that daily deposits for credit card and check conversion transactions
are made to the City's Bank Depository daily.
Yes..E1_ae ~~~i wie( cleposit tuiicts f6r ci-edit. clel,it, atici e-ciieclc Eo~ at1y DDA acc~sttrit
iIiat is iffllwd \ia the Fcdera1 Reserve P,aAilig s~stein.
~ 38
` ' Elavon
Attachment A: Excel File to Enter Merchant Fees
Below is the City's average merchant services activity over the past 12 months. Please indicate the cost for providing each of these services on a per-item
basis. The formula entered for the estimated annual cost will calculate the cost using the 12-month item volume average x fee per item x 12 months. If
appropriate, identify any other services not listed and their associated costs. Any service not appearing or which does not have a fee indicated on the Proposal
Form will be considered free of charge in the merchant services contract. Please attach a sample monthly statement.
12 Month Averaqe
Dollar Item
Volume Volume
Point of Purchase (POP) -17 Locations
Check Verification
Credit Card - Utility Customer Service (Billing)
Credit Card - All Others
Debit Card - Utility Customer Service (Billing)
Debit Card - All Others
Accounts Receivable Conversion (ARC) -17 Locations
Check Verification
Credit Card
Point of Purchase (POP) - Police Department Warrants only
Check Guarantee
Credit Card
Debit Card
Accounts Receivable Conversion (ARC) - Police Department Warrants only
Check Guarantee
Credit Card
Internet Credit Card Transactions
Municipal Court
Utilities Customer Service (Billing)
Building Inspections'
Library"
E-Check (Municipal Court, Customer Service & Building Inspections)***
Point of Purchase (POP)
Accounts Receivable Conversion (POP)
Miscellaneous
Chargebacks
Refunds - Credit/Debt Cards
NSF Billing Services
Customized Reporting
New/Additional Fees
Credit Card - Utility Customer Service (Projected)
Debit Card - Utility Customer Service (Projected)
Returned Checks
ECS Minimum Bill Fee
Monthly Statement Fees (per MID)
Virtual Merchant - Monthly Maintenance (per MID)
Total Fees
$ 1,300,000
6,000
$ 1,200,000
5,100
$ 255,000
3,500
$ 200,000
1,000
$ 109,000
440
12 Estimated
Fee per Item x Mo. = Annual Cost
$ 0.15 x 12 = $ 10,800.00
x 12 = $ -
0.12% x 12 = $ 3,672.00
x 12 = $ -
0.12% x 12 = $ 1,569.60
$ 1,100,000
850
$ 0.15 x
12
1,530.00
$ 80,000
400
0.12% x
12
1,152.00
$ 2,500
8
$0.18 + 1.98% x
12
611.28
$ 15,000
30
0.12% x
12
216.00
$ 2,100
4
0.12% x
12
30.24
$ 1,500
$ 15,000
$ 100,000
$ 3,000,000
$ -
$ 450
$
$
$ 1,000
$ -
$ -
$ -
$ 1,200,000
$ 200,000
$ -
$ -
$ -
$ -
20
$0.18 +
2.2%
x
12
439.20
35
0.12%
x
12
216.00
400
0.12%
x
12
1,440.00
12,500
0.12%
x
12
43,200.00
-
0.12%
x
12
= $
-
35
0.12%
x
12
6.48
-
$
0.15
x
12
= $
-
-
$
0.15
x
12
= $
-
5
$
12.00
x
12
720.00
-
$
-
x
12
= $
-
-
$
2.00
x
12
= $
-
-
TBD
x
12
= $
-
5,100
0.12%
x
12
17,280.00
1,000
0.12%
x
12
2,880.00
5
$
3.00
x
12
180.00
-
$
25.00
x
12
= $
-
45
$
5.00
x
12
2,700.00
45
$
5.00
x
12
2,700.00
$ 91,342.80
'Implemention anticipated in mid-October 2010.
"Payments made through PayPal but processed/funded through selected merchant services provider.
"'The City desires to offer this new service in conjunction with the implemention of selected merchant services provider.
Visa Interchange Category
CPS Retail
CPS Retail Tier 1
CPS Retail Tier 2
CPS Retail Tier 3
CPS Supermarket
CPS Supermarket Tier 1
I CPS Supermarket Tier 2
~ CPS Supermarket Tier 3
CPS Rewards 1
~ CPS Rewards 2
CPS Rewards 2 T&E
CPS Retail 2 Card Present
CPS Retail 2 Card Not Present
~ Utflity*"
ICPS Hotel/Car Rental
CPS Card Not Present
CPS Retail Key Entered
CPS Smali Ticket
[CPS Retail Service Station
ICPS Restaurant
IEIRF
ICPS E-commerce Basic
I CPS E-commerce Preferred
ICPS E-commerce Preferred - Hotel
ICPS E-commerce Preferred -Auto Rental
I CPS E-commerce Preferred - Pass Transport
CPS Account Funding
Standard
CPS Debit Tax Payment
CPS Debit Tax Payment - Convenience Fee
Debt Repayment
GSA G2G
GSA Large Ticket - existing
GSA Large Ticket - that are Z$8,750
I Purchasing Large Ticket"`
~CPSAutomated Fuel
CPS PassengerTransport
~ Purchasing Card Level III Data Rate
ICorporate Card Level II Data Rate
~ Business Card Level II Data Rate
I Purchasing Card Level II Data Rate
~ Commercial Card Retail - Corporate
I Commercial Card Retail - Business
ICommercial Card Retail - Purchasing
I Commercial Card Business to Business - Cor
ICommercial Card Business to Business - Bus
I Commercial Card Business to Business - Pur
I Purchasinq Card - Card Not Present
I Business Card - Card Not Present
I Corporate Card - Card Not Present
I Utility Business
~ Purchasing Electronic with Data
Purchasinq Card Electronic
Business Card Electronic
Corporate Card Electronic
Commercial Card Standard
Signature Preferred Card Not Present
Signature Preferred Retail
Signature Preferred 13213
Siqnature Preferred Electronic
Signature Preferred Standard
International Merchant Signature Preferred
(Signature Preferred Interreqional - Airline
I International Electronic
~ International Standard
I international Commercial Card
~ Internationai Commercial Card
I International Electronic
~ International Issuer Chip
I International Acquirer Chip
~ International Standard
I International Airline
~International Infinite Card
(International Signature Card
~International Secure E-Commerce
I International Merchant E-Commerce
ISignature Card Electronic
ISignature Card Standard
Printed: 9/3012010 10:42 AM
I Chg Type I
1 1056/15901
~ 1009/1501 j
~ 1036/15021
~ 1037/15031
~ 1053/1591 1
1 1010/15111
1 1038/15121
1 1039/15131
1 10931
I 10941
1 10951
1 1 050/1 55 01
1 1060/15601
1 1092/15921
1063-1066/
1563-1566
1067/15671
1069/1569 1
( 1084/15841
~ 1086/1586i
I 1085/15851
~ 1059/15591
~ 1051/15511
~ 1052/15521
I 1 082/1 5 82 1
1 1083/15831
I 1081/1581 1
1055/1555 1
1683/1558 1
15881
I 15891
1 15871
I 16541
1 10141
I 10171
1 10151
I 1068/1568 1
1 1061l15611
~ 10881
~ 16871
I 10871
~ 16811
I 16001
1 16531
1 16501
porate I 16011
iness 1 16521
chasing I 16511
1 16041
1 16021
1 16031
I 16921
I 1688)
I 16861
1 16851
I 16841
1 16821
I 16741
1 16751
I 16761
I 16781
~ 16771
( 16791
I 16701
I 10711
I 10701
I 10721
1 16601
I 16611
I 16621
1 16631
I 16641
1 16651
I 16661
16671
16681
16691
I 10121
~ 1011]
Pricing and Profitabity
Cons/Comm Rates
July 2010
% Rate + Per Item ~
1.54%1+ 1$0.10 1
1.43%1+ ($0.10 1
1.47%I+ j$0.10 I
1.51%1+1$0.10 1
1.24%I+ I$0.05 I
1.15%I+ I$0.05 I
1.20%1+ 1$0.05 1
1.22%I+ I$0.05 ~
1.65%1+ 1$0.10 ~
1.95%1+ 1$0.10 1
1.95%1+ 1$0.10 1
1.43%I+ I$0.05 I
1.43%1+ 1$0.05 1
0.00%1+ 1$0.75 1
1.54%I+ $0.10
1.80%I+ I$0.10 I
1 •80%I+ I$0.10 I
1.65%1+ 1$0.04 1
1.15%1+ 1$0.25 1
1.54%1+ 1$0.10 1
2.30%1+ 1$0.10 1
1.80%1+ 1$0.10 ~
1.80%1+ 1$0.10 ~
1.54%I+ I$0.10 1
1.54%1+ 1$0.10 1
1.70%I+ I$0.10 I
2•14%1+ I$0.10 I
2.70%1+ I$0.1o I
1.65%I+ 1$0.10 I
1.20%1+ ($39.00 1
Eliminated 1
0.95%1+ [$35.00 ~
1.15%I+ I$0.25 ~
1.70%1+ 1$0.10 1
1.80%I+ I$0.10 I
2.05%1+ 1$0.10 1
2.05%I+ I$0.10 I
2.05%1+ 1$0.10 1
2.10%1+ 1$0.10 1
2.20%1+ 1$0.10 1
2.30%1+ j$0.10 1
2.10%I+ I$0.10 ~
2.10%1+ 1$0.10 ~
2.10%I+ I$0.10 ~
2.55%1+ 1$0.10 1
2•25%I+ I$0.10 I
2.20%1+ 1$0.10 1
0.00%j+ 1$1.50 1
2.65%1+ 1$0.10 1
2.65%j+ 1$0.10 1
2.40%1+ 1$0.10 1
2•25%1+ 1$0.10 1
2.95%1+ 1$0.10 1
2.40%I+ 1$0.10 I
2.10%1+ 1$0.10 1
2.10%I+ I$0.10 I
2.40%1+ 1$0.10 1
2.95%1+ 1$0.10 1
Eliminated ~
Eliminated I
Eliminated I
Eliminated I
Eliminated I
1.80%1+ 1$0.00 1
1.10%1+ I$0.00 I
1.20%j+1$0.00 1
1.00%1+ 1$0.00 1
1.60%I+ I$0.00 I
1.10%1+ 1$0.00 1
1.80%1+ j$0.00 1
1.80%I+ 1$0.00 I
1.44%1+ j$0.00 1
1.44%1+ j$0.00 1
2.30%1 + j $0.10 1
2.70%1+ [$0.10 1
Off-line Debit Rates
July 2010
% Rate + Per Item I
0.95%1+ 1$0.20 1
0.62%j+ 1$0.13 1
0.81 %I+ I$0.13 I
0.92%1+ 1$0.15 1
0.95%1+10.20" 1
0.62%I+ I$0.13 I
0.81%1+ 1$0.13 1
0.92%I+ 1$0.15 I
0.80%1+ 1$0.25 1
0.80%1+ 1$0.25 1
0.00%1+ 1$0.75
1.36%I+ $0.15
1.60%I+ I$0.15 1
1.60%I+ I$0.15 I
1.55%1+ 1$0.04 1
0.75%1+10.17""' 1
1.19%1+ 1$0.10 1
1.75%1+ j$0.20 1
1.60%1+ 1$0.15 1
1.55%1+ 1$0.15 1
1.36%I+ I$0.15 1
1.36%1+ 1$0.15 1
1.60%1+ I$0.15 I
135%j+ I$0.20 I
1.90%1+ 1$0.25 1
0.00%1+ 1$2.50 1
0.00%I+ 1$0.00 1
0.35%1+ 1$0.50 1
II I
0.75%1+ 10.17"'* 1
1.60%1+ 1$0.15 1
II
II
Updated Aug 19, 2009
~ EIRF Debit Fuel Max
~CPS AFD Debit Max
(CPS Service Station Debit Max
ISignature Preferred - Fuel
I Cash Advance
IConsumer Credit Vouchers
I Commercial Card Credit Vouchers
I Consumer MOfTO Credit Vouchers'
~ Passenger Transport Credit Vouchers
I international Service Assessment
I Cash Advance International Service Assessment
lAccount Verificationt
I Mis-Use of Autht
IZero Floor Limitt
I NAPFt
I NAPF Exemptt
I Risk ID Servicet
I Echeck Acquirer Processinq Fee
~ Clearing Access
I InPI Acquiring Fee (IAF)
~IAF High Risk
lAssessments %
lAssessments PI
lAssessments
*excludes Direct Marketing Sic Codes 596X
$0.35 Cap
***program requires registration
$0.95 Cap begins July 18, 2008 (through Oct 2009)
t Fee Billed on Authorizations
16571
1 1 1
0.00%1+ 1$0.95
16591
1 1 1
0.00%1+ 1$0.95
16581
1 1 1
0.00% + 1$0.95
14681
1.15%1+ I$0.25 I
I
701
-0.18%1+ 1-$1.50 1
1
10771
1.76%1+ 1$0.00 1
1.31%1+ 1$0.00
10781
2•24%1+ 1$0.00 1
1 1
10791
2.05%1+ 1$0.00 1
1.87%1+ 1$0.00
10761
2.07%1+ 1$0.00 ~
1 1
2131
0.40%1+ 1$0.00
0.40%j+ 1$0.00
2151
0.40%1+ 1$0.00
0.40%1+ 1$0.00
30421
0.00% + 1$0.0250
0.00%1+ 1$0.0250
30431
0.00% + 1$0.0450 I
0.00%1+ 1$0.0450
30441
0.00% + 1$0.1000 ~
0.00%1+ 1$0.1000
30401
0.00% +$0.0195 I
0.00%1+ 1$0.0195
30451
0.00%1+ $0.0000 1
0.00%1+ 1$0.0000
30461
0.00%j+ $0.0010 1
0.00%1+ 1$0.0010
30471
0.00%1+ $0.0000 I
0.00%1+ 1$0.0000
2021
0.00%1+ $0.0025 1
0.00%1+ 1$0.0025
2101
0.45%1+ 1$0.0000 I
0.45%1+ 1$0.0000
2161
0.90%1+ j$0.0000 1
0.90%1+ 1$0.0000
2001
0.1100%1+ 1$0:0000 1
0.1100%1+ 1$0.0000
1
Eliminated I
Eliminated
i
Moved I
Moved
Printed: 9l30/2010 10:42 AM Pricing and Profitabity Updated Aug 19, 2009
Cons/Comm Rates
Off-line Debit Rates
July 2010
July 2010
MPS SHORT
1VIsa Interchange (US Territory Merchants Only)
DESCRIPTION (
Chg Type
% Rate + Per Item
I% Rate + Per Item
Puerto Rico Domestic Gas Station
PR GAS CR / PR
2501/2500
1.00% +$0.00
0.90% +$0.00
1
I
GAS DB
1
I
~ Puerto Rico Domestic Gas Station Platinum
I PR GAS PLT 1
25021
1.15%1+ 1$0.00
1.15%1+ 1$0.00
~ Puerto Rico Domestic Gas Station Comm
I PR GASCOMM i
25031
1.15%1+ 1$0.00
1 1 1
~ Puerto Rico Domestic Gas Station Sign
I PR GASSIGN (
25041
1.18%1+ 1$0.00
1 1 1
I Puerto Rico Domestic Supermarket
1 PR SPMK CR / 1
2506/2505
1.05%I+ $0.00
1.00% +$0.00
PR SPMK DB
~ Puerto Rico Domestic Supermarket Platinum
I PR SPMKPLT ~
25071
1.18%1+ 1$0.00
1 1.18%1+ 1$0.00
( Puerto Rico Domestic Supermarket Comm
I PRSPMKCOMM ~
25081
1.18%1+ 1$0.00
1 1 1
~ Puerto Rico Domestic Supermarket Sign
I PRSPMKSIGN
25091
1.25%1+ 1$0.00
1 1 1
Puerto Rico Domestic Emerge Mrkt
PR EMRG CR /
2511/2510
+
$0.00
1.10%
+ $0.00
1.05%
(
PR EMRG DB
1
I
I
I
~ Puerto Rico Domestic Emerge Mrkt Platinum
I PR EMRGPLT
25121
1.25%1+ 1$0.00
1 1.25%1+ I$0.00
~ Puerto Rico Domestic Emerge Mrkt Comm
IPREMRGCOMM 1
25131
125%1+ 1$0.00
1 1 1
~ Puerto Rico Domestic Emerge Mrkt Sign
I PREMRGSIGN 1
25141
1.28%1+ 1$0.00
1 1 1
Puerto Rico Domestic Utilities
PR UTLY CR / PR
2516/2515
+
$0.00
1.10%
+ $0.00
1 05%
I
UTLY DB
1
I
I
I
~ Puerto Rico Domestic Utilities Platinum
I PR UTLYPLT ~
25171
1.25%1+ 1$0.00
1 1.25%1+ 1$0.00
~ Puerto Rico Domestic Utilities Comm
I PRUTLYCOMM ~
25181
1.25%1+ [$0.00
1 1 1
~ Puerto Rico Domestic Utilities Sign
I PRUTLYSIGN ~
25191
1.28%1+ 1$0.00
1 1 1
Puerto Rico Domestic Warehouse
PR WRHS CR /
252112520
1.10%I+
$0.00
+ $0.00
1.05%
(
PR WRHS DB
1
I
I
~Puerto Rico Domestic Warehouse Platinum
I PR WRHSPLT 1
25221
1.25%1+ 1$0.00
1 1.25%1+ 1$0.00
~Puerto Rico Domestic Warehouse Comm
I PRWRHSCOMM 1
25231
1.25%1+ 1$0.00
1 1 1
~Puerto Rico Domestic Warehouse Sign
IPRWRHSSIGN 1
25241
1.28%1+ 1$0.00
1 1 1
Puerto Rico Domestic Retail 1
RR RTDB CR / PR
2526/2525
+ $0.00
1.35%
1.30% +$0.00
I
I
I
Puerto Rico Domestic Retail 1 Platinum
IPR RTLIPLT I
25271
1.85%1+ 1$0.00
1 1.85%1+ 1$0.00
Puerto Rico Domestic Retail 1 Comm
IPRRTL1COMM I
25281
1.85%1+ 1$0.00
1 1 1
Puerto Rico Domestic Retail 1 Sign
IPRRTL1SIGN I
25291
2.00%1+ 1$0.00
1 1 1
Puerto Rico Domestic Retail 2
T
Lg CR / PR
RR
2531/2530
+ $0.00
1.30%
1.25% +$0.00
~
I
2
I
I
Puerto Rico Domestic Retail 2 Platinum
IPR RTL2PLT 1
25321
1.80%1+ 1$0.00
1 1.80%1+ 1$0.00
Puerto Rico Domestic Retail 2 Comm
I PRRTL2COMM 1
25331
1.80%1+ 1$0.00
i I I
Puerto Rico Domestic Retail 2 Sign
IPRRTL2SIGN 1
25341
1.90%1+ 1$0.00
1 1 1
Puerto Rico Domestic Standard
/
2536l2535
1.65% +$0.00
1.65% +$0.00
I pR STND DB
1
Puerto Rico Domestic Standard Platinum
1 PR STNDPLT 1
2537
1.85%1+ 1$0.00
1.85%1+ 1$0.00
Puerto Rico Domestic Standard Commercial
1PRSTNDCOMM ~
2538
1.85%1+ 1$0.00
1 1
Puerto Rico Domestic Standard Signature
1PRSTNDSIGN ~
2539
2.00%1+ 1$0.00
1 1
Virgin Islands Domestic Signature & Infinite
1VISIGN/INF ~
25401
1.80%1+ 1$0.00
1 1
Virgin Islands Domestic Commercial
iVI COMM ~
25411
1.80%1+ 1$0.00
1 1
Virgin Islands Domestic Electronic Cons
1VI ELECT ~
2542
1.10%1+ 1$0.00
1 1.10%1+ 1$0.00
iVirgin Islands Domestic Issuer Chip Cons
iVI ISS CHP ~
2543
1.20%1+ 1$0.00
1 1.20%1+ 1$0.00
~Virgin Islands Domestic Airlines Cons
IV] AIRLINE 1
25441
1.10%1+ 1$0.00
1 1.10%1+ 1$0.00
Virgin Islands Domestic Secure Cons
IVI SECURE 1
25451
1.44%1+ 1$0.00
1 1.44%1+ 1$0.00
iVirgin Islands Domestic Elec Commerce Cons
IVI ECOMM 1
25461
1.44%1+ 1$0.00
1 1.44%1+ 1$0.00
IVirgin Islands Domestic Standard Cons
(VI STND 1
25471
1.60%1+ 1$0.00
1 1.60%1+ 1$0.00
~Guam Domestic Electronic Cons
1GU ELECT 1
25481
1.00%1+ 1$0.00
1 1.00%1+ 1$0.00
~Guam Domestic Electronic Commercl
IGUELECTCOM 1
25491
1.85%1+ 1$0.00
1 1 1
~Guam Domestic Recurring Cons
(GU RECURE 1
25501
1.00%1+ 1$0.00
1 1.00%j+ 1$0.00
~Guam Domestic Recurring Commercial
IGU RCRCOMM 1
25511
1.00%1+ 1$0.00
1 1 1
~Guam Domestic Sm Ticket Cons
IGU SM TKT 1
25521
1.00%1+ 1$0.00
1 1.00%1+ 1$0.00
~Guam Domestic Sm Ticket Commercial
IGUSMTKTCOM 1
25531
1.85%1+ 1$0.00
1 1 1
~Guam Domestic Issuer Chip
IGU ISS CHP 1
25541
1.95%1+ 1$0.00
1 1.95%1+ 1$0.00
~Guam Domestic Issuer Chip Cons
IGU CHP CON 1
25551
1.10%1+ 1$0.00
1 1.10%1+ 1$0.00
~Guam Domestic Secure Electronic
IGU SECURE 1
25561
1.65%1+ 1$0.00
1 1.65%1+ 1$0.00
~Guam Domestic Merch Ecommerce
IGU ECOMM 1
25571
1.65%j+ 1$0.00
1 1.65%1+ 1$0.00
~Guam Domestic Standard Cons
IGU STD CON 1
25581
1.44%1+ 1$0.00
1 1.44%1+ 1$0.00
~Guam Domestic Stnd Pltnm & Sign
IGU STD P&S 1
25591
1.85%1+ 1$0.00
1 1.85%I+ 1$0.00
~Guam Domestic Stnd Commercial
I GU STDCOMM 1
25601
1.85%1+ 1$0.00
1 1
lAmerica Samoa Domestic Standard Cons
JAS STD CON 1
25611
1.44%1+ 1$0.00
1 1.44% + I$0.00
lAmerica Samoa Domestic Stnd Commercial
JAS STDCOMM 1
25621
1.85%1+ j$0.00
1 (
1 Marshall Islands Domestic Standard Cons
I MH STD CON I
25631
1.44%1+ [$0.00
I 1.44% + [$0.00
1 Marshall Islands Domestic Stnd Commercial
I MH STDCOMM I
25641
1.85%1+ [$0.00
1 1
~ Northern Mariana Islands Domestic Standard Cons
Northern Mariana Islands Domestic Stnd Commercial
~ Palau Domestic Standard Cons
~ Palau Domestic Stnd Commercial
~ US Minor Outlying Islands Domestic Standard Cons
~ US Minor Outlying Islands Domestic Stnd Commercial
~ LAC Commercial
~ LAC Infinite & Signature
~ LAC Electronic Cons
~ LAC Issuer Chip
~ LAC Airline
~ LAC Secure Ecommerce
~ LAC Merch Ecommerce
~ LAC Standard Cons
~AP Airline Commercial
~AP Airline Comm Stnd
~AP Airline Consumer
IAP Issuer Chip Plat
IAP Issuer Chp Sign&Infinite
IAP Iss Chip Gold
JAP Iss Chip Consumer
JAP Electronic Gold
JAP Electronic Consumer
JAP Secure Ecomm Platinum
IAP Secure Ecomm Sign&Infnt
JAP Secure Ecomm Gold
JAP Secure Ecomm Consumer
JAP Mrch Ecomm Platinum
JAP Mrch Ecom Sign&Infnt
JAP Mrch Ecom Gold
JAP Mrch Ecom Consumer
IAP Recurring Pymt
JAP Standard Commercial
JAP Standard Platinum
JAP Standard Sign&Infinite
JAP Standard Gold
AP Standard Consumer
International Commercial Card
International Electronic
International Issuer Chip
International Acquirer Chip
International Standard
International Airline
International Infinite Card
International Signature Card
International Secure E-Commerce
International Merchant E-Commerce
IMP STD CON I
25651
1.44%1+ 1$0.00
1 1.44%1+ 1$0.00
IMP STDCOMM 1
25661
1.85%1+ 1$0.00
1 1 1
1 PW STD CON 1
25671
1.44%1+ 1$0.00
1 1.44%j+ I$0.00
1 PW STDCOMM 1
25681
1.85%1+ 1$0.00
1 1 1
I UM STD CON 1
25691
1.44%j+ 1$0.00
1 1.44%1+ 1$0.00
1 UM STDCOMM 1
25701
1.85%1+ 1$0.00
I I I
IVLAC COMM 1
25711
1.80%j+ 1$0.00
1 1 1
IVLAC SIGN 1
25721
1.80%1+ 1$0.00
1 1 1
IVLACELECT 1
25731
1.10%1+1$0.00
1 1.10%j+I$0.00
IVLAC CHIP 1
25741
1.20%1+ 1$0.00
1 1.20%1+ 1$0.00
I VLACAIRLN 1
25751
1.10%1+1$0.00
1 1.10%1+[$0.00
IVLACSECURE 1
25761
1.44%j+1$0.00
1 1.44%1+1$0.00
IVLACMECOMM 1
25771
1.44%j+1$0.00
1 1.44%j+1$0.00
I VLAC STND 1
25781
1.60%j+ 1$0.00
1 1.60%j+ I$0.00
IVAPAIRCOM 1
25791
1.60%j+1$0.00
1
IVAPAIRSTD 1
25801
1.80%j+1$0.00
1
IVAPAIRCON 1
25811
1.16%1+1$0.00
1 1.16%1+1$0.00
IVAPCHPPLT 1
25821
1.95%1+1$0.00
1 1.95%1+1$0.00
IVAPCHPSIGN 1
25831
2.12%j+ 1$0.00
1 1 1
IVAPCHPGOLD 1
25841
1.52%j+1$0.00
1 1.52%1+1$0.00
IVAPCHPCON 1
25851
1.32%1+1$0.00
1 1.32%1+1$0.00
IVAPELECTG 1
25861
1.42%1+1$0.00
1 1.42%1+1$0.00
IVAPELCTCON 1
25871
1.22%1+1$0.00
1 1.22%1+1$0.00
IVAP ECOM P 1
25881
1.85%1+ 1$0.00
1 1.85%1+ 1$0.00
IVAPECOMSIG 1
25891
2.02%1+j$0.00
1 1 (
IVAP ECOM G 1
25901
1.55%1+ 1$0.00
1 1.55%1+ 1$0.00
IVAPECOMCON 1
25911
1.35%1+ 1$0.00
1 1.35%1+ 1$0.00
1VAPMECOMP 1
25921
1.72%1+1$0.00
1 1.72%1+1$0.00
1VAPMCOMSIG 1
25931
1.89%j+1$0.00
1 1 1
IVAP MCOM G 1
25941
1.42%1+ 1$0.00
1 1.42%1+ 1$0.00
1VAPMCOMCON 1
25951
1.22%1+ 1$0.00
1 1.22%j+ I$0.00
IVAP RECUR 1
25961
1.16%1+ 1$0.00
1 1.16%1+ 1$0.00
IVAPSTDCOM 1
25971
1.85%1+1$0.00
1 1 1
IV APSTDPLT 1
25981
1.85%1+ 1$0.00
1 1.85%1+ 1$0.00
IVAPSTDSIGN 1
25991
2.02%1+1$0.00
1 1 1
IVAPSTDGOLD 1
26001
1.55%1+ 1$0.00
1 1.55%1+ 1$0.00
IVAPSTDCONS 1
26011
1.35%1+ 1$0.00
1 1.35%1+ 1$0.00
IV INTLCOMM 1
16601
1.80%1+ 1$0.00
1 1 1
IV INTLELCT 1
16611
1.10%1+ 1$0.00
1 1 1
IV INTLCHIP 1
16621
1.20%1+ 1$0.00
1 1 1
IV INTLACQR 1
16631
1.00%1+ 1$0.00
1 1 1
IV INTLSTND 1
16641
1.60%1+ 1$0.00
1 1 1
IV INTLAIR 1
16651
1.10%1+ 1$0.00
1 1 1
IV INTLINFN 1
16661
1.80%1+ 1$0.00
1 1 1
IV INTLSIGN 1
16671
1.80%1+ 1$0.00
1 1 1
IV INTLSECR 1
16681
1.44%1+ 1$0.00
1 1 1
IV INTLECOM 1
16691
1.44%1+ 1$0.00
1 1 1
I" -,terCard Interchange Category
,.,.;nt III Tier 1
Merit III Tier 2
Merit III Tier 3
SuperMarket"*
SuperMarket Tier 1
SuperMarket Tier 2
SuperMarket Tier 3
Warehouse Club'*`
]Warehouse Club Tier 1
( Warehouse Club Tier 2
Warehouse Club Tier 3
Key Entered
~ Merit I
~ Merit i - Insurance
~ Merit I- Real Estate
~ Utility"'
~ Petroleum*'
~ Standard
~ MC Passenger Transport
~Convenience Purchases
(MC Travel Industries Premier Service-
~Service Industries"'
~ Public Sector CNP & CP
~ US Merchant UCAF
~ US Full UCAF
~ Small Ticket
~ Small Ticket - Tier 1 Debit
~ Petroleum- CAT/AFD"
]Petroleum - Service Stations*`
~Restaurant
rging Market
.nced Merit III
tnhanced Merit III Tier 1
Enhanced Merit III Tier 2
Enhanced Merit III Tier 3
Enhanced Supermarket"`
Enhanced Supermarket Tier 1
Enhanced Supermarket Tier 2
Enhanced Supermarket Tier 3
Enhanced Warehouse Club*'*
Enhanced Warehouse Club Tier 1
Enhanced Key Entered
~ Enhanced Merit I
~ Enhanced Merit I- Insurance
( Enhanced Merit I- Real Estate
~Enhanced Standard
~ Enhanced Convenience Purchase
~ Enhanced Service Industries*"
~ Enhanced Public Sector CNP & CP
~ Enhanced Merchant UCAF
~ Enhanced Full UCAF
~ Enhanced Travel Premier"'"
~ Enhanced Utility""
~Enhanced PassengerTransport
~ Enhanced Petroleum"
~ Corporate Face to Face - Corporate
~ Corporate Face to Face - Business Cards
~ Corporate Face to Face - Fleet Cards
~ Corporate Face to Face - Purchasing Cards
iCorporate Face to Face Petroleum
iCorporate Data Rate III
(Corporate Data Rate II - Corporate
1C:nrp Data Rate II - Business
Data Rate II - Fieet
. Data Rate II - Purchasing
rCorp Data Rate II Petroleum
~ MC Utilities - Business
~ Corporate Data Rate I
~ Corporate T&E III - Cor orate
~ Corporate 7'$~6M; f0 10'42 RirG
~ Corporate T&E I- Corporate
Cons/Comm Rates Off-Iine Debit Rates
July 2010 July 2010
I Chg Type I % Rate + Per Item I % Rate + Per Item
1023/15231
1.58%1+1$0.10
1 1.05%1+1$0.15
1018/15181
1.43%1+ 1$0.10
1 0.70%1+ 1$0.15
1615/15151
1.48%1+1$0.10
j 0.83%1+1$0.15
1605/15051
1.55%1+1$0.10
1 0.95%1+1$0.15
1024/15241
1.48%1+1$0.05
1 1.05%1+I$0.15*
1019/15191
1.27%1+1$0.00
1 0.70%1+1$0.15
1616/15161
1.32%1+ 1$0.00
1 0.83%1+ 1$0.15
1606/15061
1.42%1+ 1$0.05
1 0.95%1+ 1$0.15
1026/15261
1.10%1+1$0.00
1 1.05%1+1$0.15*
1020/15201
0.90%1+1$0.00
1 0.70%1+1$0.15
15171
1 1
1 0.83%1+ 1$0.15
15071
1 1
1 0.95%1+ 1$0.15
1027/15271
1.89%1+ 1$0.10
1 1.64%1+ 1$0.16
1021/1521 1
1.89%1+ 1$0.10
1 1.64%1+ 1$0.16
16301
1.43%1+1$0.05
1 1 1
1634/1631 1
1.10% + 1$0.00
1 1.10%1+ 1$0.00
1636/15361
0.00% +1$0.65
1 0.00%1+ 1$0.45
16951
1.90% + 1$0.00
1 1 1
1000/15001
2.95%1+ 1$0.10
1 1.90%1+ 1$0.25
1022/15221
1.75%1+1$0.10
1 1.60%1+1$0.15
10801
1.90%1+ 1$0.00
1 1 1
1033/1035/
+ $0.10
1.58%
1.36% +
$0.15
1533/1535
1
1
10291
1.15%1+1$0.05
1 1.15%1+1$0.05
1032/10891
1,55%1+ 1$0.10
1 1 1
1006/15301
1.58%1+1$0.10
1 1.05%1+1$0.15
1007/1531 1
1.68%1+ 1$0.10
1 1.15%1+ 1$0.15
15931
1 1
1 1.55%1+ 1$0.04
13391
1 1
1 1.30%1+ $0.02
1595i
1 1
1 0.70%1+ $0.17
15961
1 1
1 0.70%1+ 1$0.17
15941
1 1
1 1.19%1+ j$0.10
15971
1 1
1 0.80%1+ 1$0.25
16231
1.73%1+ 1$0.10
i I
16081
1.43%1+ 1$0.10
i I
16091
1.48%1+1$0.10
i I
16101
1.55%1+1$0.10
1 1 1
16241
1.48%1+1$0.05
1 1 1
16121
1.27%1+1$0.00
1 1 1
16131
1.32%1+1$0.00
1 1 1
16141
1.42%1+ 1$0.05
1 1 1
16261
1.10%1+ 1$0.00
1 1 1
16201
0.90%1+ 1$0.00
1 1 1
16271
2.04%1+ 1$0.10
1 1 1
16211
2.04%1+ 1$0.10
1 1 1
16971
1.43%1+ 1$0.05
1 1 1
16911
1.10%1+ 1$0.00
1 1 1
1698
2.95%1+ 1$0.10
1 1 1
1680
1.90%1+ 1$0.00
1 1 1
1629
1.15%1+ 1$0•05
1 1 1
1632/16891
1.55%1+ 1$0.10
1 1 1
16071
1.73%1+ 1$0.10
1 1 1
1611
1.83%1+ 1$0.10
1 1 1
1633/1635
1.90%1+ 1$0.10
1 1 1
16381
0.00%1+ 1$0.65
1 1 1
16221
1.90%1+ 1$0.10
I 1 1
16961
1.90%1+ 1$0.00
1 1 1
10401
2.15%1+ 1$0.10
1 1 1
16391
2.20%1+ 1$0.10
1 1 1
16411
2.50%1+1$0.10
1 1 1
16401
2.40%1+ 1$0.10
1 1 1
1644i
2.05%1+ 1$0.10
1 1 1
10461
1.80%1+ 1$0.10
1 1 1
10471
2.15%1+ 1$0.10
1 1 1
16491
2.20%1+ 1$0.10
1 1 1
16481
2.50%1+ 1$0.10
1 1 ~
16471
2.40%1+ 1$0.10
1 1(
16931
2.05%1+ 1$0.10
1 1~
13371
0.00%1+ 1$1.50
1 1 ~
10481
2.65%1+ 1$0.10
1 1 ~
10051
2.20% + $0.10
)
10041
. i .
Ly I ~
10021
2.40%1+ 1 $0.00
I 1 1
Updated: Feb 15, 2010
Corporate T&E III - Business
~ 13051
2.30%1+ 1$0.10 1
Corporate T&E II - Business
~ 13041
2.35%1+ 1$0.10 1
I-norate T&E I -Business
~ 13021
2.50%1+ 1$0.00 1
>rate T&E III - Purchasing
I 13091
2.50%I+ 1$0.10 1
i~ porate T&E II - Purchasing
1 13071
2.55%1+ 1$0.10 1
Corporate T&E I- Purchasing
~ 13031
2•70%1+ 1$0.00 1
Corporate T&E III - Fleet
~ 13141
2.50%1+ 1$0.10 1
Corporate T&E II - Fleet
~ 13081
2.55%1+ 1$0.10 1
~ Corporate T&E I- Fleet
~ 13171
2.70%1+ 1$0.00 i
Corporate Standard
~ 10011
2.95%1+ 1$0.10 1
Corporate Large Ticket 1
~ 10421
1.25%1+ 1$40.00 1
~ Corporate Large Ticket 2
~ 16421
1.25%1+ 1$40.00 1
Corporate Large Ticket 3
~ 16431
1.25%1+ 1$40.00 1
Corporate Large Ticket 1 MPG
1 16711
1.20%1+ 1$0.00 1
Corporate Large Ticket 2 MPG
1 16721
0.90%1+ 1$0.00 1
Corporate Large Ticket 3 MPG
1 16731
0.70%1+ 1$0.00 1
~ Enhanced Data Rate I
1 13451
2.77%1+ 1$0.10 1
~ Enhanced Data Rate II
I 13461
2.32%1+ 1$0.10 1
~ Enhanced Data Rate II - Petroleum
1 13861
2.17%1+ 1$0.10 1
~ Enhanced Data Rate III
I 13471
1.92%1+ 1$0.10 1
~ Enhanced Face to Face
1 13481
2.32%1+ 1$0.10 1
~Enhanced Face to Face - Petroleum
1 13871
2.17%1+ 1$0.10 1
~Enhanced Large Ticket I
1 13491
1.37%1+ 1$40.00 1
~Enhanced Large Ticket II
1 1350
1.37%1+ 1$40.00 1
~Enhanced Large Ticket III
1 1351
1.37%1+ 1$40.00 1
Enhanced Large Ticket I MPG
1 1352
1.20%1+ 1$0.00 1
Enhanced Large Ticket II MPG
1 13531
0.90%1+ 1$0.00 1
Enhanced Large Ticket III MPG
1 13541
0.70%1+ 1$0.00 1
Enhanced Business Standard
1 13551
3.07%1+ 1$0.10 1
Enhanced T&E I
1 13561
2.62%1+ 1$0.00 1
Enhanced T&E II
1 13571
2.47%1+ 1$0.10 1
Enhanced T&E III
~ 13581
2.42%1+ 1$0.10 1
Enhanced Business Warehouse Base
~ 13591
1.10%1+ 1$0.00 1
Enhanced Business Warehouse Tier 1
1 13601
0.90%1+ 1$0.00 1
Enhanced Business Utilities
~ 13611
0.00%1+ 1$1.50 1
'd Business Corp Face to Face
~ 14401
2.37%1+ 1$0.10 1
I Bus Corp F2F Petroleum
~ 16451
2•22%1+ 1$0.10 1
lvvvrld Business Utility
1 13381
0.00% + 1$1.50 1
I Worid Business Large Ticket 1
1 14421
1.42% + j$40.00 1
lWorld Business Large Ticket 2
1 14701
1.42% + j$40.00 1
lWorld Business Large Ticket 3
~ 14841
1.42% + 1$40.00 1
I World Business Large Ticket 1 MPG
~ 14851
1.20%1+ 1$0.00 ~
I World Business Large Ticket 2 MPG
~ 14861
0.90%1+ 1$0.00 ~
I World Business Large Ticket 3 MPG
1 14871
0.70%1+ 1$0.00 i
lWorld Business Data Rate III
1 14461
1.97%1+ 1$0.10 i
lWorld Business Data Rate II
1 14471
2.37%j+ 1$0.10 i
lWorld Bus Data Rate II Petroleum
1 16941
2.22%1+ 1$0.10 1
lWorld Business Data Rate I
1 14481
2.82%1+ 1$0.10 i
I World Business T&E III
1 14651
2.47%1+ 1$0.10 1
~ Worid Business T&E II
1 14641
2.52%1+ 1$0.10 1
~ Worid Business T&E I
1 14621
2.67%1+ 1$0.00 i
~ World Business Standard
1 14991
3.12%1+ 1$0.10 1
~ Worid Elite Business Large Ticket I
1 13621
1.47%1+ 1$40.00 1
]World Elite Business Large Ticket II
1 13631
1.47%1+ 1$40.00 1
lWorid Elite Business Large Ticket III
1 13641
1.47%1+ 1$40.00 1
lWorid Elite Business Face to Face
1 13651
2.42%1+ 1$0.10 1
lWorld Elite Business F2F Petroleum
1 13661
2.27%1+ 1$0.10 1
lWorld Elite Business Data Rate I
1 13671
2.87%1+ 1$0.10 1
lWorld Elite Business Data Rate II
~ 13681
2.42%1+ 1$0.10 1
lWorld Elite Business Data Rate II Petroleum
~ 13691
2.27%1+ 1$0.10 1
lWorld Elite Business Data Rate III
~ 13701
2.02%1+ 1$0.10 1
I World Elite Business T&E I
13711
2.72%1+ 1$0.00 1
lWorld Elite Business T&E II
13721
2.57%1+ 1$0.10 1
I World Elite Business T&E III
13731
2.52%1+ 1$0.10 1
lWorld Elite Business Utilities
~ 13741
0.00%1+ 1$1.50 1
I World Elite Business Large Ticket I MPG
( 13751
1.20%1+ 1$0.00 1
I World Elite Business Large Ticket II MPG
~ 13761
0.90%1+ 1$0.00 1
I World Elite Business Large Ticket III MPG
1 13771
0.70%1+ 1$0.00 1
r ~ Elite Business Standard
1 13781
3.17%1+ 1$0.10 1
emium Electronic
~ 13261
1.85%1+ 1$0.00 1
~Intl Premium Full UCAF
( 13271
1.85%I+ I$0.00 1
1 Intl Premium Merchant UCAF
( 13281
1.85%1+ 1$0.00 1
1 Intl Premium Consumer Standard
1 13291
1.85%1+ 1$0.00 1
~Intl Premium Commercial Standard
1 13801
2.00%1+
$0.00
~ Internation@fdofflb5u12L)'I L) I I UAZ Al 1
1 1031 f
h"IiW9
~ 6o i a
i i[y
~International Standard
1 10301
1.60%1+ 1$0.00 1
Updated: Feb 15, 2010
~InYi Full UCAF
I 10341
1.54%I+
1$0.00 I
~InYI Merchant UCAF
( 10491
1.44%I+
1$0.00 1
P'" Electronic Card Consumer
1 16371
1.10%I+
1$0.00 1
orporate
~ 1041)
2.00%I+
1$0.00 1
i. .;orporate Purchasing
I 10431
2.00%I+
1$0.00 I
~InPI Corp. Purch. Data Rt II
I 10451
1.70%1+
1$0.00 I
~InPI Corporate Large Ticket
~ 10441
0.90%1+
1$30.00 I
~Diners Electronic
I 10981
2.00%1+
1$0.00 1
~Diners Standard
I 10991
2.50%1+
1$0.00 ~
lWorid Merit III
I 14231
1.73%1+
1$0.10 I
lWorid Merit III Tier 1
I 14181
1.53%1+
1$0.10 I
1 World Merit III Tier 2
I 14151
1.58%1+
1$0.10 I
lWorid Merit III Tier 3
~ 14221
1.65%1+
1$0.10 I
( Worid SuperMarket""
I 14241
1.58%1+
1$0.05 I
(World SuperMarket Tier 1
I 14191
1.37%1+
1$0.00 I
World SuperMarket Tier 2
I 1416j
1.42%1+
1$0.00 I
World SuperMarket Tier 3
I 14251
1.52%1+
1$0.05 I
World & World Elite Warehouse Club"'
~ 14261
1.10%1+
1$0.00 I
World Warehouse Club Tier 1
~ 14201
0.90%1+
1$0.00 I
World Key Entered
~ 14271
2.05%1+
1$0.10 I
World Merit I
~ 1421
2.05%1+
1$0.10 I
World Merit I- Insurance
~ 1417
1.43%1+
1$0.05 I
World Merit I- Real Estate
~ 1481
1.10%1+
1$0.00 I
World Standard
1400
2.95%1+
1$0.10 I
World Utllity
14361
0.00%1+
1$0.65 ~
World Card T&E
14281
2.30%1+
1$0.10 I
World Restaurant
14941
1.73%1+
1$0.10 ~
World Merchant UCAF
14301
1.73%1+
1$0.10 I
World Full UCAF
14311
1.83%1+
1$0.10 (
World Petroleum"
14951
2.00%1+
1$0.00 i
World & World Elite Convenience Purchases
14801
2.00%1+
1$0.00 (
World & World Elite Service Industries"*
1 14291
1.15%1+
1$0.05 ~
World & World Elite Public Sector CNP & CP
1 1432/14891
1.55%1+
1$0.10 ~
World Elite Utility
I 14391
0.00%1+
1$0.75 I
World Elite Merit III
I 14451
2.20%1+
1$0.10 ~
' 'd Elite Merit III Tier 1
~ 13411
2.05%1+
1$0.10 I
I Elite Merit I I I Tier 2
~ 13401
2.10%1+
1$0.10 1
v..,rld Elite Merit III Tier 3
~ 14441
2.15%1+
1$0.10 I
World Elite SuperMarket*"
~ 14501
1.90%1+
1$0.05 1
World Elite Key Entered
~ 14351
2.50%j +
1$0.10 I
World Elite Merit I
~ 14341
2.50%1+
1$0.10 I
World Elite Merit I- Insurance
I 14371
2.20%1+
1$0.10 I
World Elite Merit I- Real Estate
I 14381
2.20%1+
1$0.10 I
World Elite Standard
~ 14331
3.25%1+
1$0.10 I
World Elite T&E
I 14511
2.75%1+
1$0.10 I
World Elite Restaurant
I 14491
2.20%1+
1$0.10 I
(World Elite Merchant UCAF
~ 14411
2.20%] +
j $0.10 I
lWorid Elite Full UCAF
I 14431
2.30%1+
1$0.10 I
World Elite Airline
~ 14541
2.30%1+
1$0.10 I
World Elite Petroleum*`
l
I 14961
2.00%1+
1$0.00 I
World Elite T&E Large Ticket
I 14$$I
2.00%1+
1$0.00 I
~High Value Key-Entered
I 14591
2.50%1+
1$0.10 I
High Value T&E Large Ticket
I 14821
2.00%1+
1$0.00 I
(
High Value Merit III Tier 1
I 14611
2.05%1+
1$0.10 I
I High Value Merit III Tier 2
I 14671
2.10%I+
1$0.10 1
~High Value Merit III Tier 3
I 14691
2.15%I+
1$0.10 1
~High Value Merit III Base
I 14601
2.20%I+
1$0.10 1
~High Value Merit 1
I 14581
2.50%1+
1$0.10 I
~ High Value Merit 1 Real Estate
I 13341
2.20%I+
1$0.10 1
~High Value Merit 1 Insurance
I 13151
2.20%I+
1$0.10 1
~High Value Petroleum Base
I 14791
2.00%I+
1$0.00 ~
~ High Value Petroleum Max
I 13791
0.00%I+
I$0.95 ~
~High Value Public Sector CP
I 14721
1.55%I+
1$0.10
~High Value Public Sector CNP
I 14731
1.55%I+
1$0.10
[High Value Restaurant
( 14741
2.20%I+
1$0.10
~M/C High Value Supermarket Tier 1
~ 13191
1.37%I+
1$0.00 1
~ M/C High Value Supermarket Tier 2
I 13161
1.42%I+
1$0.00 1
~M/C High Value Supermarket Tier 3
' 13251
1.52%I+
1$0.05 1
~ iigh Value Standard
~ 14571
3.25%1+
1$0.10 1
ligh Value Supermarket Base
I 14921
1.90%1+
1$0.05 1
WIC High Value Service Industries
I 14711
1.15%1+
1$0.05 1
1 M/C High Value T&E
I 14931
2.75%I+
1$0.10 1
M/C High Value Warehouse Base
I 14831
1.10%I+
1$0.00 1
M/C High Value Warehouse Tier 1
1 13201_
0.90°/a1+
$0.00
M/C High af9Aq1i :42 N 1
I 14771
7rNW
. 6o i a
i iYy
M/C High Value Convenience Purch
I 14911
2.00%1+
1$0.00 I
Updated: Feb 15, 2010
~M/C High Value Full UCAF
1 14761
2.30%1+ 1$0.10
1 1 1
~M/C High Value Merchant UCAF
~ 14751
2.20%1+ 1$0.10
1 1 1
Ih^'(' High Value Utilities
I 14781
0.00%1+ 1$0.75
I I I
ards Redemption Consumer
1 13811
0.90%1+ 1$0.00
1 1 1
vards Redemption Debit
I 13821
1 1
1 0.90%1+ 1$0.00
~Rewards Redemption Worid
1 13831
0.90%1+ 1$0.00
1 1 1
~ Rewards Redemption Commercial
1 13841
0.90%1+ 1$0.00
1 1 1
~ Electronic Payment Account
1 16901
0.00%1+ 1$0.00
1 1
ICash Advance
1 00701
0.00%I+ I-$2.05
1 I
~ Consumer Debit Refund Group 1
1 14011
1 1
1.72%1+ 1$0.00
]Consumer Debit Refund Group 2
1 14021
1 1
1 1.68%1+ 1$0.00
~Consumer Debit Refund Group 3
1 14031
1 1
1 1.40%1+ 1$0.00
~Consumer Credit Refund Group 1
~ 1404i
2.42%1+ 1$0.00
1 1 1
~ Consumer Credit Refund Group 2
~ 14051
2.09%1+ 1$0.00
i I I
~Consumer Credit Refund Group 3
~ 14061
1,95%1+ j$0.00
1 1 1
~ Consumer Credit Refund Group 4
( 14071
1.82%1+ 1$0.00
1 1 1
]Consumer Credit Refund Group 5
1 14081
1.73% +($0.00
1 1 1
1 Corporate Refund Group 1
1 14091
2.37% +($0.00
1 1
~Corporate Refund Group 2
1 14101
2.30% + j$0.00
I I
~Corporate Refund Group 3
1 14111
2.21%1+ 1$0.00
1
~C:orporate Ketuntl Vroup 4
1 14121
2.16%j+ 1$0.00
1
lAcquirer Program Support Fee
1 3101
0.550%I+ I$0.0000
I 0.550%I+ I$0.0000
1 Inti Cross Border Fee
1 3111
0.400%1+ 1$0.0000
1 0.400%1+ 1$0.0000
]Intl DCC Cross Border Fee
1 3161
0.800%1+ 1$0.0000
1 0.800%1+ 1$0.0000
I Access Feet
1 30501
0.000%1+ 1$0.0000
1 0.000%1+ 1$0.0000
lAssessment %
1 3001
0.110%1+ 1$0.0000
1 0.110%1 + J$0.0000
lAssessment PI (NABU Fee)
~ 3041
0.000%1+ 1$0.0185
1 0.000%1+ 1$0.0185
~MCAssessments
Moved
~ Moved
T Fee Billed on Authorizations
` $0.35 Cap
*'$0.95 Cap
"`program requires registration
Printed: 9/30/2010 10:42 AM Pricing and Profitability Updated: Feb 15, 2010
Discover Interchange Category
I Chg Type ~
ttetan Hir rtewaras
11125
~
Key Entered AIP Rewards
11126 1
Card Not Present/E-Commerce AIP Rewards
11127 1
Automatic Payments AIP Rewards
11128 ~
Express Services AIP Rewards
1129 ~
Petroleum AIP Rewards
1130 I
Public Services AIP Rewards
11131 1
Emerging Markets AIP Rewards
(
11132
Supermarkets/Warehouse Clubs AIP Rewards
11133 ~
Restaurants AIP Rewards
11134 ~
Hotel/Car Rentals AIP Rewards
~
11135
Passenger Transport AIP Rewards
11136
Utilities AIP Rewards
11145
Real Estate AIP Rewards
~
11146
Insurance AIP Rewards
11147
~
Mid Submission Level AIP Rewards
11137 1
Base Submission Level AIP Rewards
11138 ~
Commercial Electronic Submission
11139 ~
Commercial Utilities
11188 ~
Commercial Base Submission
11140 ~
Consumer Adjustment Voucher Program 1 Rewards
11141 ~
Consumer Adjustment Voucher Program 2 Rewards
11142 ~
Consumer Adjustment Voucher Program 3 Rewards
11143 ~
Commercial Adjustment Voucher Program 1
11144 ~
Consumer Adjustment Voucher Program 1 Core
11211 ~
Consumer Adjustment Voucher Program 2 Core
11212 ~
Consumer Adjustment Voucher Program 3 Core
11213 ~
Retail AIP Core
11189 ~
Key Entered AIP Core
11193 ~
Card Not Present/E-Commerce AIP Core
11194 ~
Mid Submission Level AIP Core
11209 ~
Base Submission Level AIP Core
11210 ~
~UtilitiesAlPCore
11206 ~
~ Real Estate AIP Core
11207 ~
~Express Services AIP Core
11196 ~
(Recurring PaymentsAlP Core
11195 ~
~Emerging MarketsAlP Core
11199 (
(Public Services AIP Core
11198 ~
~InsuranceAlPCore
11208 ~
~Petroleum AIP Core
11197 ~
ISupermarkets/Warehouse Clubs AIP Core
11202
( Restaurants AIP Core
11203
~ HotellCar Rentals AIP Core
11204 ~
( Passenger Transport AIP Core
11205 ~
~Retail AIP Premium
11148 ~
~ Key Entered AIP Premium
11149 I
( Card Not Present/E-Commerce AIP Premium
11152 ~
lAutomatic Payments AIP Premium
11153 ~
Express Services AIP Premium
11154 ~
Petroleum AIP Premium
11155 ~
Public Services AIP Premium
11156 ~
~ Emerging Markets AIP Premium
11157 ~
Supermarkets/Warehouse Clubs AIP Premium
11158 ~
Restaurants AIP Premium
11159 ~
Hotel/Car Rentals AIP Premium
11160 ~
Passenger Transport AIP Premium
11161 ~
Utilities AIP Premium
11162 ~
July 2010 July 2010
% Rate + Per Item I % Rate + Per Item
1.71%I+I$0.10
1.97%1 + $0.10
1.97%1 + $0.10
1.20%1+ $0.05
1.70%1+ 1$0.03
1.73%1+ 1$0.05
1.50%1 + 1$0.10
1.45% + 1$0.05
1.65% + 1$0.05
1.90%1 + 1$0.10
1.90°/al + 1$0.10
1.90%I + 1$0.10
0.00%1 + 1$0.75
1.10%1 + 1$0.00
1.43%1+1$0.05
2.40%1 +1$0.10
2.95%I +1$0.10
2.30%1 +1$0.10
0.00%1 +1$1.50
2.95%1 + $0.10
2.07%1+ $0.00
2,02%1 + $0.00
1.75%1 +I$0.00
2.25%1 +1$0.00
2.07%1 +1$0.00
2.02%1 +I$0.00
1.75%1 +1$0.00
1.56%1 +1$0.10
1.87%1 +1$0.10
1.87%1 +1$0.10
2.40%1+I$0.10
2.95%1 +1$0.10
0.00%1 +1$0.75
1.10% +1$0.00
1.70°/a +1$0.03
1.20%1 +1$0.05
1.45%1+1$0.05
1.50%1 +I$0.10
1.43°/a 1 + 1$0.05
1.55%1 +I$0.05
1.40%1 +1$0.05
1.56%1 +1$0.10
1.58%1 +1$0.10
1.75%1 +1$0.10
1.71%1 +1$0.10
2.00%1+1$0.10
2.00%1 +I$0.10
1.20%1 +1$0.05
1.70%1 +1$0.03
1.73%1 +1$0.05
1.50%1 +1$0.10
1.45%~ +1$0.05
1.65% +1$0.05
2.20% +1$0.10
2.30% +1$0.10
2.30% +1$0.10
0.00%1 +1$0.75
Real Estate AIP Premium
Insurance AIP Premium
Mid Submission Level AIP Premium
Base Submission Level AIP Premium
Utilities AIP debit
Supermarkets/Warehouse Clubs AIP debit MAX
Retaii AIP debit
Key Entered AIP debit
Card Not Present/E-Commerce AIP debit
lAutomatic Payments AIP debit
~Express Services AIP debit
~Petroleum AIP debit
~ Public Services AIP debit
~ Emerging Markets AIP debit
ISupermarkets/Warehouse Clubs AIP debit
Restaurants AIP debit
Hotel/Car Rentals AIP debit
Passenger Transport AIP debit
Real Estate AIP Debit
Insurance AIP Debit
Mid Submission Level AIP debit
~ Base Submission Level AIP debit
~ Consumer Adjustment Voucher Program 1 debit
~ConsumerAdjustment Voucher Program 2 debit
Consumer Adjustment Voucher Program 3 debit
Consumer Adjustment Voucher Program 1 Premium
Consumer Adjustment Voucher Program 2 Premium
Consumer Adjustment Voucher Program 3 Premium
Cash Advance
International Cash Advance
International Electronic
International Base Submission Level
Assessment PI (Data Transmission Fee)
Assessment °/a
Data Usage Feefi
~Intl Processing Fee
~ Intl Csh Adv Processing Fee
(Intl Service Fee
lAssessments
T Fee Billed on Authorizations
11186
11187
11163
11164
11182
1183
1165
1166
11167
11168
11169
(1170
(1171
(1172
11173
11174
11175
11176
11184
11185
11177
11178
11179
11180
11181
11190
11191
(1192
170
173
11214
11215
1401
1400
13060
1402
1403
404
1.10%1 +1$0.00
1.43%1+1$0.05
2.40%1+I$0.10
2.95%1+1$0.10
~
~
~
~
~
2.07%1+ 1$0.00
2.02%1+ 1$0.00
1.75%1+ 1$0.00
0.16%1+ 1$1.65
0.16%1+ I$3.00
1.16%1 + 1$0.00
1.70%1 + I $0.10
0.0000%1+ 1$0.0025
0.0925°/a 1+ 1$0.0000
0.0000%I+ 1$0.0050
0.3000%1+ 1$0.0000
0.3000%1+ 1$0.0000
0.4500%1+ 1$0.0000
Moved
ii
0.00%1+ 1$0.75
0.00°/a1+ 1$0.36
1.02%1+ 1$0.16
1.62%1+ 1$0.16
1.62%1+ 1$0.16
1.20%1+ 1$0.05
1.55%1+ 1$0.04
0.76%1+ 1$0.16
0.90%1+ 1$0.20
0.90%1+ 1$0.20
1.02%1+ 1$0.16
1.19%1+ 1$0.10
1.35%1+ 1$0.16
1.59%1+ $0.16
1.10%1+ $0.00
0.80%1+ $0.25
1.72%1+ I$0.20
1.89%1+ 1$0.25
1.80%1+ 1$0.00
1.69%1+ 1$0.00
1.35%1+ 1$0.00
0.0000%1+ 1$0.0025
0.0925%1+ 1$0.0000
0.0000%I+ $0.0050
0.3000%1+ $0.0000
0.3000%1+ $0.0000
0.4500%1+ 1$0.0000
Moved
RFP # 4578 - ADDENDUM # 1
Addendum # 1 to be returned with Bid Proposal
Please see the attached pages for answers to questions submitted by
prospective bidders:
NO OTHER CHANGES AT THIS TIME.
This forrrt shall be signed and returned with your bid.
Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
PAYMENT DEVICE PROCESSING AGREEMENT
This Payment Device Processing Agreement ("Agreement") is entered into as of the Effective Date by and auiong the
entity identified below as tlie Merchant (together with any affiliated entities listed on Schedule B to the Agreeinent), referred to
collectively as the "Merchant," Elavon, Ina ("Elavon") and Member, as designated on the Merchant Application, and
inchtdes the following Terms of Service (the "TOS") and all Schedules and otlier attachments to the Agreement, each of which
is incorporated in full by this reference. The Agreement governs the Merchant's receipt and use of the Processing Services.
PAYMENT DEVICE PROCESSING SERVICES ELECTED BY MERCHANT. Merchant elects the following
Paymeirt Device Processing Services as described in the Agreement (including all applicable Schedules) and subject to tlie
additional terms and couditious of the applicable provisions of the Merchant Operating Guide (the "MOG"):
~ TOS, General Provisions and the MOG
❑X Schedule A, Schedule of Fees
0 Schedule B, Affiliated Entities
~ Schedule C, Merchant Application
(Large Relationship)
~ Substitute Form W-9 (required)
Pavment Device Processine Seivices Available to
Merchants Generallv (check desired Processine Services):
❑ Credit Card Seivices
❑ Debit Card (signature-based) Services
❑ Debit Card (PIN-based) Services
❑ Bill Payment (Pinless Debit) Seivices
❑ Wireless Seivices
❑ Contactless Seivices
❑ Schedule D, Electronic Gift Card Seivices
❑ Schedule E, Electronic Check Seivices
❑ Schedule J, Processing Services for Convenience Fees
❑ Schedule K, Enterprise Billing Solutions Seivices
Pavuient Device Processine Seivices Available to
Merchants Overatina in Certain Merchant Cateeories
(checlc desired Processine Services):
❑ EBT Services
❑ Hospitality Services
❑ No Siguature Required Program Seivices
❑ Schedule F, Petroleum Seivices
❑ Schedule I, Processing Services for Government
Entities and Institutions
Pavment Device Processine Seivices Available to
Merchants Overatine in Certain Jurisdictions (check
desired Pi•ocessine Se►•vices):
❑ Schedule G, Processing Services iu Canada
❑ Scliedule H, Processing Services in Puei-to Rico
IN WITNESS WHEREOF, the parties hereto have eaecuted the Agreement.
ELAVON, INC.
on behalf of itself and each of the affiliated entities
identified on Scliedule B(the "MERCHANT"): BY:
By. Name:
Name: Title:
Title: Date:
("Effective Date")
MEMBER
By:
Name:
Title:
Elavon
TERMS OF SERVICE
Section A- General Provisions Applicable to All Services
1) DEFINITIONS; RULES OF CONSTRUCTION.
Capitalized terms used in the Agreement and in auy
applicable Schedule shall have the meanings ascribed to
such terms in the Glossary set fortli in Section B of this
TOS oi• iu such Schedules. All Schedules are expressly
incorporated in their entirery and made a part of the
Agreement. Captions in the Agreement and in the
attaclied Schedules are for convenience only and do not
constitute a limitatioii of the terms in the Agreemeirt.
Singular terms shall include the plural, and vice versa,
unless the context otherwise requires. The word "day"
shall mean "calendar day", unless specifically stated
otherwise. In the event of a conflict between the terms of
Section A- General Provisions, and any applicaUle
Schedule, the terms of the applicable Schedule shall
prevail.
2) ACCEPTANCE OF PAYMENT DEVICES.
Merchant shall determine in accordance with the
Payment Network Regulations and the Agreeiiient wliich
types of Payment Devices and Processiiig Services it
will agree to accept as a form of payment fi•om its
Customers by selecting the applicable Processing
Seivices on page 1 of the Agreement and/or on the
appropriate Schedule. The terms and conditions for the
acceptance of the applicable Payment Devices and
Merchant's use of the Processing Services are set forth
in the Agreement and in the Merchant Operating Guide
(the "MOG"), incorporated herein by this reference and
located at our website
littps:/hvNvw,inercliantcounect.coin/CWRWeb/pdf/MOG
_Eng.pd£ Each Schedule to the Agreeuient shall be
governed by the TOS aud the applicable provisions of
tlie MOG, as well as by the terms set forth in the
Schedule.
3) TRANSACTIONS.
a) Merchant Compliance. Merchant uiust comply
with all the requirements under the Agreement.
Merchant nnist also comply with the procedures set
foi-th in the MOG and any other guides, uianuals, or
iules provided in writing by Elavon fi•om time to
time.
b) Settlement of Transactions. Subject to tlie otlier
provisions of the Agreement aud subject to
Merchant's compliance with the terms of the
Agreement and the Payment Network Regulations,
Elavon and Member will process Transactions daily,
and if Mercliant maintains its DDA with Member,
provisional credit for Transactions (less recoupment
of any Chargebacks, returns, adjustments, fees
(subject to Section (A)(5)(a)), fines, penalties,
assessments fi•om the Payment Neriworlcs and other
amounts due to Elavon or Member under the
Agreement) may be available as soon as the next
Elavon Payment Device Processing Agreeiiient (v.07.01. ]0)
banking day after the banking day on which Elavon
and Member process the Transactions. Regardless
of where Merchant maintains its DDA, Merchant
acknowledges and agrees that Elavon and Member
may use either "direct" (ACH debit authority
pursuaut to which Chargebacks, returns,
adjustments, fees (subject to Section (A)(5)(a)),
fines, penalties, assessments fi•om the Payment
Networks and other amounts due to Elavon or
Member under the Agreement are debited from the
DDA) or "neY" (pursuant to which Chargebaclcs,
returns, adjustments, fees (subject to Section
(A)(5)(a)), fines, penalties, assessments fi•om the
Payment Networks and other amounts due to Elavon
or Member under the Agreeiiient are netted fi•om
Transaction proceeds) methods to recover any
amounts owed by Merchant to Elavon or Member
under the Agreement. To the extent required,
Merchant authorizes and appoints Elavon or
Member to act as Merchant's agent to collect
Transaction amounts fi•om the Customer, the Issuer
or the Customer's financial institution.
i) Deposits. Merchant agrees that the Agreement
is a contract of financial accommodation within
the meaning ofthe Bankruptcy Code, 11 U.S.C.
Section 365, as amended from time to time.
Merchant aclulowledges that its obligation to
Elavon and Member for all ainounts owed
under the Agreement arises out of the same
transaction as Elavon's and Member's
obligation to deposit fiuids to the DDA and
such amounts are owed in the ordinaty course
of business.
ii) P►•ovisional C►•edit. Merchant acknowledges
ttiat all credits for fimds provided to it are
provisional and subject to reversal in the event
that Elavon and Member do not receive
payment of corresponding settlement amounts
fi•om the Payinent Netivorks. Merchant further
aclcnowledges that all credits are subject to
adjustments for inaccuracies and errors
(including rejects) and ChargeUacks in
accordance with the Agreement and the
Payment Networlc Regulations, whetlier or not a
Transaction is charged back by the Issuer or
Custouler. Merchant authorizes Elavon or
Member to initiate reversal or adjustment (debit
or credit) entries and to initiate or suspend such
entries in accordance with the Agreement as
may be necessary to grant or reverse
provisional credit for any Transaction. Fuilher,
Elavon may delay Merchant-issued Cardholder
credits for up to five (5) business days for
accounting verification. Cardholder credits
issued by Merchant to PIN-Debit Cards will not
be subject to this delay.
2
Elavon
iii) Chargebacks. Merchant agrees to accept for
ChargeUack, and will be liable to Elavon and
Member in the amount of any Transaction
disputed by the Cardholder or Issuer for any
reason uuder the Payment Network
Regulations. Merchant authorizes Elavon and
Member to offset fi•om funds due Merchant or
to debit tlie DDA or the Reseive Account for
the amount of all Chargebacks. Merchant will
fully cooperate with Elavon and Member in
complying with the Payment Network
Regulations regacding all Chargebacks,
iv) Original Transaction Receipts. Under no
cii•cumstances will Elavon or Member be
responsible for processing returns, refunds, or
adjustinents related to Transactions not
originally processed by Elavon aud Member.
c) DDA and ACH Authorization. Merchant will
establish and maintain with Member (or with
another ACH paiticipatiilg financial institution) one
or more DDAs to facilitate payment for
Transactions. Merchatit will maintain sufficient
funds in the DDA to acconunodate all Transactions
contemplated by the Agreement and all
Chargebacks, returns, adjustments, fees, fines,
penalties, assessments from the Paymeirt Networks
and other payments due under the Agreement.
Merchatit irrevocably authorizes Elavon, Member,
and their respective authorized vendors and agents
who provide seivices under the Agreement at
Merchant's request, to initiate ACH debit and credit
entries to the DDA or the Reserve Account for airy
products or services requested by Merchant in order
to make payments to or collect paymeirts fi•om
Merchant due under the Agreement. The foregoing
authorizations will remaiu iu effect after termination
of the Agreement until all of Merchaut's obligations
to Elavon and Member liave been paid in fiill.
Elavon and Member have the right to delay, within
tlieir reasonaUle discretion, crediting the DDA with
funds related to Ti•ansactions in order to investigate
any Transactions related to suspicious or fi•audulent
activity or funds for Transactions for which Elavon
or Member have not received funding fi•om the
applicable Payment Networks. Elavon and Member
will endeavor to investigate or process any delayed
Transactions expeditiously and will endeavor to
notify Merchant if any Transactions are delayed for
more than forty-eight (48) hours. Elavon has tlie
right to rely upon written instiuctions submitted Uy
Merchatit requesting changes to the DDA. In the
event Merchant changes the DDA, the ACH debit
and credit authorization established liereunder will
apply to the new account and Merchant shall
provide Elavon and Member such information
regarding the new DDA as they deem necessary to
effect payments to and from the DDA as provided
under the Agreement. It may take Elavon up to ten
Elavon Payment Device Processing Agreement (v.07A 1.10)
(10) Uusiness days after Elavon's receipt of a written
notice fi•om Merchant to reflect in its system any
change to Merchant's DDA.
d) Depositoiy Institution. Merchant authorizes its
depositoiy instihttion to grant Elavon and/or
Member access to auy and all information or records
i•egarding the DDA reasonably requested by Elavon
and/or Member to debit or credit the DDA and to
otlierwise exercise their rights under the Agceement
with respect to tlie DDA.
e) Asserted E►•rors. It is the responsibility of
Merchant to reconcile the statements regarding
Transaction activity received fi•om Elavon, any
Payment Netwoi•k, and any third paity vendors with
the statements Mercliaut receives for Merchant's
DDA. Merchant ulust promptly examine all
statements relating to the DDA and promptly notify
Elavon and Member in writing of any errors in the
statement Merchant received from Elavou.
Merchant's written notice must include: (i)
Merchant nauie and account numbei; (ii) the dollar
amount of the asserted erroi; (iii) a description of
the asseited error; and (iv) an explanation of why
Merchant believes an error exists and the cause of it,
if known. That written notice nnist be received by
Elavon witliin forty-five (45) days of the date of the
Elavon statement containing the asserted error. If
Merchant fails to provide such notice to Elavon
within said forty-five (45) days, Elavon and
Member shall iiot be liable to Merchaut for any
errors Merchatit asserts at a later date. Merchatit
may not make any claim against Elavon or Member
for auy loss or expense relating to any asserted error
for forty-five (45) days immediately following
Elavon's receipt of Merchant's written notice.
During that forty-five (45) day period, Elavon (i)
will be entitled to investigate the asserted error, and
Merchant shall not incur any cost or expense in
connection with the asseirted error without notifying
Elavon, and (ii) notify Merchant of its proposed
resolution of the asserted error.
4) SECURITY INTERESTS, RESERVE ACCOUNT,
RECOUPMENT, AND SET-OFF.
a) Security Intei•ests.
i) Security Agreement. The Agreement
constitutes a security agreement under the
Uniform Commercial Code. Merchant grants to
Elavon and Member a security interest iu and
lien upon: (a) all funds at any time in the
Reserve Account, regardless of the source of
such funds, and (b) all funds underlying present
and future Trausaction Receipts in process by
Member or Elavon (collectively, the "Secured
Assets"). These security interests and liens will
secure all of Merchant's obligations under die
Agreement. Elavon and MemUer uiay execute
this security interest, without notice or deinand
of any lcind, by making an iuimediate
Elavon
withdrawal or by restricting Merchant's access
to the Secured Assets.
ii) Perfection. Upon request of Elavon or
Member, Merchant will execute one (1) or
more control agreements or other documents to
evidence or perfect this security interest.
Merchant represents and warrants that no other
Person has a security interest in the Secured
Assets. With respect to such security interests
and liens, Elavon and Member will have all
rights afforded uuder the Uniform Conunercial
Code, any other applicable law and in equity.
Merchaiit will obtain fi•om Elavon and Member
written consent prioi• to gcanting a security
interest of airy kind in the Secured Assets to a
third party. Merchant agrees tliat this is a
contract of recoupment and Elavon and
MemUer are not required to file a uiotiou for
relief fi•om a banlccuptcy action automatic stay
to realize a►ry of the Secured Assets.
Nevertheless, Merchant agrees not to contest or
object to any motion for relief fi•om the
automatic stay filed by Elavon or Member. If
Merchant fails to execute control agreements or
other docuinents to evidence or perfect the
security interest or lien within ten (10) days of
Elavon's or Member's request, Merchant
authorizes and appoints Elavon as Merchant's
attorney in fact to sign Merchant's name to any
control agreement or other documents used for
the perfection of any security interest or lien
granted hereunder.
b) Reserve Account.
i) Establishment. Elavou inay establish a
Reserve Account in the Reserve Amount upon
the occurrence of a Reserve Event for the
purpose of providiug security and a source of
fuuds to pay Elavon and MeinUer for any and
all amounts that may be owed Uy Merchant
hereunder. Elavon and Member shall have sole
control of the Reserve Account.
ii) Reserve Amount. The Reserve Amount is
equal to the aggregate dollar value of: [(average
% credits to processing volume during the same
period + average % Chaigebacks to processing
volume during the same period) multiplied by
four] multiplied by [average monthly
processing volume] plus [one montli's average
fees] plus days delayed deliveiy multiplied
by the average day's processing volume]. For
purposes of this calculation, the number of days
delayed delivery means the numUer of days
between the date on which the Cacdholder's
Payment Device is charged and the date tlie
product is shipped to the Cardholder (if the
goods are being shipped) or the date the
Cardholder receives the product or seivice.
Further, for purposes of this calculation, Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
will determine, in its sole reasonable discretion,
the applicable period considering factors such
as Merchant's Transaction volume and
seasonality.
(A) Reserve Event. The following will
constitute Reserve Events: (a) fi•audulent
activity in any monthly period that equals
or exceeds one percent (1%) of Merchant's
average monthly volume over the
preceding twelve (12) month period, (b)
Cliargebacks in any monthly period tliat
equal or exceed one percent (1%) of the
total dollar value of incoming items to
Elavon, (c) Elavon's reasonable belief that
a Merchaiit not approved by Elavon to
engage in delayed deliveiy trausactions has
accepted deposits but has not delivered the
goods or services, (d) the commencement
of a Bankruptcy Proceeding by or against
Merchant, (e) termination of the
Agreement for any reason or the
occurrence of an event listed in Section
(A)(12)(b)(ii)(B) or (C) giving Elavon or
Member the right to terminate the
Agreement, ( fl nonpayulent of amounts
owed by Merchant to Elavon or Member,
(g) fines or assessments imposed or
reasonably expected to be imposed by the
Payment Networks, (h) the occurrence of a
material adverse change in Merchant's
financial condition, (i) assigmnent of the
Agreement by, or a change in control of,
Merchaiit witliout Elavon's consent, and (j)
revocation, termination or non-renewal of
any guaranty, indemnity agreeinent, letter
of credit or any other Alternate Security
provided in connection with the
Agreement, if applicable.
iii) Funding. Elavon and Meulber may fuud the
Reserve Account (in each case up to the
Resetve Amount) by any one or more of the
following means.
(A) Elavon and Member may require Merchant
to deposit funds into the Reserve Account;
(B) Elavon and Member may debit the DDA;
and/or
(C) Elavon and Member may deposit into the
Reserve Account funds they would
otherwise be obligated to pay Merchant.
iv) Use of Funds in Reserve Account. Elavon or
Member may, without notice to Merchant,
apply funds in the Reseive Account against any
outstanding amounts Merchaut owes under the
Agceement. Also, Elavon or Member may debit
the Reserve Account to exercise their rights
under the Agreement including, without
limitation, their rights of set-off aud
recoupment to collect any amouuts due to
ia
Elav n
Elavon or Member. Further, Merchant agrees
that Elavon or Member iliay be required to send
funds in a Reseive Account to a third party in
response to a tax levy or other court order.
v) Terinination of Reserve Account. Funds held
in the Reserve Account shall remain in tlie
Resetve Account, and shall be used only to pay
amounts due to Elavon aud Member (except as
otherwise provided iu the Agreement), until the
Merchant has paid in full all auiounts owing or
that may be owed under tlie Agreement,
inchiding all Chargebacks, returns, adjustments,
fees, fines, penalties, assessmeuts fi•om the
Payment Networks and any other payments due
under the Agreement. In no event shall
Merchant Ue entitled to a return of any fuuds
remaining in tlie Reserve Accouiit before two
hundred seventy (270) days following the
effective date of termination of the Agceement.
Notwithstanding tlie foregoing, if Elavon and
Member determine that tlie Reserve Event that
gave rise to the establishment of the Reserve
Account has been sufficiently cured, Elavon
and Member may, in their sole discretion,
terminate the Rese►ve Account and/or release
fitnds from the Reserve Account prior to the
termination of the Agreement.
vi) Alternate Security. In lieu of or in addition to
establishing and funding a Reserve Account,
Elavon may, in its sole and absolute discretion,
accept an alternative form of security
("Alternate Security") for the purpose of
providing a source of funds to pay Elavon aud
Member for any aud all amounts owed by
Merchant. Elavon retains the right, at any time,
to reject Alternate Security previously accepted
by Elavon and/or to require funding of a
Reseive Account so that the aniount of funds
held in a Reserve Account, takeu togetlier with
amounts represented by any Alternate Secm•ity
accepted by Elavon, equal the Reserve Amouut.
c) Recoupment and Set-off. Elavon and Member
have the right of recoupment and set-off. This
meaus tliat they inay offset any outsYanding or
uncollected amounts owed to them hereunder from:
(i) any amounts they would otherwise be obligated
to deposit into tlie DDA; and (ii) any other amounts
they may owe Merchant under the Agreement.
Mercfiaut acknowledges that in the event of a
Bankruptcy Proceeding, in order for Merchant to
provide adequate protection under Bankruptcy Code
Section 362 to Elavon and/or Member hereunder,
Elavon and MemUer may require the creatiou of a
Reseive Account and either of them shall have the
right to offset against the Reserve Account for any
and all obligations Merchaut may owe to Elavon
and Member, without regard to whether the
obligations relate to Transactions initiated or
Elavon Payment Device Processing Agreement (v.07.01.10)
pi•ocessed before or after the initiation of the
Banla•uptcy Proceeding.
d) Remedies Cunmlative. The rights conferred upon
Elavon and Member in this section are not intended
to be exclusive of each otlter or of any other rights
and remedies of Elavon and Member under the
Agreement, at law or in equity. Rather, each and
every right of Elavon and Member under the
Agreement, at law or in equity is cumulative and
concurrent aud in addition to every other riglit.
5) PROCESSING SERVICES; FEES; OTHER
AMOUNTS OWED; TAXES. Elavon and Member
will provide Merchant with Processing Services in
accordance with the Agreemetrt. Merchant will
compensate Elavon and Member for Processing Seivices
as indicated on Schedule A, Schedule of Fees, and in any
otlier Schedules executed by Elavon, Member and
Merchant.
a) Fees. Merchant will pay Elavon and Member fees in
the ordinaiy course of business for all Processing
Services, supplies, and equipment in accordance
with Schedule A, any amendment to Schedule A
and any additional application or setup form(s) or
schedules provided by Elavon and Member in
writing to Merchant. Such fees will be calculated
and debited fi•om tlie DDA or the Reserve Account
once each day or uiontli for tlie previous day's or
month's activity as applicable, or will be deducted
fi•om the funds due Merchant under the Agreement.
U) Researcli. In addition, Merchant will pay Elavon at
its standard rates for research as set forth on
Schedule A including, but not limited to, research
required to respond to any third party or government
snbpoena, levy, garnishment or required repoiling
on Merchant's accouirt.
c) Change of Fees. The fees set forth in the Agreement
aud any additional application or set up form will not
be amended by Elavon for the Initial Term of the
Agreement except as provided in Schedule A or to
pass through to Merchant increases in interchange,
assessments, or fees imposed by a third pai-ty.
Nolhvitlistanding the previous sentence, tlie Card
Processing Fees set forth in Section III of Schedule A
may be adjusted during the Initial Term or any
Renewal Term in Elavon's or Member's discretion,
without further consent or agreement from Merchant,
to pass tlu•ough any new fees imposed upon Elavon
or Meulber by any third pa►ties (including any
Payment Network) in connection with the Processing
Services.
d) Other Amounts Owed. Merchant will promptly
pay Elavon or Member any amolmt incurred by
Elavon or Member attributable to the Agreement,
including, without limitation, Chargebacks, returns,
adjustments, fees, fines, penalties, assessments
(including all fines, penalties, or assessments by tlie
Payment Networks as a result of Merchant's
Transaction processing), and any other payments
Elav n
Elavon Payment Device Processing Agreement (v.07.01.10)
due under the Agreement. Elavon or Member may
offset these amounts fi•om funds otherwise owed Uy
Elavon or Member to Merchant or may debit these
amounts from Merchant's DDA or Reserve Account
by ACH. In the event such offset or ACH debit does
not fully reiinburse Elavon or MemUer for the
amount owed, Mei•chant will promptly pay Elavon
or Member such amount upon demand. Elavon will
cliarge interest on all uncollected amounts owed to
Elavon or Member that are more than tliirry (30)
days past due at a rate equal to the lesser of (i) the
product of the uncollected amounts and tlie then-
current Federal Funds Rate plus 10% (calculated
and computed on the basis of a 365-day year), or (ii)
the maximum daily rate of interest permitted under
applicable law.
e) Taxes. Merchant is also obligated to pay all taxes
and other charges imposed by any governmental
authority on the goods and services provided ttnder
the Agreement excluding the income taxes
attributable to Elavon or Member. If Merchant is a
tax-exempt entity, Merchant will provide Elavon
and Member with an appropriate certificate of tax
exemption.
6) ACCURACY OF INFORMATION;
INDEMNIFICATION; LIMITATION OF
LIABILITY.
a) Accuracy of Information. Merchant must promptly
notify Elavon in writing of any material changes to
the inforination provided in the Merchant
Application, in the bid process if applicable, or
otherwise in the Agceement, including, without
limitation, any additional location or new facility at
which Merchant desires to use the Processing
Services, the form of entity (e.g., partnership,
coiporation, etc.), chauge in conh•ol, material
changes to the type of goods and seivices provided
and/or payments accepted, and how Transactions
are completed (e.g., by telephone, mail, electronic
conuiierce, or in person at Merchant's place of
business). The notice must Ue received by Elavon at
least ten (10) business days prior to the change.
Merchant will promptly provide any additional
information reasonably requested by Elavon. Elavon
has the riglit to rely upon written instructions
submitted Uy Merchant to request changes to
Merchant's business information. Merchant may
request written confirmation of Elavon's conseut to
the changes to the Merchant's business information.
b) Indemnification.
i) By Merchant. Merchant will be liable for and
indemnify, defend, and liold harmless Elavon,
Member and tlieir respective employees,
officers, directors, and agents against all claims
by third parties for losses, damages, liabilities
or expenses, including all reasonaUle attorneys'
fees and other costs and expenses paid or
iucurred by Member and/or Elavon, any
Transaction processed under the Agreement,
any breach by Merchant of the Agreement,
Merchant's negligence, gross negligence or
willful misconduct, any action taken Uy Elavon
or Member with respect to the DDA or Reseive
Account in accordance with the Agreement, or
any Merchant Bankruptcy Proceeding, but
excluding claims to the extent attributable to
Elavon's or Member's negligence, willfiil
misconduct, or Ureach of the Agreement.
ii) By Elavon. Elavon will be liable for and
indemnify, defend, and liold liarmless Merchant
aud its employees, officers, directors, and
agents against all claims made by third parties
for losses, damages, liabilities or expenses
arising out of Elavon's Ureach of the
Agreement, negligence, gross negligence, or
willfiil misconduct, but excluding claims to the
extent attributable to Merchant's negligence,
gross negligence, willful misconduct, or breacli
of the Agreement.
c) Limitation of Liability. Merchant acknowledges
that fees for the Processing Services provided to
Merchant by Elavon aud Member are very small in
relation to the funds advanced to Merchant for
Transactions and consequently Elavon's and
Member's willingness to provide these seivices is
based on the liability limitations contained in the
Agreement. Therefore, in addition to gceater
limitations on Elavon's or Member's liability that
may be provided elsewhere, any liability of Elavon
and Member under the Agreement, whether to
Merchant or any other party, whatever the basis of
the liability, will not exceed, in the aggregate, au
amount equal to the lesser of (a) the fees paid by
Merchant to Elavon a►1d MemUer during the last
tiiree (3) months, exclusive of fees and variable
costs incurred by Elavon and Member to process
Transactions, such as Interchange costs,
assessments, and fees imposed by a third party or,
(b) fifty tliousand dollars ($50,000). In no event will
the parties, or their agents, officers, directors, or
employees be liable to any other party to the
Agreement for indirect, exemplary, punitive,
special, or consequential damages.
d) Perforinance; Disclaiiner of War►•anties.
EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THE AGREEMENT, ELAVON
AND MEMBER MAKE NO WARRANTIES,
EXPRESS OR IMPLIED, REGARDING THE
PROCESSING SERVICES, AND NOTHING
CONTAINED IN THE AGREEMENT WII,L
CONSTITUTE SUCH A WARRANTY. ELAVON
AND MEMBER DISCLAIM ALL IMPLIED
WARR.ANTIES, INCLUDING THOSE OF
MERCHANTABII,ITY AND FITNESS FOR A
PARTICLTLAR PiJRPOSE. No party hereto shall be
liable for any failure or delay in its performance of
Elav n
Elavon Payment Device Processing Agreement (v.07.01.10)
the Agreetnent if such failure or delay arises for
b) Merchant Covenants. Merchant covenauts the
reasons beyond the control of such paity aud
following to Elavon and Member during the Initial
without tlie fault or negligence of such paity.
Term and any Renewal Term:
7) REPRESENTATIONS AND WARRANTIES;
i) Compliance with Laws and Payment
COVENANTS.
Network Regulations. Merchant will comply
a) Merchant Representations and Warranties,
with all Laws and Payment Network
Merchant represents and warrants to Elavon and
Regulatious.
Member tlie following as of tlie Effective Date:
ii) Business Use. Merchaut is oUtaining and using
i) Information. Merchant is validly existing and
the Processing Seivices fi-om Elavon aud
duly organized under the laws of the
Member for business purposes only and to
jurisdiction in which it was formed witli all
facilitate lawfiil business Transactions between
necessary autliority, qualifications, liceuses and
Merchant and its Customers. Merchant will not
registrations necessaiy to conduct its business,
submit Transactions for processing to Elavon or
in all jurisdictions where Mercliant conducts
Member for any businesses, materially different
business, in compliance with all Laws and
products, or methods of selling other than those
Payment Network Regulations. All written
set fortli in the Merchant Application without
information provided in the Merchant
the prior written consent of Elavon. Merchant
Application, in the bid process if applicable, the
also aclcnowledges tliat the DDA into which
assumptions in Schedule A or any other
debits and credits are made is Ueing used for
document suUmitted to Elavon or Member is
laNvful business purposes only.
true and complete aud properly reflects the
iii) T►•ansactions. To the best of Merchant's
business, financial condition aud otvnership of
knowledge, all Transactions are bona fide. No
Merchant in all material respects.
Transaction involves the use of a Payuient
ii) Authority and Power. Merchant and the
Device for any purpose other than the payment
person signing tlie Agreement on Merchant's
to Merchant or a return or adjustuient related to
Uehalf have tlie power to execute aud perform
such payment. No Transaction involves a
the Agreement. The person executiug the
Cardholder obtaining cash fi•om Merchant
Agreement is duly authorized to bind Merchant
unless allowed by tlie Payment Network
and eacli affiliated entity identified iu
Regulations and agreed to in writing by Elavon.
Schedule B to all provisions of the Agreement
All Transactions will be accepted at entities
as if each affiliated entity had executed the
properly identified to Elavon and Membec on
Agreement, and such person is authorized to
Schedule B attached hereto.
execute any document and to take airy action on
iv) Responsibility for Actions. Merchant is
behalf of Merchant which may be required by
responsible for any violations of this
Elavon to carry out the Agreeuient. Fui-ther, the
Agreemetrt that result froui the actions of or
signing and/or performiug in accordance with
failure to act by Merchant's officers, directors,
the Agreeinent will not violate a►iy Law, or
employees, ageuts, Value Added Servicers,
conflict with any ottier agreement to which
business invitees, and those of any other Person
Merchant is subject,
who, with or without Merchaut's consent or
iii) MasterCard MATCHTni System and
cooperation, obtains access to information
Consortium Merchant Negative File.
related to Transactions from Merchant or access
Merchant has never been placed on tlie
to systems under Merchant's control, but
MasterCard MATCHTnf system (formerly
excluding all actions or failures to act to the
known as the Combined Terminated Merchant
eatent attributable to Elavon's or Member's
File), or been named to tlie Consortium
breach of tlie Agreement, negligence or willful
Merchant Negative File maintained by Discover
misconduct.
or, if it has, it has disclosed this fact to Elavon
c) Elavon and Member Representations and
in writing.
Warranties. Elavon and Member, each on tlieir
iv) No Litigation. There is no action, suit, or
own behalf and not on behalf of the other, represent
proceeding pending, or to Merchant's
and warrant to Merchant the following as of the
knowledge, threatened that would reasonably
Effective Date of tlie Agreement:
be expected to materially impair Merchant's
i) Information. Elavon is a corporation validly
ability to carry on Merchant's business
existing and organized under the laws of tlie
suUstantially as now conducted or which would
State of Georgia. Member is a banlcing
materially and adversely affect Merchant's
association validly existing and organized in the
financial condition or operations.
Uuited States.
ii) Corporate Power. Elavon, Member and the
persons siguing the Agreement on behalf of
Elavon
Elavon Payment Device Processing Agreement (v.07A 1.10)
each of them have the power to execute and
perform the Agreement. The persons executing
the Agreement are duly authorized to bind
Elavon and Member, as applicable, to all
provisions of the Agreement and such persons
are authorized to execute any document and to
take any action on behalf of Elavon and
Member, respectively, which may be required
to cariy out the Agreement. Fui-ther, the signing
and/or performing in accordance with the
Agreement will not violate any Law, or conflict
with any other agreement to which tliey are
respectively subject.
iii) No Litigation. There is no action, suit, or
proceeding pending, or to Elavon's or
Member's knowledge threatened, which if
decided adversely would impair Elavon's or
Member's ability to carry on tlieir business
substantially as now conducted or which would
adversely affect Elavoii's or Member's
financial condition or operations.
d) Elavon and Member Covenants. Elavon and
MemUer, each on their oNvn behalf and not on behalf
of the other, covenants to Merchant the following
during tlie Initial Term and any Renewal Term:
i) Co►npliance with Laws and Payment
Networlc Regulations. Elavon aud Member
will comply with all Laws and Payuient
NetNvork Regulations including the
requirements of the Payment Card Industry
("PCI") Data Security Standard, as applicable
to them and tlieir respective systems, for the
Processing Services provided under the
Agreement. The Merchant may review
Elavon's current PCI compliance status on the
Payment Nehwork websites as available.
ii) Responsibility for Actions. Elavon and
Member are responsible for any violations of
tliis Agreement that result fi•om the actions of or
failure to act by their officers, directors,
employees and agents; Uut excluding actions or
failures to act to the extent attributable to
Merchant's Ureach of the Agreement,
negligence or willful misconduct.
8) AUDIT AND INFORMATION.
a) Audit.
i) Elavon or Membei• Audit. In the event that
Elavon or Member reasonably suspects that
they are subject to a financial or i•eputational
risk due to Merchant's actions or omissions,
Merchant authorizes Elavon and Member to
perform an audit or inspection of Merchant's
operations to confirm compliance with the
Agreement upon reasonable advance notice aud
at Elavon's or Member's expense. Merchant
agrees to cooperate, in good faith, with any
such audit conducted by Elavon or Member.
ii) Data Compromise, Security, and Payment
Networlc Audit. In addition to Mercliant's
obligations under Section 13(e)(i), in tlie event
of a known or suspected data compromise,
secui•ity iucident, the occurrence of suspicious
activity, or otherwise if required by the
Payment Networks, Merchant will obtain, at the
request of Elavon, Member or any Payment
Network, and submit a copy of a forensic audit
fi•om a qualified incident response assessor of
the informatiou security of Merchant's business
at Merchant's expense. Mercliant acknowledges
and agrees that the Payment Networks have the
right to audit Merchant's operations to confirm
compliance witli tlie Payment Network
Regulations.
b) Information,
i) Authority. Merchant authorizes Elavon and
Member to make, upon receipt of the Merchant
Application and fi•om time to time, any business
credit or other inquiries they consider
reasonably necessary to review the Merchant
Application or continue to provide Processing
Seivices lmder the Agreement. Merchant also
authorizes any Person or credit repoi-ting
agency to compile information to answer those
business credit inquiries and to furnish that
information to Elavon.
ii) Financial Information. Upon the request of
either Elavon or Member, Merchant will
provide Elavon and Member audited fiuancial
statements prepared by an independent certified
public accouutant selected by Merchant. Within
one Inmdred twenty (120) days after tlie end of
each flscal year, Merchant will furnish Elavon
and Member, as requested, a fiuaucial statement
of profit and loss for the fiscal year and a
balance sheet as of the end of the fiscal year,
each audited as provided above. Merchant shall
also provide Elavon aud Member such interim
financial statements and other information as
Elavon or Member may request froui time to
time. Notwithstanding the foregoing, Merchant
shall not be obligated to provide financial
statements or similar information other than
those included in Merchant's filings with the
Securities and Exchange Commission so long
as Merchant remains registered and obligated to
file financial statements (including annual
reports ou Form 10-IC and quarterly repoits on
Form 10-Q) pursuant to the Securities
Exchange Act of 1934, as amended.
iii) Merchant Information. Merchant agrees tliat
any infoi•ination about Merchant or any of its
principals, affiliates or agents that is provided
to Elavou or Member on the Merchant
Application or otherwise obtained by Elavon or
Member in connection with the Agreement may
Elav n
be (A) used Uy Elavon atid Member, and their
respective affiliates, agents and referral
patiuers, (i) in order to provide the Processing
Setvices and related functions to Mercliaut and
to respond to any further application for
services, or (ii) for administrative purposes; (B)
disclosed and shared for reporting purposes to
credit rating agencies, in accordance with the
Payment Network Regulations, to Issuers and to
the financial institution where the DDA is
maintained; (C) used or disclosed in the course
of any actual or potential sale, reorganization or
other change to Elavon's or Member's
business; (D) collected, used and disclosed as
required or permitted Uy Laiv (e.g., for tax
reporting oi• in response to a subpoena); atid (E)
retained for such periods of time as required by
Elavon and Member to perfor►n tlieir
obligatioiis aild exercise their i•igtits under the
Agreement.
c) Customer ldentification. To lielp tlie govermnent
fight the funding of terrorism atid money laundering
activities, federal law requires all financial
institutions to obtain, verify, and record information
tliat identifies eacli Person who opens an acconnt.
Accordingly, Merchant must provide ceilain
information and identifying documents to allow
Elavon and Member to identify Merchant.
9) FRAUD MONITORING. Merchant is solely
responsible for nlonitoring its Transactions. Elavon and
MemUer are under no duty to monitor Merchant's
Transactions for fraudulent or other suspicious activity.
10) BUSINESS CONTINUITY.
a) Merchant. Mercliant is solely responsible for all
Transactions and Transaction Receipts until such
tiine as the Transaction Receipts have been received
and validated by Elavon. Merchant will maintain
sufficient "backup" information and data (e.g.,
Transaction Receipts or detailed reporting) with
respect to Transactions and will provide such
information and data to Elavon or Member upon
request in order to reconstruct any information or
data lost due to any malfunction of Merchant's or
Elavon's or Member's systems. Elavon is under no
duty to recreate lost Transactions or Transaction
Receipts unless such loss results fi•om Elavon's
breach of the Agreement.
b) Etavon aud Member. Elavon and Member are
required, pursuant to federal banking regulations, to
establish, maintain, and test an effective and
comprehensive business continuity plan (`BCP").
Elavon and Member maintain BCPs that ace
commercially reasonable within the indush•y for the
Processing Services. Elavon and MemUer will
continue to adhere to their respective BCPs and will
modify those plans fi•om time to tiine to meet the
objectives and requirements of their respective
businesses.
Elavon Payment Device Processing Agreement (v.07.0110)
11) THIRD PARTIES.
a) Products or Services. Merchant may desire to use a
Value Added Servicer to assist Merchant with its
Transactious. Merchant shall not utilize airy such
third parties unless Merchant has disclosed such use
to Elavon previously in writing, and unless such
Value Added Seivicer is fully compliant with all
Laws and Payment Network Regulatious. Any
Value Added Servicer used by Merchant must be
registered witli the Payment Networks prior to tlie
performance of any contracted seivices on behalf of
Merchant. Further, as Uetween the pailies to tlie
Agreement, Merchant will be bound by the acts atid
omissions of any Value Added Servicer and
Merchant will be responsible for compliance by
such Value Added Seivicer with all Laivs and
Payment Network Regulations. Merchant will
i►idemnify and hold harmless Elavon and Member
fi•om and against any loss, cost, or expense incurred
in connection with or by reason of Merchaut's use
of any third parties, including Value Added
Seivicers. Neither Elavon nor Member is
responsible for any Value Added Seivicer, nor are
they i•esponsible foi• any Travsaction until Elavon
receives data for the Transaction in the format
required by Elavon.
b) Thircl Party Contractors. Merchant acknowledges
and understands that Elavon or Member may use the
services of third pai-ty service providers in
connection with the performance of their obligations
under the Agreeinent, including auy Schedule to the
Agreement. Except as otherwise provided in the
Agceement, Elavon and Member shall be
responsible for the performance of their obligations
hereunder uotwithstanding auy use of or delegation
of any responsibility to a third party service
provider.
12) TERM AND TERMINATION.
a) Term. Unless terminated as set forHi below, the
Agceement, including all Schedules hereto executed
as of or following the Effective Date, will remain in
effect for the Initial Term, as defined on Schedule
A, Schedule of Fees, following the Effective Date
set out on page 1 of the Agreement. Thereafter, the
Agreement, including all Schedules thereto, will
automatically renew for successive Renewal Terms,
as defined on Schedule A, Schedule of Fees, unless
terminated as set foilh below. If Merchant processes
Transactions beyond the Initial Term or Renewal
Term, then the terms of the Agreemeut shall govern
such Trausaction processing.
b) Termination.
i) By Merchant.
(A) The Agreement may be terminated by
Mercliant effective at the end of the Initial
Term or any Renewal Term by providing
written notice of an intent not to renew to
Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
Elavon at least ninety (90) days prior to tlie
expiration of the then curreiit term.
(B) The Agreement may be terminated by
Merchaut if any of the following conditions
remain uncured tliirty (30) days after
Merchant provides Elavon and Member
written notice of the existence of the
condition:
(1) Elavon has failed to pay Merchant an
uudisputed amount owed to Merchant
under the Agreement; or
(2) Elavon or Member has failed to
perform a material oUligation under
the Agreemeut.
ii) By Elavon or Member.
(A) The Agreement may be terminated by
Elavon or Member effective at the end of
the Initial Term or any Renewal Term by
providing written notice of an intent not to
renew to Merchant at least ninety (90) days
prior to the expiration of tlie then current
term.
(B) The Agreement may be terminated by
Elavon or Member if, after providing thirty
(30) days written notice, any of the
following conditions remain:
(1) The occurrence of Excessive Activity.
(2) The acceptance of Card Not Present or
Convenience Fee Transactions without
proper disclosure to Elavon and
Member in the Agreement or an
amendment to the Agreement.
(3) The failure to pay Elavon or Meinber
any amouirt Merchant owes Elavou or
Member.
(4) The failure by Merchant to perform a
material obligation of the Agreement.
(C) The Agreement inay be terminated by
Elavon or Member immediately upon the
occurrence of one or more of the
following:
(1) The occurrence of a material adverse
change in Merchant's finaucial
condition.
(2) The garnishment or attachment of
Merchant's deposit accounts with
Member, Alternate Security, the DDA,
the Reseive Account, or any of
Mercliant's property in the possession
of Elavon or Member,
(3) The commencement of a Bankruptcy
Proceeding by or against Merchant.
(4) Any representation, warranty or
covenant by Merchant is false or
misleading in any material respect as
of the date made, or becomes false or
misleading in any material respect at
any time during the terul of the
Agreement.
(5) Any Payment Network requires
Elavon or Member to terminate the
Agreement or cease processing
transactions for Mei•chant.
(6) Any change, not approved by Elavon,
that constitutes a material change in
the types of goods and services
Merchant sells or in the methods Uy
which Mercliant sells them, or any
change that results in Merchant's
violation of Elavon's or Member's
underwriting policy.
(7) Assignment of the Agreement or a
change in coutrol of Merchant without
Elavon's written consent.
(8) Revocation, terulination or non-
renewal of any guaranty, indemnity
agreement, letter of credit or other
Alternate Security executed in
connection with the Agreement, if
applicable.
The paities' riglits of termination under the Agreement
are cumulative. A party may exercise its termination
rights with respect to an individual Schedule to the
Agreement or the participation of any affiliate without
terminating other Processing Seivices or Schedules,
provided that any termination of the Agreenlent iii whole
shall automatically termiuate all, related Processing
Services aud Schedules. A specific right of termination
in this section shall not limit any other riglit of tlie paity
to terminate the Agreement or any Schedule expressed
elsewhere.
c) Notice of Termination.
i) Notice of termination by Merchant, Elavon, or
Member must be given in writing. Termination
shall be effective on the date specified by the
written notice; provided, however Merchant
agrees that closing Merchaut's account with
Elavon may take up to thirty (30) days
following Elavon's receipt of written notice of
termination. In those limited instances where
Merchant's account is reinstated by Elavon
following termination by either Merchant or
Elavon in the Initial or any Renewal Term, all
of MecchanYs obligations under the Agreement
are likewise i•einstated and will renew for
successive Renewal Terms effective on the date
of reinstatement.
d) Action upon Termination.
i) Accounts. All obligations of a party regacding
Transactious processed prior to termination will
suivive termination. Funds related to
Transactions processed prior to termination
may be placed in a Reseive Account until
Merchant pays all amounts Merchaut owes
Elavon or Member or for which Merchant is
10
r
Elavon
liable under the Agreement. Merchant must
maintain enough funds in the DDA following
termination to cover all ChargeUacks, returns,
adjustments, fees, fines, penalties, assessments
fi•om tlie Payment Networks and otlier amounts
due under the Agreement for a reasonable time,
but in any event, not less than 180 days fi•om
termination.
ii) Equipment. If Merchant's equipment is leased,
Merchant is obligated to honor the terms and
conditions of MerchanYs leasing contract. If
Merchant's equipment is owned or supplied by
Elavon, Merchant must return all equipment to
Elavon and pay Elavon any amounts Merchant
owes for such equipmeut within thirty (30)
days.
iii) Early Termination Fee. If Merchant teruiinates
the Agreement before the end of the Initial Term,
except for terminatioti pursuant to Section
(A)(12)(b)(i)(B), Merchant will immediately pay
Elavon and Member, as liquidated dauiages, an
early termination fee as specified on Schedule A,
Schedule of Fees. Merchant agrees that the early
termination fee is not a penalty, but rather is
reasouable in light of the fiuancial harm caused
by Merchant's early termination. In addition to
the foregoing, if Merchant terminates the
Agceement during the Initial Term, other than a
termiiiation under Section (A)(12)(b)(i)(B), auy
incentives, discounts or credits granted by
Elavon to Merchant, as reflected on Schedule
A, Schedule of Fees, will be immediately due
and payable to Elavon in accordance with
Schedule A.
13) COMPLIANCE WITH LAWS AND PAYMENT
NETWORK REGULATIONS; MATCHTM AND
CONSORTIUM MERCHANT NEGATIVE FILE.
a) Compliauce witli Laws aud Payment Networlc
Regulations. Merchant, Elavon aud Member agree
to comply with all applicable Payment Network
Regulations, including all requirements applicaUle
to obtaining authorization for ACH debits from or
charges to a constmier account, as applicable, and
with any policies and procedttres provided by
Elavon or Member. Merchant, Elavon and Member
fiu-ther agree to comply with all Laws applicable to
the selected Processing Services, including without
limitation, Laws related to: (i) Payment Devices; (ii)
electronic fund transfers; (iii) confidential treatuient
of information; and (iv) the Fair aud Accurate Credit
Transactions Act of 2003 (FACTA), includiug its
requirements relating to the content of Transaction
Receipts provided to Cardholders. Merchant will
execute and deliver to Elavon and Meulber all
documents they may fi•oin time to time reasonably
deem necessary to verify Merchant's compliance
with this provision.
Elavon Payment Device Processing Agreement (v.07.01.10)
b) Privacy Laws. In addition to Section (A)(14)(b),
each party hereto nnist take all commercially
reasonable steps to protect the confidentiality of
Cardlioldei• and Transaction informatiou and shall
establish aud maintain pliysical, technical and
administrative safeguards to prevent unauthorized
access by third parties to such Cardliolder and
Transaction information and in a manner that
complies with applicaUle Laws, includiug witliout
limitation the federal Health Insurance Portability
and Accountability Act, the federal Gramm-Leach-
Bliley Act, FACTA or other applicable privacy
laws.
c) MATCHTnz and Consortiuui Merchant Negative
File. Merchant ackuowledges that Member and/or
Elavon is required to report Merchant's business
name and flie name of Merchant's principals to the
MATCHTM listing maintained by MasterCard and
accessed by Visa or to the Consortium Merchant
Negative File maintained by Discover, if applicable,
pursuant to the requirements of the Payment
Network Regulations. Merchant specifically
consents to Elavon's and Member's fiilfilhnent of
tlie obligations i•elated to the listing of Merchant in
such databases, and Merchant waives all claims and
liabilities Merchant may have as a result of such
reporting.
d) Security Program Compliance. Merchant must
comply with the requirements of the Paynlent Card
Iiidustry (PCI) Data Security Standard (PCI DSS)
including the Cardholder Information Security
Prograui (CISP) of Visa, the Site Data Protection
Prograui (SDP) of MasterCard, the Data Security
DISC Program and tlie PCI DSS regulations of
Discover Network, and the security programs of any
other Payment Network regarding which Merchant
accepts a Payment Device, as applicable, and any
modifications to, or replacements of such programs
that may occur fi•om time to time (collectively,
"Security Programs"). Upon request, Elavon will
provide Merchant with tlie respective website links
to obtaiu the current requirements of the Visa,
MasterCacd, and Discover Network Security
Prograins. Merchaut will not disclose Cardholder or
Transaction information to any third party, except to
an agent of Merchant assisting in completing a
Transaction, or as otherwise required or permitted
by Laws and the Payment Net«+ork Regulations.
Merchant must maiutain all systems and media
containing Cardholder and Transaction information
in a secure manner to prevent unauthorized access to
or disclosure of such information. All Value Added
Seivicers must coulply witli the requirements of
those Security Programs. Merchant is responsible
for Merchant's own actions or inactions, those of
Merchant's officers, directors, shareholders,
employees aud agents, including any Value Added
Servicer (collectively, "Merchant's Agents").
11
Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
Merchant shall indemnify and hold Elavon aud
Member harniless fi•om any liability, loss, cost, or
expense resulting from tlie violation of any of the
Security Program requirements by any of
Merchant's Agents.
e) Data Coinpromise.
i) Notice and Investigation. Merchant
acknowledges and agrees that Cardholder data
and banlc account information obtained by
Merchant in connection with any Transactiou is
tlie property of the financial institution that
issued the Payment Device or holds the
Customer's account. Merchaut must notify
Elavon and Member within twenty-four (24)
hours (and if notice is given orally, it nnist be
confirmed in writing within the same tiventy-
four hour period), if Merchant lrnows or
suspects that Cardholder Data, Customer
information, or Transaction information lias
been accessed or used without authorization
from Merchant, Merchant's Ageuts or systems
within Merchant's or its agent's control (a
"Data Incident"). The notice must include: (a) a
detailed written statement about the Data
Incident including the conh•ibuting
circumstances, (b) the form, number and range
of compromised account information, (c)
specific account numbers compromised, and (d)
details about the ensuing investigation and
Merchant's security personnel who may Ue
contacted in connection with the Data Incident.
Merchant must fully cooperate Nvith the
Payment Networks, Elavon and Member in the
forensic investigation of the Data Incident.
Within seventy-two (72) hours of becoming
aware of the Data Incident, Merchant must
engage the services of a data security firm
acceptable to the Payinent Networks and/or to
Elavon and Member to assess the vulnerability
of the compromised data and related systems.
Merchant must provide weekly written status
reports to Elavon and Meuiber until the forensic
audit is complete. Merchant must promptly
furnish updated lists of potential or known
compromised account numbers aud other
documentation or information that the Payment
Networks and/or Elavon and MemUer may
request. In addition, Merchant nmst provide all
audit repoils to Elavon and Member, and such
audits must be completed to the satisfaction of
the Payment Networks and/or of Elavon and
Member. If Merchant fails to supply the
forensic audits or other information required by
the Payinent Networks and/or by Elavon and
Member, Merchant will allow Elavon or
Member to perform or have performed such
audits at Merchant's expense.
ii) Prese►•vation of Records. In the event of a
Data Incident, Merchant must take immediate
steps to preserve all business records, logs and
electronic evidence relating to the Data
Incident. Merchant shall cooperate with Elavon
and Member to rectify, correct and resolve any
issues that may result from the Data Incident,
inclttding pi•oviding Elavon and Member with
(and obtaining any necessary waivers for) all
relevant information to verify Merchant's
ability to prevent future data incidents in a
manner consistent with the Agreement.
iii) Liability for Data Incident. Without waiving
any of Elavon's and Member's rights and
remedies, Merchant is liable for all fi•audulent
transactions related to any Data Incident and all
costs Elavon or Member incur as a result of
such Data Incident, including any fees, fines,
penalties and/or assessments by the Payment
Networks, claims from tliird pa►ties, all costs
related to the notification of Cardholders or
Customers and cancellation, re-issuance of
Payment Devices (including underlying
accounts), forensic investigation, and PCI DSS
review for a repoit of compliance.
iv) Elavon Data Co►npromise. If Elavon suffers a
data incident and Cardholder, Customer, or
Transaction information has Ueen accessed
from Elavon, its employees or agents, or
systems within Elavon's control, then Elavon
will follow all applicable Payment Network
Regulations ivith respect to such data incident
including providing the required repoi-ting and
forensic audits to the Payment Networks.
14) USE OF TRADEMARKS; CONFIDENTIALITY;
PASSWORDS.
a) Use of T►•adeinarlcs. Merchant may use and display
the Payment Netwoi•ks' marks, and sliall display
such marks in accordance with the standards for use
established by the Payment Networks. Merchant's
right to use all such marks will terininate upon
termination of the Agreement or upon notice by a
Payment Network to discontinue such use, and
Merchant must thereafter promptly return airy
materials displaying the marks. Merchant's use of
promotional materials provided by tlie Payment
Nerivorlcs will not indicate, directly or indirectly,
that such Payment Networks endorse any goods or
seivices other than their own and Merchant may not
refer to auy Payment Networks in stating eligibility
for Merchaut's products or seivices.
b) Confidentiality.
i) Cardholder and Transaction Inforination.
Merchant, Elavon and Member shall, at all
tiines, protect the confidentiality of Cardholder
and Transaction information in accordance with
all applicable Laws and Payment Netwoi•k
Regulations. Merchant, Elavon and Member
12
Elavon
must maintain Cardholder and Transaction
information for such time periods as may be
required by Laws and the Payment Network
Regulations and thereafter destroy, in a manner
that will render the data unreadable, all such
media that tliey no longer deem necessaty or
appropriate to maintain. Further, Merchant,
Elavon and Member must take all steps
reasonably necessary to ensure that Cardholder
and Transaction information is not disclosed to
unauthorized parties or otherwise misused.
Merchavt may not retain or store magnetic
stcipe or CW2/CVC2 data after authorization
for record keeping or additional authorizatiou
processing.
ii) Bankruptcy. In the event of failure or other
suspension of Merchaut's business operations,
including any Bankruptcy Pi•oceeding,
Merchant must not sell, transfer, or disclose any
materials tliat contain Cardholder or
Transaction information to tliird parties.
Merchant must:
(A) Return this information to Elavon, or
(B) Provide acceptable proof of destruction of
this information to Elavon.
iii) Confidential Information Generally. Each
party shall at all times protect tlie other patlies'
Confidential Information. The Receiving Party
will not use a Disclosing Party's Confidential
Information in any way directly or indirectly
detrimental to the Disclosing Party. Each party
recognizes that the disclosure or unauthorized
use of Confidential Information will injure the
Disclosing Party. Each party furtlier recognizes
and agrees that the injuiy that the Disclosing
Party will suffer for any actual or threatened
breach by the Receiving Party of the covenants
or agreements contained herein cannot be
compensated by monetary damages alone, and
the Receiving Party therefore agrees that the
Disclosing Party, in addition to and without
limiting any otlier remedies or riglits which it
may have under the Agreement or otherwise,
shall be entitled to equitable relief, includiug
injunction aud specific performance. The
Receiving Party fuither agrees to waive any
requirement for the securing or posting of any
bond in connection with such equitable remedy.
c) Passwords. If Merchant receives a password from
Elavon to access any of Elavon's databases or
seivices, Merchant will: (i) keep the password
confidential; (ii) not allow any other Person to use
the password or gain access to Elavon's or any of its
agent's databases or seivices; (iii) be liable for all
action taken by any user of the password that
obtained access to the password fi•om Merchant; and
(iv) promptly notify Elavon if Merchant believes
Elavon's databases or services or Merchaut's
Elavon Payment Device Processing Agreement (v.07.01.10)
information has been compromised by use of the
password. If Merchant receives passwords fi•om a
third party for products or services related to
Transaction processing, Merchant must protect such
passwords in the manner required by such third
party and indemnify, defend, and hold Elavon and
Member harmless fi•om any losses, costs, or
expenses tliat arise fi•om Merchant's use or misuse
of such third party passwords.
d) Proprietary Interest. Merchant has no interest
whatsoever, including, without limitation, copy►•iglit
interests, fi-anchise interests, license interests, patent
rights, property rights, or otlier interest in any
seivices, software, or hardware provided by Elavon,
unless specifically agreed to in a separate license or
use agreement between Merchant and Elavon.
Nothing in the Agreement shall be construed as
granting Merchant any patent rights or patent
license in any patent which Elavon may obtain in
respect to Elavon's seivices, software, or
equipment. Merchant will make no atteuipt to
duplicate or otherwise ascertain the components,
circuit diagrams, logic diagrams, flow charts, source
and object code, schematics or operation of, or
otherwise attempt to reverse eiigineer any of
Elavon's services, equipinent, or software.
e) Actions upon Termination. Upon tlie request of
the Disclosing Paity or upon the termination of the
Agreement, the Receiving Party shall promptly
return all Confidential Information and all copies of
such Confidential Information in the Receiving
Party's possession or in the possession of its agents
andlor will deliver to the Disclosing Party, destroy
or irreversibly erase, as the Disclosing Party shall
request, all originals aud copies prepared by the
Receiving Parly or its agents or prepared for the
Receiving Party's use containing or reflecting any
Confidential Information of the Disclosing Party. In
tlie event a dispute arises between the pairties in
relation to the Confidential Information (or a part
thereof) oi• the Agreement, the Receiving Party may
retain a copy of such Confidential Information (or
part tliereo fl as, in tlie Receiving Paity's discretion,
reasonably exercised, is necessaiy for its defeuse of
the dispute and its retention and use of such
Confidential Information shall continue to be
subject to the terms ofthe Agreement.
fl Disclosure of Confidential Inforination. In the
event that the Receiving Paity and/or its agents
become legally required or compelled (by
deposition, interrogatory, request for documents,
suUpoena, civil investigative demand or by any
similar pi•ocess or coui-t or administrative order) to
disclose Confidential Information, then the
Receiving Party shall provide the Disclosiug Party
with prompt prior written notice of such legal
requirement so that the Disclosing Paity may seek a
protective ocder or otlier appropriate remedy and/or
13
Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
waive complia►ice witli the terms of this Section 14.
In the event that such protective order or other
remedy is not obtained, and regardless of ivhether
the Disclosing Paity waives compliance with the
terms of this Section 14, the Receiving Party agrees
to disclose only that portion of the Confidential
Information which the Receiving Paity, as advised
by the written opinion of counsel, is legally required
to be disclosed and to exercise best efforts to obtain
assurances that confidential treatment will be
accorded such Confidential Information.
15) MISCELLANEOUS PROVISIONS.
a) Entire Agi•eement. The Agreement (including all
Schedules, attachments, exliibits, addenda and other
documents incorporated by reference into the
Agreement or any of its Schedules, attachments,
exhibits or addenda) and any amendment or
supplement to it, constitutes the entire agi•eement
between the pai-ties, and all prior or other
representations, written or oral, are merged in and
superseded by the Agreement. In the event of a
conflict between the documents comprising the
Agreement, the following order of priority will
apply: (i) any amendment or Schedule to the
Agreement; (ii) the TOS; (iii) the Payment Network
Regulatious; (iv) the Merchant Operating Guide;
and (v) any other guides or manuals provided to
Merchant fi•om time to time.
b) Jurisdiction and Venue; Governing Law. All
matters arising out of or related to the Agreement
will be governed by and construed in accordance
with the LaNvs of the State of Georgia. The parties
agree that all performances and Transactions under
the Agreement will be deemed to have occurred in
the State of Georgia and that Merchant's entry into
and performance of the Agreement will be deemed
to be the transaction of Uusiness within the State of
Georgia. Jurisdiction and venue for auy claini or
cause of actiou arising under the Agreement (other
than collection actions by Elavon or Member
relating to auiounts owed by Merchant under the
Agreement) shall be exclusively in the United States
District Couit for the Northern District of Georgia,
and the pailies submit to personal jurisdiction of,
aud waive any personal jurisdiction or inconvenieut
forum objection to, that court. If subject matter
jurisdiction does not exist in the United States
District Court for the Northern District of Georgia,
then the exclusive forum and venue for any sucli
action shall be the courts of the State of Geoi•gia
located in Fulton County and the parties submit to
personal jurisdiction of, and waive any personal
jurisdiction or inconvenient foium objection to, such
court. Merchant, Elavon and Member hereUy jointly
and severally waive any and all riglit to trial by jury
in any action or proceeding relating to the
Agreement. Merchant, Elavon and Member each
represents to the other that this waiver is knowingly,
willingly and voluntarily given.
c) Exclusivity. During the Initial Term and any
Renewal Term of the Agreement, Merchant will not
enter into an agreement with any other entity that
provides processing seivices similar to those
provided by Elavon and Member as contemplated
by the Agreement without Elavon and Member's
written consent.
d) Construction. Any alteration or strilceover in the
text of the Agreement or any Schedule thereto will
have no binding effect and will not be deemed to
amend the Agreement. The headings used in the
Agreement are inserted for convenieuce only and
will not affect the interpretation of any provision.
Tlie language used will be deemed to be the
language chosen by the parties to express their
mutual inteut, and no iule of strict construction will
be applied against any parry.
e) Assignability. The Agreemetrt may not be assigned
by Merchant, directly or by opei•ation of laNv,
without the prior written consent of Elavon. If
Merchant, nevertheless, assigns the Agreement
without Elavon's consent, the Agreement will be
binding on the assignee as well as Merchant. Elavon
will not transfer or assign the Agreement without
the prior written conseut of Merchant, provided that
such consent shall not be required for (i) the
assignment or delegation to an affiliate of Elavon, or
(ii) the assignment or delegation to any Person into
or with which Elavon shall merge or consolidate, or
who may acquire substantially all of Elavon's stock
or assets.
fl Notices. Any written notice to the other party under
the Agreement will be deemed received upon the
earlier of: (i) actual receipt; or (ii) five (5) business
days after being deposited in the United States mail,
or (iii) one (1) business day after being deposited
with a nationally recognized overnight carrier. Such
notices will be addressed to the Merchant's last
address shown on the records of Elavon, or to
Elavou at 7300 Chapmau Highway, Knoxville, TN
37920.
g) Bankruptcy. Merchant will immediately notify
Elavon of auy Bankruptcy Proceeding initiated by
or against Merchant. Merchant will include Elavon
on the list and matrix of creditois as filed wittl the
Bankruptcy Court, whether or not a claim may exist
at the time of filing. Mercliant acknowledges that
the Agreement constitutes an executory contract to
make a loan, or extend other debt financing or
financial acconuliodations to, or for the benefit of
Merchant, and, as such, cannot Ue assumed or
assigned in the event of Merchant's banla•uptcy.
h) Customer Contact. Merchant authorizes Elavon
and Member to contact Merchant's Customers or
their Issuer if Elavon or Member determines that
such coutact is uecessacy to obtain information
14
Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
i)
J)
k)
m)
n)
aUout any Transaction between Mercliant and a
Customer.
Teleplione Recording. For quality assurance and
training purposes Merchant authorizes Elavon to
monitor and record telephone conversations at any
time. The decision to record any conversation shall
be solely in Elavon's discretion and pursuaut to
applicable Law.
Communication with Merchant. Merchant agrees
that Elavon and Member may provide Merchant
with information about their services including,
without limitation, information about new products
and/or seivices by facsimile, telephone, mobile
telephone and/or electronic mail.
Amendments. Except as otherwise provided in the
Agreement, auiendments to the Agreement shall be
in writiug and signed by tlie parties.
Nofiwithstanding the foregoing, Elavon and Member
may amend or inodify the Agreement, to the extent
such changes are required by or attributable to
changes in the Payment Network Regulations or
other Laws, upon written notice to Merchant.
Elavon or Member will inform Merchant of such a
change in a periodic statement or other written
notice, and such change will become effective not
less than thirty (30) days following the issuance of
the notice. Notwitlistanding the previous sentence,
changes to fees authorized by the Agreement will be
effective upon notice to Merchant, unless a later
effective date is provided.
Severability and Waiver. If any provision of the
Agreement is found to be illegal or otherwise
unenforceable, the invalid or unenforceable
provision shall be deemed to be cuilailed or revised
to tlie extent necessary to inake such provision valid
and enforceable and all other provisions of tlie
Agreement shall remain enforceable and unaffected
thereby. None of the failure, the delay Uy any paity
to exercise, or the partial exercise of any right under
the Agreement will operate as a waiver or estoppel
of such right, nor shall such amend the Agreement.
All waivers requested by a party must be signed by
the waiving party.
Independent Contractors. Elavon, Member, and
Merchant will be deemed independent contractors
and no one will be considered an agent, joint
venturer, or partner of the otlier, unless and to the
extent otherwise specifically provided herein. The
Agreement has been entered into solely for the
benefit of the pairties hereto and is not intended to
create an interest in any third party.
Survival. All of the obligations of each party hereto
that by their nature should suivive termination or
expiration of the Agreement in order to achieve its
purposes, including, without limitation, Sections 3,
4, 5, 6, 7, 10, 12, 13, 14, and 15(b) of the TOS, shall
so suivive and remain binding upon and for the
benefit of the parties hereto.
o) Counterparts; Facsimile Signatures; Deliveiy.
The Agreement may be signed in one or more
counteipaits, eacli of which shall constitute an
original and all of which, taken together, shall
constitute one and the same agreement. Deliveiy of
the various docuuients and instiuments comprising
the Agreement may be accomplished by a facsimile
trausmission, and such a signed facsimile or copy
shall constitute a signed original.
p) Force Majeure. Elavon and Member sliall not be
considered in default in perforinance of tlieir
obligations to the extent such performance is
delayed by force majeure affecting their ability to so
perform. Force majeure shall include, but not be
limited to, hostilities, restraint of iulers or peoples,
revolution, civil commotiou or riots, strilce, loclcout,
epidemic, accident, fire, flood, earthquake,
windstorm, explosion, lack of or failure of
telecommunication facilities, regulation or
ordinance, demand or requirement of any
government or govermnental agency, or any court,
tribunal or arbitrator(s), having oi• clai►ning to liave
jurisdiction over the suUject matter of the
Agreement or over the paities hereto, or any act of
God or any act of government or airy cause whether
of the same or different nature existing now or in the
future which is beyond the reasonable control of
Elavon and Member.
Section B - Glossai•y
16) ACH Rules: The NACHA Operatiug Rules and
Operating Guidelines, which govern the interregional
exchange and settlement of ACH transactions.
17) Agreement: The Payment Device Processing
Agceement, including the TOS, MOG, any Schedules,
attachments, exhibits, addenda, the Merchant
Application, amendments, or additions as permitted
under tlie terms of the Agreement.
18) Aiternate Security: The security described iu Section
(A)(4)(b)(vi).
19) American Express: American Express Travel Related
Seivices Company, Inc.
20) ACH: Automated Clearing House.
21) ACH Network: The funds transfer system governed by
the ACH Rules. The ACH Network allows participating
depositoiy financial institutions to clear interbank
entries electronically.
22) Bankruptcy Proceeding: With respect to a Person
means (i) tliat the Person or any subsidiary of sucli
Person sha1L• (a) conunence a voluntary case uuder the
Bankiuptcy Code of 1978, as amended, or otlier federal
bankruptcy laws (as uow or hereafter in effect); (b) file
a petition seeking to take advantage of any other
applicable laws, domestic or foreign, relating to
bankiuptcy, insolvency, reorganization, winding up oi•
composition or adjustment of debts or auy other similar
conseivatorship oi• receivership proceeding instituted o1•
15
Elav n
Elavon Payment Device Processing Agreement (v.07.01.10)
administered by any regulatoiy agency or body; (c)
consent to or fail to contest, in a timely and appropriate
manner, any petition filed against it in an involuntacy
case under such bankruptcy laws or other applicable
laws; (d) apply for or consent to, or fail to contest in a
timely and appropriate manner, the appointment of, or
the taking of possession by, a trustee, receiver,
custodian, liquidator, or similar entity of such Person or
of all or any substantial pai-t of its assets, domestic or
foreign; (e) admit in writing its inability to pay its debts
as they become due; ( fl make a general assignment for
the benefit of creditors; (g) make a conveyance
fi•audulent as to creditors under any applicable law; or
(h) take any action for tlie purpose of effecting any of
the foregoing; or (ii) that a case or other proceeding
shall be commenced against the Person or any
subsidiaiy of such Person in any couit of competent
jurisdiction, or through any regulatory agency or body,
seeking: (a) relief under the Bauluuptcy Code of 1978,
as amended, or other federal bankruptcy laws (as now or
hereafter in effect) or under any other applicable laws,
domestic or foreign, relating to banlcruptcy, insolvency,
reorganizatiou, winding up or composition, or
adjustment of debts; or (b) tlie appointment of a tiustee,
receiver, custodian, liquidator or the like of such Person
or of all or any substantial pai-t of the assets, domestic or
foreign, of such Person or any other similar
conseivatorship or receivership proceeding instituted or
administered by any regulatoiy agency or body.
23) Card Not Present: The processing environment where
the Payment Device is not physically presented to the
Merchant by the Cardholder as the form of payment at
the time of the Transaction. Card Not Present includes,
Uut is not limited to, Mail Order, Telephone Order, and
Electronic Commerce Transactions.
24) Card Present: The processing environment where the
Payment Device is plrysically presented to the Merchant
by the Cardholder as the form of payment at the time of
the Transaction.
25) Cardholder: (i) the individual in whose name a
Paymeiit Device has been issued; or (ii) any individual
who possesses or uses a Payment Device and who
puipoits to be the person in whose name the Payment
Device was issued or who purpoi-ts to be an authorized
user of the Payment Device.
26) Chaigebaclc: A Transaction disputed by a Cardholder
or Issuer pursuant to the Paymeiit Network Regulations.
27) Confidential Information: All information or items
proprietaty to any paity to the Agreement, of which
another party to the Agreement obtains knowledge or
access as a result of the relationship formed as a result
of the Agreement, including, but not limited to, the
following types of information and other information of
a similar nature (whether or not reduced to writing):
scientific, technical, or business information, product
makeup lists, ideas, concepts, designs, drawiugs,
techniques, plans, calculations, system designs,
formulae, algoritlmis, programs, software (source and
object code), liardware, manuals, test procedures and
results, identity and description of computerized
records, identity and description of suppliers, customer
lists, processes, procedures, trade secrets, "know-how,"
marketing techniques and material, marketing and
development plans, price lists, pricing policies, and all
other financial information.
28) Convenience F'ee: A fee chaiged by Merchant for an
added convenience to the Cardholder for the use of a
Paymeiit Device in a Transaction in accordance with the
Paymeiit Networlc Regulations.
29) Credit Card: A card or device associated with a
revolving line of credit that may be used to purchase
goods and seivices fi•oin Merchant or to pay an amount
due to Merchant. A"Credit Card" includes any of the
following cards or devices that are associated with a line
of credit extended to the Person to whom the card or
device is issued: (i) a Visa card or other card or device
bearing the symbol(s) of Visa U.S.A., Inc. or Visa
International, Inc. (including Visa Gold cards); (ii) a
MasterCacd card or other card or device bearing the
symbol(s) of MasterCard International Incorporated
(including MasterCard Gold cards); (iii) a Discover
Network card or other card or device bearing the
symbol(s) of Discover Network; or (iv) any card or
device bearing the symbol of any other Credit Card
Association.
30) Credit Card Associations: (i) Visa.; (ii) MasterCard;
(iii) American Express; (iv) Discover Nerivork; (v)
Diners; (vi) JCB; and (vii) any other organization or
association that hereafter contracts with Elavon and/or
Member to authorize, caphu•e, and/or settle Transactions
effected with Credit Cards or signature-Uased Debit
Cards issued or sponsored by such organization or
association, and any successor organization or
association to any of the foregoing.
31) Custo►ner: A client of Merchaut who elects to conduct
a payment Transaction with Merchant tlu•ough
presentation of a Payment Device (including a
Cardholder).
32) Debit Card: A card or device bearing the symbol(s) of
one or more EFT Networks or Credit Card Associations,
which may be used to purchase goods and seivices from
Merchant or to pay an amount due to Merchant by an
electronic debit to the Cardholder's designated deposit
account. A"Debit Card" includes (i) a card or device
that bears the symbol of a Credit Card Association and
may be used to conduct signature-based, offline debit
Transactions; and (ii) a card or device that bears the
syinbol of an EFT Network and can be used to conduct
PIN-based, online debit Trausactions.
33) Demand Deposit Account (DDA): The commercial
checking account at a financial institution acceptable to
Elavon and Member designated by Merchant to
facilitate payment for Transactions, Chargebacks,
returns, adjustments, fees, fines, penalties, assessments
fi•om the Payment Networks aud other payments due
under the Agreenlent.
16
Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
34) Diners: Diners Club International Ltd.
35) Disclosing Party: The party providing the Confidential
Information to the otlier party directly or indirectly (via
one or more third parties acting on behalf of and at the
direction of the pai-ty providing its Confidential
Infor►nation).
36) Discovei•: DFS Services LLC.
37) Discover Netwoi•lc: Tlie payment netNvork operated and
maintained by Discover.
38) EBT Card: A card utilized for electronic benefits
transfers.
39) ECS Association: Visa (in its operation of the Visa
POS Check Seivice), NACHA and any regional ACH
association or networlc, the Federal Reseive (in its
processing of ACH entries or Demand Drafts or other
legal replacements or substitutes for a Paper Check,
including under the Check Clearing for the 215t Century
Act or under applicable provisions of the Uniform
Commercial Code), aud any other organization or
association used by Elavon and/or Member in
connection with the ECS that is hereafter designated as
an ECS Association by Elavon fi•om time to time.
40) EFT Networks: (i) Interlink Neriwork Inc., Maestro
U.S.A., Inc., STAR Networlcs, Inc., NYCE Payments
NetNvork, LLC, PiILSE Network LLC,
ACCEL/Exchauge Network, Alaska Option Seivices
Coiporation, Arnied Forces Financial Network, Credit
Union 24, Inc., NETS, Inc., and SHAZAM, Inc.; and (ii)
any other organization or association that hereafter
authorizes Elavon and/or MemUer to authorize, capture,
and/or settle Transactions effected with Debit Cards,
and any successor organization or association to any of
the foregoing.
41) Effective Date: The date set foirth in the signature block
of Elavon on page 1 of the Agreement.
42) Elavon: As applicable, Elavon, Inc., a Georgia
corporation, and any affiliate or subsidiaiy of Elavon,
Inc. that provides Processing Services to a Merchant
related to Transactions. Elavon is a registered member
service provider of each Member. Elavon may also be
referred to as "Servicer" iv the Agreement, tlie MOG or
other documents provided to Merchant in connection
with the Processing Seivices.
43) Electronic Check Services (ECS): The service offering
by Elavon pursuant to which Transactions effected via
an ACH Payment Device are presented for clearing aud
settlement by or thcough an ECS Association.
44) Electronic Commerce Transaction: A Transaction that
occurs when the Cardholder uses the internet to make a
payment to a Merchant.
45) Electronic GiFt Card (EGC): A special stored value
card provided by Merchant that is redeemable for
merchandise, services or other Transactions.
46) Excessive Activity: The occurrence, during any
monthly period, of Chargebacks and/oc Retrieval
Requests in excess of one percent (1%) of tlie gross
dollar amount of Merchant's Transactions or retuins in
excess of two and one-half percent (2.5%) of the gross
dollar amount of Transactions.
47) Interchange: The cleacing and settlement system for
Visa, MasterCard and, where applicable, Discover
Credit Cards and Debit Cards, where data is exchanged
between Elavon and the Issuer through the applicable
Payment Network.
48) Issuer: The financial institution or other entity that
issued the Credit Cacd or Debit Card to the Cardholder.
49) JCB: JCB International Co., Ltd.
50) Laws: All applicable local, state, and federal statutes,
regulations, ordinances, iules, and other binding law in
effect fi•om time to time.
51) Mail Order/T'elephone Order (MO/TO) Transaction:
For MO, a Transaction that occurs when tlie Cardholder
uses the mail to make a payment to a Merchant and for
TO, a Transaction that occurs when the Cardholder uses
a telephone to make a payment to a Merchant.
52) MasterCard: MasterCard International Incorporated.
53) Member: The sponsoring Member designated on the
Merchant Application or on a particular Schedule
hereto, as applicable. Any Member may be changed by
Elavon at any tiuie and the Merchant will be provided
notice of same.
54) Merchant: The entity set out in the fiist page of the
Agreement aud the affiliated entities listed on Schedule
B attached hereto, jointly and severally. Entities inay Ue
added to Schedule B Uy substituting a new Schedule B
that is in writing and signed by all parties, and Merchant
may add additional accounts or locations that are owned
Uy Merchant without the need to execute a new
Schedule B.
55) Merchant Application: The Merchavt Application
attached hereto as Schedule C and any additional
document containing information cegacding Merchaut's
business tliat is submitted to Elavon and Member in
coimection with MerchanYs application for Processing
Services, including documents submitted by Merchant
as a pai-t of the bid process, if applicable.
56) Merchant Operating Guide (MOG): Elavon's
operating manual that prescribes iules and procedures
governing Transactions and Merchant's use of the
Processing Services. The MOG may be amended from
time to time by Elavon in its sole discretion, which
amendments will be effective upon notice to Merchaut.
57) NACHA-The Electronic Payments Association: The
national association that establishes standards, rules, and
procedures governing the ACH Nehvork, including the
ACH Rules.
58) Payment Device: Any device or ulethod used for the
purpose of obtaining ci•edit or debiting a designated
account including a Credit Card, Debit Card, and auy
other financial transaction device or method, including
an Electronic Gift Card, clieck (whether converted into
electronic form or used as a source document for an
electronic fimd h•ansfer), EBT Card, stored value card,
"smai-t" card, or other device created to be used for the
purpose of obtaining credit oi• debiting a designated
17
Elavon
account, tliat is now or hereafter effected tlu•ough
Transactions with Merchants.
59) Payinent Networlc: Any Credit Card Association, EFT
Network, ECS Association, govermnental agency or
authority, and any other entity or association that issues
or sponsors a Payment Device.
60) Payment Network Regulations: Individually and
collectively, as the context may dictate, all rules and
operating regulations of the EFT Networks, Credit Card
Associations and ECS Associations, and all rules,
operating regulations, and guidelines for Transactions
issued by Elavon fi•om time to time, including, without
limitation, all amendments, changes, and revisions made
thereto fi•oin time to time.
61) Person: Any individual, firm, corporation, busiuess
trust, pailnership, governmental agency or authority, or
other entity and shall include any successor (by merger
or otherwise) of such entity.
62) POS Device: A terminal, software or otlier point-of-sale
device at a Merchant location that conforms with the
requirements established fi•om time to time by Elavon
and tlie applicable Payment Network.
63) Processing Services: The Payment Device processing
services and other related products aud services received
by Merchant pursuant to the Agreement.
64) Receiving Party: The recipient of Confidential
Information fi•om the otlier party directly or indirectly
(via one or inore third parties acting on behalf of and at
the direction of the otlier party),
65) Reserve Account: Tlie account established pursuant to
Section (A)(4).
66) Rese►•ve Amount: The amount estaUlished pursuant to
the calculation set forth in Section (A)(4).
67) Reserve Event: The events designated in Section
(A)(4).
68) Retrieval Request: A request initiated by a Cardholder
or Issuer that requires the Merchant to produce a legible
copy of the Cardholder's signed Transaction Receipt
within a specified period of time.
69) Servicer: See "Blavon."
70) TOS: These Terms of Service and all additions,
amendments, modifications and replacements to the
TOS, as applicaUle.
71) Transaction: Any action between a Cardholder using a
Payuient Device and a Merchant that results in activity
on the Cardholdei's account (e.g., payment, purchase,
refund, or return).
72) Transaction Receipt: The paper or electronic record
evidencing the purchase of goods or seivices fi•om, or
payment to, a Merchant by a Cardholder usiug a
Payment Device.
73) Value Added Servicer: Any entity that stores,
processes, transmits or accesses Payment Device data or
Transaction data on behalf of Merchant or that provides
software to Merchant for h•ansaction processing,
storage, or transmission, except to the extent such
services ace performed by the entity in its capacity as an
Elavon Payment Device Processing Agreement (v.07.01.10)
agent of Elavon performing Elavon's obligations under
the Agreement.
74) Visa: VisaU.S.A., Inc.
18
Elavon
Elavon Payment Device Processing Agreement (v.07.01.10)
SCHEDULE A
SCHEDULE OF FEES
[Separately Provided]
Schedule A
Elavon
SCHEDULE B
AFFILIATED ENTITIES
Elavon Payment Device Processing Agreement (v.07.01.10)
Checlc one:
❑ Merchant named on page 1 only, and all locations will operate under Federal Tax ID Numbei•
❑ Merchant named on page 1, witli Federal Tax ID Nuinber and the following affiliate(s) (a
separate Form W-9 must be submitted for each entity identified below):
Name
Tax ID Number
MERCHANT, on behalf of itself and each of the ELAVON,INC.
affiliated entities identified above:
By:
By:
Name:
Name:
Title:
Title:
Date:
(Schedule B "Bffective Date")
MEMBER
By:
N ame:
Title:
Schedule B
Elavon
Elavou Payment Device Processing Agreement (v.07.01.10)
scxEDVLE c
MERCHANT APPLICATION (LARGE RELATIONSHIP)
[Separately Pi•ovided]
Schedule C
Elavon Schedule I- Processing Services for Government Entities and Institutions (vA LO 1.10)
SCHEDULEI
PROCESSING SERVICES FOR GOVERNMENT ENTITIES AND INSTITUTIONS
PROCESSING SERVICES FOR GOVERNMENT ENTITIES AND INSTITUTIONS. Merchant elects and
agrees to accept tlie Payment Device Pi•ocessing Seivices for government entities and institutions, as such seivices are furtlier
described in this Schedule and tlie Exhibits hereto, and subject to tlie terms and conditions of the applicable provisions of tlie
Agreeulent. Except as expressly modified pursuant to this Schedule, all terms and conditions of the Agreement, including all
other Schedules to tlie Agreement, remain iu full force and effect and shall govern the relatiouship among the parties to this
Schedule I.
Capitalized terms used and not otheiivise defined in this Schedule I shall have tlie meanings ascribed to them in the
Agreement or in the Merchant Operating Guide ("MOG"), which is incorporated herein by this reference.
IN WITNESS WHEREOF, the pailies hereto have executed this Schedule I to the Agreement.
, ELAVON, INC.
on behalf of itself and each of the affiliated entities
identified on Schedule B to the Agreeinent (the By:
"MERCHANT"):
By:
Name:
Title:
Name:
Title:
Date:
MEMBER
By:
Name:
Title:
(Schedule I "Bffective Date")
Scliedule I
Elavon Schedule I
Section A- General Provisions Applicable to All
Merchants under this Schedule
1) Fees. Elavon and Member will be compensated for
the Processing Seivices provided under this Schedule
as provided in the Agreement as such Agreement may
be modified by this Schedule.
2) The following provisions hereUy replace the like-
numbered provisions of the Agreement or are hereby
inserted or deleted fi•om the Agreement, as indicated,
for Merchants operating under this Schedule.
a) Section (A)(4)(a)(i) Security Agreement. is
deleted.
b) Section (A)(4)(a)(ii) Perfection. is deleted.
c) Section (A)(6)(a) Accw•acy of Information. is
revised to read as follows:
"a) Accw•acy of Information. Mercliant must
promptly notify Elavon in writing of any material
changes to the iuformation provided in the
Merchant Application, in the bid process if
applicable, or othei•wise in the Agreement,
including, without liuiitation, any additional
location or new facility at which Mercliant desires
to use the Processing Services provided under this
Schedule, the form of entity, change in control,
material changes to the type of goods and seivices
provided and/or payments accepted, and how
Trausactions are completed (e.g., by telephone,
mail, electronic coinmerce, or in peison at
Merchant's place of business). The notice must be
received by Elavou at least ten (10) business days
prior to the change. Merchant will promptly
provide any additional information reasonaUly
requested by Elavon. Merchant will be
responsible for all losses and expenses incurred
by Elavon or Member arising out of Merchant's
failure to provide proper notice or requested
information for any such change, and will not
make any claims against Elavon or MemUer for
any losses sustained Uy Merchant as a result of
such failure. Elavon may iminediately terminate
the Agreement upon a material change to the
information in tlie Merchant Application if such
change is not approved by Elavon. Elavon has
the right to rely upon written instructions
submitted by Merchant to request clianges to
Merchant's business information. Merchant may
request written confirmation of Elavon's consent
to the changes to the Merchant's business
information."
d) Section (A)(6)(b)(i) Mercliant Responsibilities.
is revised to read as follows:
"i) Merchant Responsibilities. As between
Merchant, Elavon and Member, Merchant will be
responsible for, and at its own expense, defend
itself against any suits, claims, losses, demands or
damages arising out of or in connection with (A)
any dispute with a Customer, Cardholder or any
tliird party relating to any Transaction, (B) any
Processing Services for Government Entities and Institutions (v.01.01.10)
action taken by Elavon or Member with respect to
the DDA or Reserve Account in accordance with
the Agreement, or (C) airy breach by Merchant of
auy obligation under this Agreement. Merchant
will not make auy claims against Elavon or
Member for any liabilities, claims losses, costs,
expenses and demands of any kind or nature,
arising out of or in connection with auy of the
foregoing suits, claims, losses, demands or
damages,"
e) Section (A)(6)(b)(ii) Elavon Responsibilities. is
revised to read as follows:
"ii) Elavon Responsibilities. Elavon will be
responsible for and will at its own expense defend
itself against any suits, claims, losses, deulands or
damages arising out of (A) Elavon's breach of the
Agreement, or (B) Elavon's negligence, gross
negligence or willful misconduct."
fl Section (A)(8)(b)(ii) Financial Information. is
revised to i•ead as follows:
"ii) Financial Information. Upon the request of
eitlier Elavon or Membei•, Mercliant will provide
Elavon and Member audited financial statements
prepared by an independent certified public
accountaut selected by Merchant, or if Merchant
is audited by a governmental authority, then
Merchaut will provide finaucial statements fi•on1
such goveinmental authority. Within one hundred
twenty (120) days after the end of eacli fiscal year
(or in the case of a government entity, when
available), Merchant will furnish Elavon and
Member, as requested, a financial statement of
profit and loss for the fiscal year and a balance
sheet as of tlie end of the fiscal year, each audited
as provided above. Merchant shall also provide
Elavon and Member such interim financial
statements and other information as Elavon or
Member may request fi•om time to time."
g) Section (A)(11)(a) Products or Services. is
revised to read as follows:
"a) Products or Services. Merchant may desire
to use a Value Added Servicer to assist Mercliant
with its Transactions. Merchant shall not utilize
any Value Added Servicer unless Merchant has
disclosed such use to Elavon previously in
writing, and unless such Value Added Seivicer is
fully compliant with all Laws and Payment
Nehwork Regulations. Any Value Added Servicer
used by Merchant must be registered with the
Payment Nehworks prior to the performance of
auy contracted services on behalf of Merchant.
Furtlier, as between the parties to this Agreement,
Merchant will be bound by the acts and omissions
of its Value Added Servicer and Merchant will be
responsible for compliance by sucli Value Added
Servicer with all Laws and Payment Nelhvork
Regulations. Merchant will be responsible for any
loss, cost, or expense incttrred in connection with
or by reason of Merchant's use of any Value
Schedule 1 2
Elavon
Schedule I- Processing Services for Govermnent Entities and Institutions (vA L01.10)
Added Servicer. Neither Elavon nor Member is
arise fi•om Merchaut's use or inisuse of such third
responsible for the Value Added Servicer, nor are
party passwords."
they responsible for any Transaction until Elavon
lc) Section (A)(15)(b) Ju►•isdiction and Venue;
receives data for the Transaction in the foruiat
Governing Law. is deleted.
required by Elavon.
1) Section (A)(15)(c) Exclusivity. is deleted.
h) Section (A)(12)(d)(iii) Early Terinination Fee.
3) In addition to the termination rights set foitli in
[DELETED]
Section (A)(12)(b)(i) of the Agreement, Merchant
i) Section (A)(13)(d) Security Prograin
shall have the following termination right added to the
Compliance. is revised to read as follows:
Agreement as Section (A)(12)(b)(i)(C):
"d) Security Program Compliance. Merchaut
"C) The Agreement may be terminated by Merchant
must comply with the requirements of the
in the event that sufficient legislative appropriation is
Payment Card Indushy (PCI) Data Security
not available, provided that Merchant gives Elavon
Standard (PCI DSS) including the Cardliolder
aud Member sixty (60) days notice prior to
Information 5ecurity Program (CISP) of Visa, the
termination."
Site Data Protection Program (SDP) of
MasterCard, the Data Security DISC Program and
Section B- Elavon Fee Collection Models
the PCI DSS regulations of Discover Network,
and the security programs of any other Payment
4) Direct Debit Fee Collection Model. If Merchant
Nerivork as to which Merchant accepts a Payment
elects the Direct Debit fee collection model on Exhibit
Device, as applicable, and any modifications to,
A to this Schedule I, Section (A)(5)(a), Fees, of the
or replacements of such programs that ulay occur
Agreement remains unclianged and in full force and
fi•om time to time (collectively, "Security
effect.
Programs"). Upon request, Elavon will provide
5) Compensating Balances Fee Collection Model. If
Merchant with the respective website links to
Merchant elects the Compensating Balances fee
obtain the current requireuieuts of the Visa,
collection model on Exhibit A to this Schedule I,
MasterCard, and Discover Network Security
Section (A)(5)(a), Fees, of the Agreement is hereby
Programs. All Value Added Servicers from
replaced with the following provision:
whom Merchant procures seivices inust comply
a) Section (A)(5)(a) Fees. Notwithstanding any
with the requirements of those Security Programs.
provisions of Section (A)(3)(b) or Section
Merchant, and not Elavon or Member, is
(A)(3)(c) to tlie contraiy, with respect to the
responsible for Merchant's own actions or
collection of fees by Elavon and Member,
inactions, those of Merchant's officers, directors,
Merchant will pay Elavon and Member fees in tlie
shareholders, employees and agents, including
ordinary course of business for seivices, supplies,
any Value Added Seivicer (collectively,
and equipment in accordance with Schedule A,
"Merchant's Agents"). Merchant shall be
any amendment to Schedule A and any additional
responsible for auy IiaUility, loss, cost, or expense
application or setup form(s) provided by Elavon
resulting from the violation of any of the Security
and Member in writing to Merchant. Elavon will
Program requirements by Merchant or auy of
send Member an invoice reflecting the amount of
Merchaut's Agents."
fees due, and Member will enter such amount in
j) Section (A)(14)(c) Passwords. is revised to read
Merchant's coinpensating balance calculation.
as follows:
MemUer will pay Elavon such amount, on
"c) Passwords. If Merchant receives a password
Merchant's behalf, within thirty (30) days.
from Elavon to access any of Elavon's dataUases
Alternatively, Elavon may net out the fees due
or services, Merchant will: (i) keep the password
fi•om any funds due Mercliaut under tlie
confidential; (ii) not allow any other entity or
Agreement.
person to use the password or gain access to
6) Montlily Net Settlement Fee Collection Model. If
Elavon's databases or services; (iii) be
Merchant elects the Monthly Net Settlement fee
responsible for all action talcen by any user of tlie
collection model on Exhibit A to tliis Schedule I,
password that obtained access to the password
Section (A)(5)(a), Fees, of the Agreement is hereby
fi•om Merchant; and (iv) promptly notify Elavon
replaced with the following provision:
if Merchant Uelieves Elavon's databases or
a) Section (A)(5)(a) Fees. Nohwithstanding auy
seivices or Merchant's information has been
provisions of Section (A)(3)(b) or Section
compromised by use of the password. If Merchant
(A)(3)(c) to the contraiy, with respect to the
receives passwords fi•oui a third party for products
collectiou of fees by Elavon and Member,
or seivices related to Transaction processing,
Merchant will pay Elavon and Meuiber fees in tlie
Merchant must protect such passwords in tlie
ordinary course of business for seivices, supplies,
manner required by such third paity and be
and equipment in accordance witli Schedule A,
responsible any losses, costs, or expenses that
any amendment to Schedule A and any additional
application or setup form(s) provided by Elavon
Schedule I
Elavon
Schedule I -Processing Services for Govermnent Entities and Institutions (v.01.01.10)
and Member in writing to Merchant. Such fees
will be calculated daily and will be offset by
Elavon and Member against amounts owed by
Elavon aud Member to Merchant for: (i) on tlie
first day of each montli for the prior mouth's
Processiug Services, and (ii) following the first
day of the moirtli for fees and other amounts owed
to Elavon and Member pursuant to Schedule A
that are not available or reasonably calculable as
of tlie last day of a pailicular mouth. In the event
that the funds owed by Elavon and Meinber to
Merchant on the first day of a calendar month are
insufficient to offset amounts Merchant owes to
Elavon aud Member for Processing Services
provided during the prior month, Elavon and
Member may offset any unpaid balance owed by
Merchant against futui•e amounts Elavon and
Member owe or will owe to Merchaut until
Merchant's financial obligations are fully
satisfied.
Section C- Government/Public Institution Service Fees
7) Government/Public Institution Service Fees. If
Merchant is both eligible to charge or to have Elavon
charge Government/Public Institution Service Fees (as
defined on Exhibit B hereto) and lias elected on
Exhibit A to manage or to have Elavon manage
Government/Public Institution Service Fees, then
Merchant shall comply with the Government/Public
Institution Seivice Fee Terms and Conditions attached
hereto as Exhibit B.
Schedule I
Elavon Schedule I -Processing Services for Government Entities and Institutions (v.01.01.10)
EXHIBIT A
GOVERNMENT/PUBLIC INSTITUTION SERVICE I+EE ENROLLMENT
Pricing Quote ❑ New Location
❑ Adc1/Update Service
Contact Nauie (First and Last):
Goods or Services Sold:
Processing Options:
Elavon Fee Collection n4odel (check one):
❑ Direct Debit
❑ Canpensatiiig Balvices (wheu available)
❑ Monthly Net Settlement
Rep Name:
( Chain
I DBA Phone
I DBA Fax
I City, State, Zip:
I Traiiiing Plione # (if different):
I Federal Tas ID:
Governmenl/Public Instimtion Service Pee Fundiiie Model (check one if Merchant elects Govemment/Public Tnstitution Service Fees (GPISP) assessmenO:
❑ Elaaoti-managed'
❑ Merchant-managedZ
Government/PuUlic Ins[itution Service Fee Sernices Proerauis (check nll that aonlv_ but onlv if n4erchaiit elects GPISF assessmentl:
❑ MasteiCard Convenience Fee Prograiu for Education and Govermnent Merchants
❑ Visa Tas Payment Progiwn
Ciover»ment/Public Institution Service Fee Pricine (aoulicable onlv if n4erchant elects GPISF assessment):
Card Sen,ice Fee %
Visa Consumer Debit (tax only): $
ACH (via Electraiic Check Services): $
Minimwn Annual Fees (if applicaUle): $
Rep Phone
Pavment/Transactinn Tvnes for GPISF Assessment (nnt all oavmendtransaction tvoes ire sunnoited for all mnaramsl (check all that anolv. but onlv if Merchant elects GPISF assessment):
❑ Credit- (check all that apply): ❑ Visa ❑ MasterCud ❑ Discover (available if Elavon-acquired)
❑ Sigiiatwe Debit- (check all that apply): ❑ Visa ❑ n4asteiCard ❑ Discorer (available if Elavon-acquired)
❑ PIN-Based Debit
❑ ACH (via Electroiuc Check Services)
Elavon Product Suuuoitine GPISP Assessment to be Used bv Merchant (clieck all that aoolv):
❑ Enterprise Billing Solutions (Schedule K required if checked)
❑ Service Pee Tenninal (VeiiFone vx570)
❑ Limited Acceptance (Visa, MasteiCard, and Discover credit cards oniy)
❑ MasteiCazd aiid Discover credit cards and signature deUit cards
❑ Merchant Proprietaiy Solution or Value-Added Servicer
❑ Other
By signing below, n4erc6ant warrants dhe Uuthfu6iess and accuracy of tlie in£ormation provided, agrees to pay the fees set forth hereui and agrees to abide by the Terms & Conditions for
Assessment of GovermnenUPublic InstiWtion Service Fees.
SignaWra
Name Title
Date
1. "Elavonananaged" means that Elavon establishes the amount of the Government/Public Institution Service Fee charged and retains Uie
Government/PuUlic Institution Service Fee in lieu of MerchauYs obligation to pay Elavon tlie per transaction fees as set forth in the Agreement.
2. "Merchantananaged" means that Merchant establishes the amount of the GovernmenUPublic Institution Service Fee charged and retains the
Government/Public Institution Service Pee. Merchant pays Elavon t6e per transaction fees as set forth in the Agreement For all such Transactions.
Elavon Processing Seivices for Govermnent Eirtities and Iustitutions Enrollment
Elavon
Schedule I -Processing Seivices for Government Entities and Institutions (v.01.0110)
EXHIBIT B
TERMS AND CONDITIONS FOR ASSESSMENT OF GOVERNMENT/PUBLIC INSTITDTION SERVICE FEES
ASSESSMENT OF GOVERNMENT/PUBLIC
INSTITUTION SERVICE FEES. Terms and Conditions
("T&Cs") for Assessment of Government/Public
Institution Seivice Fees.
1) APPLICABILITY OF AGREEMENT. If Merchant
has requested authority to charge or to Iiave Elavon charge
a Government/Public Institution Seivice Fee to its
Customers for Eligible Transactions, the following
provisions apply to such Eligible Trausactions aud the
related Government/Public Iustitution Seivice Fees
charged. Any other Transactions or fees, including
Convenieuce Fees, are governed by the standard
provisions set foilh in the Agreement, as modified by tlie
applicable Schedules thereto. Merchant agrees to the
following provisions, as and to the extent applicable, in
addition to the terms and conditions of the Agreement.
2) RULES OF CONSTRUCTION. These T&Cs are
intended to complemeut and are subject to your
Agreement. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such
terms in the Agreement or tlie MOG. In tlie event of a
conflict between tliese T&Cs and other terms of the
Agreement or the MOG, the terms of these T&Cs shall
prevail.
3) DEFINITIONS.
a) Aereement. The Terms of Service (TOS) or the
Payment Device Processing Agceement, as applicable.
b) Govermnent/Public Institution Service Fee. The fee
charged by Elavon or Merchant, at MerchanYs election, to
Customers condttcting Eligible Transactions (as described
herein, as applicable) at Merchants operating in ceitain
designated merchant category codes ("MCCs"). For the
avoidance of doubt, fees referred to as a"seivice fee" or
"convenience fee" (in tlie context of tlie MCCs described
herein) as used in the applicable rules of the Credit Card
Associations, where the fee is processed as a separate
Transaction fi•om the underlying purchase or payment
Transaction, are included within the definition of, and are
referred to herein, as a"Government/Public Institution
Service Fee."
4) GOVERNMENT/PUBLIC INSTITUTION
SERVICE FEE SERVICES.
a) Government/Public Institution Service Fee Services.
At Merchant's election, Merchant may choose to charge a
Governuient/Public Institution Seivice Fee (a Merchant-
managed Government/Public Institution Seivice Fee) or to
have Elavon cliacge a Government/Public Institution
Seivice Fee (an Elavon-managed Government/Public
Institution Seivice Fee) to its Customers for Eligible
Transactions, in each case provided that Merchaut is in
compliance with the Payment Network Regulations and
Laivs, including the Electronic Fund Transfer Act and
Regulation E. If Merchant elects an Elavon-managed
Government/Public Institution Seivice Fee, Merchant
agrees that any Government/Public Listitution Service Fee
collected in connection witli an Eligible Transaction will
be retained by Elavon and Member and that such amount
constitutes Elavon's and Member's property, and
Merchant has no right, title or interest in such amounts.
Further, if Merchant elects an Elavon-managed
Government/Public Institution Seivice Fee, Merchant
agrees that Elavon may adjust the Governinent/Public
Institution Seivice Fee amount fi•om time to time as
necessary or appropriate to accommodate changes in
Payment Network fees (including Intercliange fees),
material changes in average ticket size and/or monttily
Transaction volume, Intercliange classification or
downgrades, clianges in Chai•geUaclc rates, or changes in
Payment Devices accepted and/or payment channels
offered by Merchant. Additionally, Elavon may
immediately terminate the Processing Services for
Governulent/Public Institution Service Fees if Merchant's
Chacgeback rates materially exceed indushy averages. If
Merchant elects a Merchant-managed Government/Public
Institution Seivice Fee, Merchant will receive and retain
the Government/PuUlic Institution Service Fee collected in
connection with Eligible Transactions and will pay regular
per transaction fees to Elavon and Member for the
Processing Services provided by Elavon and Member with
respect to such Transactions. Merchant agrees that the
minimum annual Transaction fees (which includes any
Elavon-retained Government/Public Institution Service
Fees) paid to Elavon and MemUer for Trausactions
processed under this Schedule shall Ue at least equal to the
"Minimum Annual Fees" amount identified on Exhibit A
hereto. For any partial period of less than a fiill year
during the term of this Schedule, the actual amount of fees
paid by Merchant to Elavon for Transactions processed
uuder this Schedule shall be annualized to determine if
Merchant has satisfied this oUligation. At the end of each
yeac (tlie first of which shall begin on the Schedule I
Effective Date and each successive year of which shall
begin immediately upon the conclusion of the preceding
year), Elavon may notify Merchant if the actual
Transaction fees paid by Merchant in respect of this
Schedule is less than the Minimum Annual Fees amount.
In the event that Merchant's actual Transaction processing
fees under this Schedule for any such period are less than
the Minimum Annual Fees, Merchant shall promptly pay
Elavon and Member the difference.
b) Conflict of Laws. To the extent Merchant's state or
other governing body has passed legislation that requires
assessment of Government/Public Institution Seivice Fees
Uy government agencies as a component of card
acceptance, such laws may conflict with Payuient Nerivork
Regulations. Merchaut bears all responsibility and liability
associated therewith, including all assessments, fees, fines
aud penalties levied by the Payment Networks.
5) REQUIREMENTS FOR GOVERNMENT/PUBLIC
INSTITUTION SERVICE FEES. Elavon may update or
Terms and Conditions for Assessment of Government/Public Instihrtion Seivice Fees
Elavon
Schedule I- Processiug Services for Government Entities aud Institutions (v.01 A1.10)
revise the provisions of this Section 5 upon written notice
to Merchant.
a) Merchants AccentinL- Visa Cards for Elieible
Transactions. The following requirements apply to
Merchants accepting Visa Credit Cards and/or Visa
signature Debit Cards that desire to charge or to have
Elavon charge a Governinent/Public Institution Service
Fee on certain Transactions. If Merchant also accepts and
wishes to cha►ge or to have Elavon cha►'ge a
Government/Public Institution Service Fee on certain
Transactions paid by MasterCard aud/or Discover Nerimork
cards, the requirements of this Section (5)(a) also apply to
Merchant in connection with tlie assessment of
Government/Public Institution Seivice Fees on
Transactions involving those Paymeut Devices.
i) Eligible Merchants. Merchants operating in MCC
9311 (Taxes) are eligible to charge or to have Elavon
charge a Government/Public Institution Service Fee to
Customers in connection with Eligible Transactions listed
in Section (5)(a)(ii) Uelow.
ii) Eligible Transactions. Eligible Merchants may charge
or have Elavon charge a Government/Public Institution
Service Fee only in connection with the following
"Bligible Transactions":
1) Federal peisonal income taxes;
2) State personal income taxes;
3) Real estate and otlier property taxes;
4) Federal business iucoine taxes;
5) State business income taxes;
6) Federal payroll/unemployment taxes;
7) State payroll/unemployment taxes; or
8) Sales and use taxes.
iii) Transaction Requireinents. The following
requirements apply to Eligible Transactions under this
Section (5)(a).
1) Merchant must provide Elavon with the necessaiy
docmnentation to facilitate Elavon's registration of
Merchant in the "Visa Taa Payment Program," the
"MasterCard Convenience Fee for Eligible Government
and Education Payments" program and/or the coirvenience
fee program of Discover Network, in each case to the
extent applicable aud required.
2) The Government/Public Institution Service Fee must be
disclosed to the Cardholder prior to the completion of the
Transaction, and the Cardholder must be given tlie option
to cancel the Transaction if the Cardholder does not wish
to pay the Government/Public Institution Service Fee.
3) The Government/Public Institution Seivice Fee must
apply in the same amount regardless of the Credit Card
type or signature Debit Card type (with the exception of
Visa Consumer Signature Debit) accepted for payment of a
given Eligible Transaction within a pai-ticular payment
chamlel. This requirement does not apply to payments
made by ACH, cash, clieck or PIN-based Debit Card.
4) The Government/Public Institution Service Fee must
not be advertised or othenvise communicated as an offset
to the merchant discount rate.
5) The Goverument/Public Institution Service Fee cannot
be chaiged for recurring payments. The
Government/Public Institution Seivice Fee is designed for
one-time payments, not for payments iii which a
Cardholdei• authorizes recurring charges or debits.
6) Merchant must accept Visa as a means of payment in
all channels (i.e., face-to-face, mail/telephone, and Internet
environmeuts, as applicable).
7) Merchaut must feature tlie opportunity to pay with Visa
at least as prominently as all other payment methods.
b) Merchants Not AccentinLY Visa Cards for Eli6ble
Transactions. The following requirements apply to
Merchants accepting Credit Cards and/or signature DeUit
Cards other than Visa (i.e., Merchants accepting
MasterCard cards and/or Discover Nerivork cards but not
accepting Visa cards) that desire to charge or to have
Elavon charge Government/Public Institution Service Fees
on Eligible Transactions.
i) Eligible Merchants. Merchauts operating in MCCs
8211 (Elementary Schools), 8220 (Colleges/Universities),
9211 (Courts), 9222 (Fines), 9311 (Taxes) and 9399
(Miscellaueous Government Seivices) are eligible to
charge or to have Elavon charge a Government/PuUlic
Institution Seivice Fee to Custoulers in connection with
Eligible Transactions listed in Section (5)(b)(ii) below.
ii) Eligible Transactions. Eligible Merchants may chacge
or have Elavon charge a Government/Public Iustitution
Service Fee ouly in connection with the following
"Eligible Transactions":
1) Payments to eleuientary and secondaiy schools for
tuition and related fees, and school-maintained room and
Uoard;
2) Payments to colleges, universities, professional schools
and junior colleges for tuition and related fees, and school-
maintained room and board;
3) Payments to federal courts of law that administer and
process court fees, alimony and child support payments;
4) Payments to government entities that administer and
process local, state and federal fines;
5) Payments to local, state aud federal entities that engage
in financial administratiou and taxation; or
6) Payments to Merchants that provide general support
seivices for the govermnent.
iii) Transaction Requirements. The following
requirements apply to Eligible Transactions under this
Section (5)(b).
1) Merchant must provide Elavon with the necessary
documentation to facilitate Elavon's registration of
Merchant in the "MasterCard Convenience Fee for Eligible
Government and Education Payments" program and/or the
convenience fee prograui of Discover Network, in each
case to the extent applicable and required.
2) The Government/Public Institution Service Fee must be
disclosed to the Cacdholder prior to the completion of the
Transaction, and the Cardholder must be given the option
to cancel the Transaction if the Cardholder does not wish
to pay the Government/Public Institution Service Fee.
3) The Government/Public Institution Seivice Fee must
apply in the same amount regardless of tlie Credit Card or
signature Debit Card type accepted for payment of a given
Eligible Transaction within a pailiculac payment channel.
Terms and Conditions for Assessment of Goveinment/Public Institution Service Fees
Elav n
Schedule I -Processing Services for Government Entities and Institutions (v.01.01.10)
This requirement does not apply to payments made by
ACH, cash, check or PIN-based Debit Card.
4) The Government/Public Instihttion Seivice Fee must
not be advertised or otheitivise communicated as an offset
to the merchant discount rate.
c) Additional Reauireinents for Merchants Utilizint!
Pronrietarv Solutions or Value Added Servicers.
i) POS Devices. Merchant is responsible for ensuring that
its software, POS Devices and card acceptance procedures
fully comply with Elavon's instructions, including with
respect to progranmiing of softNvare and POS Devices to
handle Eligible Transactions to ensure proper assessment
of Government/Public Institution Service Fees. If the
Government/Public liistitution Service Fee is Elavon-
managed, Merchant is fiuther responsible for complying
with all requirements as provided by Elavon fi•om time to
time to appropriately process the Eligible Transactions to
qualify for optimal Interchange rates within five (5) days
of Elavon's communication to Merchant of the same. If
Merchant fails to make changes to its POS Devices or card
acceptance procedures requested by Elavon within five (5)
days of the request, Elavon may, in its discretion,
discontinue the program or suspend a certain paymeut
type. Fuilher, if Mercliant fails to make such changes aud
the Government/Public Institution Seivice Fee is Elavon-
managed, Elavon may adjust the Government/Public
Institution Service Fee amount, bill the Merchant for
charges iu excess of tlie Governinent/Public Institution
Seivice Fee to recover losses related to Transactions that
did not qualify for optimal Interchange rates or for
applicable Credit Card Associations' reimbursement
programs, including, but not limited to, losses related to
MerchanYs failure to distinguish betNveen pricing of Visa
signature Debit Cards and all other card types for
transactions processed within the Visa Tax Payment
Program.
ii) Approval Required to Chaige or Adjust
Government/Public Institution Service Fee. Merchant
may not charge or adjust Governiuent/Public Institution
Service Fees unless Mercliant has disclosed such fees to
Elavon previously in writing and Merchant has been
approved by Elavon to charge or adjust such
Government/Public Instihition Service Fees. If Merchant
charges or adjusts a Government/Public liistitution Service
Fee without having disclosed such fee or adjustment
previously in writing and obtained Elavon's consent,
Merchant will be in breach of the Agreement and Elavon
may immediately terminate tlie Agreement in addition to
pursuing auy other remedies available under the
Agreement, Laws and Payment Networlc Regulations.
iii) Value Added Servicer. Merchants accepting Visa
cards for Eligible Transactions who utilize proprietary
solutions or Value Added Seivicers to manage a
Goveinment/Public Institution Seivice Fee must comply
with Attachment 1. attached hereto.
6) ADDITIONAL PROCESSING REQUIREMENTS.
If Merchant voids an underlying Eligible Transaction, the
associated Government/Public Institution Service Fee must
be voided as we1L If Merchant processes a refund for an
underlying Eligible Transaction, Merchant must disclose to
Customeis that Government/Public Instihrtion Seivice
Fees are non-refiuidable. Merchaiits that desire to charge
or to Iiave Elavon charge Government/Public Institution
Service Fees will be assigned separate NIDs for use in
connection with Eligible T►•ansactions and related
Goverimient/Public Institution Seivice Fees. MIDs
assigned for use with EligiUle Trausactions and/or
Govermnent/Public Institution Seivice Fees may not be
used to process Transactions that are not Eligible
Transactions.
7) PAYMENT AND TRANSACTION TYPES
SUPPORTED. Govermnent/Public Instihrtion Seivice
Fee capaUility for Credit Cards and/or signature Debit
Cards depends on the Merchant's MCC, as described
above, avd the Payment Nehvork Regulations of the
applicable Credit Card Association. Governnient/Public
Institutioii Service Fee capability is supported only through
Elavon products specified on Exliibit A hereto. Not all
paymeut and transaction types are suppoi-ted for all
products. Additionally, Merchant proprietaiy soffivare,
POS Devices, or Value Added Seivicers may be certified
to process Elavon-managed GovernmendPublic Institution
Service Fee Transactions. Closed network prepaid cards,
electronic benefits transfei•, and dynamic currency
conversion are not supported for Goveinment/Public
Institution Seivice Fee processing,
Terms and Conditions for Assessment of Government/Public Institution Service Fees
Elavon
Schedule I -Processiug Services for Government Entities and Institutions (v.01.01.10)
ATTACHMENT 1 to T&Cs
GOVERNMENT/PUBLIC INSTITUTION SERVICE FEE PROCESSING REOUIREMENTS FOR
MERCHANTS USING PROPRIETARY SOLUTIONS OR A VALUE ADDED SERVICER
1. Underlying Eligible Transactions
The following data must be inserted in the listed fields when creating the authorization and clearing requests for the
underlying Eligible Transaction (the tax liability payment).
FIELD NAME
I VALUE
Merchant Categoiy Code
~ 9311- Tax Payments
Merchant Name
The following lists the format and iuformation for each type of tax collected for
this field:
■ Federal tax payments, you must use "US Treasury Tax Payment"
■ State Income Tax: NN - State Income Tax, where NN represents the state,
for example, CA - State Income Tax
■ For all other taxes: Taxing Authority - Tax Type, for example:
✓ Sales Tax: NN Franchise Tax Board - Sales Tax
✓ Business Income Tax: NN Franchise Tax Board - Business Income
✓ Property Tax: NN Funds E-Pay - Real Estate
~ Merchant City
~ Merchant customer seivice phone number.
Merchant State
Merchant state two letter acrouym (NN), for exaiuple, CA; (not the state of the
provider).
ECI Indicator
■ Use 1 or 4 for phone-initiated (MOTO) payments.
■ Use 5, 6, 7, 8 or 9 for Internet-initiated payments.
Merchant Verification Value
This value is used for large federal tax payment requests only. If appropriate,
Visa will assign and notify you of your unique MW value.
Local Tax
lii the Sales Draft Record (TCOS), Transaction Record 6(TCR6), positions 5-16
("Local Tax"), inseit the vahie of "0" _"0%°' tax rate.
Local Tax Included
In tlie TCOS, TCR6, position 17 ("Local Tax Included"), insert a value of "2" _
Trausaction is not suhiect to tax.
H. Gove►•nment/Public Institution Service Fee Transactions
The following data must be inseited in the listed fields when creating the authorization and cleariug requests for the
Governnlent/Public Institution Service Fee.
~ FIELD NAME
VALUE
~ Merchant Category Code
9311- Tax Payments
Merchant Name
The following lists the format and information for each type of tax collected:
■ Federal tax payments, you inust use "US Treasuiy Tax Payment Service
Fee"
• State Income Tax: NN - State Income Tax Service Fee, for example, CA -
State Income Tax Seivice Fee
■ For all other taxes: Taxing Authority - Tax Type Service Fee, for
exauiple:
✓ Sales Taa: NN Franchise Tax Board - Sales Tax Service Fee
✓ Business Income Tax: NNFranchise Tax Board-Business Income
Service Fee
✓ Property Tax: NN Funds E-Pay - Real Estate Service Fee
~ Merchant City
~ Merchant service phone immber.
Merchant State
Merchant state two letter acronym (NN), for example, CA; (not tlie state of the
provider).
ECI Indicator
m Use 1 or 4 for phoue-initiated (MOTO) payments.
a Use 5, 6, 7, 8 or 9 for Internet-initiated payments.
Local TaY
In the Sales Draft Record (TCOS), Transaction Record 6(TCR6), positions 5-16
("Local Tax"), insert the value of "0" _"0%" tax rate.
Local Tax Included
In the TCOS, TCR6, position 17 ("Local Tax Included"), insei-t a value of "2" _
Transaction is not subject to tax.
Elavon Government/PuUlic Institution Seivice Fee Requirements for Merchants using proprietaiy software or a
Vahie Added Servicer
Evon Schedule E- Electronic Check Seivices (v 07 01 10)
la
scxEvuLE E
ECS SERVICES
This Schedule E supplements, is made a part of and is subject to tlie terms and conditions of the Agreement.
ELECTRONIC CHECI{ SERVICES ELECTED BY MERCHANT. Merchant elects and agrees to the following Electronic Check
Services as part of the Payment Device Processing Services, as such Electronic Check Seivices are described in this Schedule E and in the
Electronic Check Seivices Merchant Operating Guide (the "ECS MOG"):
M Electronic Check Services General Requirements and the ECS MOG
Check Conversion - Service Levels (check desired ontions):
❑ Conversion with Guarantee (check all that apply):
❑ POP' ❑ BOCZ ❑ ARC'
❑ Conversion with Verification (check all that apply):
❑ POP' ❑ BOCZ ❑ ARC3
❑ Conversion with Verification and Collections* (check all that apply):
❑ POP' ❑ BOCZ ❑ ARC3
❑ Conversion Only (check all that apply):
❑ POP' ❑ BOCZ ❑ ARC3
❑ Conversion Only Nvith Collections* (check all that apply):
❑ POP' ❑ BOCZ ❑ ARC3
1 Point of Pwchase entries
2 Back Office Conversion entries
3 Account Receivable Conversion enhies
*A sepazate collections agreement is required.
Imaae Options (check one):
❑ POS with Lnage
❑ Cash Office Image (COI)
❑ Centralized/Enterprise Image (CI)
❑ Outsourced Lnage (OI)
❑ Not Applicable - ACH Processing
ACH Processine via ECS XNP (Check Not Present)* - Seivice
Levels (check desired ontions):
❑ ACH Processing with Verification (check all that apply):
❑ liiternet-Initiated Entries (WEB/CCD)
❑ IVR-Initiated Entries (TEL/CCD)
❑ Customer Service-Initiated Entries (TEL/CCD)
❑ Recurring Entries (WEB/PPD/CCD)
❑ ACH Processing Only (check all Uiat apply):
❑ Internet-Initiated Entries (WEB/CCD)
❑ IVR-Initiated Entries (TEL/CCD)
❑ Customer Seivice-Initiated Entries (TEL/CCD)
❑ Recurring Entries (WEB/PPD/CCD)
❑ Schedule E-1, ECS Additional Services Supplement
❑ Exhibit A to Schedule E-1, Fees for Additional ECS Services
❑ Exhibit B to Schedule E-1, Hold Check Agreement
*Entries drawn ou busiiiess accouiits must be classiEed as CCD (Coiporate Credit or Debit
regardless of initiation chaimei.
Deliverv Method (check all that annlv):
❑ Visa Online
❑ EnCircle Online
❑ Visa Batch
❑ EuCircle Batch
❑ Elavon Batch
❑ Batch Check
❑ Enterprise Billin. Solutions or Bill Payment Portal (Schedule K required)
Capitalized terms used and not otherwise defined in this Schedule shall have the meanings ascribed to them in the Agreement or the ECS
Rules (includ'uig in the ECS MOG and the ECS Priiner).
IN WITNESS WHEREOF, the pai-ties hereto have executed this Schedule E to the Agreement.
, ELAVON, INC.
on behalf of itself and each of the affiliated entities identified on
Schedule B to the Agreement (the "MERCHANT"): By:
By: Name:
Name: Title:
Title: Date:
MEMBER
By:
Name:
Title:
(Schedule E "Bffective Date")
Scliedule E
Elavon
Section A- Electronic Check Services General
Requiretnents
In the course of its acceptance and use of ECS,
Merchant represents, warrants and covenants the
fol lowing:
1)
2)
3)
4)
5)
6)
7)
8)
Merchant shall comply with and be bound by (a) the
ECS Rules, including the ACH Rules, the ECS MOG
and the ECS Priiner, and (b) Laws, including, but not
limited to, the Check Clearing for the 215t Century Act
and Regulation CC, Atticle 3 and Ai-ticle 4 of the
Uniform Commercial Code as in effect in the
applicable state(s), the Electronic Fund Transfer Act
and Regulation E, and the Fair Credit Repoiting Act
as amended by the Fair and Accurate Credit
Transactions Act. The current version of the ECS
MOG is located at our website
littt)s://www.mercliantcoiliiect.cotii/CWRWeb/Electi-o
nicCheckService.do.
Merchant shall pay the fees for ECS as set foilh in the
Schedule A, Schedule of Fees, to tlie Agreement, as
sucli Schedule of Fees is supplemented or modified by
any exhibits or attachments to this Schedule.
ln the event Merchant accepts for ECS any payment
that is ineligible for ECS as specified in the ECS
MOG for any reason, such Ti-ansaction is subject to
Chargeback. Merchant may Ue liable for the amount
of the Transaction and any actual damages related to
or arising out of processing a Ti-ansaction that has
been chaiged back.
Merchant shall cause a Checlc Reader/Icnager to be
readily available for use at all Merchant locations at
which Merchant accepts Paper Checks for ECS
processing.
Merchant must use commercially i•easonable
procedures to verify the identity of each Customer that
presents a Paper Check or Customer ABA Routing
Number and account informatiou for ECS processing.
Merchant shall be solely responsible for providiug
Customers with uotifications and disclosures in
connection with ECS, including, but not limited to,
posting all point of sale signage and distributing all
Customer takeaways and all notices and disclosures
required to be provided under the ECS Rules and
Laws.
Merchant may use the ECS only in connection with
the presentment and acceptance of a Paper Check or
Custonler ABA Routing NLUnUer and account
information for ECS processing in payment for goods
or seivices sold by Merchant, or in payment for an
oUligation owed to Merchant, and only in compliance
with the ECS Rules. Merchant shall be the sole user of
the ECS, and Me►•chaut may not resell or otherwise
transfer any portion of ECS (or any associated
information) in whole or in part to any other Person.
Merchant represents and warrants, with respect to all
ECS Transactions submitted for processing by
Schedule E -Electronic Check Services (v.07.01.10)
Elavon, that (i) the Customer has duly authorized the
debiting or crediting of the Customer's account for the
amount of the ECS Transaction in accordance with
Laws, (ii) the Transaction represents an obligation or
i•ight of the Pe►•son who is tendei•ing the Paper Check
or suUmitting the Customer ABA Routing Number
and account information for ECS processing, aud (iii)
the ECS Transaction is for merchaudise actually sold
or rented, for seivices actually rendered, or for the
actual amount due and owing from the Customer to
Merchant or from the Merchant to the Customer, in
each case for the actual price of such merchaudise or
seivices (including tax) or for the actual amount due
and owing to Merchant or the Customer, as applicaUle.
Merchant represents and warrants that no portion of
any ECS Ti-ansaction involves auy element of
Merchant's extension of credit.
9) Merchant is responsible to Elavon for any Transaction
chaiged back by Elavon or its agent in accordance
with the Agreement, including the ECS MOG, and for
any fines, penalties and assessments of the Payment
Networks incurred as a result of Merchant's non-
compliance with Laws or the ECS Rules. Merchant
agrees to immediately pay to Elavon or its agent (by
means of debit oi• set-off initiated Uy Elavon or its
agent, submission of payment by Merchant, or
otherwise, at the sole option of Elavon), an aniount
equal to the amount of any ECS Transaction that is
stopped, not settled, or cliaiged back, as well as any
related fees and charges.
10) Merchant must fully cooperate with all pailies in the
resolution of Customer disputes, as well as
Chargebacks, returns, adjustments, representments,
and errors in accordance with the ECS Rules and
Laws.
11) All of the representations aud warranties made to Visa
as a Merchant pursuant to the Visa POS Check
Seivice Operating Regulations and all of the
representations and warranties an Originating
Depositoiy Financial Institution or a Third Paity
Sender is deemed to make on behalf of an Originator
pursuant to the ACH Rules shall be deemed
representations and warranties Merchant makes to
Elavon and Member upon Merchant's submission of
an Item or a Transaction for ECS processing.
a) Merchant acknowledges Visa's right to terininate
or limit its relationship with MemUer or to
terminate the Visa POS Check Service at any
time. Merchant further acknowledges that Visa
may permanently prohibit Merchant's
participation in the Visa POS Check Seivice in
the event of (A) fi•audulent activity, (B)
presenting a Ti-ansaction that was not the result of
an act between Merchant and a Customer, (C)
presenting a Transaction as a Customer-present
Transaction where the Customer was not present
at the point of sale or Mercliant accepts
previously voided Paper Cliecks, (D) repeated
Scliedule E
Elavon
violations of the Visa POS Check Service
Opei•ating Regulations, or (E) any other activity
that may result in undue economic hardship or
damages to the goodwill of the Visa POS Check
Service.
b) Merchant has satisfied all of tiie Merchant
standards and obligations set foi-th in the Visa
POS Check Service Operating Regulations and
the Originator standards and obligations set foith
in the ACH Rules as of the Effective Date of this
Schedule and shall continue to satisfy such
standards and obligations during the Initial Term
and any Renewal Term, as applicable.
12) Merchant is responsiUle for and will ensure that all
information, including MiCR data and payment
amounts, are accurately captured fi-om a Paper Check
in accordance with the applicaUle ECS Rules, and that
all sucli information and Customer ABA Routing
NumUer and account information for ECS processing
are accurately reflected in the i•elated Item Merchant
sends to Elavon for processing tiu•ough ECS.
Merchaut will not subuiit for clearing or settleuient
any physical Paper Check unless aud until Elavon a►id
MemUer liave processed and settled a Chargeback to
Merchant witli respect to any Items created from such
Paper Check.
13) Merchant will not disclose to third parties auy
informatiou related to ECS Transactions including,
but not limited to, Customer ABA Routing Number
and account information, driver's license number,
telephone numUer, or social security number except as
specified in the Agreement, including the ECS MOG.
Merchant shall keep all such iuformation confldential
and secure, in accordance witli the Agceement and
Laws.
14) Merchant does not have the right to use ECS data for
auy purpose other than to support the ECS itself.
15) Merchant must treat all ECS documents, including,
but not liinited to, the Agreement, including the ECS
Rules, the ECS MOG and ECS collateral material or
related guides, as confidential and proprietary
iuformation and must protect it with the same degree
of care as Merchant would protect its own confidential
and proprietaiy information and as fuirther specified in
the Agreemevt.
16) Merchant's Agreement and use of the ECS may be
terminated inunediately by Elavon for failure to
comply with the terms of this Schedule, the
Agreement or Laws.
17) Merchant assumes full responsibi(ity for, and agrees to
indemnify and protect Elavon against, airy losses
suffered by Elavon as a result of Elavon complying
with Merchant's directions in submitting or
resubmitting auy Item for processing. Further,
Mercilant assumes full responsibility for the alteration
of any ltem made at Merchant's direction prior to
resubmission by Elavon of the Item for processing.
Merchant will uot request or direct Elavon to modify
oi• alter any Item, or to submit or resubmit any Item
Schedule E- Electronic Check Services (v.07.01.10)
for processing, where Merchaut Icuows or should
know that such modification, alteration, submission,
or resuUmission is not permitted by Law.
Section B - Glossary
18) ABA Routing Number: The ABA number that
uniquely identifies the bank that holds the Customer
account to be debited or credited through ECS.
19) Authorization: A process where a Draivee Bank,
processor, or Autliorizing Agent approves a
Transaction, including as specified in the Visa POS
Check Service Operating Regulations.
20) Authorizing Agent: A third party designated by
Elavon to provide approvals and declines for
Transactions.
21) Batch: The total of the Transactions processed since a
Merchant's last settlement.
22) Chaigeback: For purposes of this Schedule,
"Chargeback" means (i) a sales Transaction disputed
by a Customer or an Item not in compliance with
Conversion with Guarantee warranty provisious or
ECS Rules; (ii) for all Seivice Levels other than
Conversion with Guarantee, the face amount of any
Item that is returned Uy the Draivee Bank or an ECS
Association to Elavon unpaid and that is ineligible for
resubmission to the Drawee Bank or the ECS
Association, including any Item retucned for non-
sufficient or uncollected funds after the third
presentment; and (iii) for all Service Levels, an Item
that is not in compliance with Merchaut's obligations,
representations and warranties under the Agreement or
this Schedule.
23) Checlc Reader/Iinager: A device certified by Elavon
that electronically captures the MICR line and/or an
image of the Paper Check.
24) Check Replacement Docwnent: A Demand Draft,
Photo-In-Lieu, or Substitute Checlc.
25) Demand Draft: A negotiable instrument drawn on the
Customer's checking account that is created fi•om
transaction data included in an Item and that does not
bear the Customer's signature but that is authorized by
the Customer and is able to be processed via standard
checlc processing methods.
26) Drawee Bank: The financial institution where a
Customer maintains a checking or other deposit
accoimt (i) on which a Paper Check that seives as the
source document for an Item is drawn, or (ii) as to
which a Customer provides the ABA Routing NUmber
and account information for use in generating an Item.
27) ECS Priiner: The detailed information relating to
ECS pi•ocesses and implementatiou provided by
Elavon to Merchant, which must be used by Mercliant
in conjunction with the technical specifications and
certification requirements provided by Elavon to
promote integrated point of sale system connectivity
and integration between Merchant and Elavon.
28) ECS Rules: Means (a) all applicable rules and
operating regulations of or appficable to the ECS
Schedule E
/i ,1
Elavon Schedule E -Electronic Check Seivices (v.07.01.10)
Associations, (b) the ECS MOG, and (c) the ECS
Primer, in each case including without limitation, all
amendments, changes, and revisions made thereto
from time to time.
29) Item: An electronic file or entiy representing a
Transaction that is created from (i) the information
captured by Merchant fi•om a Paper Check using a
Check Reader/Imager, or (ii) Customer inputs of ABA
Routing Number and account information, that is
forwarded by Merchant to Elavon or Member in
accordance with the Agreement.
30) MICR: The magnetic ink character read line encoded
on a Paper Check that contains infornlation about the
Customer's checking account, including the ABA
Routing Number aud checking account number.
31) Paper Checlc: A Customer's paper check presented to
Merchant for payment to the Merchant, which checlc
will seive as the source document for Items.
32) Participant: An organization that agrees to comply
with the Visa POS Check Seivice Operating
Regulations, completes comprehensive ceitification
testing with Visa, paiticipates in one or more of the
service levels, and performs functions and activities
appropriate to participating in the Visa POS Check
Service.
33) Photo-In-Lieu: A photocopy of a Paper Check, other
than a Substitute Checlc.
34) Substitute Checlc: A draft that includes images of the
fi•ont and back of the original Paper Check and that
may meet the requirements for a"Substitute Check"
under the Check Clearing for the 21St Century Act and
related regulations.
35) Visa POS Check Service: Visa's proprietaiy checlc
clearing product which utilizes the VisaNet network to
offer direct checlcing account access to autliorize, clear
and settle consumer checks draivn on banks
participating in this service.
36) Visa POS Checlc Service Operating Regulations: A
set of specifications, guidelines, and principles defined
by Visa that govern the operation and flow of
information for transactions paiticipating in the Visa
POS Check Seivice.
Schedule E 4
Elavon Schedule E- l -Electronic Check Seivices (v 07 01 10)
scxEDULE E-i
ECS ADDITIONAL SERVICES SUPPLEMENT
1) ADDITIONAL SERVICES SELECTED. Merchant elects and agrees to the following ECS Additional Services, as such
services are descriUed in the ECS MOG and subject to the additional terms and conditions of tlie applicable provisions of
the Agreement. All costs and fees payable by Merchant for the ECS Additional Service(s) chosen by Merchant are as
provided in Exhibit A to this ECS Additional Services Supplement.
❑ Hold Check Services'
❑ Stop Payment Seivices
❑ Check on Deliveiy (COD) Services2
❑ Returns Consolidation Services
❑ Automated Telephone Authorization (ATA) Services3
2) ADDITIONAL REQUIREMENTS APPLICATION TO ECS ADDITIONAL SERVICES.
a) If Merchaut elects Hold Check Services, Merchant must use the Hold Check Agreement attached as Exhibit B to this
ECS Additional Services Supplement, as the use of such Hold Check Agreement is described in the ECS MOG.
b) Merchant's use of ATA Services is provided as is, where is, and neither Elavon nor Member makes any
representations or warranties, express or implied in connectiou with the ATA Services, including, witliout limitation,
any warranty against infi•ingement or any implied warranty of inerchantability or fitness for a particular purpose.
IN WITNESS WHEREOF, the pai-ties hereto liave executed this Schedule E- ( to the Agreement.
MERCHANT
By:
Name:
Title:
ELAVON, INC.
By:
Name:
Title:
Date:
(Schedule E-1 "Bffective Date")
MEMBER
By:
Name:
Title:
' Merchants electing Hold Check Services must also elect Automated Telephone Authocization Services.
' Merchants electing Check on Delivery Services must also elect Automated Telephone Authorization Services.
; May be selected as a stand-alone seivice; must be selected if Merchant elects Hold Check Services or Check oii Delivery
Seivices.
Schedule E-1
Eavon Schedule E- l- Electronic Check Services (v. 07.01.10)
l
EXHIBIT A TO SCHEDULE E-1
FEES FOR ADDITIONAL ECS SERVICES
Hold Checlc Services:
Check Guarantee Rate %
Per Transaction Fee $
Per ATA $Fee Waived
Fees will be charged for both approved and declined Ti•ansactions. If Merchant has selected Stop Puyment Ser0ces to
accoiiipaiay Hold Checli Services, the Fees associated inith the Stop Payntent Services are iraclzrded in the Hold Chec%
Services Fees listed above.
Stop Payment Services with ECS Conversion with Guarantee
Check Guarantee Rate %
Per Transaction Fee $
Fees will be chaiged fa• botla approved and decliiaed Ti•ansactions.
Checlc on Delivery (COD) Services:
Check Guarantee Rate %
Per Transaction Fee $
Per ATA $
Fees »>il! Ge claarged for both approved ancl cfeclinecf Ti•ansuctions.
Automated Telephone Transfer (ATA) Services:
Per ATA
If Alerchcunt hcrs selected ATA Services to accorrtpanry Hold Chec% Service oi• Chec% on Deliveiy Services, Fees charged for
trse of A TA Services in connection with Hold Chec% aiad C{aecli on Delivery tr•ansactions ai•e listed ariicler Hold Checli
Services or Chec% oii Deliveiy Services above, as applicable. Use of fITA otlaer thaia in coniaectiola iiliih Holcl C17ec%
Seivices or C/ieck on Delivery Seivices will be claarged at t/ae rates iiTdicnted direct/y above.
Returns Consolidation Services:
Per Returned Transaction
Exhibit A to Schedule E-1
Elavon
EXHIBIT B TO SCHEDULE E-1
HOLD CHECK AGREEMENT
Date:
AUTHORIZATION PROCEDURES:
Schedule E-1 - Electronic Check Services (v. 07.01.10)
1. Date(s) of Paper Check(s) must be date of transaction.
2. Each Hold Check must be individually called in under the Hold Check Merchant NID
3. Write the individual four-digit approval ntunber on the front of each Paper Check approved.
4. All other applicable terms and conditions of the Schedules and Exliibits and ECS MOG for Automated Telephone
Authorization (ATA) are incorporated into this Agreenient.
Merchant:
ECS Hold Check Representative:
Customer (Checkwriter):
ProductlEquipment:
Product / Equipment Serial
GENERAL TERMS AND CONDITIONS BELOW
The Merchant and tlie Customer agree to adhere to the dates of deposit with regard to the Paper Checks listed below. Any
returned items deposited earlier or later than the dates specified below will be in violation of the Agreement.
Check Number pollar Ainount Date to be DeUOSited
I. $
2. $
3. $
4. $
Total Amount of all Hold Checks Authorized $
Guacantor Approval Number(s)
Merchant Representative / Date
Customer / Date
A copy of tlie Bill of Sale, a copy of this Agreement, and tlie Paper Check must accompany each returned Hold Clieck sent to
EnCircle Payments Solutions, LLC ("Guarantor"), otherwise purchase of the Paper Check will be declined.
Guarantor Contact Information
EnCircle Payment Solutions, LLC
Check Processing
Oue EnCircle Plaza, 1691 N.W. 107 Avenue, Miami, Plorida 33172-271 I
Plione (305) 592-7800 • 1-800-827-1100 • Fax (305) 477-6783
\vww.EnCirclet)avments.com
Exliibit B to Schedule E-I
Elavon
Schedule E- I- Electronic Check Services (v. 07A 1.10)
GENERAL TERMS AND CONDITIONS
AUTHORITY TO ACCESS/REVIEW PERSONAL CREDIT HISTORY: Customer specifically autliorizes Guarantor to
access aud review his/her personal credit history to obtain approval for this Agreement and the extension of credit. Customer
acluiowledges that he/she has the right to request in writing within five (5) days of this Agreement, the nature and scope of the
foregoing investigation.
PROMISE TO PAY: Customer understands that Guarantor may guarantee payment on this Agreement to Merchant. Customer
acknowledges this Agreenient and tlie services of Guarantor as a material benefit to Customer in purchasing said
equipment/product and therefore unconditionally promises to pay Guarantor the full payment for any such Paper Check listed
on this Agreement in the event of default. Customer therefore confirms that tllis Agreement is a personal promissory note
whereby Customer specifically agrees to abide by the terms of payment and deposit, and that this promissory note shall inure to
the benefit of Guarautor for payment in tlie event of default. Customer understands and agrees that Guarantor shall be
permitted to rely on the purchased equipment/product as collateral for paylnent under this Agreement but may also in its sole
discretion have the option to proceed directly against the Customer for the full value as provided by laNv.
DEFAULT: Customer understands and agrees that he/she shall be in default of this Agreement when Guarantor in its sole
discretion deems that it has been furnished with any misleading, inaccurate or false information by the Customer relating to this
transaction, either verbal or written, or payments due are not made as agreed.
LEGAL RESPONSIBILITY: Nothing in this Agreement shall waive or Iiulit Guarantor's legal remedies in tlie event of
default or in the circumstances where the Customer writes a bad Paper Check to fulfill the obligations under tliis Agreement.
Customer undelstands and agrees that jurisdiction and venue in any action at law brought by Guarantor to enforce this
Agreement will be in Miami-Dade County, Florida. In addition, Customer specifically waives his/her right to a jury trial.
Customer also agrees to pay Guarantor its court costs, expenses, reasonable attoruey's fees and liquidated damages in the
amount of fifteen percent (15%) of the total purchase price of the equipment/product when Guarantor is required to use an
attorney's seivices to enforce this Agreement.
Exhibit B to Schedule E-1
Excentions/Clarifications to Citv of Denton RFP No. 4578
Elavon, Inc. ("Elavon") agrees to the terms, conditions and specifications contained in the RFP
provided that the parties also execute Elavon's Payment Device Processing Agreement and
applicable Schedules (the `Blavon Agreement"), copies of which are submitted herewith. Areas
of conflict between the Elavon Agreement and the RFP have been identified below. The
Payment Networlcs require that Elavon enter into agreements with its merchants containing
specific provisions mandated by the Payment Networlc Regulations, which provisions are not
included in the RFP. Therefore, in the event that Elavon is the successful bidder, Elavon will
require that the parties include the terms of the Elavon Agreement, in substantially the same form
as submitted herewith, in the final contract and wiil, in good faith, worlc and negotiate with the
City toward a resolution of all conflicting items.
In ceitain instances Elavon may, tluough its various sales channels, submit more than one
response to this RFP. While Elavon's exceptions to the legal terrns and conditions of the RFP
may be similar, the remainder of the bid and pricing issues will differ due to the independent
responses prepared by each sales channel.
RFP Section Exceution/Clarification
RFP and Throughout the RFP and Contract, the term "Merchant" is used to describe
CONTRACT Elavon, which is contrary to standard industry practices. The term
"Merchant" would describe the City, as the party accepting payment from
its customers, while the term "Processor or Acquirer" would be used to
describe Elavon.
10.8 Elavon will provide the City, during normal business hours, with at least
ten days prior written notice, at the City's expense, subject to Elavon's
standard security policies, applicable laws and Payment Network
Regulations, and no more than once annually, with records and
information pei-taining to transactions processed under the Elavon
Agreement. However, due to the sensitive nature of the information
processed, Elavon cannot permit the City or anyone to have unfettered
access to Elavon's books and records.
MERCHANT SERVICES CONTRACT
Contract As indicated above, the term "Elavon" would be substituted for
"Merchant."
As indicated above, the Elavon Agreeinent would be included as item (a),
with the remaining sections renumbered.
II This section is non-applicable, as the City is in control of the acceptance
of Transactions which Elavon will process.
IV To the extent Section 6(d) of the Elavon Agreement conflicts with Section
IV of the Contract, Elavon will remove that portion fi•om the Elavon
Agreement.
V Elavon will provide invoice billing, provided that Elavon has the right to
offset any outstanding or uncollected amounts that are more than ninety
(90) days past due from (i) any amounts they would otherwise be
obligated to deposit into the DDA and (ii) any other amounts Elavon rnay
owe the City under the Agreement. Elavon will maintain the ability to
debit the DDA for Chargebacks, returns, adjustments or other amounts
provided for in the Elavon Agreeinent. Further, in the event of non-
appropriation, Elavon requests that the City provide it with 60 days notice
prior to termination. See Section 3 of Schedule I to the Elavon
Agreement.
VIII The indeimlification provision proposed by the City is too broad, as the
City reinains responsible for disputes with its customers. Elavon is not an
insurer of the City's Transactions. The City is ultiinately responsible for
the transactions it agrees to accept froin its custoiners. See Sections 2(d)-
(e) of Schedule I to Elavon's Agreement for a better description of the
parties responsibilities with respect to payment transaction processing.
XI Depending upon the services selected, Elavon already has in place
subcontractors to perforin such services for all of its merchants. As a
result, Elavon reserves the right to replace such subcontractors as Elavon
deems necessary and prudent.
XX See Section 15(e) of the Elavon Agreeinent with respect to the parties'
ability to assign the Contract.
XXII See Section 10.8 above. Delete the SO inile radius requirement. Change
"five business days" to "thirty days."
Exhibit B. Insurance Reauirements for Contractors
Elavon welcomes further discussion between the parties' insurance personnel to clarify all
requirelnents and exceptions.
First page, Change "A" to "A-."
First bullet
First page, Delete this requirement.
Second bullet
Second page, Delete the phrase "or materially changed."
First bullet
Worlcers Delete the last sentence, as it is non-applicable. Also delete Attachment 1.
Compensation
Attachments (Payinent Device Processing Agreement, Schedules)
~
~e:)orting So utions ■
I he Easy, Effective Way to Manage Your Payments.
N/1/hether yoLi are lookin, far an
Information That"s Right on the Money
anljiie tool for a sinbfle i,~cat;on
No matter whatyour business, or how sophisticated your accounting
infrastructure, chances are, you could manage your payment activity more
or a pfl~,verf~l report»,`, SOIL3tjOn
efficiently and effectively.
tt7 l7"31f1c7g:' YOll'f c f]i2l'pr15e, E1f3v`Jfl
The key is having the right information when you need it, so you can make
provicles inforriiation thai's rigrit
adjustments, deal with unexpected issues, and take advantage of promising
oil thp ~~on2y
opportunities.
Elavon offers a comprehensive range of flexible, effective reporting solutions
to help you profitably manage your payment activity, track the status of
specific transactions, and reduce your expenses.
n
E avon
MerchantConnect The Online Ve/indovv to
Your Payment Processing Account
MerchantCannect, our web-based real-fiime service, provides the stream(ined and secure reporting
you need. You can quickly and easily access payment information, while profiecfiing cardholder and
account data. lt's afi your fingertips when you need it.
MerchanfiConnect offers two service levels: Basic and Premium
MerchantConnect Basic
MerchantConnect Basic provides a single log-in for a
singfe location and features the ability to manage your
account and have convenient access to important reporting
and support information.
My Accouni
My Account provides yau with fast access to a{I the information
you need to manage your account. Reviewing your merchant
prof+le, viewing your statemenfis, and maintaining account
information is just a few clicks away.
M4y Reporfa
My Reports shows you time►y and secure accounting
information including deposit summaries, transaction
activifiy, chargeback and retrieval status and links to
report sites for Elavon`s Electronic Gift Card and
Electronic Check Service programs.
Support
The Support Area makes it easy to Find comprehensive
information about transaction processing, industry
mandates, product supporfi and practical tips for how
to contro{ processing costs and improve your bottom line.
~ The Interchange Information Area helps you better
understand the rules and regulations that determine
transaction pricing. Included are charts that outline
qualification categories and helpful information on
how to prevent downgrades.
~ The Compliance and Data Security section provides
valuable payment industry guidelines and best practices
to help you safeguard your customer account information.
. ~
~
MerchantConnect Premium
MerchantConnect Premium provides a flexible solution for
managing payments across multiple locations.
In addition to all the feakures provided in our Basic service,
MerchantConnect Premium provides hierarchical reporting
and the ability to aggregate data from multiple locations.
7his enables an individual store manager to access reports
on a single outlet, while a regional or corporate executive
could use one log-on to view consolidated payment
information on a11 the stores ar geographic regions under
his or her authority,
MerchantConnect Premium offers more comprehensive
and versatile reports. For exampfe, most reports cover a
year's worth of activity rather than the six months provided
with the Basic service level. Data is searchable, and can
be exported to a spreadsheet or another application for
further analysis.
Other se,vices 'snc4ude:
~ Informative interchange qualification reports that
summarize your payments, classify qualification rates,
and provide insight as to why transactions are
downgrading.
~ The ability to easily "dri{I down" to view batches of
transactions grouped by card type or batch reference
number, or to find additionai detail such as autharization
information and truncated card numbers.
~ An innovative transaction search 6eature that enables
you to search by credit card number, invoice number
or other criteria.
IVlanage All Payment
Activity
Elavon's reporting solutions are designed
to provide you with critical information
that can have a big impact on your bottom
line. Among the reports that you'll
receive are:
Settlement & Batch
Provides summaries of daily batch settlement
and transaction detail, card types (including
credit, debit, and fleet), and electronic checks.
Chargebacks
Contains information such as date, amount,
reason, card number, and reversal date. In-depth
information helps you efficiently respond to
chargebacks to better manage costs.
Retrievals
Provides information on retrieval requests similar
to what's provided in chargeback reporting.
Helps with timely management, to reduce the
percentage of retrieval requests that may progress
into chargebacks.
Interchange Summary*
Enables you to better understand how transactions
are qualifying, allowing you to minimize processing
expenses by recognizing downgrades.
Transaction Search*
Credit card number search that includes
authorization and settlement detail.
*Available exclusively on MerchantConnect Premium
Easy Access to Information
The online account information and robust reporting
gives your business the tools needed to manage your
payment processing more efficiently and effectively. Here
are just a few of the valuable reports available through
MerchantConnect.
Settlemenf Report
Settlement Report '
peponing Ler<I: CWNGOUp d CRVM
~evel V~Ne: lO d 68
From Oate:O-Y-5
ro o:u: _zoos
oammi- oauom: I 1.-.,,,,,x F..., o,
a rm maqou
u
Chargeback Detail
' ~
k
o~:.nmTn om~~~~rPm n^mn r.erv oce~ m r.rcrosantvarm
I
l.lnrcM1.inllnfn.maNnn ~a.nl~f~•m~rtnn
Merchan110: 6596874858 CaselD:
10015M75 t
MerchantName: SPORTSTIMEATiHEGROVE UsageCOdUOesc.:
FmlChargeback (
SloraNa: 342 Reepanae5talus:
PenFng i
OoA: . CazeCreaUd:
]I?Jt008 ~
nn...~~inninrnrmiilnn CasaAge:
d
Transa<HonAmo~nL 3330.13 pesponaeE~pimllan:
1'I5200d j
TansaclionJAUN)Date: t/.1R008 OaysLeRTaRespanE:
38 '
AccounlNO.: 536115'^~980 OebIllCreEilAmaunL
5330.13 j
CreEi1CaNType: MC FlnanclalACtlanOate:
]R2008 ~
Issuing8ank: CITIBANKNA FlnanclalSUWS:
PostM `
AIr11naTi<ketNO.: FlnancblACOOn:
Debl
ARNNO.: 55417]46004690091999999 CharyebackCAllcal0ate:
Y152008
ANharWUOnCOde: 110fiSB ReasonCOde:
4&l7
~ nCOdeDeec.: NoCa~dxNMairaOOn
InterchangeQualification5ummary
RepaNn9Level:Akrc~anl iChargebock Detail
Leve1VaNe:9508i51812
From ~ale:O1MAY~]005
To Uale:01~NN-2005
!
~ownloaEOplionv:~'~•+•~M1F!~+~s~.fnmm~.sonaa.zdV:..u=lcsv~
aNTm~lln e~lTnnac~on~l IAV~no~Ti~k~llV~rcenlalTnna
YASiFA I4
11
`
f
~ IMUUI~iI I I.l~~l 5~1~.MI.f~1 594.1a1 ~9.la.t f
Interchange Qualification Summary
'
a
~
Custom Reporting - The Reporting Solution Matched to Your
- Specific Needs
For retailers with specific report requirements, Elavon offers fully customized
solutions. You receive in-depth analysis of virtually any information that you
might need - produced for any time period, in any format. Data can be
summarized or detailed through a variety of hierarchies - from chain, to region,
to store and to individual batch. Integration with enterprise systems eases overall
accounting functions.
Another Reason to Count on Elavon
Whatever reporting solution suits your needs, you can count on Elavon. All of
our offerings comply with card association requirements related to data security.
Equally important, our easy, flexible reporting solutions wil) grow as your payment
needs expand - from credit and debit card processing to electronic check
processing and electronic giR cards.
,
~
~
Elav ~n 02008 Elavon is a regislered trademarks in Ihe Uniled Slafes ond/or olher covntries. All righls reserved. This documenf is prepared by Elovon as o service For its
merchanls. The information discussed is general in nature and may not apply to your specific siluation. RPT-CMP-1057-US Rev0408
~7 C~ ~ ~ ; ~
~ " 1'~_~~ " r~ ~~I''.~~ ~ 1
' ' ` ~ , ~
f a . . ~ ~ ~ 1 ~
p~~ p~ p~' p~~, z
~ . ; ~ ~ ~ , ~
~ ~ ~ ~ 9 ~
Setttemenfi Report
MEP,CHF,NTCONNECT PRENIIUM REf'OR -1 S
RepoRinG Level: Client Group & Chain
Leve1 Vatue: 10 & 53
Feam Date: 01-MAY-2005
To Date: 07-MAY-2005
Downioad Options: f!Aicroso~t Excef_~i7, Com_ma Separate.d_ValLie_ &~SVj_
~ Merchant No.
~ Business Name
~ Depasit DaYe ~ P
aid by Merchant Services ~ Paid by Others
~ Totaf DeposiEed ~
14002367542
IJUNCTION RIVER ELECTRICAL
~ 5/7/2005 ~
$396.53
~ S0.00
~ 5396.53 ~
16854000000E8112
ITALLULAH RIVER ELECTRIC
~ 517l2005 ~
$475.73
~ $0.00
~ $475.73 ~
14002317450
1 HOUSTON ELECTRICAL
~ 5/6l2405 ~
$3,439_65
~ $0.00
~ $3,489.65 ~
14002367542
IJUNCTION RIVER ELECTRICAL
~ 516/2005 ~
$5,356.39
~ S63.24
~ $5,419.63 ~
1685400000089569
I"fRl COUN7Y EC FL
~ 5(6/2005 ~
$1,512.58
~ $6.00
~ $1,512.58 ~
1685406000088912
ITALLULAH RIVER ELECTP.(C
~ 5/6/2007- I
^a7.114.04
~ $0.00
~ $7,194.04 ~
14002317450
IHOUSTON ELECTRICAL
~ 5/512005 ~
$3.293.82
~ $0.00
~ $3,293.82 ~
14002367542
IJUNCTION RIVER ELECTRICAL
~ 5!5/2005 ~
.^s2.629.73
~ $O.OG
~ $2,629.73 ~
1685400000079400
1 CATO ELECTRiC
~ 515I2005 ~
$1.520.24
~ $100.80
~ $1,621.04 ~
685400000088912
ITALLULAH RiVER ELECTRIC
~ 51512005 ~
$6,065.69
~ $0.00
~ $6,065.69 ~
4002317450
IHOUSTON ELECTRICAL
~ 514/2005 ~
$3,680.62
~ $0.00
$3,680.62 ~
4002367542
IJUNCTION RIVER ELECTRICAL
~ 5/4(2005 ~
$3.615.33
~ $0.00
$3,615.38 ~
~oua:uvvv'"v~;£-s-t0
~G:niG_ ._..'."R'.C.
~ 55'4r`200-5
s2 4.:5
16$5400000081539
ITRI COUNIY EC FL
~ 5/4/2005 ~
S1,513.17
~ $0.00
~ $1,513.17 ~
685400000088912
ITALIULAH RIVER ELECTP.IC
~ 51412005 I
$5,945.51
~ $0.00
~ $5,945.51
4002347450
~HOUSTON ELECTP,IC
( 5/3i200 -5 (
$3.774.58
~ $0.00
~ $3,1-74_58
4002367542
~JUNCTION RNER ELECTRlCAL
~ 513(2905 ~
$3.608.50
~ $0.00
~ $3,608.50 ~
685400000079400
~CATO ELECTRIC
~ 5/3/2005 (
$2.883.08
~ $0.00
~ S2,883.08 ~
6E5400000081569
I?RI COUNTYEC FL
~ 5
/3/2005 ~
$1.686.10
~ $0.00
~ $1,686.10 ~
635400000488112
1
ITALLULAH RNER ELECTRIC
L
~ JIJI?OUJ ~
55.718.83
~ $0_00
~ S5,718.63 ~
14002317450
1 HOUSTON ELECTRIC
( 5/2I2005 ~
$2.620.15
~ $0.00
~ $2,620_95 ~
4002367542
IJUNCTION R1VER ELECTRICAL
~ 512/2005 ~
S4.137:89
~ $0.60
~ $4,137.89 ~
685400000079400
~CATO ELECTRIC
~ 5/2/2005 ~
S2,364.24
~ $0.00
~ $2.36424 ~
6E5400000081569
ITRf COUNTY EC FL
~ 5/2/2005
$1,184.29
~ $0.00
~ $1,184.29 ~
635400000088112
(TALLULAH RIVER ELECTRIC
~ 5/2/2005
58.564.50
( $0.00
~ $3,564.50 ~
685400000079400
1 CATO ELECTRfC
~ 5,11/2005 ~
$241.66
( $0.00
~ S241.66 ~
685400000081569
(TALLULAH R1VER ELECTRIC
~ 5/1;2005 ~
S1,321.2E
( $0_QO
~ $1,321.25 ~
Granc? 7o;-pi:
`s36,217.5a
3372.6a
586.596.27
Batch Su~~ary
Depos€t Date: 05/0412005
Wierchant No: 685400000079400
Qovvnioad Optios:s: M-licrosoft Excel 97, Comrna Separated Value (CSV)
Paid Bp Mer.
Paid by
T4ta8
Deposit Date
Bagch No.
Etems
Serv'sces
Others
Deposited
514/20051
1131
21
$135.81 1
$0.001
$136.81 1
514/20051
1091
21
$261.131
$0_001
$261.131
;i~.f2-0 5 u1
9561
,2 1
sI
ut ..:~I
S775.61 1
5/4/20051
1051
31
$193.851
$0.001
$ i 93_85
5/4/20051
1131
31
$215.241
$0.001
$215.24
514/20051
21 01
21
$131.411
$0.001
$131.49 1
:3rand eataI: '
1
1
a1,503.561
S2 :4_591
$1.71 J.251
Ba$ch Detail
Merchant iVo: 685400000079400
Batch Number= 956
Dcswnload Options: Nlicroscft EYCeI 97, Camma Separated'va{ue (CSV)
Card Type
Btems
Su€n om Sales
Sum of Credits
NeY Tota!
JAiC
~ 11
$142.181
$0.001
$142.181
)(`J~G
~ 21
$95241
(W22-?--3)1
$72.511
iVi
~ 31
$370.001
95A
$342.04
1 ECS
( 31
$112.351
$0_00l
$112.35~
IDB
~ 21
$38.321
$0.001
$38.321
GI SC
~ 11
$72.41 1
$fl
00!
$72.411
~
( 121
s s -L Z731
tl
t~5 0.=~',l'
Transactoon SLrmmasy
iMeretiant N0: 685400000079400
Card Type: ALL
Dowrafoad Optioras: Nticrosoft Exce! ~,7, +.,omrrv SEparated Value iCS'✓}
Merchant No.
SYore No. Card
Type Card No. 7rans. Type
Trans. Amount
7rans. Date
Posr Date
P,uih. Cods
1685400000079400
~ OIAX
1378574--"""`8003 ISaie I
5142.18 1
514120051
5!4120051
2449281
I
^.r>
u'I,:si,
.,1-
I,~-~u.Jil r
_ ~-"U'ufv. I~^...c,~. I
c v..,~ P~..L-~r°I
~
'Jf-tl_~ nw~l
-
,s/-7:.U..r, JI
a Gf6r'~3I
1685400000079400
1 O lMC
1588830°--'6634 ICredit I
(S2-2.73 )l
-
514/2005 1
5!4/2005 1
D24976 1
1685400000079400
1 DlVI
1443050'"""°8848 13ale 1
$126.00 1
514/20051
5/4l20051
3976221
I685400000079400
f OlVI
158S880"""`""'6634 I5ale 1
$244.00 1
514120051
5/4/20051
G289761
f 685400000079400
1 OlVI
1443050"`"°"2848 1 Credit I
(S-- -.9611
5/4120051
514120051
8686761
1685400000079400
1 0 IECS
1588880`°'-6634 I5ale ~
556.18 1
514120051
5/412005 1
2249761
1685400000079400
1 OIECS
1443050"`""8848 iSale ~
512.75 1
514/20051
5!4120051
899576
1685400000079400
1 OIECS
1588880--'6634 IS21e ~
$43.42 1
514/20051
5/4/20051
E24676
1685400000079400
1 OIDB
1943050""°'"8848 iSale I
S29.21 1
514/20051
5/4/20051
897679
1685400000079400
1 0 iDB
(28888d°"""*66,',4 ISale 1
$9.11 1
514/2005 1
5/4/2005 1
D24886
1685400000079400
1 OIBfSC
164.3050-""`8848 ISale ~
572.41 1
514/20051
5/4/20051
947676
1Granr.1 i o*Gi:
I
;1779.5il
I
I
Transaetissn Detae6
Dowraloac3 flptiorts: f.licrosoft :E:xcel 97, Comma Seuarated Value (CSV)
MPS Reaerestce No:
144261097
Batch IND:
111305050230
e ~ansactsan Refesence No:
144261097
1 Mesc~~an; Batch=
1113
Ianv.ITk'" :
120620
~Sa~CS'aXAEaeQuI'3t;
10
f CaSc baCf4 r,mOC3i1t:
I.
1tflerch6a at Catega~;r Code:
14900
IAVS ReSp, vod'°.
(IV
I Passchase aype:
{Sa(e
ISaHes Tax 9ndicatoa-:
IN
I C4.sstomAr Coae.
120620
'PC@i'cha5e Fdf:6Fl[i CatI£3$3.
I Exp6ration Date:
13-Jul
l,Putta Approvai Code:
18 -c, 76, ?6
IROS 7-niry i"Oode:
IK
(CheCk No:
(0
~~~~ik- Routgng No:
►a
lQuali;€cation:
I U i ILITY D
IwArd Class:
IMC CHECK ACGESS CARD FOREIGN
I Card Type:
iMC
I1IE~~~ Phone bndicatom :
17
(~f'sarket andbcatcar:
'Cus-Lom Datae:
1*70000206200
1,e,rati~. AMoua~t~ F.ccocant No
$95.24 ~443050~"~8$48
!
A.uthorizaton Detaid
raval Gode AutYa. Date ~ Auth- ~ "srne
I 9:13:4`t
~se Gode ~ Aap
` p,uth- Respo ~ 8976'76 512412045,
~ A
5e'Lt9emen€ By Card Type
Reporting Level: Merchant
Leve[ VaEue: 10 & 68
Fsam Date: 01-MAY-2005
To Dase: 07-MAY-2005
Dmw¢zleaad Opiions: JiMicroscft Ex.cel 97, Comma Seoarated `Jafue fCS`lr
Depasii
SaEss
Credit
4V1erchant No. 8tore
BVa. Card Type
Dafie Batch
No.
Iteens
Amounu
Amount
Net Totai
98879467631
01 A?: 1
5/9/20051
9841
221
$1,196.711
$0.001
$1,196.711
93879467631
OIDI 1
5/9/20054
9841
81
$516.621
$0.001
$616.621
98879467631
01 MC 1
5/9120051
9841
421
$2,356.561
$0.001
$2,356.561
98879467631
011J1 1
5I9120051
9841
1621
$9,432.451
$0.001
$9,482.451
98879467631
OJAX 1
5/10/20051
9851
81
$295.191
$0.001
$295.191
98879467631
01211
5110120051
9851
21
$103.391
$0.001
$103_391
98879467631
0 1 t4C 1
5/10120051
9851
131
$475.791
$0.001
$475_791
98879467631
01~L' 1
5/10/20051
9851
311
$1,423.941
$0.001
$1,423.941
98879461631
OIAX 1
5112120051
9871
101
$347.651
$0.001
$347.651
98879467631
01 F,Y 1
5112/20051
9861
121
$740.641
$0.001
$740_641
98879467631
01 DC 1
5112120051
9871
11
$26.501
$0.001
$26.501
98879467631
01211
5112120051
9871
31
$121.371
$0.001
$121.371
98879467631
0191 1
5/12I20051
9861
41
$133.80i
$0.001
$133.801
98879467631
01 MC 1
5112120051
9861
151
$725.181
$0.001
$725.181
98879467631
01 MG 1
5/12I20051
9871
23'
$385.391
$0.001
$885.391
98879467631
0 1 V! 1
5112120051
9871
431
$1,864.951
$0.001
$1,864_951
98879467631
OlV! 1
5/12/20051
9861
461
$1,942.671
$0.001
$1,942.671
98879467631
0 1 r",Y. 1
5/13/20051
9881
231
$1,479_191
$0.001
$1,471.111
98879467631
01 DC 1
5/13/20051
9881
21
$115_691
$0.001
$115.691
98379467631
01~' 1
5/13/20051
9881
41
$125.341
$0.001
$125.341
98879467031
DIMG 1
5113/20051
9881
281
$1,016.4?l
$0.001
$1,016.441
98879467631
01 VI 1
5/13/26051
9881
631
$2,662.701
$0.001
$2,662.701
98879467631
01 PY 1
5/14/20051
9891
111
$418_081
$0.001
$418.081
98879467631
01 Di' 1
5114120061
9891
21
$165.301
$0.001
$165.301
98879467631
01 PVEC 1
5/14/20051
8891
291
$1,377.611
$0.001
$1,377.611
98879467631
01VI 1
5i14/20051
989'
1081
$4,448.491
$0.001
$4.448.491
98879467631
01 AX ~
5/15/20051
9901
221
$1,101.541
$0.001
$1,101.541
98879467631
01 DI ~
5/15/20051
9901
71
$226.371
$0.001
$226.371
Se~~ement By Casd Type
98879467631
01 MC
1 5/15120051
9901
681
$2,772361
$0.001
$2,772.361
98879467631
0 1VI
1 5115/20051
9901
1701
$7,386.531
$0.001
$7,386.581
98879467631
OIAX
1 5116/20051
9911
191
$906291
$0.00I
$906.291
98879467631
012i
1 5/16120061
9911
31
$304.841
$0.001
$304.841
98879467631
01 MC
1 5/16/20051
9911
501
$2,373_551
$0.001
$2,373.551
98879467631
OIVI
1 5116/20051
9911
1381
$5,772.631
$0.001
$5,7172:631
98879467631
0L~
1 5/17/20051
9921
91
$230.001
$0.001
$280.001
98879467631
019E
1 5117/20051
9921
21
$64.371
$0.001
$64.371
98879467631
01 MC
j 5/17120051
9921
211
$992_601
$0.001
$992.601
98879467631
0111/1
I 5/17/20051
9921
471
$1,923.891
$0.001
$1,923.891
98879467631
OIF;n
1 5/18/20451
9931
71
$284.341
$0_001
$284_341
Qa!al4C~Jca~cjon -1 ransacfiion 5urnmarY
Levei: Merchant
pepprt's+sc1 g508'~5't6~2 _
Levei Vatue-a1-MA~Y-2005 pescriptian
Fcor7 Ds~e: 2q05 CS~J Transaction ~ Downgjacle Rsason
p~_.IUN- n~G:S°-Parat2~lLtatue_L - ~ iransaction jyae ~tD~Rld
To Date: '~.cF~Si. vcm _ ~ransaction
pate
ivlicros~; p,mo u s~ t G ARBH INAt C A¢ A Bt~-tTY ~
p tions: ~}gT
~ov,, ERM
~laad P ~ pctual Qual Rate ` ~r"v.9~r I 513t2005lsale ~~~,y~tALID p
~Ca s c l'~ Y PelC9ass q"~iti;KNET DA~~ FAGE .
Rate tiGS~Ce S33.381 5/2312005~S a l e 11NVAL1D g~ NpTFAG E Ta`
I gest ExPected ~US COMM ~ ~POS Ei~TRy CODE
547.091 5121/2405`Sate ~4DE
,ardhotdsr Lr ~~~A,; IV
Y ' S34.26 1 gate MISStNG VALIQA"nON G4DE "
G- - ~ i p p 5 0 12d05} A1VA GR C H A N TSS
~ STAN~AR gy 120.63 I 2 Sate LiNE
1C~'SR~AIL ' ' 5129120 05~. UDM- 4
'a~J1311~,.,Y_ , 1 ~MC Dp,TA1 ~p,UTHOA~ETI CHA42lNDiCA OR ~
1MEP.1T 1 4 ~ NtC _ ICORP S-['ND 4WjaL10 AUTFt
CE-FA vi SAGTION 10 TP.PE
IFA
oa~6 R~A~ 1 } ~ ~ NtISSU~tGTR ~-r COMpLETE MAG S
55~~6 Z ~GPg ~POSENTR
• 1 1 ~ ~ ~
. 1 1 1
1 1
t
Qualifi~~~~on Transaca:on Detaii
Download Options: -Gxi (`Nill likelv oqen in Microsofit Word)
I AccountlVumber:
1 547206-- 10241
1 lUfe;chant§D:
1 90081516121
lAuthorization lamaunt_
1 20.991
lAuthorization Date:
1 5/16120061
I Aeathor'szafidon Time:
( 16:03:041
lAuthorizatian P.esponse Code:
~ Al
lAuthorizatian Approvai Cocle:
! 581161
I Aufhorizaiion Source:
~ 61
lAuth Chas [ndicator (ACI):
( E
JAVS Resp. Coe9e:
i .
~Purchase Type:
~ Salel
~ Merchant Class Type:
~ ReTail l
ISaies Tax Bnciicator:
~
~Sales e ax Arnocsnt:
~
~Cardholdee 1D:
~ 401663*'--"'16661
~ fVierchani Cafiegory Code:
~ 55411
JPOS Entry Mode:
~ S
I POS Mermina0lndicator:
( .
Ii ransaction Type:
I Salel
IV6SA Trart ID:
1 151367213376361
1 V1SA Valiclation Code:
1 83761
~MC Sanknet Ref No:
f
~IVIC Banknet Ref Date:
( ~
Downgrae9es By 9~terchange LeereQ
Report"sng Level: IUerchant
Leve~ Va&ue: 9508151612
Fr~m Da6e: 01-MAY-2005
d a G3ate_ 01-JUN-2005
~owndoad Qptions: iViicrosei: Excel 97. Comma Scnarated Value (CSV)
~ CarcE C6ass I QuaSificaYion Levet
~MASTERCARD COMMERCIAL IC DATA I
~
ISub-To:ai Ai3AS i ERCAI.RQ COMMEP,CiAL
I
~ MASTERCAP.D PRESENT ~ MERIT I
~
~Sub-Total: PJIASTEPCR.FD PP,ESEiNT
ViSA CARD NOT PRESENT IEIRF
ofial: VISA CRI?D NOT PRESFNT
(
IVISA CARD PRESE(vT (EIRF
~ IREWARDS 1
(
ISub-Tc,ial: VISti, C,4P.D PF?c-SENT ~
C
(VISA COMMERCIAL ~COMM ELEC
~ ICORP STND
~
ISub- i o't21_ VISA CQMN7ERCla.L ~
I
IVISA DE81T CARD NOT PRESENJEIRF D
Sub-Total. VI;:F. DEBI i C.Si',D f,JOT PP,E•SENIT
S m rans ,N0. or "frans I Percent of Ta ans I
~ $3,175.18 1
381
100.00%1
~ $3. i %5.18 ~
381
~
`IOQ.QO%~
~ $84.22 ~
11
~
100.00%I
~ S°422 ~
11
~
100.00°q
~ $8,001.86 ~
711
~
100.00°/a1
~ 38.001.36 ~
711
(
100.00%1
$347.$1
21
(
021%1
$99,556.62
9661
99.79%1
I $99.{J-04.~-!3 1
96.-1
1
10Q.40401
( $4,850.35 ~
411
~
97_62%1
~ $115_49 ~
1 ~
238%1
1 $4,965.84 1
421
1
1 1~D.0U-) C~C,~
' $4,167_30 1
531
100.00%
~ $4.157.30 ~
5~,~
~
100.00°/ l
I
1Grand TotGi: (
1 $120.293.83 1 1,173
Repoatang Level: Merchani
LeveE Vadue: 4230700088
i rorr DatP: 01-MAY-2005
1 O ..~iai°: 0I-,llJN-2005
Card C~ass: VISA CNECK ACCESS CRRD FOREIGN
To`:~~ ~ransac~~ons: 9
'q c'La6 Amount: $132.21
Downlca~ Optyons: IU!icrosoii Excei 97. Comma Seuaraied Value (CS'J)
I Reasor C}owngraded
~°1o Trans I
# Trans I
S Trans I
(AUTH DATET(MELINESS
~ 11.11%1
11
$14.691
~iNVALID AUTH CHAR INDICATOR
! 11.1 i%1
11
$14.69
~(NVALIDAUTHORIZATIONAMOUNT
11
$14.69
~1NVALID CARDHOLDER !D
( 11.11°10~
11
$14.691
~1NVALID MOTO MAIL-PHONE CODE
11
$14.691
~MISSING PURCHASE 1D
~ 11.11%1
11
$14.691
~MISSfNGTELEPNONENUNIBER
I 11.11°101
11
$14.691
~MISSINGTRANSACIIONID
~ 11.11%I
11
$94.691
(MISSING VALIDATION CODE
~ 11.11%1
11
$14.691
Interchange Qualificataon Suca-aanary
Reporting LeveE: Merchant
Leve! Value: 9508151612
a ;om i3atR: 01-MAY-2005
Ta Date: 01-JUN-2005
Dovvraload Options: Microsort Excel 97. Camma Secaraied Value lCSVI
Ma o,
Card Type 9oitercl-iange L.evel
Transactions
Net Sales
Average a ic€cet
Percent of Tearas
IMASTER IC DATA I ~
381
$3,175.18 1
$83.56 (
1.28%1
I (CORP INTL I
11
$34.13 I
$34.13 I
0.03%1
1 INTLELEC ~
751
$8,665.64 1
$115.54 1
2.54%1
~ (INTL STND (
21
$163.83 ~
$81.92 I
0.07%1
1 KEY ENTE D (
271
$2,296.11 ~
$85_04 ~
0.91%1
I KEY ENl"ERD (
291
$2,884.76 1
$99.47 1
a 9g°/a 1
IMC REF G3D 1
7$1
$7,236.41 (
$92.77 1
2.64°/a1
~ IMC REFCON4 1
2151
$19,52278 1
$90_80 1
727%1
I MC REFCRP2 1
51
$297.°v0 1
$59.56 1
0.17%1
I MCW KEYED 1
31
$129.55 1
$43.18 1
0_10°/a)
~ I MCW MERIT3 1
4991
$59,275.90 I
$118_79 1
16.87%1
~ lMERIT 3 D 1
8381
$68,344.90 1
$81.56 1
28.33%1
I IMERIT I (
11
$84.22 1
$84_22 1
0.03%1
IMERIT III 1
1.1471
$114,447.14 1
$99.78 1
38J3%1
~
ISuU-Total: PdiASTER 1
2,9581
5286,558.31 i
$1.170.32 ~
(
1 00.00
IVISA ~COMM ELEC ~
411
$4,850.35 ~
$118_30 1
0.83%1
1 ICORP STND 1
11
$115.49 1
$115.49 1
0A2%1
~ ,CPS RETAIL 1
1,2751
$133,938.17 ~
$105.05 ~
25.80%1
I CR CONS D (
1491
$11,597.53 ~
$77.84 ~
3.01°/a1
( IEIRF 1
73'
$8,349.67 1
$114.38 1
9.43%1
I EfRF D 1
531
$4,167.30 1
$78.63 1
9.07%1
IRE"AILD 1
2,0961
$168,484.88 1
$80.38 1
42.41%1
I REWARDS 1 1
9661
$99,556.62 1
$103.06'
19.55%1
~ IUS CR COMM I
21
$247.00'
$123.50 1
0.04%1
~ 1 US CR CONS 1
2861
$25,348.10 1
$88.63 1
5.79%1
.~n
~
I'n'~archange
!
ai?1'_
.1 f•.n f~ 1 ~-`'St%
w~
~ y~,~` ~`rz'•:~,?~'~'f`e.
rr.asu~
Chargebark Lisi
Repornnv ~ evd~:11.•n; "inure
I.o'roIV.IIUr.
from Ontn: ~t-f CH'?~~~~=
to Daic: 4:..fEl3-i;IGr,
no.•~~,ia.,d 00-_ -r-,•. _ 1- ;,i,:. - . -Ij
Case ID Nccount Dlo.
Usage CotlMDesc, Status
Merchant CJame
5[oro No.
Merchani 10
IrfrscI.~.:rd.°c
IS'C..;ST7Pd~n.:,inCGr:DVL
1 :-,.1
,,..wv.,~
t~8`ioii~a71578335""^5500
IFirsiChargeback IReversed
ISPORTSTIPAEATTHcGROVE
I 3421
65485746561
19252555315I536225""^'3980
I RrstCharqeback I Reversed
ISPORTSTIMcSUGARtuiILLS
1 2241
65479431521
79C,52~S~U5I5i8338"°"5500
IrirstChargeback IPer,ding
IS?ORTS7IMESUGARMILIS
1 2241
65479431821
19851653981536225""^3980
IFIrstChargeback lReversed
I ScVIERVILLEFRCTORYSTORE
I 2471
65432153451
19 6 5?515 931518338"'°'5500
IFirstChargeback IReversed
IPNRKGNFAC70P.YSTORE
I EZI
65432185281
193$251693I536225"'""3930
1 Pi:stChargeback I Pending
~PARKCITYFACTORYSTO}2E
1 621
65432185261
19850E-,7C9518338'"-5500
I'rlrstChargebarJa IReversed
ISARASOTAFACTORYSTORE
( 631
65432185821
15P,5 2 8~3235?.6225-3980
IFinlCbaroebartc I Pendinq
I CAMARILLO FACTORY STORE
I 641
65432784941
125f.68c7;1518338"""5500
IFia[CnargebaUC IP.eversed
IGROVECITI`FACTORYSTORE
1 651
65432184861
1 9.7L,207123I536225"""3980
~FirsLChargeback IPeversed
I NAPLESFACTOFYST6RE
1 671
65432184681
17-,107,I518338'°°'5500
IFislChargebarJc IReversed
ICLiMONFACTORYSTORE
I 661
65432184521
i985;5u5071601160""°'1100
1 r2stChargebau I Pending
IVACAVILLEFACTORYSTOP.E
1 721
(35432584i1I
19r41:91871518338"""5500
1 FirstChargebaUc IPending
ICASTIcROCKFFCTORYSTORE
1 731
65432184831
1p651 ~91•^:.p1536225"""3980
IFrs;Chargeback IPending
ICA571EROCKFACTORYSTORE
I 731
65432184831
1~!9`--1-.017,,15'I5338"""S50O
IFirstChargeback IPendinq
ICASTLEROCKFACTORY5TCRE
I 731
65432184831
19850753791536225"°3980
1 FrstChargebac;c I Reverocd
I7UCSONFACTOP.YSTOFE
1 751
65432183871
_.,.'725I51833E°'^'5500
1 Frs:Chamebach IRaversed
INORTH6END FAGTORYSTORE
1 761
65432183791
l9P52?712GI536225'"""3980
I FrstChar_qeback I Pending
INORTHBENDFACTORYS70RE
1 761
6543218379l
i<_!g:;.^_a7.J<_~I5,B338"""5504
IFirs:Chargeback IPending
1805TONSPOP,T5TIf•dE
I 821
6543218328I
iSP,5p.; 2381536225'-3939
IFrs:Charge6ack IReversed
IBOSTONSPORTSTRJIE
I 821
65432183281
-.52<67-i221576336"""5500
1 FIrs,Chargeback I Pendng
I NEWYORKSPOftT5TIh1E
1 841
65432182961
1S01 5277 G571536225"°°39BG
IRfstCF;arge6aUC IPanding
I NEWYORKSPORTSTIN7E
I 841
6 5 4 321 829 61
.._7_,7 a61516338"""55DD
I FirsiChargeback IReverseC
I tJEWYORK5POR75TIME
~ 841
65432182901
Fmancl3l
Uays LCI;
Actian Finaneial
Anancial
Transaction Response
To
Rcason
Amount Aelion
Action Dme
Date Expiration
Respond
Code Fcason Code Ocsc,
..:~u..~,.16~SP, I
J:12C06j
1I3.nuv1 o-125IG96!.'j
w)
4:u71S;oCardhct.,c,Fc:~ti~.L-.a:itn
1GredEt I
2r720061
10020051 226720061
191
48371NoCardhofderAothorizalion
fS3i~4J'ICredit 1
21720061
112512005I 31192006I
491
4837INoCardholderAWhorization
5318.q91Debll
I 2l32006I
i1l25f20051 3119120061
441
4II37INoGardholderAufhonzalion
.--7.5>dCredit 1
2i13120061
10tt3r0051 211920061
G)
821 DupliWleProcessing
f'>2_12.7 3dCreCi!
( 2/320061
t12i20051 37162006I
431
483i1+1oCardholderAUlhar,zation
S232.791Debit I
2020061
1727120051 3178120061
441
483iINoCardhalderAwhorixation
SiBt6 c11 Credit
I 213120061
71125R0051 :+1162006I
411
811Fraud-CardPresentEnvimnment
$123.3010ebit
( 211312006I
12/77f20051 3J28120061
431
483iINOCa:dholderAulhoriza:lon
=1-±-9411Crecfit
I 202006I
10172120051 311420091
391
46371NOCardho;derAUthori:.ahoq
~~io._oi~Credit
213/20061
I
121720051 315120061
301
4837 1 NoCardhoitlerAUthori:ation
i,~,9;~~Credit
2132006I
12177i70051 7116120061
Ail
4834 IDuplicaleProcessing
5214.70 IOebit
1 2182006I
12/28f20051 3178f20061
381
UpI UnauthorizedPurchase
$490.06 iDebil
1 2i6120061
1227f20051 31202006 1
421
&11Fraud-CardPresen[Eavironment
5400.001Debil
I 21612006I
12121 t20051 312W20061
421
BIIFraud-CardPresentEnvi;onmenl
S3729610ebi1
1 216120061
17/27120651 32020061
421
61IF:aud-CardPresentEnviranmenl
ic3U5.i°_II Credt
1 21'7120061
10131120051 224120061
171
b'IlFraud-CardPresenlenvironmeni
~~Z-, 5 Z;ICredit
( 217120061
112120061 3117120061
381
45371NoCartlhotderAVthorva7ion
i27674 iDebit
1 212129061
11210061 3717720061
431
46371 NoCardholderAuthori2iion
5150.0OIDebit
I 21620061
116120GGf 3f1920061
dil
4808IRequesledlRequlredAuthorizalionNot06tained
.a;L~_UG,ICredil
I 7J13120051
11f'12/20051 311020061
251
81 IFrzud-CardAreseniEovironment
5309.94 10ebit
1 2fi3l20061
17302005~ 328l20061
431
4837INoCardhoiderAUthorizalion
5495.931Debit
I 211320061
121120061 32it20061
42I
4837 INoCardholderAUthorrzation
o1u2_50ijCredit
I 2/t6R006I
1111920051 32620061
381
48371 NoCardholderAuthorizatior
Lrvdnl0?.d ~,ptions:
N'`eschant aD=
NEecchant
Stase No.:
Chargeback oeta~ll
• a;~en in N'icra;n+,'~`tarcl'~.
~yxt i~~)tit iicet,,
654881-4656 Case eQdetDesc. ~
v~ Sa9
,
SPOR~"S'C1ME AT T~E FesP4nse c~~tus
•''42 Case Crea4ed:
7ransact%on Arno~~+~:
'6ransaction ~~ugh} Da~e:
Creditcasd ~`Ipe'
155L9461~ g~~4C:
iickeL "o. :
Na•= code:
Aug~,orizatson
r a-' $330.13
~tIJ~2tia6
~,3980
536225 MC
CI i IBANK N.A.
55417346004690042999()628
'IoQ752~2t5
:~~a~;aFirst Chargeback
pending
21g12Q06
-8
Case A9e, ~X 1rataon:
ResPo¢ase ~ and:
Days Left -To Resp
~ebidGredit ~.vnaun~:
~inancial A~~ion Qa`e:
6
F9nanci3
Fananciat A'tj on'
Chargeksack Criticae nate:
FLeasoc~ Cade'
Reason cade Desc. ~
311512006
26
$330.13
2t912dQ6
Posted
Debit
312512006
4$37
INQ Cardholder AuthOSizatilon
~~,fdnio_ac, ~ax cover shceti,
~~ar~~~~~~ ~rofale
Repor~ing Level: Client Group & Cnain
t evel Value; 3& 99999
From Date: 01-MAY-2005
5o Date: 01-JUN-2005
DovvnEoad C?ptseras: iVlicrosort Excei 97. Comma SeDarGiea `Jalu2 (CSV)
I Ca6 v e ypc- I Jescroptiqn
IMASTER lAccount Number Not on File
I I Non-Receipi ofi Merchandise
I I iVo CardholderAuthorizaiion
I ! Gardhalder poes Nat Recognize-Potentia! Fraud
I IRequested/Required Authorization Not Obtained
I
1Sub-T.r~tal: fJASi FR,
I
(VISA ICredit not Processed
( I Illegible Fulfitlment
I ITransaction Not Recognized
I i Pre-Arbitration/Arbitration
I I Fraud-Card Absent Environment
f I Fraud-Card Present Environment
Fraudulent Transaction-Card Absent Environment
i
Isub-ro+al: vIsA
~ 2eason Code I CourutI
~ 48121
21
1 48551
21
1 48371
81
( 48631
11
1 48081
11
14 S12.579.60 ~ 100.00°/,
851
21
$134_43 y
15_38%1
601
11
$76_34 1
7.69%1
751
11
$54.69 1
7.69%1
971
11
$21_52 1
7_69%1
331
11
$358_52 1
7.69% 1
811
31
$1,499.99 1
23.08% 1
831
41
$703.55 1
30.77°l0 ~
1,01 $2,8=8.96 1 'i0o.ooll/
Arnount I
rercent 1
$262.30 1
14.29°/a 1
$631.02 ~
14.29%
$4,104.'I5 ~
57.14°/a
$5.972.99 ~
7.14°/a
$1,609.94 ~
7.14°/a
JCFi7d -i 04a1 27 `J EJr ~"2J.55
Retreival List
Reporting Level: Clienl Grouri Z Chain
Levsl Vapue: 3 & 99999
From 6ale: 01-MAY-2005
To Date: 01-JUN-2005
Davrnload Ontions: Macrolatt_G>;cel 97 Comma.SeparateJ Vaiue !CSV,
Ticke:
Retrieval
Reirieval
TransacTion Trensactio
Fulfilled
Case ID Card Nam6er
Number Sta.us
Merchant No Srore
No.
Amount
Qate
Date
n Amounl
Oate
Expire Date
lvJV-rw'6, Iti -..is.14 u..e....
I Il'4n, d('IC
I i'+CQJ~r~4J11
aJl
wi "J2.
,
V 2 u12 0 0 rJl
10 045 974 621438857"'""0941
1 lpending
1 96680784781
141
$130.
20 1
5/28120051
518l20051
$180•20 1
1
6l25/20051
10045974521438E57"""0941
1 lPending
1 96060784781
141
$211
39 1
5/28/20051
518120051
5211.99 1
1
6/2512 0 0 51
10045501021546Gi6"^"4279
1 1 Fulfilled
1 96080784i81
941
'13 40.
+'0 1
5121120051
5/6120051
540.70 1
5/27120051
6199120051
1004534058148730. <312
1 1 FWfilled
~ 96080784781
141
$234
_90 1
515l20451
4121120051
$234.90 1
5126120051
612120051
10046001571435688"'*"0757
1 lPendina
~ 98080784041
251
$6q'
:6 1
5131l20651
5/10120051
$647.96 1
1
6126120051
1004586614 1446539 4296
1 1 Fulfilled
1 96080787,7D 1
561
.n743
.73 1
5125120051
811112004 1
$743.73 1
5l2512005 1
612212005 1
1004570853141472u 0564
1 IFuifilled
1 96080787,701
561
:,66
24 1
5118/20651
4120120051
S66,24 1
5/27120051
6l15120051
10045340571438852`"""'2972
1 IFuWiIled
1 96080787641
131
S45
.80 1
515120651
413120051
945.50 1
5126120051
6!2120051
10045340561438552*'---2972
1 IFuifilled
1 96080787641
18l
s3°
_9<1 1
5/5/20051
4/3/20051
538.94 1
5/27120051
612120051
10045227421546038^""'4305
1 1 Fulfilled
1 96080782971
491
$324
.67 1
5/3120051
4113/20051
$324.67 1
5/19/20051
5l29120051
100453465514266E8"""4888
1 IFuifilied
1 96080781161
271
57'
5G 1
575120651
4/9f20051
573.50 1
512 612 0 0 51
612120051
10045992961546630""'8573
1 IFulfilled
I 96080780991
341
$176
_66 1
5/3120051
4192/20051
.n176.86 1
51i9120051
528120051
10045346541541712*'-'-0138
1 IFuifilled
1 96086780671
321
$115
.90 1
515/20051
12120/20041
$915.90 1
5126/20051
613/20051
10045358561432378"""5504
1 IFulfilled
1 91169-779711
861
:p279,
07 1
516/20651
5J1120051
$279.07 1
5119120051
613/20051
Refcc~lval F3etaal
, ti~n~ _ i ex: i W ill lik~lu aG~n tn
Dcv4S1toad
Merchant it3:
,NJtercha~t ll``me:
Store N0. :
Transactioo Amount;
Transaetion (Auth) Date:
p,ccaurat iVo.:
Ccedit Car~ ~~~e--
isssat~9 ~a~k:
(aar€sn°
Code =
A'thosization
450422 ~ 466
SPaRTS TIME AT TKE GOURT
38
5111(20~6
$532
43$354 Vl
GT1BAi`1K 1V-A•
55417346004690042999
62B
Case ID:
Usa~e C;odeJDesc..
F,eSponse Siatus=
psesentatiorl Status:
case Created=
~etrieva7 p'90'
ReSponse EYPi
g~etr'seval T~Q°~espo~d:
Days ~-e§`~.
Futf"ti6ed Dat°:
pe#.reeva[ Amo€»nt:
r,eason code:
Reason Code Desc. :
l005274904
Retrieval
pending
FENDED
512 t 124Q5
-5
6125f2fl06
6125/2006
24
$162.11
33
FRAUD ANALYSIS RoQljEST
UO';^1C11r2C1 Y-~uX C0~1•~•1 Sil~~'=.
a'~~trieara~ ~ro~~~~e
R4Epos'tcng Lpve@. Client Group & Chain
Leyel ifa9ue: 3 & 99999
Frorra Date: 01-MA .'-2005
Ta Date: 01-JUN-2005
'own6oac~ ~~tioiis: ~~Zicros~~: Exr_el ~7. Co~~ma
S,Qarateci l1alue (CSV).
i
I 4eason Code ~ CoaaratI
on
Card 7ype Descript
6341 21
I
~ M ASTER IVerify Signature
1 ITrans Not Pecognized
63211 2 ~
~
I 41
ySUi:-TO[~I' 1~1'll=1S I~R ~
~
IVISA ICARDHOLDER REQUEST
j 301 1I
33 1 101
~FRAUD ANALYSiS REQUEST
~
j
ISubJotal_'JiSA ~
i5
uiand ;uLGI
Arnouni ~
Percent o#SoTal Aanourat
$501 _33 ~
76.20°la
$156_60
23.80%
$743.73 ;
2T.71°!0
$1,940.11 !
7229%
$2684.4.4 i 100.00°/0
S ;.342.37
Loca'Lion Profile L6st
G~~portirg LaveC: Clieni Grouo & Chair,
Leve~ 4`alue: 3 & 99999
Dowsilaad Optioras: MicrosoTt Cxcel 97. Comma Seoarated Value (C: V)
[Vlerchanti Nad Sfare No. I Account Statlas ~ Status As 4f I Openec6 I Last Active I Last Sa1e ~
p3334194531
871 Open
1 11/16/20041
1/2/20041
5730/20051
5/30/20051
83312233491
821 Open
1 2/15120051
4/9/20041
5/30/20051
5/30120051
1 8J313184141
891 Open
1 211 512 0 0 51
5/28l20041
5/30/20051
5/30/20051
1 83313784481
901 Open
I 1217/20041
5128120041
5/30/20051
5/30/20051
1 83313784971
911 Open
1 11/22120041
5128/20041
5/30/20051
5/30/20051
1 8,3313187351
921 Open
1 11/8120041
5/28/20041
5/30120051
5/30/20051
1 83313187391
9310pen
1 5/17/20051
612/20041
5130120051
5/30/20051
1 85 3 313 7 8754 1
941 Open
1 4/12/20051
5/28/20041
5/30/20051
5/30/20051
1 8 3317838731
941 Closed
1 415/20051
9130120041
1
1 83322349471
941 Open
1 3J29I20051
1120/20651
1
1 83322955851
951 Open
1 5/10/20051
2116/20051
5/30120051
5/30/20051
1 8-3 3231':' 49381
10110pen
1 3/29120051
2118/20051
1
141154378441
831 Open
1 11l8/20041
6/9120031
5/30120051
513012005
1 411 5-437µ' 151
8410pen
1 1118/20041
6/9120031
5/30/20051
5130124051
141154374231
8510pen
1 1118/20041
6/9120031
5130120051
5/30120051
1 4 i 1543 74311
861Open
1 11!8/20041
6/9/20031
5130120051
5130J20051
145375553241
7701 Ciosed
1 4/15/20031
11115/20021
1
1
14-15375553341
77010pen
1 3/14120051
12/28/2001i
5126/20051
5l26120051
145383378851
11 1Oper
1 6r120041
12/28/2001 i
5/30/20051
5/30/20051
141,383374511
101 Cfosed
1 4l15120031
11/15(20021
1
1
1453832374481
101 Ciosed
1 3/14/20051
12/28120011
5127/20051
5/27/20051
1 45-H3374441
1801CIosed
1 4/15/20031
11/15/20021
1
1
1453833 74741
18010pen
1 3114120051
12128/2001 1
5127120051
5/27/20051
145383374771
01 Closed
1 4115120031
11/15/20021
1
1
145383374841
01 Ciosed
1 8/8/20031
12120/20011
1
1
145383374421
641 Open
1 4128/20041
12128/20011
5/30120051
5130120051
145383383381
5410pen
1 4126120041
12J20120011
5130120051
5130/20051
(45383383"f 41
411 apen
1 4126/20041
12/20/2001 1
5/30/20051
5/30/20051
145383383241
3310pen
1 3114/20051
12/28/20011
5/36120051
5/30/2005
145383383321
5510pen
1 4126120041
12/20/20011
5130/20051
5130/2005
14538,°i.°iu343I
4510pen
1 4/26/20041
12/20/20011
5130/20051
5/30/2005
Locataot-a Profi9e L:st
4538333835; ~
3210pen
1 3(14/20051
12/28/20011
5/30/20051
45383383451
621 Open
j 4/26/20041
12/28/2001 1
5/30l20051
4538:;~383731
571 Open
1 4/26120041
12l2012001 1
5/30/20051
45383383811
371 Open
1 4/26/20041
12/23/2001 1
5130120051
45333383441
3410pen
1 3/14/20051
12123/20011
5/30120051
4538J38I I SI
271Open
1 4/26/20041
92/28/20011
5/30/20051
4 53 8 3 3) 4 123 1
2610pen
1 3l14/20051
12/28120011
5/30/20051
45383381311
7310pen
1 4126120041
12/2012001i
5/30/20051
453833-81441
661 Open
1 4/26120041
12128120011
5/30/20051
45303381541
6010pen
1 4/26/20041
1/23l20021
5/30/20051
45383381441
581 Open
1 4/26120041
12l20120011
5/30l20051
5/30/20051
5/30/20051
5/30/26051
5/30/2Q051
5/34/20051
5/30/2Q051
5/30/20051
5/30/20051
SIJOI2OO51
5/30/20051
5/30/20051
Lovat~on Detagl
Dovvnioad Goiions- Texi (\Ajill [ii:elv ooen in :Vlicrosoft Word'r
DBA Address:
I DBA Name:
I SPORTS NO 97 HENDERSONI
f Street Address 1:
1 5555 VILLAGE WALK DRfVEI
I Street Address 2:
~
lAttent€on:
~ .
ICity:
~ HENDERSONI
IState:
~ NVI
IZzp:
1 999991
I Phone:
( 555-555-55551
IFax:
1 555-555-55551
Biliing Address:
~ DE3A Nara-ce: ( RUSSELL PAQUETTE -#97 HENDERSON I
Street Address 1: ( PO BOX 19391
Street Address 2: ~ .1
(Attengion: ~ RUSSELLPAQUETTE-#97HENDERSONI
JCifiy: ~ SUMNER I
I State: ~ WAI
IZi p: ~ 99999-9999 1
I Phone: ~ 555-555-5555 1
( Fax: ~ • I
Chargebaek Adclress:
~DBA iVarne: ~
JANE DOEI
~SteeezAddress 1: ~
6750 S 555TH STI
~ Street Address 2: ~
.1
IAttentipn: I
JANE DOEI
~ Citjr: ~
KENTI
~State: ~
WAI
IZip: ~
99999-99991
I S'Iiona: ~
555-555-5555 1
1 Fa:.: 1
555-555-5555 1
AMEX No: 1 52582785311
Location Detail
~ Discover No:
IC}EF'IaPS CIUI3 NO:
IJcB No_
~Sef#le Method:
~ fV3er Class Typs:
ITransferreci From iVferchant#:
lAs Of:
Ii sansr'erretd Fro'n Chain No:
I As Qf:
ITransPerrec9 From iV€erchant#:
I As O'f:
ITransferred From Chain No:
I As Of:
5599588979
95555196531
EQC!
NATIONAL ACCOUNTI
.I
Equipme~~ Sh~~~~~~ ~~~ort
I Date I Caf'r@E.'6'
1 4/29/2005 1 U?S Ground
1 1119120051 UPS Ground
( 12/15120041 UPS Ground
~ 11/1120041 UPS Ground
4/1812003 1 UPS Next Day Air
3127120021 UPS Ground
iTC2cCS416da #
~ 18868836766
~ 18868836766
~ 18868836766
~ 18868836766
~ 18868836766
I 18868836766
Thr<. lp aqe piu.ruJ•.s (rnu „.rllh inlorrnalwri ; r, I'IwIll I~) uI< ur, Inlu irn,ahvti y;"u W ±4j:_-.Illr lwr'ik E; ilL,t r - I::-r.ItcPI DII`I rrr I(=',
nurr, Lr_r ithie fii:l =.i: rii.irnV,t`r-- ni lfPi ranJ1 11-11.1 Ifi4!rl rlirH I Ii1r "'-"uL, rrnC' Irullui rc,~ar wdniinauw, ,rill I1~-vt ,r q, rs.:,r rr rr- . i i
fl~1F~,' a~r 1~"Jt 3oteiasbq~r ~:i:ls(i1`.B
Center Name:
Center Manager Con,act:
BANK OF AiViERICA. (VATIONAL ASSOCIATION
DAILEY JINt
(404) 724-8867
Mailing Atldress:
BANK OF AMERICA N.A.
Security Contact:
NATIONAL VCC/POS CLAIMS
BANK OF AMERICA
1825 E BUCKEYE ROAD AZ9-503-01-19
PHOENIX, AZ 85034-4216
Accounting Contact:
Chargeback Address:
BANK OFANIERICA N.P..
BANK OF ANiERfCA N_A.
602-5e7-7716
NATIONAL VCC(POS CLAIMS
1825 E. BUCKEYE ROAD AZ9-503-01-19
CustorracrSeruice Coneact:
PHOENIX, AZ 85034-4216
Retrieval Address:
BANK OF AMERlCA N.A
after Hours Con[act:
NATIONAL VCC/POS CLAIMS
1825 E_ BUCKEYE ROAD
PHQENIX, AZ 85034-4216
L 0 C'~~~0 N (S)
!=-lierit Group.
1
l_.h airi f^durri b e r;
f.4Nrrl'i;ant I~~: '
F:n4NLr"'~.Bi~E 'XaONT[-ES
21Jl_iE, -71
" M AVA 3%.A B L E S 'a,f_%lf M E Nd SS
Foerriat I F'L'F _J
Em"'`=
, I p`t
' ~:-~~~l
;
r
om") . 411,,-Ullflj
d
,
L4,
~ i
~ ~ l 09, - ? {
_1 . j~
Authorization File Layout
Variable Name ~
Data Type I
Size ~ Value
Record Type ~
Char ~
2 ~ AU
Business Date ~
Date I
8 ~
Terminal Number ~
Char I
22 ~
Merchant Number ~
Char I
16 ~
FI Number ~
Int
4 ~
Agent ~
Int
4 ~
Trans Date ~
Date (
6 ~
Trans Time ~
Char ~
6 ~
Trans Type (
Char ~
2 ~
Card Type ~
Char ~
2 ~
Account Number ~
Char ~
24 ~
Trans Amount ~
Float ~
12 ~
Cash Amount ~
Float ~
12 ~
Auth Code ~
Char ~
6 (
Reversallnd. ~
Char I
1 ~
Auth Source Code ~
Char I
1 ~
Auth Method ~
Char I
1 ~
Input Method (
Char ~
1 ~
VPS Ind. (
Char (
1 ~
VPS Data ~
Char ~
20 ~
Reply Code ~
Char ~
2 ~
Exp. Date ~
Char ~
4 ~
Issuer Response ~
Char I
2 I
AVS Ind ~
Char ~
1 (
Track Ind ~
Char ~
1 ~
CW2 Result ~
Char ~
1 ~
Capture Ind ~
Char ~
1 ~
Batch Nbr (
Char
3 ~
Format Data I
Char
132 I
~ Table Name
~
Settlement File Layout
Batch Header Record
Variable Name
Data
Size
Value
Type
Record Type
Char
~ 2
BH
Settlement Date
Date
~ 8
Terminal Number
Char
~ 22
Batch Number
Int
~ 3
FI#
( Int
~ 4 ~
Agent#
~ Int
~ 4 ~
Merchant Number
( Char
16 (
Batch Control Number
( Char
12 (
Settlement time
~ Date
~ 6 (
Settlement Type
~ Char
~ 1 (
Auto Close Ind
~ Char
~ 1 ~
Application Id
~ Char
~ 8 ~
Net Amount
~ Float
~ 122 (
Items
~ Int
~ 4 ~
Chain
~ Int
~ 4 ~
Sic Cat
~ Int
~ 4 ~
Batch Status
~ Char
~ 1 ~
Settled Items Record
SI Record Layout
Variable ~
Data Type
Size ~
Value
Record Type
Char
2 ~
SI
Settlement Date
Date
8
Terminal Number
Char
~ 22
Batch Number
Int
( 3 (
Item Number (
Int
( 4 (
Tran Code (
Char
~ 2 (
Account Number ~
Char
~ 24 (
Card Type ~
Char
~ 2 ~
Trans Amount ~
Float
~ 8.2 ~
Auth Code (
Char
~ 6 ~
Auth Date ~
Char
~ 6 (
Auth Time ~
Char
~ 6 ~
Custom Data I
Char
~ 12 ~
Input Method I
Char
~ 1 ~
Auth Source Code ~
Char
~ 1 ~
Void Ind ~
Char
~ 1 ~
VPS2K Data I
Char
~ 20 ~
AVS Result I
Char
I 1 I
Orig Auth Amount ~
Float
~ 8.2 ~
Reference Number I
Int
I 12 I
Table Name
Merchant Profile File Layout
~ Variable Name
~ Data Type
I Size
~ Record Type
( Char
( 2
~ Merchant Number
~ Char
( 16
~ DBA
~ Char
45
~ Address1
~ Char
45
~ Address2
~ Char
45
~ City
~ Char
25
~ State
~ Char
2
~ Zip
~ Char
10
~ Phone
~ Char
12
~ Contact Last Name
~ Char
20
~ Contact First Name
~ Char
20
~ SIC Code
~ Char
4
~ Assoc Number
~ Char
9
~ Application ID
~ Char
8
~ First Deposit Date
~ Date
6
~ Date Opened
~ Date
( 6
~ Projmthvol
~ Float
( 12.2
~ Discount Rate
~ Float
( 5.2
~ Stratus Chain
~ Char
~ 4
( Check Ind
~ Char
~ 1
~ DDA
~ Char
~ 17
I Routinq Transit
I Char
~ 11
~ Time Zone
~ Char
~ 3
~ Last Update
~ Date
~ 6
~ Delete Ind
~ Char
~ 1
~ Value
~ 10
~
~
~
~
~
(
~
~
~
~ MMDDYY
MMDDYY
Chargeback File Layout
Field Name
~ Description
~ Data Type
~ Length
New Flag Indicator
Indicates the version
Constant value = Y
1
of the file to ACS.
File Format
Indicates the file
Numeric, right
3
format version
Justified, Left Zero
number.
filled. Value for this
format = 002
FI
FI Number
Numeric, Right
4
Justified, Left Zero
Filled.
Agent
Agent Number
Numeric, Right
4
Justified, Left Zero
filled
Merchant ID
Merchant Id
Alphanumeric, Left
16
Justified, Right Space
fill
Acct Number
Cardholder Account
Alphanumeric. Left
19
Number
Justified, Right Space
fill.
Tran Amount
Transaction Amount
Numeric, Right
12
Justified, Left Zero
filled, 2 place decimal
implied.
~ Tran Date
( Transaction Date
I MMDDYY format
( 6
CT
Card Type
Alphabetic, Valid
1
values are:
MC = MasterCard
VI = Visa
RC
Reason Code
Numeric, Right
3
Justified, Left Zero
filled
Sequence Number
Seq. Number
Alphanumeric Left
24
Justified, Right Space
filled.
Reference Number
Reference Number
Alphanumeric, Left
23
assigned by Nova.
Justified, Right Space
filled.
Transaction Type
Indicates whether the
Alphabetic, Valid
2
transaction is a credit
values are:
or debit.
CR = Credit
DB = Debit
Retrieval File Layout
Field Name
~ Description ~
Data Type, Mask ~
Length
Flag
Indicates to ACS that
Constant Value = Y
1
this is the New
Record Layout
FI
Financial Institution
Numeric, Right
4
ID
Justify, Zero Fill
Agent
Agent Number
Numeric, Right
4
Justify, Zero Fill
Merch ID
Merchant ID
Alphanumeric, Left
16
Justify, Space Fill
Acct Number
Cardholder Account
Alphanumeric, Left
19
Number
Justify, Space Fill
Exp. Date
~ Card Expiration Date ~
Numeric, Zero Fill ~
4
Tran Amount
Transaction Amount
Numeric, Right
12
Justify, Zero Fill, 2
place decimal implied
Tran Date
~ Transaction Date ~
MMDDYY format (
6
Auth Code
Authorization Code
Alphanumeric, Space
6
Fill
Req. Date
Retrieval request date ~
Numeric, Zero Fill ~
6
Close Date
Retrieval Close Date ~
Numeric, Zero Fill ~
6
Sequence Nbr
Sequence number
Alphanumeric, Left
24
assigned by Eclipse
Justify, Space fill
System
MC_VN Nbr
Mastercomm or
Alphanumeric, Left
16
Visanet ID Number
Justify, Space Fill
Req_type
Request Type
Numeric, Valid Values
1
are:
0= Original Request
1= Second request
Reference Number
Reference Number
Alphanumeric, Left
23
assigned by eclipse
Justify, Space Fill
(transponder number)
Data Definitions - Table 40-A Transaction Types
'01' RETAIL SALE
'02' RETAIL SALE WITH CASH BACK
'03' CASH ADVANCE
'04' MAIL ORDER
'05' TELEPHONE ORDER
'06' WIRE TRANSFER
'07' AVS ONLY TRANSACTION
'08' AUDIO RESPONSE UNIT (ARU)
'10' CHECK VERIFICATION/GUARANTEE
'20' PURCHASE RETURN
`34' PURCHASE/CONVERSION
`35' PURCHASE/CONVERSION/VERIFICATION
`36' PURCHASE/CONVERSION/GUARANTEE
`37' VOID
'50' MERCHANT SUSPICIOUS (AUTOMATIC REFERRAL)
'60' BALANCE INQUIRY
'61' PRE-AUTHORIZATION
'62' PRE-AUTHORIZATION COMPLETION
'63' RESUBMITTAL
'80' HOST-BASED TRANSACTION INQUIRY
'81' HOST-BASED BALANCE INQUIRY
'82' HOST-BASED ITEM CORRECTION
'83' HOST-BASED FORCE
'84' HOST-BASED CLEAR BATCH
'90' HYBRID SETTLE BATCH
'99' HYBRID CLEAR (PURGE) BATCH
Card Types
'MC' MASTERCARD
'VI' VISA
'AX' AMERICAN EXPRESS
'DC' DINER'S CLUB
'DI' DISCOVER
'JC' JAPANESE CREDIT BUREAU
'ER' ENROUTE
'PL' PRIVATE LABEL CARD *
'DB' DEBIT CARD
'CH' CHECK'
'EC E-CHECK
Method and Indicator Values
AD-AUTH-METHOD 'T' = P.O.S. TERMINAL
'E' = ELECTRONIC CASH REGISTER
'C' = COMPUTER-TO-COMPUTER INTERFACE
'A' = AUDIO RESPONSE UNIT
'Z' = AUTOMATED TELLER MACHINE
'V' = VOICE
'B' = BATCH
' ' = DOES NOT APPLY
AD-COMM-TYPE 'L' = LOCAL
'W' = WATS
'C' = CPU (FIXED)
AD-INPUT-METHOD
SD-INPUT-METHOD '0' = SWIPED
'1' = KEYED
AD-REVERSAL-I ND
SD-REVERSAL-IND '0' = NOT REVERSED
'1' = REVERSED
AD-VOID-IND '0' = NOT VOIDED
'1' = VOIDED
AD-REFERRAL-REPLY '0' = NOT A REFERRAL REPLY
'1' = TRANSACTION IS REFERRAL REPLY
AD-VOICE-FORCE '0' = NOT FORCED
'1' = FORCED (AUTHORIZED IN CENTER)
SD-FORCE-IND '0' = NOT FORCED
'1' = FORCED
AD-AVS-IND '0' = NO AVS
'1' = AVS WITH AUTHORIZATION
'2' = AVS ONLY
Switch-Ids
'MC' MASTERCARD
'VI' VISA
'AX' AMERICAN EXPRESS
'DI' DISCOVER
'JC' JAPANESE CREDIT BUREAU
'DX' DELUXE DATA
'MD' MERIDIAN
'TC' TELECREDIT
'IB' NOT SWITCHED - BELOW FLOOR LIMIT
'IC' NOT SWITCHED PROCESSED - CONTINGENCY
'SC SCAN
'IL' INTERLINK
'MO' MOST
'PU' PULSE
'ST' STAR
'NY' NYCE
'MS' MONEY STATION
'HO' HONOR
'YK' YANKEE 24
'MC' MAC
'MA' MAESTRO
'BM' BANKMATE
'QU' QUEST
'ML' MAGICLINE
'CS' CASHSTATION
'DL' DELUXE DATA
Reply Codes
'A'APPROVED
'AI' APPROVE WITH ID
'D' DECLINED
'DX' DECLINED - EXPIRED CARD
'C ' REFERRAL (CALL TO ISSUER)
'P ' PICK UP CARD
'IP' INCORRECT PIN
'EM' ERROR - MERCHANT/TERMINAL ID
'EB' ERROR - BANK ID
'ET' ERROR - TRANSACTION TYPE
'EA' ERROR - ACCOUNT NUMBER
'EX' ERROR - EXPIRATION DATE
'DI' DUPE ITEM (HOST-BASED)
'IC' ITEM NUMBER CONFLICT (HOST-BASED)
'IN' ITEM NOT FOUND (HOST-BASED)
3 i
J7
o C-3 ~ Ai~~~ ~
.
f
; , ~ .
Merchant Services
7300 Chapman Highway
Knoxville, TN 37920
lillmhillullnnhulhlnluulhlulmlliluhudhhilmhllnluliilhl
John M. Doe, Inc.
111 Main Street
Anytown, GA 30000-1234
Your Resources For Help
Merchant Billing Statement
Cycle: Cut-off
Statement Date: 09/01/2008
DBA Name: Jolin M. Doe, Inc.
Store Numbei° 08
Merchant Number: 987654321
Chain Nuinbei° 10101
Client Group: 00032
Principal Chain: 65001
Parent Cliain: 05001
Parent Entity: 62900
Page 1 of 4
For Customer Service call 1-800-555-1941
News For You
Liipoi°tcrnt Information Updates
Summaiy ,
Ntinier ofltems
Dollcn•Antottnts
Fee/Charges Categorv
Fee Stmtntarv
Sales
146
9570.36
Visa/MasterCard/Discover Charges
22019
Rehirus
0
6400 -
Authorization Fees
1.50
Net Sales
146
9570.36
Other Fees
10.00
Chargebacks
0
0.00 -
Total Chaiges and Fees
231.69
Adjustments
0
0.00 -
Total Sales
146 ,
9570.36
Total CJzar•ges afad Fees {aave Geer7 posted to Accotrnt YX;YXYKI,Y0123
Sales Recap
Sales-----
Credits-----
-----Net Sales-----
Curcl
Itein
Iteira
Discount
Per Itern
Type
Count
Amount
Coaifrt
A»iount
Amourtt
Pairi
Paid
VISA
79
5,252.97
0
0.00
5,252.97
109.77
9.75
MC
57
3,605.75
0
0.00
3,605.75
75.91
6.63
DSCV
3
354.00
0
0.00
354.00
7.60
0.30
AMEX
7
357.64
0
0.00
357.64
0.00
0.00
Deposits
Batcle
Settlen:ent
Refer-eitce
Batch
Cartl
Paict by
Pard by
Total Eatcli
Date
Date
Narmber
Nu»tber
Type
Mercl:ant Srvcs
Otlters
A)1101[ltt
08/01/08
08/01/08
125896523
00265
BATCH
160.00
0.00
160.00
VISA
59.50
0.00
M/C
100.50
0.00
08/02/08
08/02/08
125897365
00266
BATCII
103.54
0.00
103.54
VISA
53.25
0.00
M/C
50.29
0.00
08/04/08
08/04/08
125897758
00267
BATCII
464.25
0.00
464.25
M/C
464.25
0.00
08/05/08
08/05/08
125898412
00268
BATCH
249.60
0.00
249.60
VISA
249.60
0.00
08/06/08
08/06/08
125898910
00269
BATCH
165.60
36.50
202.10
VISA
80.85
0.00
Merchant Services
Merchant Billing Statement
7300 Chapman
Highway
Cycle: Cut-off
Knoxville, TN
37920
Statement Date: 09/O 1 /2008
DBA Name: John M. Doe, Inc.
Store Number: 08
Merchant Number: 987654321
Chain Numbe►•: 10101
Page 2 of 4
Deposits
(continued)
Baick
Settlenteizt
Rejer-eizce
Batclt
Card
Paid by
Pairl by Total Batch
Date
Date
Naririber
Nuinber
Type
Mercllant Srvcs
Otl:ers Amouirt
M/C
84.75
0.00
AMEX
0.00
36.50
08(07/08
08/07/08
125899458
00265
BATCH
115.00
0.00 115.00
VISA
52.50
0.00
M/C
62.50
0.00
08/08/08
08/08/08
125899974
00266
BATCH
260.23
0.00 260.23
VISA
112.14
0.00
M/C
148,09
0.00
08/09/08
08/09/08
125810059
00267
BATCH
0.00
37.39 37.39
AMEX
0.00
37.39
08/11/08
08/11/08
125810187
00268
BATCH
200.25
0.00 200.25
VISA
178.20
0.00
M/C
22.05
0.00
08/12/08
08/12/08
125810247
00269
BATCH
243.02
0.00 243.02
VISA
137.25
0.00
MJC,
105.77
0.00
08/13/08
08/13/08
125810387
00270
BATCH"
562.59
18.50 581.09
VISA
276.34
0.00
M/C
227.75
0.00
DISC
58.50
0.00
AMEX
0.00
18.50
08/14/08
08/14/08
125810501
00271
BATCI3
396.75
0.00 396.75
VISA
306.00
0.00
M/C
90.75
0.00
08/15/08
08/15/08
125810692
00272
BATCH
671.89
0.00 671.89
VISA
101.13
0.00
M/C
570.76
0.00
08/16/08
08/16/08
125810837
00273
BATCH
143.37
0.00 143.37
VISA
46.94
0.00
M/C
96.43
0.00
08/18/08
08/18/08
125811143
00274
BATCH
291.54
0.00 291.54
VISA
231.10
0.00
M/C
60.44
0.00
08/19/08
08/19/08^
125811209
00275
BATCH
577.55
0.00 577.55
VISA
402.25
0.00
M/C
175.30
0.00
08/20/08
08/20/08
125811317
00276
BATCH
639.75
72.00 711.75
VISA
508.50
0.00
M/C
131.25
0.00
AMEX
0.00
72.00
08/21/08
08/21/08
125811487
00277
BATCH
683.63
58.50 742.13
VISA
335.94
0.00
M/C
347.69
0.00
AMEX
0.00
58.50
08/22/08
08/22/08
125811605
00278
BATCH
934.52
50.00 984.52
VISA
555.02
0.00
M/C
379.50
0.00
AMEX
0.00
50.00
08/23/08
08/23/08
125811741
00279
BATCH
522.35
0.00 522.35
VISA
442.96
0.00
M/C
79.39
0.00
08/24/08
08/24/03
125811911
00280
BATCH
92.10
0.00 92.10
VISA
53.25
0.00
M/C
38.85
0.00
08I25/08
08/25/08
125812084
00281
BATCH
470.25
0.00 470.25
VISA
254.25
0.00
M/C
216.00
0.00
08/27/08
08/27/08
125812228
00282
BATCH
742.69
0.00 742.69
VISA
557.75
0.00
M/C
105.44
0.00
DISC
79.50
0.00
08/28/08
08/28l08
125812393
00283
BATCH
348.25
0.00 348.25
Merchant Services
7300 Chapman Highway
Knoxville, TN 37920
Deposits
Batch Settlemeirt Refef-ence Batch
Carrl
Paicl by
Dnte Date Nuirrber- Nutttber
Type
Mercltant Srvcs
VISA
178.75
M/C
169.50
08/29/08 08/29/08 125812458 00284
BATCH
174.00
VISA
79.50
M/C
94.50
AMF,X
0.00
Deposit Totals
9,212.72
Eacl2 batclJ under "Paid by Alercliant Selvices has been posted to Accourat MMXU0123
Visa/MasterCard/Discover Charges
Merchant Billing Statement
Cycle: Cut-off
Statement Date: 09/01/2008
DBA Name: John M. Doe, Inc.
Store Nuinbei° 08
Merchant Number: 987654321
Chain Numbei° 10101
Page 3 of 4
(continued)
Paid by
Total Batc/t
Dtlter-s
Amouiit
0.00
0.00
84.75
258.75
0.00
0.00
0.00
357.64
9,570.36
Sales
Itenr
Interclrange
Interclrmtge
Interchmrge
Descriptioie
Amottftt
Coultt
Per- Item
Rafe
Dnllanc
Visa - Interchuige
COMM ST'ND
95.25
1
0.1000
2.7000
2.67
COM 13213 B
103.50
2
0.1000
2.1000
2.37
CPS RETAIL
583.22
9
0.1000
1.5400
9.88
CPS NO CARD
525.05
8
0.1000
1.8500
10.51
EIRF
1,37697
19
0.1000
2.3000
33.57
CPS/CNP DB
753.29
9
0.1500
1.6000
13.40
EIRF-US DB
417.57
11
0.2000
1.7500
9.51
CPS/RTL CHCK
334.38
6
0.1500
1.0300
4.34
REWARDS l
227.19
2
0.1000
1.6500
395
REWARDS 2
836.55
12
0.1000
1.9000
17.10
Total Visa
5,25297
79
107.30
MasterCard - Interchauge
MERIT III
170.26
2
0.1000
1.5800
2.89
ICEY ENTERED
701.18
14
0.1000
1.8900
14.65
DATA RATE I
334.34
5
0.1000
2.6500
9.36
MERIT 3 DB
81.54
3
0.1500
1.0500
1,31
KEY ENTERED DB
941.88
13
0.1600
1.6400
17.53
ENH MER 3
491.01
G
0.1000
1.7300
9,09
ENH I{EYED
364.00
6
0.1000
2.0400
8.03
MCW KEYED
448.54
7
0.1000
2.0500
9.90
MCW MERIT3
73.00
I
0.1000
1.7300
1.36
Total MasterCard
3,605.75
57
74.12
Discover - Interchauge
DISCKEYED
295.50
2
0.1000
1.9200
5.87
DISC CNP
58.50
1
0.1000
1.9200
1,22
Total Discover
354.00
3
7.09
TotalInterchauge
188,57
Sales
Item
Assessment
Assessment
Assessnaent
Description
A»iount
C01112t
Per Itent
Rate
Dollar•s
MasterCard Assessment
3,605.75
o
0.0000
0.0950%
3.44
Visa Assessmeut
5,252.97
3
0.0000
0.0925%
4.88
Discover Assessment
354.00
3
0.0000
0.0925%
0.32
Total Assessmeut
8.64
Sales
Itent
Processing
Pr•ocessiiag
Processing Fee
Descriptioit
Anrotont
Cotent
Fee Per Itern
Rate
Dollar•s
Visa Processing Fee
3,747.73
53
0.0000
0.2500
9.37
Visa Check Processing Fee
1,505.24
26
0.0000
0.2500
3.77
MasterCard Processing Fee
3,605.75
57
0.0000
0.2500
9.01
Discover Processing Fee
354.00
3
0.0000
0.2500
0.89
Total Processiiig Fees
23.04
Summaty
220.19
Merchant Services Merchant Billing Statement
7300 Chapman Highway Cycle: Cut-off
Knoxville, TN 37920
Statement Date: 09/O 1 /2008
DBA Name: Jolin M. Doe, Inc.
Store Number: 08
Mecchant NumUer: 987654321
Chain Nwnber: 10101
Page 4 of 4
Other Trausaction Charges
DR
Sules
Dzseointt Diseocuit
Item
Per Itern
Ifem
Description
CR
Ainount
Rate CharQes
Counf
Rate
C/tarQes
AMEX NON-STL
DR
357.64
0.000 0.00
7
0.000
0.00
CR
0.00
0.000 0.00
0
0.000
0.00
BTCH BATCH I-IDR
DR
0.00
0.000 0.00
25
0.000
0.00
CR
0.00
0.000 0.00
0
0.000
0.00
sulillllaiy
DR
357.64
0.00
32
0.00
cR
0.00
0.00
0
0.00
NET
357.64
0.00
32
0.00
Authorization Fees
Ite1~a
Authorizatrort
Description
Coultt
Rpte
Fees
VISA WAT
86
0.0000
0.00
M/C WAT
60
0.0000
0.00
DISC WAT
3
0.1500
0.45
AMEX WAT
7
0.1500
1.05
0.45
Visa/Ma
sterCai•d/Discover Authorization Fees:
0.00
ECS Authorization Fees:
EGC Authorization Fees:
0•00
Other Card Authorization Fees:
1.05
Total Autliorization Fees:
1.50
Other Fees
Non TaxaUlc Items
Description
7iems
Rate
Total
STMT FEE
l
10.00
10.00
Total Non-Taxable Items:
10.00
Total Taxable Items:
0.00
Total Tax:
0.00
Total Other Fees:
10.00
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM: Jon Fortune ~
SUBJECT
Consider adoption of an ordinance of the City Council of the City of Denton designating a Depository for
City Funds for a terin begiiuung June 1, 20 11 and ending May 31, 2016; authorizing the City Manager to
execute a Depository Services Contract with Wells Fargo Banlc, N.A. as the priinary depository;
authorizing the City Manager and other City employees to transact business with the Depository; and
providing an effective date. (Audit/Finance Committee recommends approval3-0)
BACKGROUND
The Depositories for Muiucipal Funds Act (TeYas Local Goveriunent Code, Chapter 105) limits the term
of a bank depository services contract to no more than five (5) years. On June 6, 2006, the City Council
approved a depository and inerchant services contract (Ordinance No. 2006-157) with Wachovia Banlc.
Wachovia subsequently merged with Well Fargo in 2009. The contract was for an iiutial term of two
years with three (3) possible one-year eYtensions not to eYtend beyond May 31, 2011. The City Council
has approved all three one-year extensions and the third and final extension is due to expire on May 31,
2011. While time remains before the expiration of the current contract, staff initiated a Request for
Proposal ("RFP") on September 30, 2010 to allow time to review and evaluate proposals. Furthermore, in
the event the City selected a different banlc depository, staff would need ample time for conversion and
iinpleinentation in order to ineet the May 31, 2011 deadline.
On September 3, 21010, the City of Denton mailed and/or e-mailed an RFP for Banlc Depository Services
to twenty-eight (28) financial institutions. A listing of those financial institutions has been provided as
part of the baclc-up to this Agenda Information Sheet (Exhibit 1). In compliance with the Depositories for
Municipal Funds Act, the City advertised the RFP in the Denton Record Chronicle on Septeinber 7t1i and
14th. The due date for proposals was October 4, 2010, wluch provided prospective institutions
approYimately four (4) weeks to make inquiries regarding the RFP and have sufficient time to submit a
proposal. While the City received a number of inquiries from prospective institutions during the four (4)
week period, only two (2) institutions eventually provided proposals on October 4t1i The two (2) bidders
were Wells Fargo Banlc and BBVA Compass Banlc. Staff made several inquiries to non-bidding
institutions and their responses ranged from not being able to meet the service requirements to poor
internal coordination due to staff turnover.
In order to fully evaluate each proposal within the context of the City's service needs, a cross-sectional
committee of staff inembers was assembled. The departments/divisions represented were: Treasury,
Accountin~, Utility Customer Service, Municipal Court, Parlcs, and Technolo~y Services. A total of
eleven (11) staff inembers comprised this committee. These staff inembers were provided with copies of
each proposal and were afforded sufficient time for review. To date, the committee has logged in more
than tlurty (30) hours throughout tlus process, including participating in three (3) days of presentations
froin both banlcs and credit card processors.
Agenda Inforination Sheet
April 5, 2011
Page 2
On October ? 1, BBVA Compass Banlc was afforded the opportuiuty to malce a presentation to City staff
on their proposal and to demonstrate their various services and products. On October Wells Fargo
Bank was afforded the same opportunity. These presentations served a useful purpose in that they
afforded both the bidding institution and staff an opportunity to inalce specific inquiries and also to clarify
any questions or issues in the RFP. It also afforded staff an opportuiuty to listen to some of the latest
products and trends in the banlcing industry, wluch may eventually lead to more efficient and cost
effective operational changes.
On October 28, the staff committee met to discuss the two proposals and evaluated each one based on the
following weighted criteria as disclosed in the RFP:
1. Ability to perform requested services (35%).
Lowest aggregate cost of banlcing services (25%).
3. Agreement to points outlined in tlus bid and contract (15%).
4. Financial condition and ability to meet collateral requirements (15%).
5. Safekeeping/collateral a~reements accepted (10%).
A bid tabulation based on tlus weighted criteria has been provided as part of the baclc-up to tlus Agenda
Inforination Sheet (Exhibit 2).
Based on staff's evaluation of each proposal, staff concluded that Wells Fargo Banlc offers the City the
best combination of services, branch presence, and pricing to meet the City's varied operational needs.
Furthermore, Wells Fargo Banlc offers a number of service enhancements that will positively impact daily
operations in most areas of the City, while avoiding the added expense of conversion and implementation
that would be required if the City chose a different banlc depository. Wells Fargo currently operates siY
(6) branch locations witlun the City, wluch allows for quick access to a myriad of banlcing services.
Below is a brief summary of service enhancements:
L Controlled Disbursement Account - improves cash flow forecasting for investment of eYCess
funds since paper checks are laiown by a specific cutoff time.
2. Enhanced Positive Pay Capabilities - automatic correction of encodint', errors and teller access at
every Wells Fargo branch.
3. Ability to dowiiload Statements and Reports to EYCeI - these are currently dowiiloadable to PDF
oiily, wluch then requires manual data entry for reconciliation purposes.
4. Electronic Conversion of Checks to ACH at Retail Lockbox - the current process is to imat"e
checlcs only.
5. Oiiline Electroiuc Returned Item Decisioiung at Retail LockboY - the current process is not
available oiiline.
6. Special Interest Rate on Deposits based on current inarlcet conditions - Deposits norinally earn an
interest rate indexed to the 90-day T-Bill.
lii recommending Wells Fargo, staff also noted that no eYisting services would be eliminated nor reduced
and, as an incentive for retaining our business, Wells Fargo has offered to defer the City's first month of
bank charges. This incentive reduces the City's first year cost by $12,222.60. Wells Fargo's proposed
fees represent a reduction of 6.6% or $9,558.2? compared to the average fees over the last 12 months.
Agenda Inforination Sheet
April 5, 2011
Page 3
However, staff would point out that a nuinber of services are currently being provided to the City at no
charge even though those services have a service price affiYed to them. If Wachovia/Wells Fargo chose
to charge for those services under the existing contract, the proposed new pricing from Wells Fargo would
be far inore favorable than what has been estiinated. A pricing coinparison has been provided as part of
the back-up to tlus Agenda liiformation Sheet (EYlubit 3). While BBVA Compass' estimated fees are less
than Wells Fargo, tlus is due to eYCluded or reduced pricing for unavailable or reduced services. lii order
to lock in the fees from Wells Fargo, staff is proposing that the City execute a five (5) year continuous
agreement. However, either party may terminate the contract with 90 days written notice. The City's
Legal Department has reviewed tlus proposed contract term and has coiif'irmed its compliance with the
Depositories for Muiucipal Funds Act.
PRIOR ACTION/REVIEW (Council, Boards or Commissions)
On November 16, 2010, the Audit/Finance Committee unaiumously recommended approval to forward an
ordinance awarding a five (5) year contract to Wells Fargo Banlc, N.A. for depository banlc services to the
City Council for consideration.
EYHIBITS
1. Listing of Prospective Financial Institutions
2. Bank Bid Tabulation
3. Pricing Comparison
4. Ordinance (Banlc Services Contract & Well Fargo's Proposal on CD)
Respectfully submitted:
f.
Bryan Langley
Cluef Financial Officer
Prepared By:
(ik-
~ f
\
Antoiuo Puente, Jr.
Assistant Director of Finance
Exhibit 1
Access 1st Capital Bank
Affiliated Bank
Bank of America
BBVA Compass
Branch Banking & Trust
Denton Area Teachers Credit Union
First Convenience Bank
First National Bank
First State Bank
First United Bank
First United Bank & Trust Co.
Inwood National Bank
JPMorgan Chase
LegendsBank
Marqbank
Members' Choice Federal Credit Union
Meridian Bank
Northstar Bank of Texas
Pegasus Credit Union
Point Bank
Provident Bank
State Bank and Trust Company
State Farm Bank
Synergy Bank
Texas Security Bank
Town Center Bank
Washington Federal Savings
Wells Fargo
BANK DEPOSITORY SERVICES
LIST OF PROSPECTIVE FINANCIAL INSTITUTIONS
RFP #4579
320 W. Eagle Drive, Ste. 100
211 Fort Worth Drive
901 Main Street, 11th Floor
729 Fort Worth Drive
15150 Preston Rd., Ste, 100
225 W. Mulberry Street
500 W. University Drive
2735 Wind River Lane
400 W. Oak Street
1517 Centre Place Drive, Ste. 100
321 W. Hickory Street
2220 San Jacinto Boulevard, Ste. 100
420 Throckmorton, Suite 400
309 W. Oak Street
2220 San Jacinto Boulevard, Ste. 230
1108 Dallas Drive, Ste. 315
100 N. I-35E, Ste. 101
400 N. Carroll Boulevard
2800 Airport Road
1700 N. Carroll Boulevard
2220 San Jacinto Boulevard
2532 Lillian Miller Parkway
525 Fort Worth Drive, Ste. 301
321 W. Oak Street
1212 Turtle Creek Boulevard
3101 Wind River Lane
3100 Wind River Lane
98 San Jacinto Blvd., TX7042, Ste. 850
Denton Texas
Denton Texas
Dallas Texas
Denton Texas
Dallas Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Ft. Worth Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Denton Texas
Dallas Texas
Denton Texas
Denton Texas
Austin Texas
76201
76201
75202
76201
75248
76201
76201
76210
76201
76205
76201
76205
76102
76201
76205
76205
76205
76201
76207
76201
76205
76210
76201
76201
75207
76210
76210
78701
Exhibit 2
CRITERIA
TOTAL POINTS EARNED
BANK BID TABULATION
RFP #4579
POINTS WELLS
ALLOWED FARGO
100 91
BBVA
COMPASS
65 I. Ability to perform the requested services. 35 33 22
II. Lowest aggregate cost of banking
service.' 25 25 9
III. Agreement to points outlined in this Bid
and Contract. 15 11 11
IV. Financial condition & ability to meet
collateral requirements. 15 12 13
V. Safekeeping/collateral agreements
accepted. 10 10 10
'BBVA Compass proposal excludes pricing for certain unavailable services: Ebox and Positive Pay.
Retail Lockbox pricing represents a reduced service level.
Exhibit 3
PRICING COMPARISON
RFP #4579
CURRENT CHARGES
PROPOSED CHARGES
PROPOSED CHARGES
BANK SERVICES
WACHOVIA/WELLS
BBVA COMPASS
WELLS FARGO
Account Reconcilement
$
3,152.27
$
2,605.56
$
2,156.04
Automated Clearing House
$
8,965.44
$
14,885.52
$
8,058.12
Cash Services
$
-
$
1,025.67
$
4,354.56
Customer Cash Letter
$
11,296.32
$
21,141.12
$
11,956.80
General Services
$
3,567.42
$
16,749.48
$
4,127.52
Global Wire Transfer
$
4,098.00
$
4,174.80
$
4,140.00
Paid Check Image
$
720.00
$
1,039.68
$
360.00
Paper Disbursements
$
1,168.80
$
372.00
$
489.60
Remote Deposit Capture
$
6,474.90
$
4,565.76
$
6,062.10
Retail Lockbox
$
65,747.21
$
43,901.40
$
69,039.48
Returns
$
4,188.00
$
3,849.00
$
2,368.80
Information Services
$
8,893.20
$
1,788.00
$
10,773.96
Securities/Safekeeping Services
$
-
$
2,827.20
$
3,528.00
Sub-Total General Fees
$
118,271.56
$
118,925.19
$
127,414.98
Additional Services:
Deposit Item Image
$
276.00
$
-
$
276.00
EBox
$
25,459.20
$
-
$
18,980.16
Sub-Total Additional Services Fees
$
25,735.20
$
-
$
19,256.16
Other Fees:
FDIC INSURANCE - $5,000,000
$
-
$
7,543.33
$
-
Sub-Total Other Fees
$
-
$
7,543.33
$
-
Total Gross Fees
Adjustments:
First Month Bank Fees Waived
$
-
$
-
$
(12,222.60)
Total Net Fees
$
144,006.76
$
126,468.52
$
134,448.54
S:\Legal\Our pocuments\Ordinances\110epository Contract Ord-Wells Fargo.doc
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON DESIGNATING A
DEPOSITORY FOR CITY FUNDS FOR A TERM BEGINNING JUNE 1, 2011 AND ENDING
MAY 31, 2016; AUTHORIZING THE CITY MANAGER TO EXECUTE A DEPOSITORY
SERVICES CONTRACT WITH WELLS FARGO BANK, N.A. AS THE PRIMARY
DEPOSITORY; AUTHORIZING THE CITY MANAGER AND OTHER CITY EMPLOYEES
TO TRANSACT BUSINESS WITH THE DEPOSITORY; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, the City of Denton has notified all the banking institutions within the City of
its intent to receive applications for the performance of depository services and the custody of
City funds for a term beginning June l, 2011 and ending on May 31, 2016 in accordance with the
requirements of Chapter 105 of the Local Government Code; and
WHEREAS, the City of Denton has received an application for depository services from
a banking institution desiring to be designated as the primary depository for both operations and
payroll accounts and standard banking services as requested in the proposal; and
WHEREAS, after such opening, the City Council found, on the basis of the bid
application, that Wells Fargo Bank, N.A. has submitted the application offering the most
favorable terms and conditions to the City for the handling of such funds; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The Wells Fargo Bank, N.A. is hereby selected and designated as the
primary depository for operations and payroll accounts, banking, and depository services
beginning June 1, 2011 and ending May 31, 2016 in accordance with Chapter 105 of the Texas
Local Government Code. The City Manager, or his designee, is authorized to execute a
depository contract with Wells Fargo Bank, N.A., substantially in the form of the attached
Contract.
SECTION 2. The Contract, including all attached exhibits, with this depository having
its office and place of business in the City of Denton, Texas, shall be attached hereto and made a
part hereof, and the same is hereby in all things approved and accepted. The City Manager, or
his designee, is hereby authorized to execute any other documents and agreements on behalf of
the City that are consistent with the services authorized by the Contract.
SECTION 3. The following officials: City Manager, Assistant City Managers and the
Chief Financial Officer, are hereby authorized to transact business with the above listed
institution regarding daily banking transactions or investments for the City of Denton.
SECTION 4. The City Manager is authorized to make the expenditure of funds and fees
and take the actions as indicated in the attached Contract and exhibits.
S:\Legal\Our pocumentsl0rdinances\1RDepository Contract Ord-Wells Fargo.doc
SECTION 5. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the dav of
, 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
Page 2
DEPOSIT'ORY SERVICES CONTRACT
STATE OF TEXAS §
§
COUNTY OF DENTON §
ARTICLE l. SELECTION AND TERM
Wells Fargo Bank, N.A. hereinafter referred to as "Depository" at Denton, Texas, a bank located
in the State of Texas and the deposits of which are insured by the Federal Deposit Insurance
Corporation, was duly selected in compliance with the terms and provisions of Tex. Loc. Gov't
Code Ch. 105, Tex. Loc. Gov't Code § 131.903, Tex. Tax Code §6.09, and all other applicable
laws, by the City Council of the City of Denton located in Denton County, Texas hereinafter
referred to as "City" to serve as the depository of the funds of City. The action of the City
Council was duly taken and the Depository is to serve pursuant to this Contract for a period of
five (5) years, beginning June l, 2011 and ending May 31, 2016. I'rovided, however, that this
Contract may be terminated by either party by providing at least a ninety (90) day written
notification of said termination. Depository also agrees that the City shall have up to one
hundred twenty (120) days from the date the City Council designates it as the City's depository
to transfer all municipal funds covered by this Contract from its current depository to
Depository. Depository further agrees that this contract may also be extended for a period not to
exceed one hundred twenty (120) days for the transition to a new Bank depository, if needed. It
may be sooner terminated by Depository's failure to adhere to all requirements of this Contract.
ARTICLE 2. OBLIGATIONS OF DEPOSITORY
A. The Depository shall pledge to the City and deposit in safekeeping and trust with
another bank acceptable to the City approved securities as defined or referred to in Tex. Loc.
Gov't Code §105.031, et. seq. and the Collateral for Public Funds Act, Chapter Act, Chapter
2257 of the Texas Government Code, in an amount of market value sufficiently adequate to
protect all uninsured collected deposits of City on deposit with Depository during the term of this
Contract, but not less than that required by Tex. Loc. Gov't Code Ch. 105, Tex. Gov't Code
§2257.022, the City's Investment Policy dated November 2, 2010, and all other applicable laws.
Depository and City shall execute the Depository Pledge Agreement attached to this Contract as
Exhibit "A" and made a part hereof as if written word for word herein. All uninsured collected
deposits, including accrued interest, are to be fully collateralized in accordance with the above
terms. Depository will be responsible for determining daily if the collateral is sufficient in
accordance with this Contract, the Depositories for Municipal Funds Act, the Collateral for
Public Funds Act, and all other applicable laws. Pledged securities will be held by T'he Bank of
New York Mellon Trust Company, National Association. Provided fiirther thate
1. The approved securities shall be of the kind def ned or referred to in Tex.
Loc. Gov't Code § 105.031 and Chapter 2257 of the T'exas Government Code, and the
amount pledged shall be in a total market value as required by applicable laws and as
provided in the Banks RFP response and the City's Investment Policy date November 2,
2010.
2. Depository shall credit the account(s) of City with the full amount or all
State of Texas Warrants presented to Depository for the account of the City no later than
the banking day next following the day of Depository's receipt of such warrants; that
Depository shall faithfully perform all duties and obligations devolving upon Depository
by law and this Contract, including specifically the duty to collect with diligence checks,
drafts, and demands for money deposited with Depository; pay upon presentation all
checks or drafts drawn on order of the City in accordance with its orders duly entered
according to the laws of Texas; pay any time deposit or certificate of deposit of City in
Depository upon maturity or after the period of notice required, and faithfully keep,
account for as required by law; and faithfully pay over, at maturity or on demand, as City
may elect, to any successor depository all balances of funds the City then has on deposit
with Depository.
3. The pledge of approved securities required by this Contract shall be a
continuing pledge, ceasing only upon the later of the termination of this Contract or the
fulfillment by Depository of all of its duties and obligations arising out of this Contract
(and a continuing security interest in favor of City shall attach immediately upon any
such pledge to all proceeds of sale and to all substitutions, replacements, and exchanges
of such securities, and in no event shall such continuing security interest be voided by
any act of Depository). But notwithstanding the foregoing Depository shall have the
right, with the consent of City, which shall not be unreasonably withheld or delayed, to
purchase and sell and substitute or replace, any and all of the approved securities pledged
pursuant to this Contract with other approved securities, so long as the market value of all
collateral securities after such substitution or replacement shall equal or exceed the
amount required by applicable law and as provided in Banks RFP response and the City's
Investment Policy date November 2, 2010.
4. This Contract shall become binding upon City and Depository only upon
approval by the City Council of the Contract and the Proposal attached hereto as Exhibit
"B". To the extent of conflict, if any there be, between this Contract and the Proposal,
and any of the attached exhibits, the terms of this Contract shall control. Nothing in the
terms and conditions of the Proposal (Exhibit "B"), including without limitation, any,
indemnity or venue clauses, shall control or reduce the obligations of Depository under
this Contract, it being the intent of the parties that the terms of this Contract shall control
and be binding over any conflicting provision in the exhibits. All conflicts in the exhibits
shall be resolved in accordance with Article 2 A.10 of this Contract.
5. City shall promptly furnish two executed copies of this Contract,
photocopies of all such receipts, and photocopies of new receipts for substitutions and
additions and written notice of deletion, when made, to Depository.
6. On the execution date of this Depository Contract the Depository agrees to
pledge an amount that is 102% of uninsured collected deposits of the City.
Page 2 of 7
7. Any closing or failure of Depository, or any event reasonably deemed by
City to constitute a closing or failure of Depository, shall be deemed to have vested full
title to all approved securities pledged pursuant to this Depository Contract in City. In
such event, City is hereby empowered to take possession of and sell any and all of such
pledged approved securities, to the extent not forbidden by law, whether in safekeeping at
another bank or in possession of City, and City is specifically so empowered by
Depository.
8. Depository agrees that it will act, and the City hereby designates
Depository as its primary depository, with both parties agreeing that all funds herein shall
be deposited and invested in compliance with all applicable local, state, and federal laws
including, but not limited to, the Depositories for Municipal Funds Act, Chapter 105,
§105.001-105.092 of the Texas Government Code (V.A.T.C.S.); the Collateral for Public
Funds Act, Chapter 2257, §2257.001-2257.083 of the Texas Government Code
(V.A.T.C.S.); the Public F.unds Investment Act, Chapter 2256, §2256.001-2256.104 of
the Texas Government Code (V.A.T.C.S.); the City Charter and Code of Ordinances of
the City of Denton, Texas as amended; and the Investment Policy adopted by the City. It
is also the intention of the parties hereto, in conformance with the above-mentioned laws
that the City shall remain at maximum flexibility to invest its funds prudently to earn the
highest rate of return consistent with the City's Investment Policy and all other applicable
requirements of the law.
9. Depository shall, in return for the City depositing its funds in the
Depository, provide professional banking services as an independent contractor for the
charges as set forth in the Depository's Proposal dated October 4, 2010 which Proposal is
attached hereto as Exhibit 66B" and made a part of this Contract for all purposes.
10. Depository shall perform all those banicing services set forth in Exhibit
"A"; its Proposal attached hereto as Exhibit "B"; the City's Request for Proposals for the
Performance of Depository Services, which is attached hereto as Exhibit "C"; and
Depository's Service Documentation as defined in Depository's Master Agreement for
Treasury Management Services and attached hereto as Exhibit "D" and made a part of
this Contract for all purposes. In case of conflicts between this Depository Contract and
the aforementioned exhibits or in case of a conflict between such exhibits, the conflict
will be resolved as follows: First, this Depository Contract controls over all exhibits;
second, Exhibit "A" controls over Exhibits "B" and "C"; third, Exhibit "C" controls over
Exhibits "B".
11. Depository shall (a) keep the municipal funds covered by this Contract, (b)
perform the duties and obligations imposed on the Depository by law and under this
Contract, (c) pay on presentation all checks drawn and personally payable on a demand
deposit account with the Depository, (d) pay all transfers properly payable as directed by
the designated employee or officer chosen by the city, (e) provide and maintain security
at the level required by Tex. Gov't Code Ch. 2257, and (f) account for municipal funds as
required by law.
Page 3 of 7
ARTICLE 3. ADDITIONAL SECURITY
Subsequent to the execution date of this Contract, should the amount of deposit exceed the
market value of the pledged securities, additional securities shall be pledged in accordance with
Section A of Article 2 of this Agreement.
ARTICLE 4. ADDITIONAL DEPOSITORIES
This Contract shall be non-exclusive and the City reserves the right to designate secondary or
additional depositories and to, if necessary, enter into Depository Agreements for other City
funds with other banks in Denton County or adjacent counties whenever the interests of the City
may demand. The City also reserves the right to contract with other financial institutions under
separate contract if the City determines that additional financial services are necessary in the
administration, collection, investment, and/or transfer of municipal funds.
ARTICLE 5. LEVEL OF COMPETENCY
Depository and its officers and employees performing services hereunder agree that in the
performance of these depository services, they shall be responsible to the level of competency
and shall use the same degree of slcill and care as presently maintained by other practicing
professionals performing the same or similar types of work in the State of Texas.
ARTICLE 6. INDEMNIFICATION
Depository shall indemnify and hold harmless the City, its officers, agents, and employees from
loss, damage, liability, or expenses on account of any claims, damages, or injuries, whatsoever to
all persons including employees of Depository and City, which may arise fram any negligence,
error, or omission in the performance of this Contract on the part of Depository or any breach of
its obligations or duties under this Contract, and Depository shall defend, at its own expense, any
suits or other proceedings brought against the City, its officers, agents, and employees, and shall
pay any expenses to satisfy all judgments or losses whatsoever which may be incuned or
rendered against them or the City.
ARTICLE 7. EXHIBITS
All exhibits attached to this Contract are considered to be integral parts of same, and Depository
will fully comply with the terms and conditions of same.
ARTICLE 8. VENUE
For purposes of determining venue and the law governing this Contract, services performed
under this Contract are performed in the City and County of Denton, Texas. Any suit or dispute
regarding this Contract shall be decided and settled in a court of competent jurisdiction sitting in
Denton County, Texas.
Page 4 of 7
ARTICLE 9. COUNTERPARTS
This Contract may be executed in any number of counterparts, and each such counterpart shall be
deemed for all purposes to have the same effect as if all parties to this Contract had signed one
and the same signature page of this Contract.
ARTICLE 10. TERMINATION
A. The City and Depository shall, as a matter of right without necessity of default on
the part of City or Depository, terminate this Contract at any time by giving the City or
Depository 90 days prior notice in writing. Should Depository default in any of its obligations to
City under this Contract, City shall give Depository notice of default in writing, and Depository
shall have 30 days from receipt of the notice to correct the default. If Depository fails to remedy
default within this time, City, at its sole option, may cancel this Contract and Depository shall be
fully responsible to pay City any and all damages caused by its default. Depository shall be paid
for all services satisfactorily performed in accordance with this Contract up to date of any
termination hereunder. Depository's filing of a petition in bankruptcy or being declared
insolvent by a federal bank regulatory agency shall be considered a material breach of this
Contract. Nothing herein shall deprive City of any other remedies in law and equity to enforce
the terms, conditions, and obligations of this Contract including, but not limited to, instituting
suit for damages or, in the alternative, specific performance of this Contract.
B. In the event of termination, Depository shall fully cooperate with the City to
transfer all municipal funds to the new depository designated by the City.
ARTICLE 11. NOTICES
All notices required under this Contract must be given by certified mail or registered mail,
addressed to the proper party, at the following addresses:
CITY:
George C. Campbell
City of Denton
215 E. McKinney
Denton, Texas 76201
DEPOSITORY:
Andrew B. Deskins
Wells Farao Bank, N.A.
4801 Southwest Pkwv., Blda. 1, Suite 175
Austin, TX 78735
Either party may change the address to which notice is sent by giving the other party notice of
the new address in the manner provided in this section.
ARTICLE 12. ASSIGNMENT
Page 5 of 7
Depository shall not assign any interest in this Contract and shall not transfer any interest in this
Contract (whether by assignment, novation, or otherwise) without the prior written consent of the
City thereto.
ARTICLE 13. BINDING EFFECT
This Contract shall be binding upon and enure to the effect of the parties hereto and their
respective heirs, execufors, administrators, legal representatives, successors, and assigns where
permitted by this Contract.
ARTICLE 14. ENTIRE AGREEMENT
This Contract and the attached exhibits constitute and express the entire agreement between the
parties and shall not be amended or modified except by written instrument signed by both
parties.
ARTICLE 15. AUTHORITY TO CONTRACT
Depository hereby does represent to the City that its officer or officers who have executed this
Contract have full and complete capacity and authority to execute a binding Depository Contract
which is effective, for all purposes, as to all services to be provided and all terms and obligations
under this Contract.
ARTICLE 16. DUPLICATE ORIGINALS
This Contract is eYecuted by the City and the Depository in three copies, all of which shall be
deemed originals.
IN WITNESS of which this Contract has been executed on this the of
by the duly authorized officers of Depository and City.
Page 6 of 7
CITY OF DENTON:
By: Date:
Name (Print): Mark Burroughs
Title: Mayor
Address: Citv of Denton
215 E. McKinnev
Denton, Texas 76201
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
,
BY:
~
~
Wells Fargo Banlc, N.A.
Depository
By: Date:
Authorized Signature
Name (Print): Andrew B. Deskins
Title: Senior Vice President
Page 7 of 7
ACCEPTANCE OF SERVICES
l p
Part l - Certification
The person(s) signing this Acceptance of Services ("Acceptance") certifies/certify that:
(a) the company identified in the signature block of this Acceptance ("Company") has received and agrees to be
bound by the Service Documentation, as defined in Wells Fargo Bank, N.A.'s ("Bank") Master Agreement for
Treasury Management Services;
(b) Company has granted the person(s) signing this Acceptance the authority on Company's behalf to (i) execute this
Acceptance, (ii) enter into other agreements with Bank for treasury management services Bank offers on or after
the Effective Date of this Acceptance (each, a"Service") and (iii) amend, terminate or otherwise act on behalf of
Company with respect to this Acoeptance and such other agreements and Services; and
(c) Company's use of any Service, including without limitation each Service Company begins using after the Effective
Date of this Acceptance, confirms Company's receipt of and agreement to be bound by the Service
Documentation relating to that Service.
(Part'11- ACH Origination Services ,
IA. Description of Security Procedure.
General. An "Entry" is an automated clearing house ("ACH") debit or credit entry issued in Company's name,
and a"File" is the data file or batch release used to transmit one or more Entries (or a communication amending
or canceling an Entry or File) to Bank. Bank will verify each File Bank receives in Company's name solely in
accordance with the security procedure(s) Company elects in this Acceptance (each, a"Security Procedure").
The purpose of the Security Procedure is to verify the authenticity of a File, not to detect an erroneous or
duplicate Entry or File.
2. Commercially Reasonabie. Company has determined (a) the Security Procedure best meets Company's
requirements with regard to the size, type and frequency of Files issued by Company to Bank and (b) the
Security Procedure is commercially reasonable. Company refuses to have its Files verified by any security
procedure other than the Security Procedure.
3. Binding Instructions. Company will be responsible for any erroneous or duplicate Entry or File Bank receives
in Company's name. Company agrees to be bound by each Entry and File, or request to cancel or amend an
Entry or File, whether or not authorized by Company, issued in Company's name and accepted by Bank in
compliance with the Security Procedure.
4. Confidentiality. Company and Bank will preserve the confidentiality of the Security Procedure and any
passwords, codes, security devices and related instructions provided by Bank. If Company becomes aware of a
breach, or suspects that a breach may occur, it will immediately notify Bank.
5. Authorized Person(s). Company will promptly notify Bank in writing of the identity of each person authorized to
receive information regarding the Security Procedure (each, an "Authorized Person") and when a person is no
longer an Authorized Person. Company will maintain effective internal procedures to safeguard against
unauthorized Entries or Files and warrants that no individual will be allowed to initiate an Entry or File without
proper supervision and safeguards.
B. Election of Securify Procedure(s).
TM-1521 Acceptance of Services - ACH, Wires and Stagecoach Sweep
Revised 11-08-2010 Page 1 of 3
The Security Procedure(s) Company has elected for ACH origination is/are:
I0 Commercial Electronic Office° (CEO8
CEO is Bank's electronic banking portal that is accessed via the Internet. Authorized users may access Bank's CEO
Internet ACH Service through the portal. CEO security procedures include fog-on credentiais specifed by Bank (that
may include a Company ID, user ID and password) and any other authentication or authorization process Bank
requires from time to time. Bank will use the CEO security procedures to authenticate each File received through
CEO in Company's name.
Security ProcedUre Elected by Company's Th►rd Party Service Provider
Company is utilizing a Third Party Service Provider ("TPSP") as defined in the ACH Ruies to originate Entries and
Files on Company's behalf. Bank will authenticate each File transmitted to Bank in Company's name in accordance
with the security procedure fhe Company's TPSP has elected. Company will notify Bank of any change to Company's
TPSP in a manner affording Bank a reasonable opportunity to act on the information, Company's TPSP is:
Third Party Service Provider: (
Contact Person: I
Telephone:
Fax: ~
IPart 'III -1Nire Transfer Services
IA. Description of Security Procedure, '
General. Bank will verify instructions to transfer funds from Company's Account that Bank receives in
Company's name (each, a"Payment Order") solely in accordance with the security procedure(s) Company
elects in this Acceptance (each, a"Security Procedure"). The purpose of the Security Procedure is to verify the
authenticity of a Payment Order, not to detect an erroneous or duplicafe Payment Order.
2. Commercially Reasonabfe. Company has determined (a) the Security Procedure best meets Company's
requiremenfs with regard to the size, type and frequency of Payment Orders issued by Company to Bank and
(b) the Security Procedure is commercially reasonable. Company refuses to have its Payment Orders verified
by any security procedure other than the Security Procedure.
3. Binding Instructions. Company will be responsible for any erroneous or duplicate Payment Order Bank
receives in Company's name. Company agrees to be bound by each Payment Order, or request to cancel or
amend a Payment Order, whether or not authorized by Company, issued in Company's name and accepted by
Bank in compliance with the Security Procedure.
4. Confidentiality. Company and Bank wifl preserve the confidentiality of the Security Procedure and any
passwords, codes, security devices and related instructions provided by Bank. If Company becomes aware of a
breach, or suspects fhat a breach may occur, it will immediately notify Bank.
5. Authorized Person(s). Company will promptly notify Bank in writing of the identity of each person authorized to
receive information regarding the Security Procedure (each, an "Authorized Person") and when a person is no
longer an Authorized Person. Company will maintain effective internal procedures to safeguard against
unauthorized Payment Orders and warrants that no individual will be allowed to initiate a Payment Order without
proper supervision and safeguards.
IB. Election of Security Procedure(s).
O 2010 Weils Fargo Bank, N.A. All rights reserved.
TM-1529 Acceptance of Services - ACH, Wires and Stagecoach Sweep Pa e 2 of 3
Revised 11-08-2010 9
The Security Procedure(s) Company has elected for Wire Transfers is/are:
I'F~ ' Voice
Bank's voice initiation security procedure consists of confirming that the personal identification number ("PIN")
accompanying a Payment Order corresponds with a valid PIN assigned to Company for voice-initiated Payment
Orders.
7 Telephone Verification Service. If Bank receives a voice-initiated, non-repetitive Payment Order of
$I I or more, Bank will make one attempt to telephone person(s) designated by
Gompany on the most current setup form for Company in Bank's records to authenticate the Payment Order.
If Bank is unable to complete the call, Bank will not process the Payment Order.
I 0 Commercial Electronic OfficeO (CE00) .
CEO is Bank's electronic banking portal that is accessed via the Internet. Authorized users may access Bank's CEOWire Transfer Service through the portal. CEO security procedures include log-on credentials specified by Bank that
may include a Company ID, user ID and password and any other authentication or authorization process Bank
requires from time to time. Bank wili use the CEO security procedures to authenticate each Payment Order received
through CEO in Company's name.
Remainder of page intentionally left blank
Part U- Signatuce and :Effective Date.
Agreed To and Accepted By:
Company:
By:
Name:
Title:
Effective Date:
( City of Denton
I
OO 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1521 Accepfance of Services - ACH, Wires and Sfagecoach Sweep Page 3 of 3
Revised 11-08-2010
MASTER AGREEMENT FOR TREASURY MANAGEMENT SERVICES
The Service Documentation described below contains the terms under which Welis Fargo Bank,
National Association ("Bank") provides treasury management services ("Services"). The Bank
customer to which the Services will be provided ("Company") is identified in the Acceptance of Services
("Acceptance").
Bank and Company agree:
Service Documentation. The Service Documentation for each Service includes:
1.1. The Service Description.
1.2. The Acceptance.
1.3. This Master Agreement for Treasury Management Services ("Master AgreemenY').
1.4. The account agreement for the deposit account(s) (each, an "Account") that Company or
Company's affiliate or subsidiary maintains at Bank or Bank's affiliate in connection with
a Service. The account agreement includes the Dispute Resolution Program that
Company and Bank agree to use to resolve any disagreements between Company and
Bank regarding accounts and Services governed by the Service Documentation.
1.5. User Guides which include Terms of Use, software, software licenses, price schedules,
specifications, instructions, and notices.
1.6. The set-up form(s) for each Service.
The Service Documentation also applies to a Service that is provided by an affiliate of Bank and
a Service that is used by an affiliate or a subsidiary of Company. "Bank" includes each such
affiliate, and "Company" includes each such affiliate and subsidiary. if there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order
set forth above. Company acknowledges receiving a copy of the Service Documentation for
each Service Bank provides to Company.
2. Services. Bank and Company will agree upon the Service(s) to be provided.
3. Changes to Services. Bank may change (or add to) the terms in the Service Documentation at
any time upon prior written notification to Company. If Company discontinues using the affected
Service before the change becomes effective, it will not be bound by the change. If Company
continues to use a Service after the change becomes effective, it will be bound by the change.
If a conflict arises between any change made by Bank and the Depository Services Contract,
the RFP and/or Bank's response, the Depository Contract, RFP and Bank's response will
control.
4. Term and Termination. Unless terminated sooner in accordance with the Service
Documentation, this Master Agreement and all Services will continue in effect until terminated
by either party upon sixty (60) days prior written notice to the other party (unless a Service is
terminated sooner in accordance with the Service Documentation). Bank may terminate any
TM-1450 Master Agreement for Treasury Management Services Page 1 of 4
Revised 09-02-2090
Service (a) following notice to Company of a breach of any provision of the Service
Documentation and Company's failure to cure the breach within sixty (60) days of the date of
such notice, or (b) without notice to Company if (i) Company is subject to a petition under the U.
S. Bankruptcy Code or (ii) Bank determines in its sole discretion that a material adverse change
has occurred in Company's ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Company's or Bank's rights with respect to
transactions occurring before termination. Bank will not be liable to Company for any losses or
damages Company may incur as a result of any termination of any Service.
5. Service Fees. Company will pay Bank the fees described in the Service Documentation and
any taxes applicable to each Service however designated exclusive of taxes based on Bank's
net income. Bank may debit Company's account(s) with Bank for any fees not covered by
earnings credits and any taxes that are due, or it may send an invoice to Company for such
amounts, which Company shall promptly pay. Bank may assess finance charges at a rate of
1.5% per month (18% per annum) or the highest rate permitted under applicable law
(determined in accordance with section 8.1), whichever is less, on any invoiced fees or taxes
not paid within thirty (30) days of the due date and will apply payments and other reductions of
amounts owed first to unpaid interest and then to other fees and charges.
6. Confidential Information. Unless otherwise provided in the Service Documentation or Texas
Freedom of Information Act, all User Guides and software constitute Bank's or its vendor's
confidential information ("Confidential Information"), and Company will not acquire any
ownership interest in or rights to Confidential Information as a result of Company's use of any
Service. Company will (a) maintain the confidentiality of the Confidential Information; (b) not
disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than Company's employees who have a
need to use the Confidential Information in connection with the applicable Service; and (c) not
decompile, reverse engineer, disassemble, modify, or create derivative works of any
Confidential Information. Company will notify Bank immediately if it knows or suspects that
there has been any unauthorized disclosure, possession, use or knowledge (each, an
"Unauthorized Use") of any Confidential Information. If Company (or its employees or agents) is
responsible for the Unauthorized Use, Company will, at its expense, promptly take all actions,
including without limitation initiating court proceedings to recover possession and prevent further
Unauthorized Use of the Confidential Information and obtain redress for any injury caused to
Bank as a result of such Unauthorized Use.
7. Liability and Indemnification.
7.1. Bank will perform each Service in accordance with reasonable commercial standards
applicable to Bank's business; laws, regulations and operating circulars governing the
activities of Bank; appticable funds transfer system(s) and clearinghouse rules; and the
Service Documentation.
7.2. Bank is under no obligation to honor, in whole or in part, any entry, file, batch release,
transfer instruction, payment order, transaction or instruction that (a) exceeds the
available balance in the Account, unless otherwise provided in the Service
Documentation; b) is not in accordance with the Service Documentation or Bank's
applicable policies, procedures or practices as made available to Company; c) Bank has
reason to believe may not have been duly authorized, should not be honored for its or
Company's protection, or involves funds subject to a hold, dispute, restriction or legal
process; or d) would possibly result in Bank violating any applicable rule or regulation of
any federal or state regulatory authority including without limitation any Federal Reserve
guidelines such as the limitations on Bank's intra-day net funds position.
TM-1450 Master Agreement for Treasury Management Services Page 2 of 4
Revised 09-02-2010
7.3. All uses of Services through Company's ID codes, passwords, token cards, PINs, or
passcodes (each, a"Code") will be deemed to be authorized by and binding on
Company. Company's failure to protect Codes may allow an unauthorized party to (a)
use the Services, (b) access Company's electronic communications and financial data,
and (c) send or receive information and communications to Bank. Company assumes
the entire risk of unauthorized use of Codes and unencrypted electronic transmissions.
7.4. Neither Bank nor any software vendor makes any express or implied representations or
warranties with respect to the Services or any software used in connection with the
Services including without limitation any warranty as to the merchantability or fitness for
a particular purpose, other than those expressly set forth in the Service Documentation.
7.5. Company will promptly furnish written proof of loss to Bank and notify Bank if it becomes
aware of any third party claim related to a Service. Company will cooperate fully (and at
its own expense) with Bank in recovering a loss. If Company is reimbursed by or on
behalf of Bank, Bank or its designee will be subrogated to all rights of Company, as
allowed by Texas state law.
7.6. Any claim, action or proceeding against Bank for losses or damages arising from a
Service, including Bank's honoring or dishonoring a check covered by a Service, must
be brought within one (1) year from the date of the act or omission or in the case of a
check from the date the check was first paid or returned by Bank or as allowed by Texas
state law.
7.7. Bank will have no liability for failure to perForm or delay in performing a Service if the
failure or delay is due to circumstances beyond Bank's reasonable control. If Bank
determines that any funds transfer or communications network, Internet service provider,
or other system(s) it has selected to provide a Service is unavailable, inaccessible or
otherwise unsuitable for use by Bank or Company, Bank may, upon notice to Company,
suspend or discontinue the affected Service.
7.8. Except in the case of Bank's negligence or intentional misconduct, Company will
indemnify and hold Bank, its directors, officers, employees and agents harmless from all
losses or damages that arise out of (a) the performance of a Service in accordance with
the Service Documentation including without limitation any warranty Bank is required to
make to a third party in connection with a Service; (b) an act or omission of any agent,
courier or authorized representative of Company; and (c) if the Service includes a
license or sublicense of any software to Company, the use or distribution of the software
by Company or any person gaining access to the software through Company that is
inconsistent with the license or sublicense or as allowed by Texas state law.
7.9. Bank will only be liable to Company for Company's direct monetary losses due to Bank's
negligence or intentional misconduct. Except in the case of Bank's gross negligence or
intentional misconduct, Bank's liability to Company will be limited to an amount allowed
by Texas state law. Except as expressly provided otherwise in the Service
Documentation or Texas state law, neither party to this Master Agreement will be liable
to the other party for any special, consequential, incidental (including without limitation
court costs and attorneys' fees), indirect, or punitive losses or damages, whether any
claim is based on contract or tort, or whether the likelihood of such losses or damages
was known to the other party and regardless of the form of the claim or action.
TM-1450 Master Agreement for Treasury Management Services Page 3 of 4
Revised 09-02-2010 1
8. Miscellaneous.
8.1. The Service Documentation will be governed by substantive federal laws, regulations
and rules and, to the extent such laws, regulations and rules are not applicable, those of
the state in which the office of Bank that maintains the Account is located, without regard
to conflicts of laws principles. Any portion of the Service Documentation which is
inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and Bank will incur no liability to Company as
a result of the inconsistency or modification and application. If any portion of the Service
Documentation is deemed unenforceable, it will not affect the enforceability of the
remaining Service Documentation.
8.2. The Service Documentation, Depository Services Contract, RFP and Bank's response
are the entire agreement between Bank and Company and supersedes all prior
representations, conditions, warranties, understandings, proposals or agreements
regarding a Service. No course of dealing or waiver of any right on one occasion will
constitute a modification of the Service Documentation or be a waiver of that right on a
subsequent occasion.
8.3. Company will provide Bank promptly upon Bank's request any existing financial
statements or other information pertaining to Company's financial condition or any
previously unprepared financial statements which Bank may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants
acceptable to Bank.
8.4. Company warrants it will not use any Service in a manner which violates any federal or
state law including without limitation any sanction or control administered by the Office of
Foreign Assets Control or Bureau of Export Administration.
8.5. If Company employs an agent in connection with its use of any Service, Company
represents and warrants to Bank that (a) Company's governing body has duly authorized
the agent and (b) Company will exercise appropriate controls to ensure each agent so
authorized does not exceed the authority so granted to it. Any communication to Bank
regarding Company's use of a Service from Company's agent will be deemed to be a
communication from Company, and Company authorizes Bank to communicate with
Company's agent regarding any such communication or Service.
8.6. Either party may provide notice to the other party by mail, personal delivery, or electronic
transmission. Bank will use the most recent address for Company in Bank's records,
and any notice from Bank will be effective when received. Company will use the
address where Company's relationship manager or other manager is located and
address any notice to the attention of such manager. Any notice from Company will be
effective when actually received by Bank. Bank will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of
Company and, except as expressly stated in the Service Documentation, will have no
obligation to verify the signature (including an electronic signature). Each party will have
a reasonable time after receipt of any notice to act on it.
8.7. Sections 1, 4, 5, 6, 7, and 8 will survive termination of this Master Agreement.
UNIMflotm ~Rnhfg( ~r~H6~c (~ggWdnent Services Page 4 of 4
Revised 09-02-20 0
Commercial Account Agreement
Effective May 1, 2005
Table of Coirtents
1. Terms Applicable to All Commercial Deposit Accounts ....................5
~ Introduction ~
( Defined Terms ~
Affiliate
............................................................................5
Authorized Signer
............................................................................5
Business Day
............................................................................5
Collected Balance
............................................................................5
Commercial Deposit Account
............................................................................5
Deposit Float
...........................................................................5
Deposited Item
...........................................................................6
]nvestable Balance
............................................................................6
[tem
............................................................................6
Ledger Balance
............................................................................6
Overdraft
...........................................................................6
Paper Item
...........................................................................6
Service
............................................................................6
Arbitration Agreement
Agreement to Arbitrate ..........................................................................................................6
Governing Rules ....................................................................................................................6
No Waiver of Self-Help or Provisional Remedies .................................................................7
Arbitrator Qualifications and Powers ....................................................................................7
Discovery ...............................................................................................................................7
C'lass Actions and Consolidations . ......J
I',i\ mcnt of ;\rbitration ('u;ts ,,incl Fccs .........................7
N/tiscellaneous ........................................................................................................................7
Statements and Otlier Account-Related Informntion I
Nlailiug Statements and Other Account-Related Iiiformation to Company ...........................8
Compauy's Obligation to Review Statements and Other Account-Related Information
and to Notify Banlc of Errors ..................................................................................8
Retw-ned, Unclaimed Statements or Other Account-Related Information .............................8
Address Changes for Statements for Company's Account and Other
Account-Related Information .................................................................................9
Notices and Other Mail ..........................................................................................................9
Electronic Communications ...................................................................................................9
1
Fi•aud Prevention (
Pirotection Against Unauthorized Items
............9
Lost or Stolen Paper ltems; Unauthorized Iteiiis
...........9
Preventing Misuse of Company's Account
..........10
~ Claim of Unauthorized Transactions; Bank's Ril4hts and Liabilit,y
~
Investigation by Bank; Company's Agreement to Cooperate
...........10
Standard of Care
...........1 1
Limitation of Liability; Indemnification
...........1 1
Adverse Claims
...........1 1
Legai Process
...........1 1
<<Freezing„ Company's Account
...........1 1
Force Majeure
...........12
Company's Insurance Coverage
...........12
~ Substitute Checics
~
~ Deposits to Company's Account
~
General
...........12
Collection Iteiiis
...........12
Endorsements
...........12
Material Appearing on the Bacl< of ltems; Checl< Legends
...........13
E3reach of Warranties
..........13
4Vhen Deposits are Credited to Company's Account
..........13
Use of Funds
..........13
Deposits at Affiliates
..........13
Deposits of Non-U.S. Items
..........13
Acts and Omissions of Other Financial Institutions
.........14
Deposited Iteiiis Returned
.........14
Direct Uepusits Returncd by Q.inl, . . .
........I4
Iteconsuructing Lost ur Desuuycct Uepositc(l Iteiiis
........14
l Withdrlwals from Company's Account
~
Determining Company's Account's Balance; DeUiting Company's Account
.........14
Orcler of Posting
IS
Paper Items Presented Over-the-Counter for Plyment by a Non-Customer
........15
Large Cash WithdraNvals
.........15
Withdrawals at Affiliates
........15
Items Resulting From Company's Disclosure of Company's Account Ntmlber
........15
Missing Signatures; Alterations; Forgeries
........15
Dates and Special Instructions on Paper Items
.......16
Facsimile or Mechanical Signatures
.......16
Consumer ACH Debit Entries
.......16
2
Stop Payment Orders; Notices of Post-Dating
General ..................................................................................................................................16
Content of Stop Payment Order ............................................................................................16
Effective Period of Stop Payment Order; Renewal; Revocation ..........................................16
Liability to Holder in Due Course ........................................................................................17
Paper Items Paid Over Valid Stop Payment Orders .............................................................17
Overdrafts; Security Interest; Banlc's Right to Setoff
Overdrafts and Insufficient Funds ........................................................................................17
Security Interest; Bank's Right to Setoff ..............................................................................17
Bank Fees and Expenses
Gen eral ..................................................................................................................................18
Payment of Banl< Fees and Expenses; Finance Charges .......................................................18
Earnings Allowance ..............................................................................................................18
Checldng Subaccounts
Nliscellaneous
Acceptabie Form of Paper Items; Document and Image Quality
.................................19
Closing Company's Account
.................................19
Contract Language
.................................19
Credit Repoits
.................................19
Disclosure of Infoniiation
19
Dormant and Unclaimed Accounts
.................................20
Entire Agreement; Headings; No Third Party Beneficiary
.................................20
Laws Governing Company's Accoimt
.................................20
Minimum Balance Requirements; Other Restrictions
.................................20
Ntodification of Agreement Account Conversion
................................20
N/fonitoring and Rccording Crniumunications .
.......21
,\du Picluciau v Rcl~iliunship .
? I
Reliance on Banlc's Records
................................21
Reordering Checks
................................21
Transferring an Interest in Company's Accoirot
................................21
IL Adclitional Terins Applicable to All Commercial
Iuterest-BeRring, Savings and Time Accoiurts ................................21
Interest-Benring Accoiuits
Variable/Fixed-Rate Accomits
..........................................................21
Method Used to Calculate Earned Interest
..........................................................21
Interest Accrual
.........................................................21
Compounding and Crediting
.........................................................22
Target Balance Accounts
.........................................................22
Interest Adjustments
.........................................................22
Tax tdentification Number Certification
........................................................22
3
Commercial Savings Accounts
Bank's Right to Require Notice .............................................................................................22
Limitations on Transfers from Company's Savings Account ...............................................22
Commercill Time Accounts
General ...................................................................................................................................23
Certificated Time Accounts ...................................................................................................23
Nlaturity Date ........................................................................................................................23
Time Requirements ...............................................................................................................23
Payment of Interest ...............................................................................................................23
Additional Deposits ..............................................................................................................23
Withdrawa) of Interest Prior to Nfaturity ...............................................................................23
Renewal Policies ...................................................................................................................23
III. Funds Transfers .................................................................................24
General ..................................................................................................................................24
Notice of Receipt of Funds ...................................................................................................24
Reliance on Identification Numbers .....................................................................................24
Duty to Report Unauthorized and Erroneous Fund Transfers .............................................2d
Erroneous Payment Orders ..................................................................................................24
Automated Clearing House (ACH) Transactions ................................................................24
IV. Selected Services ................................................................................25
ATNI Deposit Service ..........................................................................................................25
Treasury EYpress DepositR Service ......................................................................................25
4
L Tei•ms Applicable to All Commercial Deposit Accounts
Introduction
In this Commercial Account Agreement ("Agreement"), "Company" refers to the owmer
or accountholder of a Wells Fargo bank commercial deposit account ("Account"). "Bank"
refers to the Wells Fargo bank at which Company's Account is maintained. This Agreement
includes the following disclosures applicable to Banl<'s commercial deposit accounts and
related services (each, a"Service"), that Bank has separately provided to Company: (i) the
schedule of Bank's fees and other account-related information (the "fee and information
schedule"), (ii) the collection schedule, (iii) the funds availability policy, (iv) the privacy
policy, (v) the rate sheets for interest-bearing accounts, each as modified by Banl< from time
to time, and (vi) any additiona) disclosures regarding Company's Account that Bank may
provide to Company. Company is responsiUle for ensuring that each Authorized Signer is
familiar with this Agreement. Unless Company has instructed Banl< in writing to the
contrary, Bank may consider communications about Coiiipany's Account from an
Authorized Signer on Company's Account as communications fi-om Company. Company
agrees to notify Bank immediately in writing if any Authorized Signer's authority has Ueen
terminated. This Agreement replaces a(1 prior agreements Nvith Banl< regarding Company's
Account other than agreements regarding secin-ity interests in, or services utilizing, the
Account. By signing Banl<'s signatw-e card for Company's Accoimt or Uy using Company's
Account or a Service, Company Nvill be deemed to have agreed to this Agreement.
Company should retain a copy of this Agreement (and any infonnation that Banlc provides
Company regarding changes to this Agreement) for as long as Company maintains its
Account with Banl<.
Defined Tei•ms
In this Agreement, certain words have a special iiieaning and are therefore defined. Certain
terms and their definitions are found in this Section, and others are found in the text of this
Agreement.
Affiliate.
An "Affiliate" is a banl< that is, directly or indirectly, a wholly or substantially owned
subsidiary of Wells Fargo & Company.
Authorized Signer,
An "Authorized Signer" is a person who has Company's actual or apparent authority to
transact business on Company's Account(s), Whether or not such person has signed the
signature ctu-d or ofhcr Clucumcn(ation for ('ompuny's Acconn1is). F3~1111, ma\cunUnuc to
reco.,,ni/c an r\utlioriictl Signcr's uulhority until 13~111l: ha; rc~Xkcd un(l haI_I a rr;isumihlc
time to act upon Company's writteu modificatioii or revocation of it.
Business Day.
A`Business Day" is eveiy day except Satw-days, Sundays and federal holidays.
Collected Balance.
The "Collected Balance" is the Ledger Balauce iu Company's Account less Deposit Float.
Conunercinl Deposit Accoiuit.
A"commercial deposit accoumt" is any deposit account, other than one of Bank's business
deposit accounts, that is not he(d or maintained primacily for personal, family or household
purposes. Examples of commercial deposit accounts include an account owned by an
individual acting as a sole proprietor, a partnership, a limited partnership, a limited liability
partnership, a limited liability company, a corporation, a joint ventwre, a non-profit
corpot-ation, an employee benefit plan or a governmental unit including an Indian tribal
entity.
Deposit Float.
"Deposit Float" is the total dollar amount of Items deposited in Company's Account for
which, based on the collection schedule used by Bank or the applicable Affiliate for this
type of account, Company's Account has not yet been credited for pw-poses of calculating
the Collected Balance.
Deposited Item.
A"Deposited Item" is an ttem (including a non-U.S. Item) that Bank cashes or collects for
Company or accepts for deposit to Company's Account.
Investable Balance.
The "Investable Balance" is the Collected Balance in Company's Account less (i) the
portion of such Collected Balance that Bank is required by law to hold in reserve at a
Federal Reserve Banl< and (ii) other adjustments.
Item,
An "Item" includes a check, substitute checl<, purported substitute checl<, electronic item,
draft, demand draft, preauthorized draft, remotely created checl<, remotely created item,
remotely created consumer item, image replacement document or other order or instruction
for the payment, transfer, or withdrawal of funds (including a withdrawal slip), automatic
transfer, and electronic h'ansaction (including a wire transfer, an ACH transfer and a
Consumer ACH Debit Enhy), any written doctmient created or authorized in Company's
name that would be a ched< or draft but for the fact that it has not been signed, and a cash-in
ticlcet or a deposit adjustment or a photocopy or an image of any of the foregoing.
Ledger Balance.
The "Ledger Balance" is the balance in Company's Account after all debits and credits for
the Business Day are posted.
Overctraft.
An "OverdrafY" is any event that results in a negative balance in Company's Account.
Paper Item.
A"Paper Item" is an Itcm that is in paper form.
Service.
A"Service" is aiiy service Banl< provides to Company inciuding Without liiiiitation any
Treaswy Management Service.
Arbitratiou Agreement
Agreement to Arbih•ate.
Except as stated in "No Waiver of Self-Help or Provisional Remedies" below, Company
and Bank agree, at Company's or Banlc's request, to submit to binding arbitration all claims,
disputes and controversies between or among Company and Bank (and their respective
employees, officers, directors, attorneys, and other agents), whether in tort, contract or
otherWise arising out of or relating in any w1y to Company's Account(s) and/or Service(s)
und their nc,-,oti;itinn, t-xcriition. aclminisn-ntiun, modi(i(otion. ~uhsliWtiun, furm.ition,
inducrmeM, cnfurccmcnt, (ICf1iuit ur tcrminu(iun (c~ich, a"[)i
Governing Rules.
Any arbih•ation proceeding will (i) proceed in a location selected by the Auierican
Arbitration Association ("AAA") in the state whose laws govern Conipany's Account;
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of thc documents Uetween
Company and Banlc; aud (iii) be conducted by the AAA, or such other administrator as
Company and Banl< shall mutually agree upon, in accordance with the AAA's commercial
dispute resolution pirocedures, unless the claim or counterclaim is at least $1,000,000.00
exclusive of claimed intei•est, arbitration fees and costs in which case the arbitration shall be
conducted in accordance with the AAA's optional procedures for large, comple;c
commercial disputes (the commercial dispute resolution procedw•es or the optional
procedures for large, comp]es commercial disputes to be referred to, as applicable, as the
`Rules"). If there is any inconsistency Uetween the terms hereof and any such Rules, the
terms and procedures set forth herein shall control. Any party who fails or refuses to submit
to arbitration following a lawful demand by any other party shall bear all costs and expenses
incurred by such other party in compelling arbitration of any Dispute. Nothing contained
herein shall be deemed to be a waiver by Bank of the protections
affordcd to it wider 12 U.S.C. Section 91 or any similar applicable state lakv.
No Waiver of Self-Help or Provisimnal Remedies.
This arbitration requirement does not limit the right of either party to (i) exercise self-help
remedies including setoff or (ii) obtain provisional or ancillary remedies such as injunctive
relief or attachment, before, during or after the pendency of any arbitration proceeding. This
exclusion does not constitutc awaiver of the right or obligation of either party to submit any
Dispute to arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in (i) and (ii) of this subsection.
Arbitrator Qullificatioits and Powers.
Any Disptite in which the amount in conh-oversy is $5,000,000.00 or less will be decided Uy
a single arUitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any Dispute in which the amount in controversy exceeds
$5,000,000.00 shall be decided by majority vote of a panel of three arUih•ators; provided
however, that all three arUitrators must actively participate in all hearings and deliberations.
Each arbitrator will bc a neuh-al attorney licensed in the state whose laws govern
Company's Account and who has a minimLnn of ten years experience in the substantive law
applicable to the subject matter of the Dispute to be arbitrated. The arbitrator(s) will
determine whether or not an issue is arbitratable and will give effect to the statutes of
limitation in determining any claim. ln any arbitration proceeding the arbitrator(s) will
decide (by documents only or with a hearing at the discretion of the arbitrator(s)) any pre-
hearing motions which are similar to motions to dismiss for failure to state a claim or
motions for sinnmary adjudication. The arbitrator(s) shall resolve all Disputes in accordance
with the substantive law of the state whose laws gover•n Company's AccoLmt and may grant
any remedy or relief that a court of such state could order or grant within the scope hereof
and such ancillary relief as is necessary to mal<e effective any award. The arbitrator(s) shall
also have the power to award recovery of all costs and fees, to iiiipose sanctions and to talce
such other action as deemed necessary to the same extent a judge could pursuant to the
Federal Rules oF Civil Procedure, the state rules of civil procedure for the state whose laws
govern Company's Account or odler applicable law. Judgment upon the aNvard rendered by
the arbitrator(s) may be entered in any court having jLu•isdiction. The institution and
maintenance of an action for judicial relief or pw•suit of a provisional or ancillary remedy
shall not constiYute awaivcr oF the right of any party, including the plaintiff; to submit the
controversy or claim to arbitration if any other party contests such action for judicial relief.
Discover,y.
In any arbitration proceeding, discovery will Ue permitted in accordance with the Rules. All
discovery shall bc c~pressly limited to matters dircctlv rclevant to the Dispute being
arbiUratc~l ,in~f mn.st hc c~~m~~lctrrl n~~ latcr than hvcnty (?~~l hefurc tlic hru~ing dalc and
\vilhin 150 driys uCthe liling ol thc Disputc with the AAA. Any reyuests fur an cXtcnsion of
the discovery pcriods, m- any discovery Dispules, will be subject to final determination by
dhe arbitrator(s) upon a showing that the request for discovery is essential for the party's
presentation and that no alternative means for obtaining iuformation is available.
Class Actions aud Consolidations.
Company and Bank agree that thc resolution of any Dispute arising pursuant to tlie ternis of
this Agreement sliall Ue resolved by a separate arbih-ation proceeding and shall not Ue
consolidated with other Disputes or treated as a class. Neither Company nor Bank shall be
evtitled to join or consolidate Disputes Uy or against others in any arbitration, or to include
in any arbitration any Dispute as a representative or member of a class, or to act in any
arbitration in the interest of the general public or in a private attorney general capacity.
Pnyment of Arbitrltion Costs and Fees.
The arbitrator(s) shall award all costs and espenses of the arUih'ation proceeding.
Miscellaneous.
To the maximum extent practicable, the AAA, the arbitrator(s), Company and Bank shall
take all action required to conclude any arbitration proceeding within 180 days of the filing
of the Dispute with the AAA. The arbitrator(s), Company, or Banl< may not disclose the
existence, content or results thereof, except for disclosures of information by Company or
Banl< required in the ordinary course of business, by applicable laxv or regulation, or to the
extent necessary to exercise any judicial review rights set forth herein. If more than one
agreement for arbitration by or between Company and Bank potentially applies to a
Dispute, the arbitration agreement most directly relatcd to Company's Account or the
subject matter of the Dispute shall control. This arbitration agreement shall sw•vive the
closing of Company's Account or termination of any Service or the relationship between
Company and Bank.
Statements and Other Account-Related Information
Mailing Statements and Other Accowit-Related Information to Company.
Except as expressly provided otherwise in this Agreement, Bank Nvill mail (or otherwise
mal<e available to Company) statements for Company's Account and notices and other
information regarding Company's Account or any Service (coilectively, "Account-Related
Information") to the postal or elech-onic address reflected in Bank's records for Company's
Account. Any statement or Accotmt-Related Information will be deemed to have been sent
to Company on the first Business Day following the date on it. A statement or other
Account-Rclated Information that is held for Company to pick up will be deemed to be
delivered to Company at the time that Banl< mal<es it available for picl< up.
Compan,y's Obligation to Review Statements and Other Accowit-Related Information
aii(i to Notify Banlc of Errors.
Company agrees to promptly and carefully examine each statement for Company's Account
and any other Account-Related Information and an), paid Items that are returned with (or
described in) the statement and any odier Account-Related Information and to proiuptly
notify Bank of, and reimburse Banl< for, any erroneous credit to Company's Account.
tiVithin ninety (90) days after Qanl< mails or otherwise mal<es the statement or other
Account-Related ]nformation available to Company, Company will iiotify Banl< of any
daim for credit or refund due, for example, to an erroneous or umauthorized deUit, a missing
signature, an unauthorized signature, or an alteration (each, an "Lmauthorized transaction").
Within one (I) year after Bank mails or othenvise mal<es the statement or other Account-
Related Infonnation available to Company, Company wil) notify Bank of any claim for
credit or refund resulting fi-om a forged, unauthorized, or missing endorsement. Such
notification is to be made by (i) calling the telephone number listed on the statement for
Company's Account or in the other Account-Related Information for such purpose and (ii)
submitting awritten report [o Banl: ns soon ns possihle, bul, in any caent, within the
limrfrnmrs tipccillc,l ❑hmc. If Company foi15 to uulih, f?,inl< within thc timcfrumcs
specified above, the balance shown on the stutemcnt 1'ur Compauiy's Accow11 or other
Accouut-Related Infonnation will be conclusively presUmed to be correct, and Company
will be deemed to have released Bank from all liability for the Items eharged to Company's
Account and for all otlier transactions covered by the statement or other Account-Related
Information. In addition, if Company fails to notify Banlc of an unauthorized transaction on
Company's Account within ninety (90) days aftcr Banlc mails or otllerwise malces the
statement for Coiiipany's Account or other Account-Related Infonnation describing the
unauthorized transaction available to Company, E3an1< <vill not be liable to Company for any
unauthorized transactions on Company's Account by the same person that could have been
prevented if Company had complied with Company's obligations under this subsection. If
Company notifies Bank of any claim for credit or refund later than required Uy this
subsection, Banl< may assert, at Company's request and on Company's behalf, any claim
against a third party that Banl< determines in Bank's sole discretion is pennitted under the
laws governing Company's Account or applicaUle rule.
Returned, Unclaimed Statements or Other Account-Related Information.
Unless otherwise prohibited by the laws governing Company's Account, (i) if two or more
statements for Company's Account are returned, Bank may discontinue sending statements
for Company's Account and other Account-Related Information to Company until
Company provides a valid address to Bank; (ii) Bank may destroy statements for
Company's Account
and other Account-Related Information that are sent to Company and retin-ned to Bank as
undeliverable; and (iii) if Bank holds the stateiiient for Company's Account or other
Account-Related Information for Company ro picl< up and the statement remains imclaimed
for sixty (60) days, Bank may send the statement to the address reflected in Bank's records
for Company's Accotmt or destroy it.
Address Clianges for Statements for Company's Accou►it and Otlter Account-Related
Information.
Company may instruct Bank to change the address to Nvhich Bank mails (or the means by
which Bank otherwise malces available) statements for Company's Account and other
Account-Related Information at any time. Bank may act on any such instruction purportedly
made on Company's behalf within a reasonable time after Bank receives such insh'uction.
Unless Company instructs Bank otherwise, Bank may in its sole discretion change the
address only for the Accoimt(s) Company specifies or for all or some of Company's other
Accounts with Bank. Bank may change Company's address of record if Bank receives an
address change notice from the U.S. Postal Service or if E3an1< receives information fi•om a
third party in the business of providing correct address information that the address in
Banl<'s records no longer corresponds to Company's address.
Notices and Other Mail.
Any notice Company sends Bank xvill not be effective until Bank actually receives it and
has a reasonable opportunity to act on it. If there is more than one Authorized Signer on
Company's Account, Bank may send statements and other Account-Related Information to
any one of them (Lmless Company has otherwise instructed Banl< in writing). Company
assumes the risl< of loss in the mail. Any notice Bank sends Company will be effective
when receivcd by Company.
Electironic Co►mmunications.
If Company provides Bank with an,electronic address to which Bank may send electronic
communications, Company agrees that Bank may send to Company by electronic
communication any information that the laNvs governing Company's Account require bc
sent to Company in writing, provided such electronic communication does not violate the
laws governing Company's Account. "Electronic comm1mication" means a message
transmitted electronically in a format that alloNvs visual text or images to be displayed on
equipment such as a personal computer monitor.
Fraud Prevention
Yrotection Against Unauthorized Items.
Company acl:nmvlcd~gc.s ihat thcrc is agowin" risk of IotiscS resultinq from unauthorizcd
Iteins. Mini, ulfcrs Scrviccs th~It provi(lc cffcc(kc nir~in~ For contrullin" thc risi< fioni
unauthurired Ilcros. 'Chcse Services inclucle:
• Positive Pay, or Positive Pay with Payec Validation, or Reverse Positive Pay
(cacli offered by Bank in conjunction with Banlc's Account Reconciliation Plan
Seivice);
• ACH Fraud Filter; and
• Payment Authorization Service.
If Bank has expressly recommended that Company use one or moi•e of these Services (or
any othei- Service related to fraud prevention that Bank offers after the date of this
Agreement), and Company either decides not to use the recomroended Sei•vice or fails to
use the recommended Seivice in accordance with the applicable Service Description or
other Bank documentation applicable to the Service, Company Nvi(1 be treated as having
assumed the risk of any losses that could have been prevented if Company had used the
recommended Service in accordance with the applicable Service Desa-iption or applicable
documentation.
Lost or Stolen Paper Items; Unauthorized Items.
If any of Company's unissued Paper Items has been lost or stolen, or if Company learns that
unauthorized Items are being issued on Company's Account, Company agrees to notify
Bank at once. To the extent that Company's failure to so notify Bank hampers Bank's
ability
to prevcnt loss, Bank will be relieved of any liability for such Items. Upon receipt of any
such notice, Bank may at its sole discretion and Without any IiaUility to Company tal<e one
or more of the Following actions: (i) close Company's Account and open a new account for
Company; (ii) dishonor any Paper Item Company or an Authorized Signer has indicated
may have been lost or stolen (unless Company or an Authorized Signer subsequently has
instructed Bank to honor such an Item); or (iii) pay any Paper Item presented for payment
on Company's Account, provided Company has instructed Banl< to pay such Paper Item and
given Qank the nimiber of that Paper Item. If Bank opens a new account for Company and
Company has authorized a third party to automatically make regular deposits to or
withdrawals fi•om Company's Account (such as wir•e or ACH transfers), Banlc shall have no
liability to Company if Company does not receive any regularly scheduled deposit or if a
regularly scheduled payment is not made for Company due to Company's failure to notify
that third party in a timely fashion of the number of Company's new Accoimt.
Preventing Misuse of Company's Accoturt.
Company agrees to take reasonable steps to ensw•e the integrity of Company's interna)
procedures with respect to Company's Account and Items drawm on Company's Accoimt or
deposited to it. To help prevent emUezzlement and protect Company's business assets, Bani<
recommends Company:
• Assign responsibilities for Company's Account to multiple individuals. Those
who reconcile statements for Company's Account should be different fi-om those
who issue Items drawn on Company's Account.
• Reconcile statements for Company's Account as received and notify Banl<
immediately of any problem.
• Contact Banl< immediately if Company does not receive the statement for
Company's Account when Company Would normally expect to.
• Watch for Paper Itetns cashed out of sequence or made out to cash. Thesc are
classic red flags for embezzlement.
Securc Company's supply of Paper Items at all times. Stolen Paper Items are a
common method of embezzlement.
• Periodically reassign accounting duties such as reconciling Company's Account
or makiiig a deposit.
• Review transaction activity on Company's Account for unexpected fluctuations.
For etample, compare the percentage of cash deposits to total deposit size. Most
businesses will maintain a constant average. A large fluctuation might indicate
embezzlement.
• Desh-oy any Paper Iteui that Company does not intencl to use.
• Use tumper-resistant Paper Items at ull times.
Notifv Banl: immcdiLitcly whcn ;in Authuriicd Si"nrr'S ,iuthurit}/ rncls so 111"i[
his/her name can be removed from all signUture earcls ~uid Online Banlcing access,
and any Cards that Baulc has issued to hin-dher can be cancelled.
• Do not sign blaiiic Paper Items.
• Obtain insw-ance coverage for these rislcs.
Claim of Unautliorized Transactions; Bnnl<'s Rights nnd Liability
Investigation by Bnnlc; Compan,y's Agreement to Cooperlte.
Banl< shall investigate any h'ansaction Company has reported to Banl< as unauthorized (a
"Claiiii of UnaLithorized Transaction"). Company agrees to (i) submit Compaily's Claim of
Unauthorized Transaction in writing to Bank by completing or obtaining a declaration under
penalty of peijwy describing Company's Claim of Unauthorized Transaction (in an
affidavit form approved by Banl<, if so requested); (ii) file a police report; (iii) complete and
retw•n to Bank any documents requested of Company; and (iv) in a(I respects cooperate
fully at Company's expense with Bank in Bank's investigation of Company's Claim of
Unauthorized Transaction.
10
Stanctlyd of Care.
Banl< will meet its standard of care for Company's Account by exercising ordinary care in
the h'ansaction at issue. When Bank tal<es an Item for processing by automated means,
"brdinary care" does not require Bank to cxamine the Item. In all other cases, "brdinary
care" requires only that Bank follow standards that do not vary innreasonably fi•om the
general standards folloNved by similarly situated banlcs. Bani<'s policies and procedures are
general internal guidelines for Bank's use and do not establish a higher standard of care for
Banl< than is othenwise established by the laws governing Company's Account A mere
clerical error or an honest mistake will not be considered a failure of Bank to perform any
of its oUligations. If Bank waives any of its rights as to Company or Company's Accoimt on
one a- more occasions, it will not be considered awaiver of Bank's rights on any other
OCC1SI011.
Limitation of Liability; Indemnification.
IN'hether i❑ connection `vitli Compan,y's Account or a Service, in no event will either
pnrty to this Agreement or its respective ctirectors, officers, employees, or agents be
liable to the other party for an,y special, cmisequential, inctirect or ptntitive dlmlges,
whether nny claim is bnsed on contract or tort or whether the lilcelihood of sucli
dlmages was lcnown to either part,y. The foregoing limitation of liability will not apply
where expressly prohibited by the laws governing Company's Account. Bank Nvill not have
any liability to Company if there are insufficient availablc fitnds in Company's Account to
pay Company's Items due to actions tal<en by (i) Banlc in accordance Nvith this Agreement
or (ii) any third party. EYCept to the extent that Banl< fails to exercise ordinary care or
brcaches this Agreement and as allowed by Texas state law, Company agrees to indemnify
and hold Banl< and its directors, officers, employees and agents harmless from all claims,
demands, losses, liabilities, judgments, and cspenses (including their attorneys' fees and
legal expenses) arising out of or in any Nvay connected with Banl<'s performance under this
Agreement Company agrees this indemnification will survive the closing of Company's
f\ccount and the termiiiation of any Servicc.
Aclverse Claims.
If any person or entity malces a claim against funds in Company's Account, or if Banl<
believes that a conflict exists Uetween or among the Authorized Signers on Company's
Account or that there is a dispute over matters such as the ownership of Company's
Account or the authority to withdraw funds fi•om Company's Accottnt, Bank may, without
any liaUility to Company, take one or more of the following actions: (i) continue to rely on
Banl<'s records to determine the owmetship of or the idcntity of the Authorizcd Signer(s) for
Company's Account; (ii) honor the claim upon receipt of cvidence satisfactory to [3an1< to
juslifv such claim; (iii) frceze aIl or a part of Ihe Funds in ('omp,,inv's Accounl until lhe
dispute is resulved to Bunl<'s satisfaction; (iv) close Company's Account and send ❑ checl:
for the available balance in Company's Accotult payable to Compnny or to Company and
each claimant; or (v) pay the funds into an appropriate court.
Legnl Process.
Banl< may accept and act on any legal process it believes is valid, whether served in person,
by mail or by electronic notification, at any location of Bank. "Legal process" includes a
levy, garnishment or attachment, tax levy or withholding order, injunction, restraining
order, subpoena, search warrant, government agency request for information, forfeiture,
seizure, or other legal process relating to Company's Account. Any sucll legal process is
subject to Banlc's security interest and right of setoff. Banlc will not notify Company of a
grand jiny subpoena affecting Company or Company's Account.
"Freezing" Company's Account.
As part of Banlc's loss prevention program, when Banlc suspeets that irregular,
unauthorized, or unlawful activities may be occun-ing in connection with Company's
Account, Bank may "freeze" (or place a hold on) the balance in Company's Account (and in
other Account(s) Company maintains with Bank) pending an investigation of such
suspected activities. If Bank freezes Company's Account, Bank will give any notice
required by the laws governing Company's Account.
F'orce Alajeure.
Neither party to this Agreement shall be deemed to be in default of any of its obligations
under this Agreement if its performance is delayed, hindered or becomes impossible
because of any act of God or of any public enemy, hostilities, Nvar (declared or imdeclared),
guerilla or terrorist activities, act of sabotage, blockade, earthquake, flood, landslide,
avalanche, tremor, groimd movement, hin-ricane, storm, explosion, fire, laUor disturbance,
riot, insun-ection, stril<e, sicl<ness, accident, civil commotion, epidemic, act of government
or its agencies or officers, power interruption or h-ansmission failure or any cause beyond
the control of either party.
Company's Insin-ance Coverage. Intentionall,y Deleted
Substitute Checks
A federal law, knowm as the "Ched< Clearing for the 21 st Century Act" or "Checl< 21," tool<
effect on October 28, 2004. This law provides for an instrument called a"substitute check."
t1 substitute check contains an accurate copy of the ft-ont and back of the original draft and
bears the legend: "This is a legal copy of your ched<. You can use it the same way you
wrould use the original checl<." As noted in the legend, a substitute ched< is the same as the
original draft for all pwposes, including proving that Company made a payment. Any Paper
Item Company issues or deposits that is returned to Company may be returned in the form
of a substitute checlc. Even if Company has cancelled Itenis returned with the statements for
Company's Account, Banl< may in its sole discretion withhold substitute checks therefrom.
Company agrees Company Nvill not transfer a substitute checl< to Banl<, by deposit or
otherwise, if Bank would be the first financial institution to take the substitute ched<, unless
Banl< has expressly agreed in Nvriting to talce it.
Deposits to Complny's Accot►nt
General.
Unless othenvise agreed in writing, Banlc may, witllout inquiry, accept a deposit to
Company's Account at any time, from any person or entity, made in any manner including
Without limitation a deposit based on an image of an ltem. Banl< may aiso refuse to accept
al) or any part of any deposit. Bank may require that Company deposit an Item that is made
payable to Company to Company's Account, instead of permitting Company to cash the
Ifem. Banlc is not responsible for a deposit until a Banlc ei»ployec has rcccived and verified
it. The receipt received at the time of deposit is not evicicnce dlat a cleposit has becn
verificd. Minl: may rcvcrsc or othcrwisc acljust any crcdit I3anl: bclicvcs it has crroncously
ina& to 0)1111riny's Accuunt 2t uny timc Wilhuut priur nulice to Cump,iny.
Cullection Items.
Bank may, in its sole discretion and with notice to Company, handle a Paper Item as a
collection Item, instead of as a deposit This means [3ank sends the ltem to the issiiei's banlc
for payment and credits Compairy's Accotmt for the Item when Banlc receives payment for
the Item. IF the Itelll is returned impaid, Banlc Nvill return the Item to Company.
Endorsemeuts.
This suUsection applies if an endorsement is necessary for the transfer or negotiation of an
Iteni. Company authorizes Banlc to supply Compaiiy's eildorsement on any ]tem Banlc takes
for collection, payment or deposit to Company's Account Company also authorizes Bank
to collect airy unendorsed Item that is made payable to Company without first supplying
Company's endorsement, provided the Item was deposited to Company's Account. Bank
may refuse to pay any Item or accept any Item for deposit or collection unless Bank is able
to verify to its satisfaction that all of the necessary endorsements are present on the Item.
For example, Bank may require that all endorsers Ue present at the time that an Item is
presented to Bank for payment or accepted for deposit or collection.
12
Material Appearing on the Bacl< of Paper ltems; Legends on Paper Items.
Company is responsible for losscs incurred by nny person that cashes or accepts Company's
Paper Items for deposit, if: (i) the loss is due to a delay in the return of the Item; and (ii) the
delay is caused by material appearing on the bacl< of the Item when it was issued or
transferred by Company. This material may include, but is not limited to, carbon bands,
blaclced out areas, and printed or written text or numbers. Company is responsible for all
losses, claims, damages or expenses that result from a restrictive legend or notation on
Company's Paper Items.
Brench of VVa►•rnnties.
If Company breaches any Nvarranty Company malces under the laws governing Company's
Account or rule with respect to any ltem, Company sh111 not be released or otherwise
discharged from any liability for such breach so long as Bank notifies Company of the
breach Nvithin 120 days after Bank learns of the Ureach. If Bank fails to notify Company
within this 120-day period, Company shall Ue released from liability and discharged only to
the extent Bank's failure to notify Company within such time period caused a loss to
Company.
1N'hen Deposits are Credited to Company's Accowit.
All over-the-counter deposits or ATNt deposits to Company's Account which are received
before Banlc's established cut-off time on any Business Day will be credited (and Nvill be
considered depositcd) to Company's Account as of the close of business that day, and Nvill
be reflected in that day's Ledger E3alance for Company's Account. All other deposits (such
as cash letter or lockbox) will be processed in accordance with the written agreements
governing such deposits or, if there is no written agreement, banl<ing practice. All deposits
received after Bank's established cut-off time on a Business Day or at any time on a day
which is not a Business Day will be credited (and Nvil) be considered deposited) to
Company's Account at the end of the next E3usiness Day. Deposits placed in one of Banlc's
"night depositories" before the established deadline on any Business Day will be credited to
Company's Account at the close of business on that same day. All other deposits placed in
the "night depository" will be credited to Company's Account at the end of the next
Business Day.
Use of Fands.
Company's use of funds deposited to Company's Account will be governed by Banl<'s
separately disclosed collection schedule and, if Company's Account is a checking account,
funds availability policy. Bank's collection schedule describes when deposits of Ttems that
satisfy certain criteria Nvill be considered collected. A fee iiiay be charged in connection
With any use oF uncollected ['unds permittecl by I3anlc. The then-current rate will appear on
thc stalcmcnt for Company's Account. BMnl:'s funds availability policy dcscribcs Mhcn
Cunds dcpositcd to Company's checl<ing Account will bc availablc to bc uscd for all
pin-poses. Bani< nriy change its collection schcdule and Punds availability policy from timc
to timc Without prior notice to Company.
Deposits at Affilintes.
Company may mal<e deposits to Company's Account(s) at an Affiliate, provided the
Affiliate agrees. If Company malces a deposit to Company's Accouut at au Affiliate, that
Affiliate's collection schedule and funds availability policy will determine when the funds
deposited to Company's Account will be considered collected and available.
Deposits of Non-U.S. Items.
Bank may refiise to accept for deposit or coilection an Item that is payable in currency other
than U.S. dollais or an Item that is not drawm on a financial institution chartered in the
United States (each, a"non-U.S. Item"). If Banl< accepts a non-U.S. Item for deposit to
Company's Account or collection, Company accepts all risk associated with foreign
currency fluctuation (exchange rate risk) and any late retw-n of the non-U.S. Item. Company
agrees Bank may use Bank's current buying and selling rate, as applicable, when processing
a non-U.S. Item and may recover from Company's Account any loss Bank incurs as a result
of processing such an ltem for Company. Bank reserves the right to place longer holds on
non-U.S. Items than the timeframes specified in Bank's funds availability policy for
Deposited Items.
13
Acts and Omissions of Other Financial Institutions.
Bank is not liable for the insolvency, neglcct, misconduct, mistake, or default of another
banl< or person, or for the loss or destruction of a Deposited Item or of a notice of
nonpayment relating thereto. If a Deposited Iteiii is lost or misrouted during the collection
pirocess: (i) Bank shall have no responsibility to Company for the actions or inactions of any
collecting bank; (ii) Banl< may charge Company's Accownt for the amount of the Deposited
Item (and reverse any interest that may have accrued to Company's Account in connection
with the Deposited Item); and (iii) Company agrees to cooperate with Bank in recreating the
Deposited Item.
Deposited Items Returned.
Banl< has the right to charge back to or otherwise debit any of Company's Account(s) for
any Deposited Item that is returned (and to reverse or recover any associated interest that
may have accrued), even if Company has made withdraNvals against it. This right of charge
bacl< or debit is not affected by the expiration of any applicable midnight deadline, provided
Bank does not have actual Icnowledge that such deadline has erpired or, having such
laiowledge, Banlc concludes that (i) the Deposited Item is retw-ned in accordance with the
laws governing Company's Account or a rule (including a clearing house rule); or (ii) Banl<
has received a claim that Company has breached a warranty made in connection with the
Deposited Item. Bani< has the right to pursue collection of such Deposited Item, even to the
extent of allowing the payor banl< to hold the Deposited Item beyond the midnight dcadline
in an attempt to recover payment. Banl< may redeposit a returned Deposited [tem and re-
present it for payment by any means (including electronic means), unless Banlc has received
instructions from Company not to redeposit such Deposited Item. Banlc will have no
liability for tal<ing or failing to tal<c any action to recover payment of a returned Deposited
Item. If one of Company's Deposited Items is returned with a claim that there is a breach of
warranty (for example, that it bears a forged endorsement or is altered in any way), Banlc
may debit Company's AccoLult for die amount of the Item (plus any associated fees) and
pay the amount to the person or entity mal<ing the claim. Banl< is Lulder no duty to question
the truth of the facts that are being asscrted, to nssess the timeliness of the claim, or to assert
any defense. Bank need not give Conipany any prior notification of its actions Nvith respect
to the claim. Company agrees to immediately repay any Overdraft caused Uy the return of a
Deposited Item.
Direct Deposits Rettu•ned by Banlc.
if, in connection with a direct deposit plan fimds are deposited to Compaiiy's Account and
Inter re(urned to the originator, Banl< may deduct the amount from that or any other Account
Company maintains at Banl<, without pxior notice and at any time, except as prohibited hy
the laws governing Compauny's Account. R~inl< may also use any other legal remedy to
recover the amount.
Reconsh-ucting Lost or Deshroycd Deposited ltems.
If a Deposited Item is lost or clesh-oyed dw-ing processing or collection (cither at Banl: or at
another point in the payments system), Company agrees to cooperate fLilly with Banlc to
reconsh-uct the Deposited Item by promptly: (i) providing Banlc with a copy of the front and
badc of the Deposited Item fi•om Company's or the issuer's records; (ii) asking the issuer to
place a stop payment on it (at Banlc's expense) and issue a replacement Item to Company (if
the Deposited Iteni has not been paid); or (iii) reviewing Coilipany's records and otlier
information and conducting any additional research as may be reasonable to determine the
issuer's identity (if Conipany does not lanow the identity of the issuer of the Deposited
Item). If Company fails to cooperate with Bank, Banl< may, at any time and Without
advance notice to Company, reverse or otherwise adjust any credit made to Company's
Account for a lost or desh-oyed Depositcd Item.
Withdrawals from Company's Account
Determining Company's Account's Balance; Debiting Company's Accoimt.
In determining the balance in Company's Account that is available to pay Items, Bank may
reduce the available balance by the amount of any hold that Bank has placed on Company's
Account under this Agreement. Additionally, Bank may place a hold on Company's
Account
14
if Bank receives an clectronic notice that an Iteiii will be presented for payment or
collection against Company's Account (a "Notice of Presentment"). The hold may remain
in effect from the time the Notice of Presentmcnt is received Lmtil the ]tem is presented or
notice is received that the Item will not be presented, whichever first occurs. Banl< may
conclusively rely on the information it receives in an electronic presentment or notification
when determining the available balance in Company's Account, and Bani< will not have any
liability for refusing to honor any of Company's Items because of insufficient funds, even if
the electronic presentment or notification incorrectly describes the Item, including its
aiiiount. Bank may debit Company's Account on the day an Item is presented by any
means, inchiding without limitation electronically, or at an earlier time based on notification
received by Bank that an ltem drawm on Company's Account will be presented for payment
or collection. A determination of the balance in Company's Account for purposes of making
a decision to dishonor an Iteiii for insufficiency or unavailability of funds may be made at
any time between the presenhnent of the Iteiii (or earlier upon receipt of any Notice of
Presentment) and the time of return of the Item. No more than one such determination need
be made.
Order of Posting.
Banl< may post Items presented against Company's Account in any order Banl< chooses,
unless the laws governing Coi»pany's Account either require or prohibit a particular order.
For example, Banl< may, if it chooses, post Items in the order of highest dollar amount to
lowest dollar amount. Banl< may change the order of posting Items to Company's Account
at any time without notice.
Paper Items Presented Over-Nhe-Counter for Payment by a Non-Customer.
If a Paper Iteiii drawm against Company's Accouilt is presented over-the-counter for
payment by a person who does not have a deposit account at Banl<, Banl< wiil not charge a
fce to the person presenting the Paper Iteiii as a condition for payment of the Paper Ifem.
Company should contact its bani<er if Company has questions or if Company is required for
1ny reason to have a place where Company's Paper ltems can be cashed Without a fee. Thc
amount of the fee is disclosed in the fee and information schedule. Banl< m1y require
identification acceptable to Banl< and not prohibited by the laws governing Company's
Account, including a fingerprint of the person presenting the Paper Item. Banl< may
dishonor the Paper Iteiii if the person refuses to pay this fee or provide dhe identification
Bank requests.
Large Cash Withdrawals.
If Company wants lo cash a checlc (or makc a cash withclrawal from Company's Account)
fa- a very large amount, Banl< may require five (5) Business Days' advance notice so thut it
can order thc cash from its vault. [3an1< muy, hut is not oblig,Ited to, rcyuirc that Cumpnny
provide aclequate sectn-ity When Company picl<s up lhc cash and may UIso require ComIXiny
to pick up the cash at Banlc's ccntral vault or othcr locntion.
1Vithdi^<nvals at Afliliates.
Conipany may make withdrawals fi•om Company's Account at an Affiliate, provided the
Affiliate agrees. Tf an Af6liate clshes an Iteiii for Complny, Banlc may plnce a hold on
Company's Accowlt(s) for a corresponding amount of funds. If the Iteiii is later returued to
the Affiliate for any reason, Banlc may debit one or more of Company's Accounts for the
amount of the Itein.
Items Resiilting P'rom Company's Disclosiire of Company's Accouut Niiuiber.
IntentionRlly Deleted
Missing Signahu•es; Alterations; Forgeries.
Bank will have no responsibility for reviewing the number or combination of signatures on
an Item drawn on Company's Accoimt. This means that if Company has indicated that more
than one signature is required in connection with an Item drawn on Company's Account,
15
Banl< will have no liability to Company if a transaction is conductcd on or through
Company's Account conh•ary to the signatw•e rcquirements Company has specified,
provided at least one of the required signatuu•es appears on the ltem. Banl< will have no
liability to Company for failing to detect a forgery of the signatLn•e of an Authorized Signei•
or an alteration of one of Company's Items, if the forgery or alteration is such that a
reasonable person could not reasonaUly be expected to detect it.
Dates and Special Instractions on Paper Items.
Bank may, without inquiry or liability, pay one of Company's Paper Items even though: (i)
special instructions written on the Paper Item indicate that Banl< should refuse payment
(e.g., "Void after thirty (30) days," "Paid-(n-Full," or "Void over $100"); (ii) the Paper Item
is staledated (e.g., it bears a date that is more than six (6) iiionths in the past), even if Bank
has Irnowledge of the date on the Paper Item; (iii) the Paper Item is post-dated (e.g., it bears
a date in the future), unless an Authorized Signer has given Banl< a notice of post-dating; or
(iv) the Paper Item is not dated. In addition, Bank may pay in U.S. dollars the amount that
has been MICR-encoded on Company's Paper Item, even though Company has pw-portedly
drawm the Paper Item in a foreign currency.
Facsimile or Mechanical Sign;ttures.
If Company has elected to use a facsimile or other mechanical signature (including a stamp)
to sign or endorse Paper Items, Banl< may rely on that signature (or any signattn-e that
purports ro be the facsimile or other mechanical signature of an Authorized Signer) as
Company's authorized signature without regard to when or by whom or by what means or
in what ink color such signature may have been made or affixed to a Paper (tem deposited
to, drawm on or otherwise debited to Company's Account.
Consumer ACH Debit Entries.
Under the ACH Operating Rules, certain types of ACH entries may only bc presented on a
consumer account. These entries (each, a "Consumer ACH Debit Lntry") include without
limitation Point of Purchase ("POP"), account receivable ("ARC"), destroyed checl<
("\CK") and retw-ned checl< ("RCI<") entries. Banl< shall have no obligation to pay, and no
liability for paying, any Consumer ACFI Debit Entry on Company's Account.
Stop Pa,ymeut Orders; Notices of Post-Dating
General.
"Stop payment order" refers to Uoth an order to Bank not to pay a Paper Item and to a notice
of post-dating. To be effective, a stop payinent order must bc received in n time and mnnner
that gives Banic a reasonable opportunity to act on it before paying, accepting, ccrtifying,
cushing or otherwise becoming obligated to pay Company's Paper ltcm as provided in the
Uniform Commereial Cocle. Gach stop pUniment order is subject ro Btinl<'s \,erificntion that
the Paper Item described in the order has not been paicL This veriticatiun ma}l occur
s« bsequcnt to the time Bank accepts the stop payment order.
Content ol' Stop Payment Order.
Bank requires the exact (i) name of the payee, (ii) number of Company's Account on which
Paper Item is drawn, (iii) Paper Itcm amount and (iv) the Paper Iteni number or a range of
Paper Item numUers. Bank may, at its sole discretion, use only a portion of the required
information in order to identify a Paper Item. Failure to provide correct and complete
information may make it impossible for Bank to stop payment of a Paper Item. Company
agrees to indemnify and hoid Ban]< harmless from and against any loss incurred by Banlc as
a result of Bank's paying a Paper Item if any of the information relied Upon in the stop
payment order is incorrect or incomplete (or as a result of Banl<'s not paying a Paper Item
for which a valid stop payment order is in effect).
Effective Period of Stop Payment O►•der; Renewal; Revocntion.
Bank need not honor a written stop payment order for more than six (6) months. For
accounts that do not have Bank's STOP AUTO-RENEWAL Service, Company must renew
a stop payment arder if Company does not want the stop payment order to expire after six
(6)
16
months. Each renewal is treated as a new stop payment order. For accounts xvith Banl<'s
STOP AUTO-RENEWAL Service, a stop payment order is suUject to annual renewals for
up to six (6) hvelve-month periods, unless Company has otherwise notified Bank in writing.
Bank may pay a Paper [tem after a stop payment order has expired, even though Nie Paper
ltem is more than six (6) months old. An instruction to revol<e a stop payment order must be
received in a time and manner that gives Bank a reasonable opportunity to act on it.
Liabilit,y to Holder in Due Cow•se.
Notwithstanding Bank's timely return of any Paper Item due to a valid stop payment order,
Company may still be liable under the laws governing Company's Account for the amount
of that Item.
Paper Items Paid Over Valid Stop Pa,yment Orde►s.
If Bank pays a Paper ltem over a valid stop payment order, Bank may require Company to
provide Bank with an affidavit describing in detail Company's dispute Nvith the payee. If
Bank credits Company's Account after paying a post-dated Paper Item over a valid and
timely notice of post-dating, Bank may charge Company's Account for the amount of the
Paper Item as of the date of the Paper Item.
Overdrafts; Secui•it,y Interest; Baiilk's Right to Setoff'
Overdrafts aud Insufficient P'uncts.
Bank may, at its option, pay or refuse to pay any Item if it Would a-eate an Overdraft on
Company's Account, without regard to whether Banl< may have previously established a
pattern of honoring or dishonoring such an Item. Bank may tal<e either of the following
actions if Bank receives an Item drawn on Company's Account and there are insufficient
available funds in Company's Accoimt to cover the ltem, Nvith reasonable notice to the
extent possible to Company:
Pay the Item and create an Overdraft on Company's Account.
• Retm-n the Itein if the Item would create an Overdraft on Company's Account.
Company agrees to pay Bank's fee that may vary depending on the action Banl< tal<es. Any
Overdraft on Company's Account is immediately due and payable, unless Bank agrees
othenwise in writing. Company agrees to reimbw-se Banl< for the attorneys' fees and other
costs and espenses Bank incurs in recovering the Overdraft (including Overdraft and
associated fees). On a Business Day when Bank determines that there are sufficievt funds in
Company's Account to pay one or more but not all of the Ttems presented for payment on
Company's Account, the orcler in which Bank posts such Items may affect the number of
ftems paid and the Overdraft and returned Item fees assessed. NVhen Bank posts Itenis in the
ordcr of highest to loNvest dollar amount, the Ovcrdraft and returncd Itcm fccs mny be more
than these fees Would be iP Bunl< werc lo post the Itcins in thc orcicr of lu\rest to highest
clollar ~1mount.
Secwrity luterest; Baulc's Right to Setoff.
To secure Company's performance of this Agreement, Company grants Bank a lien on and
security interest in Compauy's Accouut and Company's accounts with any Affiliate. In
additioii, Company aclanowledges Bank may scroff against any Accuunt(s) (including
matured and unmatured time Accotmt(s)) for any obligation Compauy owes Bank at any
time and for any reason as allowed by the laws govetning Company's Account These
obligations include Uoth secured and unsecw•ed debts and deUts Company owes individually
or together with another person. Bank may consider this Agreement as Company's consent
to Banl<'s asserting its secLu•ity interest or exercising its right of setoff should the laws
governing Company's Account require Company's consent. If Company's Account is an
unmatured time account, Banle may deduct any early withdrawal fee that may be due as a
result of Bank having exercised its right of setoff. If Conlpany has a Sweep Account,
Company also authorizes Bank to redeem Company's shares in the Designated Money
Market Fund and apply the proceeds to any obligation Company owes Bank. The rights
described in this subsection are in addition to and apart firom any other rights, including any
rights granted under any security interest that Company may have granted to Bank.
17
Banlc Fees and Eipenses
General.
Company agrees to pay Bank in accordance with the fee and information schedule.
Company also agrees to pay an amount equal to any applicable taxcs, however designated,
exclusive of taxes based on the net income of Banlc.
Pa,yment of Bank Fees and Expenses; Finlnce Charges.
Banlc may either directly debit Company's Account or invoice Company for Bank fees and
expenses and taxes incwrred in connection with Company's Account and any Service. If an
Earnings Allowance accrues on Company's Accoimt, Bank xvill periodically apply
Company's accrued Earnings Allowance to Bank fees and expenses (unless Bank othenvise
indicates in writing). Bank may debit Company's Account (or any odier Account Company
maintains at Banl<) or invoice Company for any amoimt Uy which the fees and expenses
exceed the accrued Earnings Allowance on Company's Account Bank may also debit
Company's Account (and any other account Company maintains at Bank) for attorneys'
fees and any other fees and expenses Bank incurs in exercising its rights under tliis
Agreement including Bank's rights in connection with Overdrafts, Adverse Claims, Legal
Process and "Freezing" Company's Account. If there are insufficient ftmds in C0111p111y's
Account to cover the debit, Banl< may overdraw Company's Account. Company agrees to
promptly pay any invoiced amount. Bank may assess finance charges on any invoiced
amounts that are not paid within forty-five (45) days oFdie date of invoice. Finance chaiges
are assessed at a rate of 1.5% per month ((8% per annum) or the highest amount permitted
by the laws governing Complny's Account, whichever is less. Chaiges for accrued and
unpaid interest and previously assessed finance chaiges will not be included when
calculating finance charges. Payments and other reductions of amounts oNved Nvill be
applied first to that portion of outstanding fees attributable to charges for accrued and
unpaid interest and previously assessed finance charges, then to other fees and expenses.
Debiting of service fees occurs on the twentieth (20m) day of cach month, or if the twentieth
(20m) day is not a Qusiness Day, on the iiext succeeding Business Day.
Enrnings Allowance.
Each month, the average monthly Investable Balance in a conunercial demand deposit
account may earn an "Earnings Allowance" which, depending on the arrangement with
Banl<, may be applied against that month's fees for the account. An Earnings Allowance in
cxcess of the tota) moiithly fees cannot be credited to the accoLmt as interest and may not be
carried forward to the following month. Garnings Allowanccs arc calculated on a 365/366-
day year basis using an "Earnings Allowance R1te," which is a variablc ratc cstablished by
Bank (and which may be as low as zcro pcrcent). Bank rescrves the right to change this rate
at any time without notice to Company. lf the account is an interest-bearing account, the
Uccount is not eligible to earn an Earnings Allowance.
Checlung SuUaccounts
For each checl<ing account, Banl< may establish on Company's behalf a masta, accoumt and
two subaccounts. All inforniation that is niade available to Conipany about Company's
Account will be at the master account level. The subaccotmts are comprised of a savings
account and a transactio» account. On the first day of each montli, Bank will allocate fimds
Uetween the two subaccotints as it deems appropriate. Items received by Bank that are
drawm against Company's master accoLmt will be presented for payment against the
h'ansaction subaccount. Funds will be transferred fi•om the savings subaccount to cover
Items presented against the h'ansaction subaccount as may be needed. On the sixth (6a,)
transfer from the savings subaccoLmt during a statement period all of the fimds on deposit in
the savings subaccoLmt will be transferred to the transaction subaccount. If Company's
Account earns interest, the use of suUaccounts will not affect the interest Company earns.
18
Miscellaneous
Acceptable P'orm of Paper Items; Document and Image Qaality.
Company agrees to comply with Banl<'s specifications for Paper Items, including without
limitation paper stock, dimensions, and other generally applicable industry standards for
Paper Items and to include on Coiiipany's Paper Items Banl<'s name and address as directed
by Bank. Certain features (such as security featw•es) of an originally issued Item or a
Deposited Item may impair the imagc quality of a substitute ched<, purported substitute
ched< or electronic (tem created by Bank or any third party. Bank will not be liable for any
claims, demands, judgments or expenses paid, suffered or incurred by Company, and
Company will indemnify Bank from and hold Bank harmless against any claims, demands,
judgments or expenses paid, suffered or incurred by Bank, arising directly or indirectly as a
result of or in connection with (i) the untimely retLu•n of any Paper Item Company has
issued as a result of, and any presentment-related problem resulting fi-om, the failure of the
Paper ltem to conform in any respect to Banl<'s Paper Item specifications, including Nvithout
limitation, failuu•e to include Banl<'s full name and address on die Paper ttem, and (ii) any
claim based on the image quality of a substitute check, purported substitute checl< or
electronic [tem, whether created by Bank or any third party.
Closing Company's Account.
Company may close Company's Account at any time. E3an1< may, in its sole discretion,
close Company's Account with ninety (90) days written notice. If Bank closes Company's
Account, Banl< may send the Collected Balance on deposit in Company's Account by
ordinary mail to Company's most recent address shown on Bani<'s accoimt records.
Whether Company or Banl< closes Company's Account, Company agrees to maintain on
deposit in Company's Account sufficient funds (determined in Bani<'s sole discretion) to
cover outstanding Items ro be paid from Company's Account, charge-bad<s including
Without limitation rehuned Deposited Items and Banl<'s fees and expenses. This Agreement
shall continue to govern Company's Account until Banlc mal<es a final disbtn-scment from it.
In addition, Banl< will not be liable for any loss or damage that may result 6-om dishonoring
any of Conlpany's ltems that arc presented or otherwise received after Coinpany's Account
is closed.
ContrRCt Langulge.
English is the controlling language of the relationship Uetween Company and Banlc Bank
may hranslate its agrcements, forms, disclosures and advertiseinents into nnother language
for Company's convenience. However, if therc is a discrepancy behveen Banl<'s English
Ianguage materials and the nruterials in another language, the EnUlish language version is
conhrolling, unlcss (i) Banl< othenvise agrees with Company in writing; or (ii) the laws
governing Cumpany's Account specifically provide for a diflerent result.
Creelit Reports.
Company authorizes Banl< to malce any inquiries that Banl< considers appropriate to
determine if Bank should open and maintain an Account for Company. This may include
ordering a credit (or other) rcport (e.g., information fi•om any motor vehicle department or
other state agency) on Company.
Disclositre of Information.
Generally, absent Company's consent, Banlc wilt not disclose information about Company's
Account, but may do so under the following circumstances: (i) to comply Nvith the laws
governing Company's Account; (ii) in connection with examinations by state and federal
banking authorities; (iii) to comply With any legal process, including witliout limitation a
subpoena, search warrant or other order of a government agency or court; (iv) when Bani<
determines that disclosure is necessary or appropriate in order to complete a transaction;
(v) to verify the existence and condition of Company's Account for a third party, such as a
merchant or credit bureau; (vi) to provide information to Company's legai representative or
successor; (vii) when reporting the involuntary closure of Company's Account (viii) when
Bank concludes that disclosure is necessary to protect Company, Company's Account, or
the interests of Bank; (ix) to agents, independent contractors, and other representatives of
19
Banlc in connection with the servicing or processing of Company's Account or Accoimt
transactions, Account analysis, or similar purposes; (x) to Banl<'s Affiliates and affiliated
companies; or (xi) if Company gives Company's pcnnission.
Dormnnt nnd Unclaimed Accomrts.
Company's Account is dormant if, for one year for a checking account or three years for a
Commercial savings or time account, there is no cusromer initiated activity (except where
the laws governing Company's Account require otherwise). If Company's Account is
dormant, Bank may hold all statements on Company's Account, but Banl<'s normal
maintenance and other fees Nvill continue to be assessed except where prohibited and ATNt
and Point-of-Sale ("POS") access inay be bloc)<ed. If Coiiipany's Account remains dormant
and is Lulclaimed by Company for the period required under the laws governing Company's
Account, Banl< is required by those laws to "escheat" the funds; that is, to deliver the funds
in Company's Account to the state Nvhose laws govern Company's Account. Banl< may
charge a fee to Company's Account for mailing an escheat notice. When the funds in
Company's Account are delivered to the state, Company's Account is closed, and no
interest accrues. To recover funds delivered to the state, Company must file a claim with the
state.
Entire Agreement; Heaclings; No Third Parti, Beneticiary.
This Agreement, the Depositoiy Services Contract, the RFP and Banlc's response constitute
the entire agreemeiit behween Company and Banl< regarding the subjects addressed in it and
supersedes prior oral or written representations, conditions, warranties, understandings,
proposals or agrcements regarding Company's Account. Headings do not constitutc a part
of this Agreement. No person or entity will be deemed to be a third party beneficiary under
this Agreement.
Laws Governing Compnny's Account.
The laws governing Company's AccowIt include thc laws and regulations of the United
States and, to the extent applicable, the laws of thc State of Texas, Denton County, Without
regard ro conflicts of laws principles. If Company's Account was not opened in person at a
Banlc office (for example, if Company opened its Account by phone, through the mail, or
over the Internet), Company's Accowit will be governed by the laws of the state in which
Bank's main office is located, unless Bank notifies Company that its Account has been
assigned to a particular Banl< office, in which event the laws of the state in which that office
is located will govern Company's Account. Any lawsuits, claims, or other proceedings
relating iu any way to Conipany's Account, any Scrvice or this f\grecment, including
Without limitation, the enforcemcnt of the Arbitration Agreement in this f\greement and the
enh•y ofjudsment on any arbih•ation award shall be venued eXclusively in thc courts of the
Statc of Texas, Dcnton County, Without regard to conflict of laws 111-inciples. Gaeh provision
of this Agrecment stands alone. Any proeision of this Agreemen[ which is inconsistent with
the laws governing Company's Accow1t, eithcr in its cntirety or with respcct to a pX-lrticular
type of transaction or Itcm, Nvill be deemed modified and applied in a manner eonsistent
with the laws governing Company's Account. Any provision of this Agreement which a
court of competent jurisdiction deterniines to be imenforceable or invalid, either in its
entirety or Nvith respect to a particular type of transactiou or ltem, will not affect the
enforceability or validity of the remaining provisions of this Agreement.
NIinimuui B11aiice Requirements; Otlier Resh•ictioiis. Intentionaliy Deleted
Alodification of Agreement; Accowrt Conversion.
Banlc may in its sole discretion fi•om time to time change this Agreement Uy adding new
provisions or by modifying or deleting existing provisions. Each such addition,
modification or deletion is referred to in this Agreement as a"modification." Wien
applieable law requires Bank to notify Compairy of a modification, Bank may do so by
posting notice of the modification in Bank or at Bank's home page (www.wellsfargo.com),
by including
20
a message on or with the statement for Company's Account, or by any other means that
Banl< consideis appropriate, unless the laws governing Company's Account requires notice
by a specific means. If a conflict arises between such modification and the terms of the
Depository Services Contract, RFP and/or Bank's response, the Depository Services
Contract, RFP or Bank's response xvill control. ln addition, [3anlt iiiay agree in writing to
waive a provision of this Agreement including Without limitation a fee (a "Nvaiver"). Banl<
may, upon prior written notice to Company, revoke any Nvaiver. Company's continued use
of Company's Account or a related Service following the effective date of any modification
or revocation of any waiver will show Company's consent to that modification or
revocation of waiver. Banl< may convert Company's Account to another type of accoimt at
any time, provided Banl< gives Company any advance notice that may be required.
Monitoring and Recording Communications.
Banl< may without liability monitor, record and retain telephone conversations, electronic
niessages, elech-onic records and other data transmissions between Company and Banlc at
any titne without further notice to Company, unless further notice is otherwise required by
the laws governing Company's Account.
No Fiduciar,y Relationship.
Banl<'s relationship Avith Company concerniiig Company's Account is that of debtor and
creditor; no fiduciary, quasi-fiduciary, or special relationship exists behveen Company and
Banl<.
Reliance on Bank Records.
Bank may rely solely on its records to detemiine thc form of ownership of and the
Authorized Signers on Company's Account.
Reordering Checlcs.
Company can reorder ched<s by mailing the reorder form enclosed in Company's current
order of checics or by calling Banlc at the telephone number shown on the statement for
Company's Account. If Company or a third party prints its ched<s, Banlc shall have no
liabiliry to Company if Banl< is unable to process such ched<s by aLitomated iiieans.
TrRnsferriug an Interest iu Compan,y's Account.
Company's Account may not be pledged, assigned, or in any other manner h-ansferred,
whether in wllole or in part, without Banlc's written agreement.
IL Additional Terms Applicable to f\ll CoTnanercial
Interest-i3earing, Savings aitd Time Accotuits
Intcrest-BcarinR Accotmts
Vsuriable/Fixed-Rate Accounts.
Company's interest-bearing Account may be either a vuriable-rate or fixed-rate account.
Unless Banlc has specified otherwise in writing, Company's Accowit will be a variable-rate
accotmt. That means Bank may in its sole discretion change the interest rate on Company's
Account at any time. If Company's Account is a fizcd-rate account and it is not a litne
account, Company will be paid the specified interest rate for at least thirty (30) days.
Dletliod Used to Cn1culRte Earned Interest.
Banlc may use either the average daily balance or daily balance method to calculatc interest.
The average daily balavice method applies a periodic rate to the average daily collected
balance for the period. The average daily balance is cniculated by adding principal for each
day and dividing by the number of days in the period. The daily balance method applies a
daily periodic rate to principal each day. Unless Banl< has specified otherwise in writing, it
wil) use the daily balance method to calculate interest. If Company's Account is a tiered-
rate account, Bank may pay the same interest rate on more than one tier.
Interest Accrual.
If Company deposits a non-cash Item, such as a check, interest begins to accrue no later
than the Business Day Bank receives credit for the deposit of that Item. This may not be the
same day that Company deposits the non-cash Item to Company's Account.
21
Compouncling and Crediting.
Intcrest will compound on a daily basis. For chcd<ing and savings accownts, intcrest Nvill be
credited on a monthly basis. For time accounts, Banl< will notify Cotnpany separately as to
the frequency with which interest will be credited to Company's Account.
'I'arget Balance Accomrts.
lf Company maintains multiple accounts at Banl<, Company may, with Banlc's consent,
designate in writing one such accoimt as its "Principal Account" and one or more additional
accounts as "Target Balance Accounts." For each Target Balance Account, Company will
separately specify to Bank in writing the Ledger Balance or Collected Balance which
Company wishes to maintain in such account (the "Target Balance"). At the end of each
Business Day, Bank will determine the applicable balance on deposit in each Taiget
Balance Account If the applicable balance in a Target Balance Account exceeds its Target
Balance, Bani< will transfer fi•om the Target Balance Account to the Principal Account such
funds as are necessary to bring the applicable balance to the Target Balance. If the
applicable balance is less than the Target Balance, Banl< wiil transfer fi•om the Principal
Account to the Taiget Balance Account such funds as are necessary to bring the applicable
balance to the Target Balance. Bank may, but Will not bc required to, transfer funds if the
hransfer Wrould create an Overdraft or exceed the Collected Balance then on dcposit in the
Principal Account.
Interest Adjustments.
An interest adjustment may be reflected on the statement for Company's Account for the
month after it occurs rather than the month in which it occurs.
Tax Identiticntion Number Certificatioii.
In most instances, Treasury regulations require Bank to obtain a Tax Identification Number
("TIN") for each account. To avoid bacl<up withholding tax on accounts that carn interest or
dividends, Company must submit Internal Revenue Service ("1RS") Porm W-9 or Porm
W-BGN to Banlc U.S. citizens or other U.S. persons, including resident alien individuals,
must provide a Form W-). If Company is a non-resident alien, Company nntst provide a
Form W-SBEN. Other additional forms m1y be required if Company is a Foreign
partnership, foreign government, or is claiming an esemption based on Effectively
Connected Income. Until Bank has received the completed and signed Form(s) W-9 or
W-3BEN, Bank may either not pay interest or pay interest and comply with the Uackup
wiHlholding requirements of the IRS. If Conipany's Account is nn intcrest-bearing checking
or savings account, it will begin earning intcrest at thc rate in cffcct on thc date Bunl<
rcccivcs Company's Porin(s) W-9 or W-8BEN. If Company's Account is a timc account, it
will carn interest at the rate in effect on the datc opcncd or the datc of last maturity,
whichever is later. ff, at any time, Bnnic receives information which indicates that someone
other th<un Company is using the snme'I'W lhat Company ccrlifiecl as its TIN on Form \V-9,
and Banl: is not ablc to dctermine to its mvn sntisC~iction th~it thu'1'IN has been ussigne(l tu
Conipany, Banlc may at its option and without notice (i) stop paying interest on Compuny's
Account, (ii) continue paying interest bLit coroply with the baclcup withholding requirements
of the IRS and/or, (iii) tal<e any other action which E3ank believes is reasonable in the
circumstances. If Company is an individual who owns its Account as a sole proprietor, upon
that individua('s death, Banlc must be provided with the individual's estate's or successor's
TIN or Bank may eidier refiise to pay interest earned on Complny's Account since the date
of the individual's deadi or wiNihold a portioii of the interest that has been earned on
Company's Account since the date of the individual's death.
Conmlercial Time Accounts
Genernl.
Commercial Time ("time") Accounts include deposits which are payable, either on a
specified date or at the expiration of a specified time, no less than seven (7) calendar days
after the date of deposit. Bank may refer to a time account as a"certificate of deposit" or a
"CD," even though the time account is not represented by a certificate.
Certificated Time Accotints.
If Company receives a certificate evideiicing Company's time Account, Bank may require
Company to present thc certificate and any amendi»ents to receive payment or transfer
ownership.
Matw•ih' Date.
Company's tiiiie Account will mature at the end of the term stated on Company's receipt,
disclosure or certificate, as applicable.
Time Requirements.
Company agrees to keep Company's funds on deposit until the maturity date. Company
may malce withdrawals fi•om Company's tiiiie Account on the maturity date or within the
grace period after that date. Banlc will not agree in advance to allow withdrawal before
maturity.
Paymettt of Interest. ~
If Company has elected a payment of interest other than a credit to Company's time
Accoimt, Banl< may in its sole discretion terminate it in favor of crediting Coinpany's tiiiie
Account. Ordinarily, such discretion will Ue exercised Nvhen an interest payment mailed to
Company's Account address has beeii returned undelivered or when an Account to which
Company's interest payments were automatically credited has been closed, or if the interest
payment amount is less than any minimum amount disclosed in the fee and information
schedulc.
Adclitional Deposits.
Other than during the grace period, Company may not mal<e additional deposits to
Company's tiiiie Account, unless Bani< othenvise agrees in writing.
NVithch•awnl of [nterest Prior to Maturity.
A withdrawal of interest prior to maturity will reduce earnings.
Renewal Policies.
(f Company's tiiiie Accowit is automatically rcncwablc, at maturity it Will rcnc\v (i) for a
lil<e tenn; and (ii) at Banl<'s interest rale in effect on the maturity date For a new tiiiie
deposit of the same term and amowlt, unless Banl< Iias notified Company that it wil( not
renew Company's Account Couipairy iuay withdraw Cotnpany's funcls anytime dtu-ing the
grace period without a fee. If Company does, Bank will not pay interest for that period on
the funds withdrawm. If Company's tiiiie Account is not automatically renewable and
Company does not withdraw the funds on the maturity date, the funds will no longer earn
interest after the maturity date and will be placed in a non-interest-bearing checl:ing
t\ccount.
23
III. Funds Transfers
General.
Funds transfcrs to oi- from Company's Account will be governed by the rules of any funds
transfer system through which the transfcrs are made, as amended fi•om timc to time,
including, without limitation, the National Automated Clearing House Association and any
regional association (each, an "ACH") and Clearing House Interbank Payments System
("CHIPS"). The following terms are in addition to, and not in place of, any other
agreements between Company and Bank regarding funds transfers.
Notice of Receipt of Funds.
Unless Bank has otherwise agreed in writing, it will notify Company of ftmds electronically
debited oi- credited to Company's Account through the statement for Company's Account
covering the period in which the transaction occurred. Bank is under no obligation to
provide Company with any additional notice or receipt.
Reliance on Identification Nwnbers.
If a h-ansfer insh-uction descriUes the person to receive payment inconsistently by name and
account number, payment may Ue made on tlie basis of the accotmt number even if tlie
account number identifies a person different fi-om the named person. If a h-ansfer instruction
describes a participating financial institution inconsistently by name and identification
number the identification number may be relied upon as the proper identification of the
financial institution.
Dut,y to Report Unatitliorized Rnd Erroneous Fund 'I'ransfers.
Company agrces to exercise ordinary care to determine whether a fund transfer to a- from
Company's Account was either erroneous oi- not authorized and Nvill notify Banlc of the
facts within a reasonable tiiiie not exceeding sixty (60) days after Banl< sends or malces
available to Company the statement for Company's Account on Nvhich the h-ansfer appears
oi- Company otherwise has notice of the transfcr, whichever is earlier. Company will be
precluded from asserting Chat Banl< is not entitled ro retain payment unless Company objects
to payment within the sixty (60) day period.
Erroneous Payment Orders.
Bank has no obligation to detect errors in payment orders (for example, an erroneous
instruction to pay a beneficiaiy not intended by Company oi- to pay an amount greater than
the amount intended by Company, or an erroneous transmission of a duplicate payment
order previously sent by Company). Should Bani< detect an error on one or more occasions,
it shall not be construed as obligating Banlc to detect errors in any futLn•e payment order.
Aiitomated Clearing Ilouse (ACFI) Trnnsactions.
The following terms apply to paymcnts to oi- from Company's Account that aure hransmitted
through an ACI I:
• Comp.iny's ri;ghls as to payments to or fiom Compuny's Account Will bc
governcd by the laws that goveru Compauy's Account.
• Credit given Uy a receiving bank to its customer for a payment fi•oin Company's
Accoumt is provisional until final settlement h1s Ueen made oi- until paymcnt is
considered received under the laws that govecn Company's Account.
• If final settlement or payment is not made oi- received, die receiving bank will be
entitled to a refund from its customer and Company, as the originator of the
payment Nvill not be considered to Iiave paid Compauy's customer.
• If a payment is made to Company's Account and Bank does not receive final
settlement or payment is not received under the laws governing Company's
Account, Company will not be considered to have received payment, and Bank
will be entitled to reimbursement from Company for that payment.
• Company hereby authorizes any Originating Depositaiy Financial Institution
(ODFI) to initiate, pursuant to ACH Operating Rules, ACH debit entries to
Company's Account for electronic presentment or re-presentment of Items written
oi- authorized by Company.
24
IV. Selected Services Intentionally Deleted
2s
O 2005 Wells Fargo Bank, N.A.
Wells Fargo Bank Northwest, N.A.
All rights reserved.
Members FDIC COM1416 (5/05)
Addendum to
Commercial Account Agreement
Effective J u ly 1,2006
Addendunn to Commercial Account Agreement
This Addendum is effective July 1, 2006. It amends Wells Fargo Bank's Commercial
Account Agreement dated May 1, 2005 (the "Agreement"). All terms defined in the
Agreeinent have the same meaning when used in this Adciendutn. If there is a conflict
Uetween this Addendum and the Agreement, this Addendum will control, Except as
espressly amended by this Addendum, tfze Agreement remains in full force and effect.
In Part T, in the section titled "Deposits to Company's Account," delete the second
sentence and replace it with:
This right of charge baclc or debit is not affected by the expiration of any applicable
midnight deadline, provided Bank does not have actual knowledge that such deadline
has expired or, having such knowledge, (i) Banlc concludes that the Deposited Item has
been returned in accordance with the laws governing Company's Account or a rule
(including a clearing house rule); ar (ii) Bank has received a breach of warranty ciaim iu
cocmection with the Deposited Item.
Immediately after the end o£ Part IV on page 25 of the Aareement, add a new Part V,
reading:
V. Electronic Banking Disclosures
Introduction
This Part describes Bank's account-related electronic banking Services and the additional
ter.ms applicablz to these Services. In general, these Services provide various ways to
transfer funds electronically to and from a Wells Fargo Commercial deposit and/or
credit account using an ATM card or check card linked to the account and/or a Personal
Identification Number ("PIN"). Bank may limit the availability of these Services at any
time, and all of these Services may not be available at each Bank location. Bank may
require Company to sign a separate agreement to obtain these Services. If there is a
conflict between the separate agreement and this Agreement, the separate agreement will
control. Additional terins, if any, applicable to these Services are provided in the Fee and
Information Schedule.
ATM Cards and Check Cards
Defuution of "Card."
"Card" means every type of ATM caz•d tliat Bank issues including: Business Check Cards
(Wells Fargo Business ATM & Check Card and Wells Fargo Business Platinum Check
Card), Business ATM Cards (Wells Fargo Business ATM), Business Deposit Cards (Wells
Fargo Business Deposit), and Lastcrnts"1 ATM Cards,
EligiUility for a Card and/or PIN.
Unless otherwise provided in this Agr.eement, only an Authorized Signer on at least one
Wells Fargo Gommercial deposit account is eligible for a Card and/or PIN, which that
Authorized Signer may use to access that Account. Issuance of a Card andlor PIN is
subject to such additional requirements as Bank may from time to time establish with
respect to that Card or PIN.
Illegal Transactions.
Each person to whom a Card is issued (a "Cardholder") agrees not to use his or her Card
or any credit or deposit account linked to liis or her Card (each, a"Linked Account" ) for
any transaction that is illegal under applicable law.
Use of a Card.
The specific ftmctions that can be performed depend on the type of Card that Bank
issues. The Business Clieck Card enables a Cardholder to make:
• Purchases at merchants that accept Visa"' credit cards and business cards and
at merchants in participating regional proprietary Point of Sale ("POS") net-
worles.
• Cash withdrawals from, balance inquiries on, and fuuds transfers between
Company's Linked Accounts diat are deposit accounts as well as advances and
balance inquiries on and payments to Coinpany's Linked Accounts that are line
of credit account(s) and credit card account(s) at Wells Fargo ATMs.
• Cash withdrawals from and balance inquiries on Company's Linked Accounts
designated as primary checking and primary savings at non-Wells Pargo ATIvIs
that participate an shared ATM networles to which Bank belongs (and, which
are identified on the ATM and the back of the Card) and American Express"
cash dispensers. In addition, deposits (with cash back), ATM statements, pur-
chases of U.S. postage stamps, and payments to accounts not linked to the
Card using the "Payment in Envelope" function are available at most Wells
Fargo ATMs.
The Business ATM Card provides the same ATM access as the Business Clieck Card and,
where available, can be used to make purchases at inerchants in participacing regional
proprietary POS networlcs.
The Business Deposit Card provides deposit access only to Company's Accounts that are
deposit accounts for those persons designated by Company or an Authorized Signer. The
Business Deposit Card is not available to sole proprietors.
The L:stant ATM Card is a temporary Card providing limited itmctions that Bank may
issue for use until the Cardholder receives his or her permanent Card by mail. An Instant
ATM Card expires twenty-one (21) days after issuance. The daily withdrawal and POS
purchase limits applicable to an Instant ATN1 Card will be aisclosed upon issuance by
Bank.
Termination of Card Privileges.
Eacli Card is the property of Bank. Bank may terminate a Cardholder's Card privileges
at any tune without notice. A Cardholder may terminate his or her Card privileges at any
time by writing Bank at the address provided in the statement far Company's account.
Company agrees to immediately notify Banlc in writing if a Cardholdec•'s autliorization
to use a Card and/or PIN has been terminated and to return that Cardholder's Card
to Bank. It a Cardholder's Card privileges are terminated, that Cardholder agrees to
immediately surrender his or her Card(s) to Bank. Termination of Card privileges will
not affect any rights and obligations for transactions made with a Card before the
privileges were terminated.
Loss Prevention Guidelines
Protectuig the Card and 1'IN.
Each Cardholder is responsible for caring for his or her Card and/or PIN as he or
she would care for checks and other Paper Itexns. Each Cardholder is responsible for
maiutaining the confidentiality of his or her PIN. Each Cardholder is advised to (i)
memorize his or her PIN; (ii) never write his or her PIN on his or her Card; or (iii)
not to share his or her Card and/or PIN witli anyone, including Bank personnel. If a
Cardholcier gives his or her Card or PIN to another person, Company will be responsible
for all transactions made by that person o.c anyone else to whom that person gives the
Cardholder's Card and/or PIN. Notify Bank icnmediately if a Card tied to Company's
Linked Accounts is lost or stolen or is no longer secure.
ATM Safety.
Banlc advises each Cardholder to 1•emember the following tips:
• Be aware of your surroundings, particularly at night.
• Consider having someone accompany you when using an ATM after dark.
• Vary the time and route you use when making deposits at an ATM to avoid
establishing a pattern.
• If you observe or sense suspicious persons or circumstauces, do not use the
ATM at that time. If you are in the middle of a transaction, cancel the transac-
tion, leave the area, and come back at another time or use an ATM at another
location,
• When using the ATM at night, park close to the ATN1 in a well-lighted area.
• Always lock your car.
• If the lights on or around the ATM are not working, select another ATM and
notify Bauk.
• If shrubbery or trees block your view, select another ATM and notify Bank.
• If you are using a drive-up ATM, be sure all passenger windows are closed and
doors locked.
• At all times, have your transaction ready and coinplete it proinptly, then leave
the area. Do not display money taken fram the ATM. Put it away and vecify
the aniount later.
Account Linkages and Designation of Accounts
Account Linkages.
To open and maintlin any type of Card, at least one qualified Wells Fargo Commercial
deposit account must be linked to the Card. A Cardholder may link such additional
deposit or credit accounts to his or her Card as Bank permits from time to time. Tlie
permitted linkages may vary depending on the type of Card. Bank may link any or all of
the Accotmts on which a Cardholder is an Authorized Signer to the Cardholder's Card
unless Company requests Banle not to link specific Accounts. In addition, if Cornpany
is a sUle proprietol; Company inay also link personal account(s) maintained at Bank to
a Card so long as the personal and busiuess accounts are established under the same
TaY Identification Number. For a Business Checlc Card, the primary checking account
linked ta the Card must be a qualifieci Commercial checking account. If the primary
business checking accoimt linked to the Card should Ue closed for any reason, Bank
may designate any additional business checking account that is linked to the Card as the
primary account on the Card. If no additional qualified Commercial checking account is
linked to the Card, the Business Check Card linlced to the closed checlcing account will
be cancelled. If the Card is linked to other business checieing, savings or Market Rate
Account (MRA)/1\/Ioney Market Access (MMA) accounts, t(ie Card will be cancelled and
a Business ATM Card will be mailed to the Cardholder.
Establishing "Primary" Accounts.
If only ane deposit account of each type (e.g., checleing, savings, or N1RA) is linked to
a Card, that account is automatically designated as the "primary" account of that type
for purpases of making electronic fund transfers and displaying the accounts at Wells
Fargo ATIvIs.
Primary vs. Other Accounts.
If more than one account of a single type is linlced to a Card, Company will be asked
to designate a primary account, secondary account, and other accounts. For example, if
four Commercial checlcing accounts are linked to a Card, one will be designated as the
"primary" checlcing account, another will be designated as the "secondary" checking
account and the remaining two accouats will be designated as "other accounts," If
Company does not designate one account as the primary account of a particular type of
account, the first account of t(iat type linked to a Card is considered the prirnary account
for that type of Account. Certain transactions are automatically debited from the Linlced
Accounts designated as primary.
Linlced Credit Card and Line of Credit Accounts.
If Bank permits Company to link a Cardholder's business or personal Vklls Fargo credit
card or line of credit account (each, a"Credit Account") to the Cardholder's Card,
that Cardholder may use the Card to access the linked Credit Accouiu to abtain cash
or transfer funds from a linked Credit Account, as long as the linked Credit Account is
in good standing and has availaUle credit. Each trausaction with the Card iuvolving the
linked Credit Account is subject to the provisions of the agreement between Company
and Banlc applicable to the linked Credit Account.
Card Transactions
Daily Limits.
If a Card is used to make ATM withdrawals ar transfers or POS purchases, the following
rules apply: Tliere is no limit on the numUer of times a Card may be used each day so
long as the separately disclosed daily dollar limits are not esceeded. The ATM daily
dollar limit is the maximum U,S. dollar amount of cash that can be withdrawn from any
combination oF Company's Linked Accounts using a Card. The POS daily purchase limit
is the maximum U.S. dollar amount of purchases (including cash back, if any) that can
be debited from Company's POS Access Account (including overdraft pxotection plan
funds used). For purposes of these daily limits only, a"day" is defined as the 24-liour
period from midnight to midnight, Pacific Time. If a transaction is initiated in another
time zone, it will be processed when Bank receives it. Bank will send notification if
Bank decreases these daily liinits. If a Card is linked to one or more Credit Accounts,
the agreeinents govexning the Credit Accounts govern cash advances from the Credit
Accounts made with a Card,
Overdraft Protection Plan Funds.
"Overdraft Protection Plan Funds" are funds available in Company's savings Account
or sweep Account (each, an "Eligible Account") and/or business line of credit and/or
business credit card that Company has elected in writing to link to Company's POS
Access Account. If Company chooses to receive overdraft protection from an Eligible
Accouut and trom a line of credit and does not indicate which account Bank should
advance funds from first, Bank will first advance available funds from t:ompany's line of
credit, up to Company's POS daily purchase limit. Bank will advance either $25 or the
exact amount of the overdraft on Company's POS Access Account, whichever is larger,
to cover tlie overdraft on Company's POS Access Account, up to Company's POS daily
purchase liinit. If the amount of availablz funds is less than $25, the amount of available
balance may be advanced. If additional funds are required to cover the overdratt on
Company's POS Access Account, Bauk will then advance available funds from Company's
Eligible Account, up to Company's daily POS purchase limit. Advances from Company's
savings Account to cover overdrafts on Company's POS Access Account are included in
the total number of witlidrawals permitted £rom Company's savings Accounc.
Point of Sale ("POS") Access Account.
Company's "POS Access Account" is Company's Linked Account to which POS
transactions post. For a Business Check Card, tlie POS Access Account is Company's
Linked Account designated as "primary checking." For a Business ATM Card, the POS
Access Account is either (i) Company's Linked Account designated as primary checking;
or (ii) if Company's Linlced Accounts do not include a checking account, Company's
Linleed Account designated as primary savings; or (iii) if Coinpany's I.inlced Accounts
do not include a checking or savings account, Company's Linked Account designated as
primary MRA/MMA.
Rewards Program for Sasiness Check Cards.
From time to time, Bank may, at its sole discretion, offer, and without prior notice,
modify or terminate, rewards programs (each, a"Program") for certain Cardholders.
Complete Program terms are provided upon enrollment in tlie Program and ontine at
www.wellsfargorewards.com/checkcard.
Tviaking Pnrchases with a Business Check Card.
Business Check Cards can be used to malce POS purchases in two ways described below.
The funds used for tlzese purchases are deducted from Company's POS Access Account,
and, if needed, any linked Overdraft protection plan funds.
• Visa POS Purchase. Purchases can be made at inerchants or service providers
that accept Visa credit cards or business cards in retail outlets, over the Inter-
net, tlirougli mail orders, and on tlie phane. To do so, the Card is presented to
the merchant and a receipt to authorize the purchase is signed. At merchants
with PIN pads, a Card is swiped, the credit Uutton is selected, and a receipt
to autliorize the purchase is signed, For Internet, phone, and mail orders, the
Card iminber and the expiration date are provided. There is no cash back fea-
ture wlien making a Visa purchase.
• POS Nehwork Purchase. Purchases can be inade at mercliants that accept pay-
ment over regional proprietary POS networlcs in which Banlc participates.*
The togos identi#ying these networlcs are displayed on the back of the Card. To
make such a purchase, the Card is presented to the merchant, ``Uhen prompted,
the PIN is entered to auttiorize the purchase. Ivlerchants participating in these
nerworks may allow cash back with the purchase amount. Some merchants
inay assess a fee for each transacciou made via these networks at their terini-
nals, and if so, a notice describing any fee should be posted at the merchant's
terminal. Tliis fee will be included in the total purchase amount shown on tlie
statement for Company's POS Access Account and reflected on the receipt is-
sued at the time of the transaction.
"Not available for cards issued in IN, IvfI, MN, OH, and SD.
Malcing Purchases with a Business ATM Card.
A Business ATM Card can be used to make purchases at merchants that accept paymeut
over regional proprietary POS networks in which Banlc participates." Refer to the
information under "POS Network Purchase," above, for information about how to use
a Business ATM Card to make purchases. The purchase and any applicable fees will be
described on the statement for Company's POS Access Account,
*Not available for cards issued in IN, MI, MN, OH, and SD.
Electronic Notice of I'urchase.
If Bank receives an eiectronic notice that a purchase has occurred, a hold may be placed
on Company's POS Access Account. Tlie hold will be for the actual amount of the
pLuchase or, depending on the merchant's practice, for the anticipated amount of the
purchase (which may Ue greater than the actual acnount of the purchase). The hold inay
remain in effect from the time the notice is received until the merchant draft or other
item is presented to Bank. The amount of each purchase will be deducted from the
available £uuds in Company's POS Access Account.
Overdrafts.
If funds in Company's POS Access Account are insu#ficient for a requested purchase
and an Overdraft protection plan has been established for that Account, then funds
from the Overdraft protection plan will be accessed, if available, up to the amount of
the requested purchase. If a requested purchase creates an overdraft on Company's POS
Access Account, Bank may, in its sole cliscretion, take any of the actions described in the
section titled "Overdrafts and Insufficient Funds" in Part I of this Agreement.
Paying Bills with a Business Checlc Card.
A Cardholder may arrange with merchants or service providers to make one-time or
recurring payments usiug a Business Check Card. A one-time payment can be made
anytime via the Internet or by phone by authorizing the merchant to bill the payment to
the Business Check Card uumber. Recurritig payments can also be tnade automatically
on a periodic basis (e,g,, monthly),
Visa Account Updater System.
Banlc subscribes to the Visa Account Updater systein ("VAU"). Under this system,
if a Cardholder gives a merchant or other billing entity his or her Carcj number and
authorizes it to periodically bill his or her Card for automatic bill payments and the
Card number changes due to replacement of a damaged Card or updated Card numbei;
the uew Card number will automatically be sent to those merchants. Because not all
merchants subscribe ta the VAU service, if an old Card number changes, the Cardholder
should notify each individual merchant of the new Card number. Changes to a Card
number as a result of a lost/stolen Card will not be updated using Visa's VAU service,
Stop Payments on Purcliase; Changes to Recurring Payments.
Stop payments cannot be requested on one-time purchases made using a Business Check
Card. If a Cardholder has told a merchant or other billing entity in advance to make
recurring debits to his or her Card, the Cardholder can stop any of these debits by
contacting the merchant or other billing entity directly to cancel or discontinue any
scheduled automatic bill payment. Some mercliants require an advance notice to
discontinue automatic payments, so Bauk recommends a Cardholder allow sufficient
advance time for auy changes to his or her payment service.
Transactions Outside the United States.
If a Card is used to make an ATM witlidrawal or a POS purchase outside the United
States, the network that handles the transaction will convert the local currency amount
of ttie transaction to U.S. dollars (or, iu the case of a POS purchase only, the merchant
that handles the trausaction may convert the currency). If the network converts the
currency, it will use either a rate selected by the network from the range of rates available
in wholesale currency markets for the applicable central processing date, which rate
inay vaxy from the rate the network itself receives, or the gover.nment-inandated rate
in effect for the applicable central processing date. If the merchant that handles ttie
POS pi.uchase converts the curreucy, then the merchant will determine the currency
conversion rate. For each purchase transaction in a foreign currency, Bank may also
charge a Foreign Currency Conversion Fee, which is based on the amount provided to
Bank by the network in U.S. dollars (the "Network Transaction Amount").
Transactions at Non-Wells Fargo ATMs.
If a Card is used at non-Wells Fargo ATMs, transactions will be limited to the account
access, withdrawal limit(s) and currency denomination(s) provided by the non-Wells
Fargo ATM, If a non-Wells Fargo ATM does not provide the option of account type
(e.g., checlcing or savings), the cash withdrawal will be from Company's Linked Account
designated as "primary checking." I£ a checkiizg account is not linked to the Card, or
if Company's Linked Account designated as "primary checking" has insufficient funds,
the request will be rejected umless sufficient funds are available in Company's Linked
Account designated as "primary savings." All withdrawals made at non-Wells Fargo
ATMs outside the United States will Ue in local currency, and balances will be shown in
local currency. Bank will debit cash ivithdrawals in currencies other than U.S. dollars
from Coinpany's Account after conversion into U.S. dollars at prevailing r.ates as
determined by Che Network and Bank on the day of conversion.
ATM Statements at Wells Fargo ATMs.
A Card may Ue used to obtain Wells Fargo EXPRESS 100 (last ten (10) transactions)
statemeuts, each of whic(i is a printout of tlie ten (10) most recent monetary transactions
(within the last forty-five (45) days) on any of Coinpany's Linked Accounts. An
EXPRESS 10 stateinent should not be used in lieu of the statement on Company's
AccoLmt for balancing Company's Account. A Card may also be useci to obtain Wells
Fargo FXPRESS BALANCESO (balances of Linlced Accounts) statements, each of which
is a printout of the balances of all of Company's Linked Accounts, The transactions and
Comparry's Linked Account balance may include deposits still subject to verification
ar collection by Bank and may differ from Company's records because of deposits in
progrzss, outstanding checks or other withdrawals, payments or fees. Certain Items
affect the balance on Company's Linked Accounts as shown on an ATM statement:
•"Deposits/Credits in Process" reflects a cumulative total of all credits to Cocn-
pany's Account using a Card since the ATM cut-off on the most recent Business
Day, inc;luding ATM deposits aud ATM transfers into Company's Account.
•"Withdrawals/Debits in Process" reflects a cumulative total of all debits to
Company's Linked Accounts using a Card or Remittance Cash Card since the
ATM cut-off on the most recent Business Day, including ATM withdrawals,
ATM transfers from Company's Linleed Accounts, and POS purchases and
cash withdrawals from Company's Linleeci Accounts,
•"Preauthorized Deposits/Payments in Process" reflects the net amount of any
deposits or payinents (preauthorized by Company or an Authorized Signer)
that the Bank has received but has not yet posted to Company's Account.
•"Funds on Hold" tnay include any amounts not yet available for withdrawal.
"Payment in Envelope" Transactions.
If a Card is used for "Payinent in Envelope" transactions, a payment coupon or return
payment stub should always be included to ensure proper posting of a payment. An
additional Business Day should be allowed for ttiese payments to post. Occasionally,
payments made using this fuuction may be delayed one (1) Business Day or more due to
applicable cut-off times or other factors.
U.S. Postage Stamp Purchases.
If a Card is used to purchase sheets of U.S. postage stamps at designated Wells Fargo
ATV1s, the purchase price will be deducted from the Linked Account seiected and appear
on the statement for that Account. Stamp purchases are subject to the Card's daily dollar
limit for cash withdrawals at ATMs.
ATM and POS Malfunctions. _
Company agrees nat to hald Bank responsible £or damages that result froin or are a
consequence of an ATM or POS malfunetion. Company agrees to promptly notify Bank
if an ATM fails to dispense the correct amount of cash or provide a proper receipt by
calling or writing Bank at the phone number or address provided in the statement for
Campany's account.
Liability for Unauthorized Caxd Transactions (We1lsProtect" Prograin)
Geueral.
The WellsProtectprogram provides protection to Company for unautho.rized transac:tions
for char.ges to Company's Account(s) subject to the conditions described below. Company
is responsible for each Card linked to Company's Account(s). Company will not be
liable for unauthorized transactions except as explained below.
Unauthorized Transactions.
An "Unauthorized Transaction" is a transaction that does not benefit Company and is
made by a person who does not have Company's actual, implied, or apparent authority
to use a Card. Under the WellsProtect prograin, Unauthorized Transactions do not
include (that is, Company is liable Eor):
• Any transaction by a co-owner (even t(iough that co-owner is not a Cardhold-
er), a Cardholder or person authorized by a Cardholder, or other person with
an interest in or authority to transact business on Company's Account.
• Any transaction by a Cardholder that e:cceeded the authority given by Com-
pany. `
• Any transaction that resulted from inadequate internal controls in Company's
organization.
• Any transaction a merchant lias processed in error, or a transactiou involving
goods ar services with wliicli the Cardholder is not satisfied.
If a Cardholder suspects that his or her Card has been lost or stolen, or that an
Unauthorized Transaction has been made with his or her Card or Card number, notify
Bank as soon as possible by calling the Wells Fargo National Business Banking Center
nuinbex listed on the back of the Business Check Card, The sooner Banle is notified,
the sooner Bank cau protect Company's Linked Accounts. A cielay in reporting the
Unauthorized Transactiou may affect Company's liability protection, as defined below.
Bank Notified Within Sixty (60) Days of Mailing of First Statement.
Company lias zero liability for an Unauthorized Transaction made with a Card or Card
ntunber as defined aUove if Bank is notified of the Unauthorized Transaction within sixry
(60) days of when the first statement for Company's Account showing the Unauthorized
Transaction was niailed.
Banlc Notified More Than Sixty (60) Days After Mailing of First Statement.
If Banlc is not notified wittiin sixty (60) days of vvhen the first statement for Company's
Accouut showing the Unauthorized Transaction was mailed, Company will have the
burden of proving that an Unauthorized Transaction occurred. Company may be
required to provide documentation in support of its claim, including an affidavit of
unauthorized use and a police report. Additionally, in evaluating Company's claim, Bank
will consider whether any negligence on the part of the Cardholders within Company's
orgaiuzation has contributed to the transaction in question. Some of the factors that
Bank will consider in connection witli t(iis evaluation include:
1. Timely reportiizg o f lost Card. Whether any loss or the£t of the Card was re-
ported to Bank within forty-eight (43) hours of discovery of the loss or theft.
2. Protnpt revietu o f statentents. Whether Company promptly reviewed the state-
ments for Cornpany's Linked Account(s).
3. Pronzpt report o f Unaattliorized Trartsactiosi. Whether, following discovery of
an unauthorized use of the Card on a statement, the Unauthorized Transaction
was reported to Bank within farty-eight (48) hours of the discovery.
4. Safegtaard Cctrd aitd PIN. Whether the Cardholder exercised reasonable care
in safeguarding his or (ler Card, Card numUer, and PIN froin loss or theft.
5. 1bltsltiple prior ittcidents. Whether Company has reported multiple incidents
of Unauthorized Transactions ta Bank within the 12-month period immedi-
ately preceding a claim and the facts and circumstances surrounding those in-
cidents.
6. Sole Proprietors. If Company is a sole proprietor and has linked Company's
business and personal accounts to a Business Check Card, Business ATM
Card, or Business Deposit Card, refer to the Wells Fargo Consumer Account
Agreement regarding the WellsProtect program for sole proprietor's liability
far Unauthorized Transactions on consumer deposit accoimts.
Telephone Banking Transactions
General.
This Section describes the special rules applicable to Banlc's telephone banking Services.
These Services may Ue accessed by telephoning Bank at the number provided on the baclc
of Company's I3usiness Check Card and either using Bank's voice-prompted Automateci
Phone System (the "Automated System") and/or speaking with a phone banker.
Questions regarding Company's Account sliould be directed to the Customer Setvice
number listed on the statement for Company's Account.
Security Procedure.
Bank will use a security procedure to authenticate each caller using the Automated
System. The security procedure will be used only to authenticate the caller. It will not
be used to detect any errors in any payment instructions that may be given by the caller.
If the caller has a PIN and is using the Automated System, Bank will use the PIN as the
security procedure to authenticate the caller. If the caller does not have a PIN and is
using Bank's Automated System and/or speaking with a phone banker, the caller will be
asked to verify certain information in Bank's records regarding Coinpany, Company's
Authorized Signer or Company's Account as the security procedure to authenticate the
caller.
PIN.
The holder of a Business Check Card or Business ATM Card will use the PIN associated
with that Card to access Bank's Automated System. A person who is not a holder of a
Business Check Card or Business ATM Card may request a PIN from the Wells Fargo
National $usiness Banking Center. Because this PIN is not tied to any Card it cannot be
used to access Company's Account(s) at ATA/ts or to make POS purchases. Bank may
cancel a PIN at any time without notice to the liolder or Company. However, a PIN that
is not tied to any Card will not usually be cancelled so long as it is used at least once
duriug a preceding siY-month period.
Authorization.
Company authorizes Bank to comply with any request of a caller using Bank's telephone
banking Services, including without limitation a request to transfer funds between or
among Company's Accounts, provided Bank authenticates the caller in cotnpliance with
one of tLie security procedures described above.
Unauthorized Telephone Bankuig Transactions.
Company agrees to notify Banlc IMMEDIATELY by calling or writing Bank at the
telephone number or address listed an the statement for Company's Account if Company
thinks the statement is wrong, or if Company needs more information about a telephone
banking transaction described on the statement. Company must, in any event, report
any unauthorized telephone u•ansaction to Bank within fourteen (14) days after Bank
mails or makes available to Company the statement on which the trausaction appzars or
Company otherwise has notice of the transaction, unless the laws governing Company's
Account otherwise provide. If Company does not, Company will be deemed to have
authorized the transaction. Bank will irrvestigate any telephane banking transaction for
which it has receiveci timely notification from Company. When Bank's investigation is
complete, Bank will notify Company of its findings and the action, if any, it will take.
Terrnination of Electronic Banleing Privileges
Ail of Company's electronic banking privileges will be terminated if Company's Account
is closed. Eauk, Company, or an Authorized Signer on Company's account(s) may
terminate specific electronic banking Services without closing Company's Account. A
Service may be termiuated by calling or writing Bank at the phone number or address
provided in the statement for Compariy's Account. Baulc cnay cancel a Card, PIN, or
access to electronic banking Services at any time without notice to Campany or any
affected Authorized Signer. If Bank cancels a Card, Company agrees to immediately
return the cancelled Card to Ban1c.
10
O 2006 Wells Fargo Bank, N.A.
NVells Fargo Batik Northwest, N.A.
All riglits reserved.
Members FDIC COM7196 (4/06)
Addendum to
Wells Fargo Bank's Commercial
Account Agreement
This Addendum amends Wells Fargo Bank's Commercial
Account Agreement ("Agreement" ) dated May 1, 2005.
All terms defined in the Agreement will have the same
meaning when used in this Addendum. If there is a conflict
between this Addendum and the Agreement, this Addendum
will control. Except as expressly amended by this Addendum,
the Agreement remains in full force and effect.
Effective Apri11, 2008
The following language is added at die end of the section titled
"Bank Fees and FYpenses," immediately following the
subsection titled "Earnings Allowance":
"FDIC Assessment.
Company is charged an FDIC Assessment based on the rate
the FDIC chaxges the Bank. The FDIC Assessment may
include deposit insurance charges, financing corporation
(FICO) charges and other charges provided by law. The
FDIC Assessment is disclosed on the regular statement or
Client Analysis Statement far Company's account. This
charge is variable and is subject to change by die Bank at
any time without notice. The charge is assessed periodically
and is based upon the average ledger Ualances Company
maintains in Company's account."
Effective February 15, 2007
In the section of die Agreement titled "Nliscellaneous," the
following language is added at the end of the subsection titled
"Closing Company's Account":
"If Company's account is an interest bearing account,
Company's account will cease earning interest from the
date Company requests it be closed, If Company's account
balance does not reach zero within three (3) months from
the date of Company's request, Bank may close Company's
account and send Company the balance as described aUove
or return Company's account to active status."
02008 Wells Fargo Bank, N.A. All rights reserved. Member FDIC COM4466 (4/08)
IMAGE POSITIVE PAY SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Image Positive Pay service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. The Service enables Company to instruct Bank to pay or return
counterFeit Checks, Checks otherwise not validly issued and certain altered Checks presented
to Bank for payment on the deposit account(s) at Bank that Company enrolls in the Service
(each, an "Account"). Each Business Day, Bank electronically compares the serial number and
numeric amount of Checks presented to Bank for payment before Bank's separately-disclosed
cutoff time on the prior Business Day to Company's Check Issue Data (see section 5). In
accordance with section 7, Bank will notify Company of each Check that does not match
Company's Check Issue Data (each, an "Exception Item") and will pay or return each Exception
Item in accordance with this Service Description. "Check" refers to each check presented for
payment on Company's Account, whether it is counterfeit, not validly issued, altered or validly
issued by Company. A"Business Day" is every day except Saturdays, Sundays, and federal
holidays. Except as otherwise provided in this Service Description, enrollment in Bank's
Account Reconcilement Plan ("ARP") Service is required.
3. Service Options. Company may enroll an Account in one of three options of the Service. The
Service options differ based on (a) when Bank electronically compares a Check to Company's
Check Issue Data (before or after posting the Check to Company's Account); (b) Bank's
handling of errors on Checks; (c) the content of Bank's report to Company of discrepancies
between a Check and Company's Check Issue Data ("Exceptions Report"); and (d) the time by
which Company must notify Bank of Company's pay or return decision ("Decision Deadline"), as
specified in the Exceptions Report. Each discrepancy is an "Exception," and each Check with a
discrepancy is an "Exception Item."
3.1. Perfect Presentment° Positive Pay. Bank electronically compares a Check to
Company's Check Issue Data prior to posting the Check to Company's Account. Each
Check with error(s) that Bank can correct, such as an encoding error, will be corrected,
so that the Exceptions Report includes only unresolved Exception Items. This option is
offered only on an Account enrolled in Bank's Controlled Disbursement Service.
3.2. Positive Pay and Positive Pay Only. Bank electronically compares a Check to
Company's Check Issue Data after posting the Check to Company's Account. Bank
then reviews each Exception Item, and reverses and reposts each Exception Item with
error(s) that Bank can correct, such as encoding errors, so that the Exception Report
includes only unresolved Exception Items. Enrollment in Bank's ARP Service is not
required for Positive Pay Only.
3.3. Basic Positive Pay. Bank electronically compares a Check to Company's Check Issue
Data after posting the Check to Company's Account and provides Company with an
Exceptions Report that contains all Exception Items including Checks with encoding
errors.
TM-1418 Image Positive Pay Service Description Page 1 of 4
Revised 04-08-2010
4. Payee Validation. Bank offers Payee Validation with Perfect Presentment Positive Pay,
Positive Pay and Positive Pay Only. In addition to performing the electronic comparison
described in section 2, Bank electronicaily compares the payee's name on each Check to the
payee's name in Company's Check Issue Data. If there is a discrepancy between the two
names that is not within parameters Bank establishes from time to time in its sole discretion,
Bank will, in its sole discretion, (a) include the Check as an Exception Item in Company's
Exceptions Report (and the discrepancy will constitute an Exception), or (b) manually review the
Check. There are two Payee Validation Options:
4.1. Standard Payee Validation Option. Bank validates the payee's name on each Check
exceeding the dollar threshold determined by Bank from time to time without notice to
Company. Bank will indemnify Company against actual direct money losses incurred by
Company as a result of an unauthorized alteration of the payee's name on each Check
paid by Bank (excluding hand-written Checks).
4.2. Customized Payee Validation Option. Bank validates the payee's name on each
Check exceeding the dollar threshold that Company elects. Company will indemnify
Bank against actual direct money losses Bank incurs as a result of an unauthorized
alteration of the payee's name on a Check below Company's defined dollar threshold,
and Bank will indemnify Company against actual losses Company directly incurs as a
result of an unauthorized alteration of the payee's name on a Check equal to or greater
than Company's defined dollar threshold (excluding hand-written Checks).
Bank will not perForm Payee Validation with respect to a Check if (i) Company fails to include
the payee's name on the Check in Company's Check Issue Data; (ii) Bank does not receive
Company's Check Issue Data for the Check before the cutoff time Bank separately discloses; or
(iii) Company requests Bank to add the payee's name manually to Check Issue Data Company
has previously provided to Bank. If Company's Account is enrolled in Bank's Greenville Perfect
Presentment Positive Pay Service, Payee Validation will be limited to those Checks presented
at a Bank branch for encashment.
5. Check Issue Data. The "Check Issue Data" for any Check is the Check's complete serial
number and numeric amount, and if Company has selected Payee Validation, the payee's name
(or truncated name). Each Business day not later than the cutoff time Bank separately
discloses, Company will provide the Check Issue Data for all Checks issued through that
Business Day to Bank in the format, through the medium, and at the place(s) Bank specifies. In
performing the Service, Bank will use only the Check Issue Data Company provides to Bank.
Bank will not electronically or manually compare a Check with an issue date after the current
Business Day against the Checks presented for payment on the Account until the issue date
contained on the future-dated Check register matches the current Business Day's calendar
date. Bank will not accept Check issue Data that contains an issue date more than forty-five
(45) calendar days in the future.
6. Payment of Matching Checks. If a Check presented to Bank matches the Check Issue Data
Company has provided to Bank (a "Matching Check"), Bank will make final payment on the
Check and charge the Check to Company's Account (subject to section 12).
7. Notification of Exception Item; Image of Exception Item.
7.1. Electronic Comparison. When Bank identifies an Exception Item through its electronic
comparison process, Bank notifies Company of the Exception Item through the
Exceptions Report,Bank makes available to Company through CEO.
TM-1418 Image Positive Pay Service Description Page 2 of 4
Revised 04-08-2010
7.2. Manual Review. When Bank manually reviews a Check in accordance with section 4
and identifies a payee name discrepancy, Bank will use its best efforts but in no event
make more than one attempt to notify Company of the discrepancy by telephoning
Company at the number Bank has on file for Company.
7.3. Holdover Exception Items. This subsection applies when Company has enrolled its
Controlled Disbursement Account in Bank's PerFect Presentment Positive Pay Service.
A"Holdover Exception Item" is an Exception Item Bank identifies after Bank prepares
and transmits the Exceptions Report to Company. Bank will use its best efforts but in no
event make more than one attempt to notify Company of each Holdover Exception Item
by telephoning Company at the number Bank has on file for Company.
7.4. Image of Exception Item. Bank will use reasonable efforts to provide an image of any
Exception Item (including a Holdover Exception Item) to Company, but Bank will have no
liability if Bank is unable to do so prior to Company's Decision Deadline.
8. Default Options for Checks Listed in Exception Report. Bank offers two options for
processing Checks listed in the Exceptions Report for which Company fails to instruct Bank to
pay or return before the Decision Deadline (each, "Company's Default Option"). Company may
elect to have Bank pay each such Check or to return each such Check.
9. Company's Instructions to Bank; Failure to Instruct By Decision Deadline.
9.1. Company's Pay or Return Decision. Company will make its pay or return decision
based on the information about the serial number and amount of the Exception Item in
the Exceptions Report, and if Company has elected Payee Validation, on any payee
information Bank provides to Company.
9.2. Instructions Prior to Decision Deadline. If, prior to Company's Decision Deadline,
Company instructs Bank to pay or return an Exception Item, Bank wiil follow Company's
instructions (subject to section 12). For each Exception Item, Company will use the
same communications channel to instruct Bank that Bank used to notify Company of the
Exception Item. If Bank included the Exception item on the Exception Report Bank
makes available to Company through CEO, Company will use CEO to communicate its
instruction regarding the Exception Item to Bank. If Bank attempted to contact Company
by telephone, Company will telephone Bank to communicate its instruction.
9.3. No Instructions Priar to Decision Deadline. If Company does not instruct Bank prior
to Company's Decision Deadline with respect to an Exception Item described in
subsection 7.1, Bank wiil process the Check in accordance with Company's Default
Option. If Bank is unable to obtain Company's instructions prior to the Decision
Deadline regarding an Exception Item described in subsection 7.2, Bank will return the
Exception Item unpaid (regardless of Company's Default Option). If Bank is unable to
obtain Company's instructions prior to the Decision Deadline regarding a Holdover
Exception Item described in subsection 7.3, Bank will process the Holdover Exception
Item in accordance with Company's Default Option.
10. Limitation of Liability and Indemnification. Each Check Company has authorized or is
deemed to have authorized Bank to pay in accordance with this Service Description will be paid
without Bank perForming Bank's customary (or any other) Check verification procedures. Bank
will have no liability for paying a Check if (a) there is an alteration in its serial number or amount;
(b) Company has elected Payee Validation and Bank fails to identify an alteration or other
exception in the payee's name because Company has truncated the name in Company's Check
Issue Data; (c) it is counterFeit, bears a forged or unauthorized signature; or (d) it was otherwise
TM-1418 Image Positive Pay Service Description Page 3 of 4
Revised 04-08-2010
~
not validly issued. Each Check that ank pays in accordance with this Service Description will
be deemed to be properly payable, a d each Check that Bank returns in accordance with this
Service Description will be deeme not to be properly payable. Without limiting the
indemnification provisions contained y ip the other Service Documentation, Company (a)
indemnifies and holds Bank harmlessVfrom any and all liabilities, losses, damages, claims,
obligations, demands, charges, costs, or expenses (including reasonable fees and
disbursements of legal counsel and accountants) that Bank may suffer or incur as a result of
Bank's payment or return of a Check at Company's instruction or otherwise in accordance with
section 9, and (b) releases and forever discharges Bank from all claims and damages, whether
known or unknown, liquidated or unliquidated, contingent, direct or indirect, which Company
has, or claims to have against Bank relating to the payment or return of any Check in
accordance with this Service Description. This Section 10 will survive termination of the
Service.
11. Stop Payment; Cancel and Void Instructions; Stale-Dated Checks. Company will not use
the Service as a substitute for Bank's stop payment service. Company will follow Bank's
standard stop payment procedures if it desires to stop payment on a Check that was validly
issued. Company agrees to use (a) a cancel instruction only to delete an outstanding Check
included in its Check Issue Data and (b) a void instruction only to notify Bank that a Check
included in Company's Check Issue Data has been destroyed and will not be re-issued. If
Company elects to use Bank's "stale-dated" feature, Bank will return each Matching Check that
is stale-dated unless Company instructs Bank to pay the Check. A Check is "stale-dated" when
it is a Matching Check with an issue date that exceeds the number of months that Company
elects as its stale date.
12. Bank's Right to Return Checks. Nothing in this Service Description will limit Bank's right to
return any Check that Company has authorized Bank to pay in accordance with this Service
Description if Bank determines in Bank's sole discretion that (a) the Check is not properly
payable for any reason (without Bank's agreeing to, or being required to, make such
determination in any circumstance), or (b) there are insufficient collected and available funds in
the Account to pay the Check. As between Company and Bank, any determination by Bank not
to pay a Check will not constitute wrongful dishonor of such Check.
13. Survival. Sections 4, 5, 7, 9, 10 and 12 will survive termination of the Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1418 Image Posifive Pay Service Description Page 4 of 4
Revised 04-08-2010
COMMERCIAL ELECTRONIC OFFICE° (°°CEO"O)
SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Commercial Electronic Office Service ("CEO"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. The CEO is Bank's electronic banking portal that is accessed via the
Internet. Authorized Representatives (see section 3) may use the CEO to access (a) Bank
Services in which Company has seperately enrolled (each, an "Accessed Service") and (b)
third-party sites Bank may make available through the CEO. Bank offers different channels
through which Company may access the CEO that may include without limitation personal
computers and mobile devices. Bank may add or eliminate channels at any time. A Bank
Service or third party site accessible through one channel may not be accessible through
another channei. The Service Documentation includes the Service Description for each
Accessed Service. In the event of a conflict between the Service Description for the Accessed
Service and this Service Description, the Service Description for the Accessed Service will
contol.
3. Access to the CEO. When Company enrolls in the CEO and as Bank may determine is
necessary after enrollment, Bank will (in accordance with section 4) provide one or more secure
means of accessing the Services (each, a"Log-On Credential") to the persons who are
authorized to access the CEO on Company's behalf (each an, "Authorized Representative").
Log-On Credentials may include without limitation Company and user IDs, passwords, token
IDs and other means of providing secure access to the CEO Service that Bank adopts after the
date Company begins using the CEO and may be changed by Bank at any time. Bank will have
no obligation to Company to authenticate separately any communication Bank receives in
Company's name through the CEO, whether or not an Authorized Representative actually
issued the communication. Bank may, at Bank's sole option, contact Company with respect to
any communication Bank receives in Company's name, but Bank's election to contact Company
with respect to one or more communication will not obligate Bank to contact Company with
respect to any subsequent communication Bank receives in Company's name.
4. Administration of the CEO.
4.1. General. Bank offers two options for administering the CEO: (a) self-administration and
(b) Bank administration.
4.2. Self-Administration. If Company enrolls in Bank's self-administration option, there are
three categories of Authorized Representatives: Company Administrator, Administrator
or User. Bank provides Bank's then-current Log-On Credentials only to Company's
initial Company Administrator(s) who will (a) assign Bank's Log-On Credentials to other
individuals and (b) designate each such individual as (i) a Company Administrator, who
may perForm all functions of Company's initial Company Administrator; (ii) an
Administrator, who may perform all the functions of an Administrator including without
limitation designating other Administrator(s) and User(s); or (iii) a User, who may access
those Services as designated by a Company Administrator or an Administrator and
TM-1426 Commercial Electronic Office ("CEO') Service Description Page 1 of 3
Revised 0113112010
those in which Bank permits a User to self-enroll. Each Company Administrator and
Administrator has the authority to enroll Company in additional Services. Company will
promptly revoke the Log-On Credentials of any Authorized Representative when that
individual is no longer an Authorized Representative.
4.3. Bank Administration. If Company does not enroll in Bank's self-administration option,
there is one category of Authorized Representatives: Users. Bank will assign Bank's
then-current Log-On credentials to each User Company designates. Each User
Company designates will remain authorized until Bank has a reasonable time to act after
receiving Company's notification that the User is no longer so authorized.
5. Restricting or Terminating Access to the CEO. Bank will not be obligated to permit any
Authorized Representative to use any Service through the CEO if Bank determines such use is
(a) not in accordance with any term applicable to the CEO, (b) not permitted by any state or
federal law or regulation, (c) not authorized by Company or any third person whose
authorization Bank believes is necessary for such use, or (d) should be denied for Company's or
Bank's protection (without Bank's agreeing to, or being required to, make this determination in
any circumstance).
6. Financial Information. Financial market data, quotes, news, research, and other financial
information developed by third parties and transmitted to Bank (collectively, "Financial
Information") may be available to Company at the CEO. The posting of any Financial
Information or any other information or data at the CEO will not be a recommendation by Bank
of any particular Service or transaction. Bank does not guarantee the accuracy or
completeness, (a) of any Financial Information, (b) is not responsible for the actions or
omissions of the third parties developing or transmitting Financial Information or (c) for any
decision made or action taken by Company in reliance on any Financial Information.
7. CEO Workstation Service. This section contains additional terms applicable to Bank's CEO
Workstation Service. The CEO Workstation enables Company to view and use for global cash
positioning, forecasting and trending data that (a) Bank automatically populates from
Company's deposit account(s) at Bank and other financial institutions Company directs to
provide data to Bank and (b) Company manually populates. Bank will not verify the accuracy
of information from other financial institutions, customer-populated data or forecasting
information. Forecasting information is not a guarantee of actual perFormance. If
Company uses the Workstation to convert funds in an account to a currency other than the
currency in which the account is denominated, the rate used through the Workstation may differ
from the rate actually used when the funds are converted on a given Business Day.
8. Company's Representations and Warranties. Company represents and warrants to Bank:
8.1. Company's governing body has duly authorized each Authorized Representative,
regardless of whether Company enrolls in Bank's self-administration option, Bank
Administration or whether the individual is designated to act as Company Administrator,
Administrator or User; and
8.2. Company will preserve the confidentiality of the Log-On Credentials and immediately
notify Bank if Company becomes aware or suspects that any Log-On Credential may
have been compromised.
TM-1426 Commercial Electronic Otfice ("CEO') Service Description Page 2 of 3
Revised 0113112010
9. Company's Agreement to Indemnify Bank. Company will indemnify and hold Bank, its parent
company, and its affiliates and each of their respective directors, officers, employees, and
agents harmless from and against all losses, damages, claims, demands, charges, costs, or
expenses (including reasonable fees and disbursements of legal counsel and accountants)
awarded against or incurred or suffered by any of them arising directly or indirectly from or
related to any material breach in a representation, warranty, covenant, or obligation of Company
contained in this Service Description:~- Kc, -s ~CAJI~
10. Survival. Sections 3, 4, 5, 6, 7, 8 and 9 will survive termination of the Service.
O 2010 Welis Fargo Bank, N.A. All rights reserved.
TM-1426 Commercial Electronic Office ("CEO') Service Description Page 3 of 3
Revised 0113912010
CASH LETTER SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Welis Fargo Bank, N.A. ("Bank") Cash Letter Service ("Service"). "Service Documentation" is
defined in Bank's Master Agreement for Treasury Management Services ("Master Agreement").
The Service Documentation includes the Acceptance of Services ("Acceptance"), and
"Company" is the company identified in the Acceptance.
2. Description of Service. With the Service, Company may present cash letters ("Cash Letters")
to Bank containing pre-encoded and properly endorsed U.S. dollar checks drawn on Bank or
other U. S. domestic financial institutions (each a, "Check") which conform to all applicable
requirements imposed by the Federal Reserve Banks and Bank's Cash Letter User Guide.
Bank will deposit the aggregate amount of Checks contained in a Cash Letter into Company's
deposit account with Bank designated in such Cash Letter in accordance with the provisions of
the account agreement governing the account.
3. Encoding Responsibilities. Company is responsible for accurately encoding the dollar
amount on each Check presented with a Cash Letter. The dollar amount and applicable paying
bank or nonbank payor routing number must be printed on each Check in Magnetic Ink
Character Recognition ("MICR") numbers. The form, content and placement of this MICR
printing must conform to all applicable technical standards established by the American National
Standards Institute and the American Bankers Association ("Industry Standards").
4. Service Charges and Collected Funds Availability for Reject Items. Checks contained in
Cash Letters which are rejected by Bank's processing equipment because they have not been
encoded in accordance with Industry Standards or which require repair and/or reentry (each, a
"Reject Item") are subject to a per-Check service charge. The service charge is assessed for
those Reject Items exceeding one percent (1.0%) of the total volume of Checks deposited in an
individual Cash Letter. In addition, all Reject Items will be made available as collected funds
one Business Day after they otherwise would have been made available under the applicable
collected funds schedule.
5. Liability; Indemnification. In addition to the limitation of liability and indemnification provisions
set forth in the Master Agreement, Bank will not be liable for, and Company will indemnify and
hold Bank, its directors, officers, employees and agents harmless from all loss, liability, claims,
demands, judgments and expenses paid or suffered or incurred by any such indemnified party
arising directly or indirectly as a result of or in connection with \day k's processing of
photocopies of Checks from a Cash Letter, (b) Bank's return unp Check in a Cash
Letter, (c) Bank's not notifying Company of any returned Check tesented and then
paid as provided in the Cash Letter User Guide, (d) the late reclamny returned Check
caused by Bank's depositing the Check more than once in accorh the Cash Letter
User Guide, (e) the late reclamation of any Check caused by thf another bank or
financial institution, (fl Company's failure to accur ately encode ann accordance with
the requirements of section 4 of this Service Description, or (g) any Bank of encoding
warranties under the Uniform Commercial Code which is attributampany's failure to
accurately encode any Check. Company acknowledges that this cation will survive
termination of this Service.
COMMERCIAL DEPOSITORY SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") commercial depository services (each, a"Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master AgreemenY'). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. With the Service, Company may order currency and coin (collectively,
"cash") from Bank's cash vault and Bank wili make such cash available to an armored car
service acting as Company's agent ("Agent") at Bank's cash vault.
3. Cash Orders from Bank's Cash Vault.
3.1. Cash Requests. Company may request in writing, telephonically by operator-assisted
call or by touch tone/automated response, or electronically via transmission, facsimile, or
Bank's Commercial Electronic Otfice° (CEO°) portal (each a"Cash Request") that Bank
make available to Company's Agent at Bank's cash vault, in an amount designated in
the Cash Request, shipments of cash (each a"Cash Shipment") in bags or other
containers ("Cash Bags"). Bank is authorized to act upon any Cash Request Bank
receives in accordance with this Service Description, and which Bank believes in good
faith to have been made by an authorized representative of Company. Bank has no
obligation whatsoever to verify, and will not be liable for its failure to verify or investigate,
any Cash Request.
3.2. Making Cash Available to Company's Agent. Bank is authorized to make Cash
Shipments available to any person whom Bank in good faith believes to be Company's
Agent. Bank will have no further responsibility, and Company assumes all risk of loss,
for cash made available to any such person. Bank will make Cash Shipments available
only at the locations, on days, and during the hours published by Bank from time to time.
Bank reserves the right to suspend the Service at any time without notice.
3.3. Company's Authorized Representatives. Company will promptly certify to Bank the
identity of: (a) the person with whom Bank is authorized to communicate regarding
authorization codes or other security procedures; (b) Company's Agent authorized to
accept delivery of cash; and ( c) where applicable, the persons who are authorized users
of the Service. Company will give prior written notice to Bank of any change in the
person(s) or Agent so authorized by Company. Bank will be fully protected in relying on
each such notification and on the obligation of Company to promptly notify Bank of any
change in the person(s) or Agent so authorized by Company.
3.4. Security Procedures. For requests made in writing or by facsimile, operator-assisted
telephone call or transmission, a Customer ID assigned by Bank is required. For CEO
requests, a User ID assigned by Bank is required. For touch-tone/automatic response
telephone requests, an Access Code is required which can be assigned either by Bank
or by Company. Operator limits may also be required. It is Company's responsibility to
put into place internal procedures that will minimize the risk of an unauthorized person
gaining access to the Customer ID, User ID(s) and Access Code(s). Such internal
TM-1416 Commercial Depository Service Description Page 1 of 5
Revised 0113112010
procedures include without limitation requiring users to maintain such number(s) and
code(s) in strict confidence. Company will notify Bank immediately in the event a breach
of security is suspected.
3.5. Debit of Account. On the Business Day that Bank makes available any Cash Shipment
to Company's Agent, Bank is authorized to debit Company's designated account at
Bank's or Bank's affiliate ("Designated Account") for the aggregate amount of the
shipment. Company will maintain collected balances in the Designated Account
sufficient at all times to cover fully any debit. Bank has no obligation to release a
requested Cash Shipment or any portion thereof to Company's Agent unless there are
sufficient collected funds in the Designated Account to fully cover the amount of the
Shipment at the time the Shipment is to be made available to Company's Agent. If
Company fails to specify a Designated Account to Bank, Bank may debit any account
which Company maintains with Bank for the amount of a requested Cash Shipment.
3.6. Packing Slip; Differences in Shipment Amount. Each Cash Shipment will be
accompanied by a packing slip. The packing slip will disclose the aggregate amount of
the Cash Shipment, the overall number of containers included in the Cash Shipment,
and the number of containers delivered to Company's Agent for transmittal to Company.
With respect to any Cash Shipment made available to Company's Agent, Company will
notify Bank immediately in writing of any difference between the amount specified on the
packing slip for that Shipment and the amount, as counted by Company, of the
Shipment. In the event that the difference cannot be resolved, Bank's count of the
amount of the disputed Shipment will be conclusive and binding on Company.
4. Delivery and Processing of Deposit Shipments at Bank's Cash Vault. The following
procedures will govern Company's delivery of currency, coin, checks, other negotiable
instruments or food coupons (each a"Deposit ShipmenY') to Bank's cash vault locations, and
Bank's processing of such Deposit Shipments:
4.1. Use of Agent to Deliver Shipments. Company will deliver Deposit Shipments in
deposit bags or other containers ("Deposit Bags") to one of Bank's cash vaults via an
armored car service acting as Company's agent ("Agent"). Company is responsible for
making all arrangements with its Agent for delivery of Deposit Shipments. Bank may
accept Deposit Shipments from any person Bank believes in good faith to be Company's
Agent. The delivery of a Deposit Bag to Bank or Bank's receipt for it on a manifest will
not be deemed proof of Bank's receipt of the contents listed on the deposit slip
contained in the Deposit Bag or Company's records. Bank will have no responsibility for
any Deposit Bag or its contents delivered to one of Bank's cash vaults until the Deposit
Bag is accepted by Bank in accordance with its procedures and the contents of the
Deposit Bag are counted by Bank.
4.2. Delivery Procedures. In delivering a Deposit Shipment to Bank's cash vault, Company
agrees to comply (and to cause its Agent to comply) with the following procedures:
Deliver Deposit Bags only at the locations, on the days, and during the hours
published by Bank from time to time;
Properly endorse all checks and other negotiable instruments included in a
Deposit Shipment;
Use only Bank-approved Deposit Bags that are properly secured;
TM-1416 Commercial Depository Service Description Page 2 of 5
Revised 0113112010
Specify the number of Deposit Bags belonging to Company which are included in
the overall shipment delivered to Bank, as well as the contents of each Deposit
Bag, on a delivery manifest, a copy of which Company's Agent will provide to
Bank at the time of delivery;
Obtain the signature of Bank's employee who accepts delivery on that portion of
the delivery manifest which the Agent retains; and
Retain a copy of the receipt or other document covering each Deposit Bag
delivered by Company to its Agent for at least one year from the date of delivery
to Company's Agent.
Company agrees that Deposit Bags wiil be used only for the deposit of currency, coin,
checks, other negotiable instruments or food coupons (collectively "items"), and will not
be used in any unauthorized manner or for any unlawful purpose. As to any property
other than items included in a Deposit Bag, Bank will not be deemed a bailee and will
have no liability for any loss of or damage to such property which may occur.
4.3. Cut-off Time; Deposit to Designated Account. If a Deposit Shipment is received at
one of Bank's cash vaults on a Business Day before Bank's published "cut-off time" for
that cash vault, the aggregate amount of the deposits in such Shipment will be credited
on that Business Day to the account with Bank specified on the deposit slip for that
Shipment (the "Depository Account"). If a Deposit Shipment is received at a cash vault
on a Business Day after Bank's "cut-off time," the aggregate amount of the deposits in
that Shipment will be credited to the Depository Account on the next succeeding
Business Day. Bank will not deposit any items received in any Deposit Shipment unless
the account number of the Depository Account into which the deposit is to be made is
specified on the deposit slip for that Shipment.
4.4. Processing of Deposit Shipments. Company authorizes Bank to open each Deposit
Bag, count the contents, credit the amount of items to the Depository Account indicated
on the deposit slip contained in the Deposit Bag and process any food coupons, all in
accordance with Bank's customary procedures. All deposits are subject to verification,
and Bank's count of the items will be conclusively deemed to be correct and complete
for all purposes. No relationship of debtor and creditor wiil arise between Bank and
Company until the count has been completed and the deposit credited to the Depository
Account. Company acknowledges that it has had an opportunity to have Bank's
applicable count and verification procedures explained to its representative and agrees
that the same will be deemed commercially reasonable. ~Company understands that no
photocopying or microfilming of items wili be performed at any cash vault location.
4.5. Adjustment Procedures. If the aggregate amount of the items in any Deposit
Shipment, as counted by Bank, is less than that reported on the deposit slip covering
that Shipment, Bank will debit the Depository Account specified on the deposit slip by
such difference and report the difference to Company. If that Depository Account has an
insufficient collected and available balance to cover the debit, Bank will debit any of
Company's other accounts with Bank for the difference, and Company agrees to
promptly reimburse Bank for the difference (or any portion thereofl for which there are
insufficient available balances in Company's accounts with Bank. If the aggregate
amount of the items in any Deposit Shipment, as counted by Bank, is more than that
reported on the deposit slip covering the Shipment, Bank will credit the Depository
Account specified on the deposit slip for the difference and notify Company of the
difference.
TM-1416 Commercial Depository Service Description Page 3 of 5
Revised 0113112010
S. Delivery and Processing of Deposit Shipments at Bank's Night Depository Locations.
The following procedures will govern Company's delivery of currency, coin, checks, other
negotiable instruments or food coupons (each a"Night Deposit") to Bank's night depository
locations, and Bank's processing of Night Deposits.
5.1. Night Depository Locations; Issuance of Keys. Company may make Night Deposits
to its deposit account(s) with Bank by placing the items to be deposited into disposable
bags furnished by Bank (each a"Night Bag") and then placing the Night Bags in the
night depository receptacle ("Night Depository") at one of Bank's branches/stores (each
a"Store") listed on Bank's Night Depository Set-up Form. Each office of Company listed
on the Night Depository Set-up Form will receive one key to the Night Depository at a
designated Store. Company will designate in writing to Bank the individuals to receive
the key for each of its offices; Bank may require such individuais to sign a receipt for the
keys they receive.
5.2. Contents of Night Bags; Deposit of Night Bags. Company agrees that Night Bags
will be used only for the deposit of currency, coin, food coupons, checks or negotiabie
instruments properly endorsed by Company (coliectively "items"), and will not be used in
any unauthorized manner or for any unlawful purpose. As to any property other than
items included in a Night Bag, Bank will not be deemed a bailee and will have no liability
for any loss of or damage to such property which may occur. Each Night Bag must
contain one or more deposit slips listing all the items contained in that Bag and their total
dollar amount, and identifying the deposit account of Company into which the doilar
amount of the deposit is to be credited (the "Designated Account"). After each Night Bag
is placed in a Night Depository, the Night Depository must be securely locked. At the
time each Night Bag is placed in a Night Depository the Bag must be securely closed
and placed completely in the Night Depository.
5.3. Processing of Night Deposits. Bank may open each Night Bag and remove its
contents without Company or any of its representatives being present. The contents of
each Night Bag will be processed in accordance with Bank's standard procedures, and if
placed in a Night Depository before Bank's established "cut-off time" on any Business
Day, those items acceptable for deposit will be deposited into the Designated Account
as of the close of business on that same Business Day. The cut-off time for deposits
made through the night depository may be different from that for deposits made at the
teller line. Night Deposits placed in a Night Depository after Bank's established "cut-off
time" will be credited to the Designated Account on the next succeeding Business Day.
Company understands and agrees that the contents of a Night Bag will not be credited
to the Designated Account, nor wiil the relationship between Company and Bank be that
of a debtor to a creditor with respect to any item in a Bag, until Bank has accepted the
item for deposit into the Designated Account after counting all the items in the Bag and
calculating the total dollar amount of all such items.
5.4. Counting and Adjustment Procedures. If Company's records regarding the total
dollar amount of the items in any Night Bag differ from Bank's calculation of the total
dollar amount of the items in the Bag, Company has the burden of proving that its
records show the correct amount in the Bag or Bank's total will be accepted as final. If
there is a difference between Bank's total and Company's total for the amount of items in
a Night Bag (as Company's total is shown on the deposit slip or slips in the Bag), Bank
will send Company a statement indicating the amount of the difference. In the event that
the difference cannot be resolved, Bank's count of the dollar amount will be conclusive
and binding on Company.
TM-1416 Commercial Depository Service Description Page 4 of 5
Revised 0113112010
5.5. Claims of Lost or Stolen Items. Company will have the burden of proving the amount
of any item which it claims was lost or stolen while it was at a designated Store and that
disappearance of the item occurred while it was at the designated Store. Company
agrees to notify Bank immediately if Company determines that any Night Bag or any
item in a Night Bag has been lost or stolen while at one of Bank's Stores. Company
agrees that it will have total responsibility for each Night Bag and its contents until the
Bag has dropped completely into a Night Depository.
6. Special Instructions. Company may submit to Bank in writing any special handling
instructions it may have in connection with cash orders or deposits of items at Bank's cash vault
or night depository locations. Bank may at its option accept or reject the instructions and so
notify Company. Even if accepted, Bank may stop complying with the instructions upon prior
notice to Company if, in Bank's opinion, continued compliance would increase Bank's costs or
risks, interfere with its established or revised procedures, or diminish the efficiency of Bank's
operations. Any loss attributable to increased risk resulting from a special handling procedure
will be borne solely by Company.
7. Survival. Sections 3.6, 4.4., 4.5., 5.4., 5.5., and 7 will survive termination of the Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1416 Commercial Depository Service Description Page 5 of 5
Revised 0113112010
CHEXSTOe SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") CheXstor service ("Service"). "Service Documentation" is
defined in Bank's Master Agreement for Treasury Management Services ("Master Agreement").
The Service Documentation includes the Acceptance of Services ("Acceptance"), and
"Company" is the company identified in the Acceptance.
2. Description of Service. The Service enables Company to have Bank maintain microfilm
records of all Items paid on each deposit account of Company at Bank that Company enrolis in
the Service (each an "Account"). Bank wiil maintain microfilm records for a period of seven
years or any longer period required by applicable law ("Record Period"). Each Item Bank
microfilms will be shredded and recycled. As part of the Service, Bank will provide a photocopy
of any Item posted against the Account which Company requests during the Record Period.
Company may request a photocopy electronically via Bank's Commercial Electronic Office° or
by contacting Bank at the telephone number on Company's account statement.
3. Liability. If Bank fails to provide in a timely manner a copy of an Item Company requests
during the Record Period, Bank will reimburse Company for (and Bank's liability will be limited
to) any direct monetary loss Company incurs as a result of the Item's unavailability (not to
exceed the amount of the Item). Bank will require Company to substantiate any claimed loss.
O 2010 Welis Fargo Bank, N.A. All rights reserved.
TM-1410 CheXstor Service Description Page 1 of 9
Revised 0113112010
CONTROLLED DISBURSEMENT
SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing Wells
Fargo Bank, N.A. ("Bank")'s controlled disbursement service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Required Account(s) and Services. Company, as defined in the Acceptance, will establish
and maintain:
(a) one or more demand deposit accounts with Bank or Bank's affiliate (each, a"Funding
Account");
(b) one or more checking accounts (each, a"Disbursement Account") at Bank or Bank's
affiliate(s) (each, a "Disbursing Bank"); and
(c) the information reporting service specified by Bank ("Information Reporting Service").
Each Funding Account and Disbursement Account and the Information Reporting Service will be
identified in the Service Documentation. Each Funding Account will be linked to one or more
Disbursement Accounts maintained by Company. Company will use each Disbursement
Account solely to issue checks (or payable-through drafts) and electronic debits (each, a
"Debit") in accordance with this Service Description. Company will not issue any Debits on any
Disbursement Accounts until Bank notifies Company that such Disbursement Account is
operational. Company irrevocably authorizes Disbursing Bank to release to Bank all information
requested by Bank with respect to each Disbursement Account.
Each Disbursement Account and Funding Account will be governed by Weiis Fargo Bank,
N.A.'s Commercial Account Agreement ("Account AgreemenY'), except that if Company's
Funding or Disbursement Account is Bank's Choice III account, "Account Agreement" will mean
Wells Fargo Bank, N. A.'s Business Account Agreement. The term "Bank" as used in the
Account Agreement will mean the bank at which such Disbursement Account or Funding
Account is maintained.
3. Determination of Total Net Presentment. Each Business Day as defined in the applicable
Account Agreement, by the reporting times Bank separately discloses to Company from time to
time, Bank will make the Total Net Presentment for each Disbursement Account available to
Company by means of the Information Reporting Service. The Total Net Presentment consists
of the total dollar amount of:
(a) Debits that have posted in the first and, if applicable, second presentment on that
Business Day; and
(b) Adjustments to the Disbursement Account reported on Bank's CD Summary report,
including without limitation Debits posted after the last presentment on the prior
Business Day (these Debits are referred to collectively as the "Prior Day Funding
Adjustments").
If the Total Net Presentment is not made available through the Information Reporting Service by
TM-1429 Controlled Disbursement Service Description Page 1 of 5
Revised 11-08-2010
the applicable reporting time, Bank will have no liability, and Company will estimate the Total
Net Presentment.
4. Company's Obligation to Deposit Funds in Funding Account. Each Business Day, by the
applicable cutoff time Bank separately discloses to Company from time to time, Company will
deposit good and collected funds in Funding Account so that the balance in Funding Account,
determined in accordance with the applicable Account Agreement, is sufficient to cover either
the Total Net Presentment or Company's estimate of the Total Net Presentment.
If Company fails to transfer funds in accordance with its obligation under the preceding
sentence or if such transfer was based on Company's estimate of the Total Net Presentment
and such estimated amount was less than the actual Total Net Presentment, Bank may, at its
sole option,
(a) advance to Funding Account(s) sufficient funds to pay the Debits presented for payment
on the Disbursement Account and transfer such funds to the Disbursement Account; or
(b) return, or cause Disbursing Bank to return, any Debits, in any order, unpaid (even
though Bank or the Disbursing Bank may have previously established a pattern of
paying such Debits). If Bank returns or causes Disbursing Bank to return the Debits,
Bank is authorized to instruct the Disbursing Bank to return to Bank any funds Bank
transferred to Disbursing Bank pursuant to Section 5.
5. Transfer of Funds to Disbursement Account. Each Business Day, Bank will (a) transfer
from the Funding Account to the Disbursement Account the amount necessary to cover the
Total Net Presentment as shown on the CD Summary Report for that Business Day and (b)
advance funds to the Disbursement Account in the amount sufficient to cover Debits that posted
to Disbursement Account after the last presentment on that Business Day (and this amount
advanced by Bank will be reported on the CD Summary Report for the next Business Day)
6. Disbursing Bank's Obligation to Pay Debits. No Disbursing Bank will have any obligation
whatsoever to pay any Debit if sufficient good and collected funds to cover the Debit are not in
the Disbursement Account on which the Debit is drawn at the time the Disbursing Bank makes
its payment decision.
7. Company's Agreement to Repay Bank's Advances to Disbursement Account(s).
Company will unconditionally pay Bank on demand without setoff or counterclaim in good and
collected funds the full amount of any advance Bank makes pursuant to Section 4(a) and
Section 5 plus Bank's fees and costs incurred in connection with such advance.
8. Security Interest. As security for the Obligations (as defined in this Section 8), Company
pledges to Bank, and grants a lien to Bank on, and a security interest in, the following and the
proceeds thereof (collectively, the "Collateral") as security for the prompt satisfaction of the
Obligations: (a) all amounts from time to time on deposit in, or withdrawable from, Funding
Account, all of Company's other accounts with Bank and Bank's affiliates and each
Disbursement Accounts, and (b) any of Company's property, or property in which Company has
an interest, now or at any time delivered, conveyed, transferred, assigned, pledged or paid to
Bank in any manner whatsoever. "Obligations" includes any and all advances, debts, loans,
obligations and liabilities that Company owes Bank and Bank's affiliates pursuant to the terms of
this Service Description, including without limitation any advances Bank makes to Funding
Account(s) pursuant to Section 4(a) of this Service Description and any advances Bank makes
to Disbursement Account(s) pursuant to Section 5 of this Service Description. Bank's receipt at
any time of any kind of security, ineluding without limitation cash, will not be deemed a waiver of
any of Bank's rights or powers under any agreement Company has signed in Bank's favor.
TM-1429 Controlled Disbursement Service Description Page 2 of 5
Revised 11-08-2010
Company will sign and deliver to Bank, on demand, all such security, control or other
agreements, financing statements and other documents as Bank may at any time request which
are necessary or desirable (in Bank's sole opinion) to grant to Bank a perfected security interest
in and to any or all of the Collateral. At the time any Obligation becomes due and payable,
Bank may sell or otherwise apply or dispose of any and all Collateral, received or to be
received, in such parcel or parcels, at such time or times, at such place or places, for such price
or prices and upon such terms and conditions as Bank may deem proper, and Bank may apply
the net proceeds of the sale or sales, application or other disposition, together with any sums
credited by or due from Bank to Company, to the payment of any and all of the Obligations, all
without prejudice to Bank's rights against Company with respect to any and all of the
Obligations which may be or remain outstanding or unpaid. Company expressly waives any
right to require Bank to make any presentment or demand, or give any notices of any kind,
including, but not limited to, any notice of nonpayment or nonperformance, protest, notice of
protest, notice of dishonor, notice of intent to accelerate or notice of acceleration. Any
requirement of reasonable notice to Company with respect to the sale or other disposition of
Collateral will be met if the notice is given at least five calendar days before the date any sale,
application or other disposition will be made. Bank's rights and remedies under any agreements
or instruments signed by Company in Bank's favor are in addition to, and not exclusive of, any
rights or remedies otherwise available to Bank under applicable law.
9. Fees. Fees for this Service may, in whole or in part, be based on the applicable fees charged
by each Disbursing Bank and will be separately disclosed to Company. Fees will not be
prorated if the Service terminates before the end of a calendar month.
10. Protection Against Fraudulent Checks. Company and Bank acknowledge that there is a
growing risk of loss resulting from the increasing use of counterfeit and certain other types of
fraudulent checks. Company recognizes that controlled disbursement service customers are
especially susceptible to losses from these checks. Company is aware that Bank offers
services known as "Image Positive Pay" and "Reverse Positive Pay" which are effective means
of controlling risk from counterFeit checks and certain other types of fraudulent checks. Bank
has advised Company that if it does not use either of these Services, Bank will be unable to
prevent losses from counterfeit and certain other types of fraudulent checks and Company will
be treated as having assumed the risk of those losses.
11. Company's Enquiries and Instructions Regarding Disbursement Account. Company will
direct all enquiries and instructions (including by way of example and not by way of limitation
stop payment orders) to Bank. In no event will any such enquiries or instructions be directed to
Disbursing Bank.
~.~_~6~ E~.~ V „~-2-~-~
12. Liability and Indem ' ication. In addition to the liability and indemnification provisions in the
Master Agreement, either Bank nor any Disbursing Bank will be liable for any claim, demands,
judgments or expenses ("Losses") paid, suffered or incurred by Company, and Company will
indemnify Bank and each Disbursing Bank from and hold each of them harmless against any
Losses paid, suffered or incurred by them, arising directly or indirectly as a result of or in
connection with:
(a) Company's perFormance or failure to perForm its obligations in accordance with this
Service Description;
(b) Bank's or any Disbursing Bank's acting on any information furnished by or on behalf of
Company in any Service Documentation or otherwise;
(c) Bank's or any Disbursing Bank's return of any Check unpaid because Company has not
deposited good and collected funds in the Funding Account related to the Disbursement
TM-1429 Controlled Disbursement Service Description Page 3 of 5
Revised 11-08-2010
Account on which a Debit is drawn sufficient to cover the Total Net Presentment;
(d) Bank's or Disbursing Bank's dishonor and return of any Debit unpaid if Company issues
the Debit before Bank notifies Company the Disbursement Account on which it was
drawn is operational;
(e) Bank's or any Disbursing Bank's nonpayment of a Debit, unless such nonpayment
results directly and proximately from, respectively, Bank's or Disbursing Bank's gross
negligence or wiliful misconduct;
(fl Bank or Disbursing Bank's late return of any Debit as a result of, and any presentment-
related problem resulting from, the failure of any Debit which has not been tested and
approved by Bank or Disbursing Bank to conform in any respect to Bank's or Disbursing
Bank's check specifications including without limitation failure to include Bank's or
Disbursing Bank's full name and address and Bank's full name on any check or payable
through draft,
(g) Except as otherwise provided under Bank's Account Reconciliation, Image Positive Pay,
Reverse Positive Pay, Payable-Through Draft, Share Draft or Payable-If-Desired Service
Descriptions, if Bank provides Company with one or more of those services, Bank's
payment of any check or payable-through draft which is unauthorized or contains a
forged, unauthorized, incorrect or illegible endorsement, a forged or unauthorized
signature, an alteration of amount or payee, or any other error, discrepancy or
deficiency; or
(h) Bank's exercise of its rights, or Bank's performance of its obligations, in accordance with
this Service Description or Bank's Account Reconciliation, Image Positive Pay, Reverse
Positive Pay, Payable-Through, Share Draft, or Payable-If-Desired Service Descriptions,
if Bank provides Company with one or more of those Services.
13. Termination. Bank may terminate this Service, close the Funding Account, and instruct the
Disbursing Bank(s) to close Disbursement Account(s), immediately upon Bank's sending
Company written or oral notice (confirmed in writing) of such action if:
(a) Company fails at any time to fund the Funding Account as required in this Service
Description,
(b) any lawsuit or other action or proceeding is filed or instituted by any federal or state
agency alleging, or any Disbursing Bank receives an opinion of counsel, that this Service
or any material term or condition of this Service violates any law or regulation,
(c) Bank's agreement with any Disbursing Bank concerning this Service is suspended or
terminated for any reason with respect to all Bank's customers receiving the Service or
with respect only to Company,
(d) the occurrence of any default by Company under the other Service Documentation or
under any other agreement or instrument signed by Company in Bank's or the
Disbursing Bank's favor including without limitation any loan agreement or promissory
note,
(e) Bank determines that one or more conditions exist or events have occurred which might
indicate, or result in, a material adverse change in Company's operations, business,
property or assets or its condition (financial or otherwise).
TM-1429 Controlled Disbursement Service Description Page 4 of 5
Revised 11-08-2010
Upon termination of this Service, Company will, in accordance with such instructions as Bank or
the Disbursing Bank may give, cease to issue Debits on the Disbursement Account(s), and the
Disbursing Bank will close the Disbursement Account(s) and stop processing Debits. Company
will continue to be liable for all Debits issued on the Disbursement Account(s) prior to
termination and for all Debits the Disbursing Bank is obligated to pay. The provisions of
Sections 4, 7, 8, 10, 12 and 13 of this Service Description will survive termination of the Service.
14. Governing Law. Except to the extent governed by federal law and regulations, the law and
OO 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1429 Controlled Disbursement Service Description Page 5 of 5
Revised 11-08-2010
FUNDS AVAILABILITY POLICY
Determining the Day of Receipt.
For determining the availability of Company's deposits, every day is a Business Day except
Saturdays, Sundays, and federal holidays. Deposits made in person at a branch office location
during normal business hours on a Business Day before Bank's established cutoff time are
considered made that Business Day. However, if Company makes a deposit after Bank's cutoff
time, or on a day Bank is not open, or on a non-Business Day on which Bank is providing
deposit services, Bank will consider the deposit was made on the next Business Day Bank is
open. Bank's cutoff time may vary by branch office location. Check with the location for its
cutoff time. If Company makes a deposit at a Bank ATM, please note the cutoff time posted at
the ATM.
2. Same-Day Availability.
The following deposits to Company's account at Bank are available the same Business Day:
• Funds deposited by preauthorized electronic credits
• The first $100 of the first deposit of the day
Checks drawn on Bank
Cash deposited at a teller window
3. Next-Day Availability.
The following deposits to Company's account at Bank are available the next Business Day:
• Checks drawn on the U. S. Treasury
• Postal Money Orders
• Checks drawn on a Federal Reserve Bank
• Checks drawn on a Federal Home Loan Bank
• Checks drawn on local and state government agencies~
• Cashier's Checks not drawn on Bankl~,_
~
4. Longer Delays May Apply.
In all cases, checks will be available within two (2) Business Days of deposit. '
• _ n depos+t-vu+th-speeiaf-cteposit°tick~-abtained-ftm-Bank empioyee.
O 2010 Welis Fargo Bank, N.A. All rights reserved. Page 1 of 1
Funds Availability Policy
Revised 0310912010
~
~
WACHOVIA
Privacy Policy for Wells Fargo and Wachovia Companies
. . ~ .
Kee-oiny im-ormation
S a~e anc'. secure
Highlights of our commitment to you
• We do not seil customer information to third parties,
° We do not share customer information with outside parties who may
wish to market their products to you.
• We safeguard your customer information carefully.
• We are committed to protecting your customer information in every
transaction, at every level of our organization.
• We are committed to helping you protect your privacy every day.
You have choices about how we share your informazion within Weils Fargo
and Wachovia and how we cantact you for marketiny purposes,See inside
for information about how to contact us and record your preferences.
This brochure inciudes the Privacy Policy forWells Fargo and Wachovia
Companies. For conswner accounis, this Policy describes how we use and protect
custorner inforrnation. This Policy also descri6es how we use and protect
information provided byindividuals in connection with business accounts, /oans
and leasing programs and provided byindividuals associated with dealers
participating in sales finance programs (called'customers"for purposes of this
brochure). We believe that proteding your privacy is an integral part of the
custornerservice we provide to you.
HOW We pY`Ot2Ct and L1S@ CUStfJ17].8Y'
informatian
1. We are committed to protecting the security and integrity of
customer information through procedures and teehnology designed
for this purpose.
• We limit employee access to customer information to those who have a
business reason to know. Employees are required to honor our code of
conduct,which includes standards for protecting customer confidentiality.
° We maintain policies and procedures covering the proper physical security
of workplaces and records.
° Our physicai, electronic, and procedurai safeguards meet or exceed federal
standards regarding the protection of customer information.
° We require contractors and outside companies who workwith us to
adhere to strict privacy standards through their contracts with us.
2. We collect and maintain customer information as part of servicing
your account and your customer relationship.
In the course of serving you, we collect information about you from a variety
of sources, such as;
• Information you provide to us on applications or forms, such as your
income and accounts with others;
' Information we receive from an outside company, such as a credit bureau,
regarding your credit history or empioyment status; or
° Information about your transactions or experiences with companies
affiliated with Wells Fargo & Company (these include Welis Fargo and
Wachovia companies),
3. The customer information we collect is used to serviee your accounts
and meex your finaneial needs.
Information may be used among the Wells Fargo and Wachovia companies, as
well as with authorized third parties (described in section 4),for a number of
purposes, such as:
~ To protect your accounts from unauthorized access or identity theft.
• To process your requests such as loan applications, purchases, and ATM
withdrawals.
° To service your accounts by issuing checks,ATM cards,and account
statements.
° To keep you informed about financial services of interest to you.
4. We do not share customer information with outside parties who may
wish to market their produets to you.
We may disclose the information we collect to non-affiliated third parties that
are acting on our behalf, or as permitted or required by law, including:
• Companies that perform support services for us, such as data processors,
technical systems consultants,or check printers,
° Companies that help us market products and services to you,conduct
surveys or provide marketing research.
• Government entities, courts or other entities (in response to subpoenas
and other legal processes), or those with whom you have requested us to
share information.
• Important Notice about Credit Reporting: We may report information
about your account(s) to credit bureaus and/or consumer reporting
agencies. Late payments, missed payments, or other defaults on your
account(s) may be reflected in your credit report and/or consumer
report.
5. Your choices for information sharing and marketing.
• We may disclose all of the information we collect, as described above,
within the affiliated Wells Fargo and Wachovia companies,which include
administrative and service units, consumer bankers, mortgage lenders,
consumer lenders, securities broker-dealers, insurance agencies, and reai
estate brokerage companies.These companies include Wells Fargo Bank,
N.A.,Wachovia Bank,N.A.,Welis Fargo Insurance,Inc.,Wells Fargo Insurance
Services, inc., Welis Fargo Investments, L.L.C. and Wells Fargo Advisors, L.L.C.
E3y law, information that is derived from your transactions and experiences
with us may be shared among the Wells Fargo and Wachovia companies
(a) for purposes other than direct marketing, and (b) unless you instruct us
otherwise,for direct marketing purposes.
Ifyou choose to limit information sharing,we will not share personai
financial information about you among affiliates (other than information
derived from your transactions and experiences with Wells Fargo and
Wachovia companies) for any purpose, except as permitted by law.ln
addition, if you select that option,we wiil limit affiliates'use of transaction,
experience and other personal financial information about you for direct
marketing purposes, However,your, choice regarding the use of certain
information for marketing purposes does not apply to any Wells Fargo or
Wachovia company that has an existing business relationship with you or
where the use is otherwise permitted by Iaw,To opt out of information
sharing and marketing, use one of the methods described below.Your
election wili apply until you tell us to change your choice.
Telephone and mail preferences. In addition to information sharing
preferences, you may request that we not contact you for marketing
purposes by telephone. For consumer accounts, this election will be
effective while you are an active customer or a minimum of five years.
For business accounts, this election wiil be effective for five years from
the date the election is received.You may also request that we not contact
you for marketing purposes by mail. For all accounts, this election will be
effective for three years.
Communicate your information sharing,telephone and mail
preferences in any of the following ways:
Wells Fargo customers
•Call 1-888-528-8460
• Online banking customers log on to a secure session at
wellsfargo.com, and choose"Change Privacy Preferences"
under the °Account Services"tab.
Wachovia customers
• Cail 1-866-203-5722 (Command Asset Program, IRA, Brokerage
and Insurance customers call 1-877-358-1114).
• Compiete the Consumer Privacy Preference Form at
wachovia.com/privacy,
Customers with accounts at both Wells Fargo and Wachovia may call either
Wells Fargo or Wachovia,Your preference will apply to all consumer
accounts linked to your personal record. Forjoint accounts,any account
holder may express a privacy preference on behaif of the other joint
account holders.
Do Not Call Policy:This Privacy Policy constitutes Wells Fargo and
Wachovia's Do Not Cali Policy wider the Telephone Consumer Protection
Act for all consumers. Wells Fargo and Wachovia maintain an internal Do
Not Call preference list. Do Not Call requests wiil be honored within 30
days and will be effective for at least five years from the date of request.
No telemarketing calls will be made to residential or cellular phone
numbers that appear on the Wells Fargo and Wachovia Do Not Call list.
• As a customer, please note that if you choose not to receive solicitations
by mail or any other channel, you may continue to receive marketing
information about Wells Fargo and Wachovia products or services in
regular account mailings and statements,when you visit us online or at
an ATM.You may also receive survey calls.
6. State laws, trust aecounts.
Some state laws may impose additional restrictions on disclosure of
information on customers for certain purposes in those states.
Nevada Residents - Nevada Statute Section 228.600(3) ailows marketing
calls to our existing customers listed on the National Do Not Call Registry,
If you prefer not to receive marketing calls from us,you may be piaced on
our Internal Do Not Call list by following the instructions in the"Your
Choices"section 5 above, or writing to Wells Fargo Operations,
P.O. Box 5277, Sioux Falls, SD 57117-5277. For more information contact
us at the address above, or email: customerservice@welisfargo.com, and
include°Nevada Annual Notice"in the subject line ofyour email. You may
also contact the Nevada Attorney General's office: Bureau of Consumer
Protection Office of the Nevada Attorney General
555 E.Washington Street,Suite 3900
Las Vegas, NV 89101
Phone: (702) 486-3132
Email: BCPINFO@ag.state.nv.us
• Vermont Residents - In accordance with Vermont law, we will not share
personal financial information about you, other than transaction and
experience information,with other Wells Fargo and Wachovia companies
for any purpose, nor will we share any personal financial information about
you with other Wells Fargo and Wachovia companies for marketing •
purposes.
• Trust accounts, for which Wells Fargo or Wachovia is the trustee, are
protected under special rules of confidentiality,and trust account
information is not shared for marketing purposes without specific consent.
Tzps tn help you protect your customer informa4ion
° Carry only necessary information with you. Leave your Social Security card
and unused credit cards at home in a safe location.
° Make photocopies ofvital information you carry regularly and store them
in a secure place, such as a safe deposit box.
° Do not provide your Social Security Number unless absolutely necessary.
• Shred documents containing personal or financial information before
discarding. Fraud and identity theft often occurs as a result of mail and
garbage theft.
• Place outgoing mail in a U.S. Postal Service mailbox to reduce the chance
of mail theft.
• Promptly retrieve incoming mail to reduce the opportunity for theft.
• Monitor your credit report for accuracy. ey law, you are entitled to
receive one free credit file dis<losure every 12 months from each of the
nationwide consumer credit reporting companies,To learn more or
request a copy of your credit report,visit annualcreditreport.com or
call 1-877-322-8228.
Aasistanee to victims of identity theft
Contact us immediately if you suspect that someone has had unauthorized
access to your Wells Fargo or Wachovia account, or access to your personal
identifying information such as your Social Security Number or credit card
information.We will take action to protect your accounts. Wells Fargo
customers call 1-800-TO-WELLS (1-800-869-3557), notify us oniine at
wellsfargo.com, or visit us at your nearest Wells Fargo location. Wachovia
customers please call 1-888-647-3648.In addition,you should also report
the crime to your local law enforcement agency and to the Federal Trade
Commission (FTC).To speak with a trained FTC telephone counselor,
call toll-free at 1-877-IDTHEFT (1-877-438-4338).To enter information
about your complaint into a secure FTC online database, sign onto
www.ftc,gov/idtheft.The site aiso provides links to numerous consumer
education materials.
Unsolicitad credit offers
If you want to reduce the number of credit offers you receive, contact the
National Consumer Credit Reporting Agencies at 1-888-567-8688
(1-888-5-OPTOUT) or visit www.optoutprescreen.com for details. Financial
institutions and other companies provide information to the Credit Bureaus
for credit verification,fraud controi purposes, and prevention of identity theft.
You may direct these agencies not to sell or share this information about you
for marketing purposes.
Customer service
if you have questions aUout your account or would like more information
about Wells Fargo products and services please cal) us at 1-800-TO-WELLS
(1 -800-869-3557), or write to the address (isted on your account statement.
More information is availabie at wellsfargo.com.You may also write to us at
Wells Fargo Operations Center, MAC #N9777-111, P.O. Box 5277,
Sioux Falls, SD 57117-5277.
Wachovia customers please visit the web site at wachovia.com/privacy, or cali
1-866-203-5722 to speak to a representative.Command Asset Program, IRA,
Brokerage and Insurance customers please call 1-877-358-1114.
This document applies to (1) consumers who have, or have had, a customer
relationship or have made an inquiry or application,and (2) individuals who
have provided personal information in connection with business accounts,
loans, and leasing programs or individuals associated with dealers
participating in sales finance programs; and where the consumer relationship,
inquiry, application, or personal information is provided to one or more of the
banks and companies with "Welis Fargo"or"Wachovia"in their names, as well
as: WF National Bank South Central; Norwest Auto Finance, Inc.;Wells Fargo
Investments doing business as Ragen MacKenzie; Fiatiron Capital Corp.;
NowLine andTower Pension Specialists, Inc.; American Mortgage Network,lnc.,
doing business as Vertice, but NOT including (a) any non-bank company with
"Wells Fargo Financial"in its name, (b) Wells Fargo Financial National Bank, (c)
Wells Fargo Advisors, the Wells Fargo Advantage Funds and the Evergreen
Funds, or (d) any insurance company, insurance agency, or insurance
brokerage or other company,which has its own privacy disclosures, Effective
on or about March 20, 2010, Wachovia Bank, N.A.and Wachovia Bank of
Delaware, N.A.will become Wachovia Bank, a division of Wells Fargo Bank, N.A.
Additional privacy provisions apply to the use of Wells Fargo's and
Wachovia's online services. See wellsfargo.com/privacy_security and
wachovia.com/privacyandsecurity for more information.
The policies and practices describzd in this disclosure are subject to change,
Uut we will communicate any significant changes to you as required by law.
The policies and practices described in this disclosure replace all previous
notices or statements regarding this subject.
Si usted desea una traduccidn completa en espanol de las Normas de
privacidad de las empresas Wells fargo y Wachovia, por favor pida una copia
en su sucursal local de Wells Fargo o escriba a: Wells Fargo Operations Center,
MAC #N9777-111, P.O. Box 5277, Sioux Falls, SD 57117-5277.
0 2009 Wells Fargo & Company. All rights reserved.
MKT6819 FOL (10-09 126490)
WELLS FARGO ELECTRONIC DEPOSITs'"
SERVICES DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Electronic Deposit services (each, a"Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master AgreemenY'). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. The Service enables Company to create electronic images of certain
Paper Items and transmit those images and other information including without limitation MICR
data in an electronic file ("Electronic File") to Bank for review and processing for credit to
Company's deposit account at Bank ("AccounY') in accordance with this Service Description.
"Paper Item" is defined in Bank's Commerciai Account Agreement, and "Electronic Item" means
the electronic image of the front and back of each Paper Item and other information captured
from the Paper Item. For each Electronic Item Bank determines is eligible for processing (see
section 5), Bank will:
2.1. create a substitute check as defined in Bank's Commercial Account Agreement that
Bank will present directly or indirectly to the bank (a) on which the original Paper Item to
which the Electronic Item relates is drawn, or (b) at or through which the Paper item is
payable (each, the "Paying Bank");
2.2. include the Electronic Item in an electronic file for presentment directly or indirectly to the
Paying Bank; or
2.3. post any Electronic Item for which Bank is the Paying Bank.
3. Creating Electronic Items and Transmitting Company's Electronic File to Bank. To create
the electronic images and transmit Company's Electronic File to Bank, Company will use either
(a) Bank's Desktop Deposit° - CEOO Service using bank provided or certified hardware or (b)
Company's hardware and software, provided they generate electronic images and Electronic
Files that meet Bank's then current standards and specifications. Any third party processor
Company uses to prepare and/or transmit Company's Electronic File is Company's agent, and
the security and privacy of Company's Electronic File are the responsibility of Company and
Company's agent.
4. Processing Company's Electronic File. Bank will review each Electronic Item and process
the Electronic Items Bank determines are eligible for processing on the Business Day Company
transmits Company's Electronic File to Bank, if Bank receives Company's Electronic File before
the processing deadline Bank separately discloses to Company ("Cut-Off Time") on that
Business Day (as defined in Bank's Commercial Account Agreement) and on the next Business
Day if Company transmits Company's Electronic File to Bank after Bank's Cut-Off Time.
5. Exception Items. Each Business Day on which Bank processes Company's Electronic File,
Bank may, without liability to Company, reject Electronic Items Bank determines are ineligible
for the Service (each, an "Exception Item"). "Exception Item" includes without limitation an
Electronic Item that (a) is illegible or contains MICR data that is not machine-readable, (b) was
previously processed as an Electronic Item, or (c) is drawn on a bank located outside the United
States and is not payable at or through a bank located within the United States. Bank will notify
Company of each Exception Item through Bank's Commercial Electronic Office° or other
TM-1864 Electronic Deposit Service Description Page 1 of 3
Revised 0113112010
communication channel at Bank's discretion. Company will deposit an Exception Item to
Company's Account only by depositing the original Paper item to which the Exception Item
relates or as otherwise agreed by Bank and Company. Even if Bank does not identify an
Exception Item when Bank processes the Electronic File that includes the Exception Item, the
substitute check or purported substitute check Bank creates from the Electronic Item may be
returned to Bank because, among other reasons, the Paying Bank determines it is illegible or
missing an image. Bank's failure to identify an Exception Item will not limit Company's
obligations to Bank under section 8.
6. Deposits to Company's Account. Bank will be deemed to have accepted each Electronic
Item that is not an Exception Item for deposit to Company's Account (a) on the Business Day
Bank processes the Electronic Item (b) at the Bank office where Company's Account is
maintained. Funds from accepted Electronic Items will be deemed to be collected in
accordance with Bank's Electronic Deposit Collected Funds Schedule Bank will provide to
Company upon request and may amend from time to time.
7. Company's Representations and Warranties. Company represents and warrants to Bank
Company will:
7.1. use the Service only for Paper Items payable to or endorsed for deposit by Company,
7.2. transmit to Bank only Electronic Items suitable for processing including without limitation
legible Electronic Items containing machine-readable MICR data,
7.3. not transmit to Bank any Electronic Item that duplicates an Electronic Item previously
transmitted to Bank,
7.4. maintain control over and sole responsibility for retention and destruction of original
Paper Items for which Company has created an Electronic Item, and
7.5. not transmit to Bank, deposit to Company's Account, or otherwise negotiate any original
Paper Item with respect to which Company has transmitted an Electronic Item to Bank,
unless Bank has notified Company that the Electronic Item is an Exception Item.
~f ~k e-.- ~
8. Company's Agreement to Indemnify Bank. Company will ~'indemnify, defend, and save
harmless Bank, its parent company, and its affiliates and e2h of their respective directors,
officers, employees, and agents (collectively in this section 8, "Indemnitees") from and against
all liabilities, losses, damages, claims, obligations, demands, charges, costs, or expenses
(including reasonable fees and disbursements of legal counsel and accountants) awarded
against or incurred or suffered (collectively, "Losses and Liabilities") by Indemnitees arising
directly or indirectly from or related to:
8.1. Any negligent or intentional act or omission by Company in the perFormance of its
obligations under this Service Description including without limitation failing to maintain
control over and properly dispose of original Paper Items, in which event Losses and
Liabilities will include without limitation consequential damages;
8.2. Any material breach in a representation, warranty, covenant, or obligation of Company
contained in this Service Description;
8.3. Bank acting as a"reconverting bank" under the Check Clearing for the 21 st Century Act
through the creation of "substitute checks" or purported substitute checks using an
Electronic Item, an Exception Item or an Electronic File, in which event Losses and
Liabilities will include without limitation consequential damages; and
TM-1864 Electronic Deposit Service Description Page 2 of 3
Revised 0113112090
8.4. Bank presenting an Electronic Item to the Paying Bank for payment.
9. Termination. In addition to its rights to discontinue providing Services under the Master
Agreement, Bank may discontinue providing the Service to Company immediately upon notice if
Bank determines in its sole discretion that Company has breached any of Company's
obligations under sections 7 or 8 of this Service Description.
10. Survival. Sections 7 and 8 of this Service Description will survive termination of the Service.
@ 2010 Wells Fargo Bank, N.A. Ali rights reserved.
TM-1864 Electronic Deposit Seivice Description Page 3 of 3
Revised 0113112010
IMAGE FILE IMPORT SERVICE DESCRIPTION
1. Introduction. This Service Description and the other Service Documentation as defined in the
Master Agreement for Treasury Management Services ("Master Agreement") between Welis
Fargo Bank, N.A. ("Bank"), and the company identified in the signature block of the Acceptance
of Services ("Company") between Bank and Company govern Bank's Image File Import Service
(the "Service").
2. Description of the Service. The Service enables Company to receive files containing images
of and data regarding (each, a"File") specified transactions on each account at Bank that
Company enrolls in the Service (each, an "Account"). The transactions include checks or other
instruments (each, an "Item") (a) posted to Company's Account; (b) cashed or collected by Bank
or accepted for deposit to Company's Account (each, a"Deposited Item"); and (c) returned
unpaid to Company's Account (each, a"Returned Deposited Item"). The data Bank provides
will include an index and images of each Item, Deposited Item and Returned Deposited Item
together with, in the case of Deposited Items, images of coupons and other information that are
received and processed by Bank along with the Deposited item. Company may retrieve Files
through the delivery channels Bank makes available.
3. Conditions to Provision of the Service. As conditions to Bank's provision of the Service,
Company will (a) at all times maintain the Account(s) in good standing; (b) subscribe to the
applicable Treasury Management Services for which images and data are provided through the
Service; and (c) agree to the terms of the software sublicense (see Section 6) if Company has
elected to use the Wellslmagee Viewer Software (the "Software") to view certain Items or
Deposited Items.
4. Rules Applicable to the Service. Bank will provide the Service to Company in accordance
with (a) the Service Documentation; and (b) state and federal laws and regulations, including
the National Automated Clearing House Association Rules ("NACHA Rules") applicable to
Paper Item conversion.
5. Paper Item Conversion. NACHA Rules ailow for the conversion of certain Items into ACH
items. Images of posted Items that have been converted pursuant to the NACHA Rules may
not be available through the Service.
6. Software Sublicense. Company will use the Software in accordance with the terms of a non-
exclusive, non-assignable sublicense ("Software Sublicense") from Bank. The Software
Sublicense will be presented to Company during installation, and Company will be required to
accept it before being ailowed to use the Software. This Section will survive termination of this
Service.
7. Termination. In addition to the termination provisions of the Master Agreement, the Service
may also be terminated by Bank immediately on written notice to Company, if Company fails to
comply with its obligations under the Software Sublicense.
O 2010 Welis Fargo Bank, N.A. All rights reserved.
TM-1945 /mage File lmport Service Descripfion Page 1 of 1
Revised 0113112010
INFORMATION REPORTING SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Information Reporting services (each, a"Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Services. The Services enabie Company to view and or receive files containing
data and/or images (each, a"File") regarding specified transactions on each deposit account at
Bank that Company enrolls in the Service (each, an "Account"). The means used to transmit
Files to Company include without limitation BAI File Transfer, Bank's Commercial Electronic
Officee ("CEO",), and CD-ROM. Depending on the Service Company elects, the transactions
may include checks or other instruments (each, an "Item") (a) posted to Company's Account; (b)
cashed or collected by Bank or accepted for deposit to Company's Account; and (c) returned
unpaid to Company's Account. "Item" is defined in Bank's Commercial Account Agreement.
3. Information From Company's Accounts at Other Financial Institutions. If the Service
Company elects permits Company to have information from deposit accounts Company
maintains at other financial institutions imported to Bank and included in a report Bank provides
to Company in connection with the Service, Bank will not verify the accuracy or completeness
of the information.
4. Software Sublicense. If a software sublicense is required for Company to access the Service
("Software Sublicense"), Bank wiil make the terms of the Software Sublicense available to
Company as part of the set up process for the Service. Company will be required to accept the
Software Sublicense before being allowed to access the Service. Bank may terminate any
Service requiring use of a Software Sublicense immediately on written notice to Company, if
Company fails to comply with the Software Sublicense. Company's obligations under this
section 4 will survive the termination of Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1431- lnformation Reporting Service Description Page 1 of 1
Revised 0113112010
STOPS-IMAGES-SEARCH ("SIS") SERVICE DESCRIPTION
This Service Description contains provisions which, in addition to the provisions
contained in the Master Agreement for Treasury Management Services between
Bank and Company (the "Agreement"), will govern the Stops-Images--Search
{"SIS"} Service (the "Service").
The Service. Company may, using a computer or a computer and browser
acceptable to Bank, request stop payment orders on checks drawn on
Company's deposit account(s) or Company's account(s) with another financial
institution maintained in connection with the Controlled Disbursement Service (a
"Controlled Disbursement Account") and, where applicable, request photocopies
of checks that have cleared Company's deposit account(s) or Controlled
Disbursement Account(s).
2. Stop Payments.
2.1 Reauirements. Bank may pay a check against Company's deposit
account(s) whenever it is presented and without regard to its date. If Company
does not want Bank to pay a check, it must place a stop payment order which is
valid for the period specified when Company opened its deposit account and must
be received within sufficient time for Bank to act.
2.2 Limitations. A stop payment order will be ineffective with respect to (a) a
check deposited to an account at a Wells Fargo Bank if it cannot be charged back
without creating an overdraft in that account, and (b) a check that was cashed by
any Wells Fargo Bank. Company authorizes Bank to accept telephone stop
payment orders from any person who Bank in good faith believes is acting on
Company's behalf. In Texas, Company must confirm an oral stop payment order in
writing.
3. Survival. The provisions of this Service Description designated as Sections 2 and
3 will survive termination of the Service.
TM-1434 Stops-Images-Search (SIS) Service Description-Revised4120/06 page 1 of 1
PAYMENT AUTHORIZATION SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Payment Authorization Service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. Company may, by executing and delivering to Bank a Payment
Authorization Service Set-up Form, elect to utilize the Service for deposit accounts which
Company maintains at Bank (each an "account"). Under the terms of the Service, Bank will
without Company's specific approval as to any particular Item, (a) automatically return unpaid
(marked "REFER TO MAKER") Items drawn against the account which are presented to Bank,
and which exceed the "Maximum Dollar Authorized Payment Amount" specified on the Setup
Form, (b) refuse encashment of Items drawn against the account which are presented to Bank
through its branch/store network, and which exceed the "Maximum Check Cashing Amount"
specified on the Setup Form, (c) refuse withdrawal requests against the account which are
presented to Bank through its branch/store network, and which exceed the "Maximum over the
Counter Withdrawal Amount" specified on the Setup Form, and/or (d) refuse encashment of
Items drawn against the account which are presented to Bank through its branch/store network,
and which are made payable to an individual.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1420 Payment Authorizafion Seivice Description Page 1 of 1
Revised 0113112010
WELLS FARGO RETURNED ITEM SERVICES
SERVICE DESCRIPTION
1. Introduction. This Returned Item Services Service Description ("Service Description")
and the other Service Documentation as defined in the Master Agreement for Treasury
Management Services between Wells Fargo Bank, N.A. ("Bank"), and the company
identified in the Acceptance of Services ("Company") between Bank and Company
govern Bank's Returned Item Services (each, a"Service").
2. Description of Bank's Returned Items Services. Bank's Returned Item Services
enable Company to have Bank (a) act as Company's returned Item processor with
respect to Items payable to Company that are presented to Bank or another financial
institution for payment and returned to Bank unpaid (each, a"Returned Item") in
accordance with Company's Special Instructions to Bank for Returned Items ("Special
Instructions") and (b) originate debits, and report and process credits received, for
Company's returned check fee ("Returned Item Service Fee Recovery"). Company shall
communicate its Special Instructions regarding Company's Returned Items to Bank, and
Bank shall communicate to Company regarding the Services, using the media, format
and communication channel(s) to which Company and Bank agree.
3. Conditions to Provision of Bank's Service. As conditions to Bank's provision of the
Services, Company shall at all times (a) maintain Company's demand deposit account(s)
at Bank (each, an "Account") in good standing; (b) subscribe to Bank's Commercial
E/ectronic Office0 ("CE00") Service; and (c) comply with all Rules Applicable to Bank's
Returned Item Services as set forth in this Service Description.
4. Rules Applicable to Bank's Returned Item Services. Bank will provide its Services to
Company in accordance with
4.1. the Service Documentation including without limitation the User Guide that Bank
makes available to Company at www.wellsfarao.com; and
4.2. State and federal laws and regulations and clearinghouse rules applicable to a
Returned Item which may include Federal Reserve Board Regulation CC Subpart
C relating to the collection of checks ("Reg CC"), Federal Reserve Board
Regulation E("Reg E") and, in the case of Bank's Returned Item Service Fee
Recovery Service when Bank originates an ACH entry on Company's behalf, the
National Automated Clearinghouse Association Operating Rules, as
supplemented by any applicable operating rules of any automated clearing house
of which Bank is a member (together, the "NACHA Rules"), all as amended from
time to time.
5. Special Instructions. Bank will process Company's Returned Items in accordance with
Company's Special Instructions, unless Bank determines in Bank's sole discretion that
doing so with respect to a Returned Item would prevent Bank from effectively providing
Bank's Service to Company.
6. Bank's Right to Chargeback Returned Items. Bank may chargeback a Returned Item
to any account Company owns in whole or in part at Bank or any affiliate of Bank without
TM-2163 Wells Fargo Returned IEem Services Service Description page 1 of 3
Revised 0113112010
regard to whether the returned Item was initially deposited to Company's Account or to
an account at another financial institution.
7. Returned Item Service Fee Recovery. Bank determines the state whose laws
establish the maximum returned check fee that Company may assess a customer who
issues a Returned Item to Company based on information about Company's retail
locations that Company provides to Bank when Company subscribes to this Service and
upon any subsequent changes in Company's retail locations. If Company fails to
provide information to Bank regarding a location in a timely fashion, Bank will assess the
lowest maximum fee permitted in the states for which Company has provided location
information.
8. ACH Entries.
8.1. Payment Obligations; Settlement; Returned Debit Entries. In the case of
Services for which Bank originates ACH debit entries on Company's behalf, each
credit to Company's Account will be made on the applicabie settlement date.
Bank may charge Company's Account for any debit, correcting or reversing entry
which is later returned to Bank. Company authorizes Bank upon prior oral or
written notice to Company to place a hold on an equal amount of funds in
Company's Account or to take any other action Bank deems appropriate to
ensure Bank receives payment for any debit, correcting or reversing entry which
is later returned to Bank.
8.2 _RPit~.bursement. Company will reimburse Bank for any loss or expense Bank
~ incurs,°wnel ° ' neystrcJega# experrses, as the result of
~ (a) a breach of any warranty Bank makes under the NACHA Rules in connection
with providing the Services to Company, (b) a breach of any representation or
warranty that Company makes in this Service Description, or (c) an action
Company asks Bank to take in connection with Bank's providing the Services to
Company. Company authorizes Bank to recover any such amount by debit to
any account Company owns in whole or in part at Bank or any affiliate of Bank.
9. Company's Representations and Warranties. Company represents and warrants
Banking that:
9.1. The information about Company's retaii locations that Company provides to Bank in
accordance with Section 7 of this Service Description is accurate.
9.2. Company has received and shall maintain current copies of the Rules Applicable to
Services including without limitation Reg CC, Reg E and the NACHA Rules and
is in compliance therewith.
10. Company's Agreement to Indemnify Bank. Company shall ' demnify, defend, and
save harmless Bank, its parent company, and its affiliates anci~ ch of their respective
directors, officers, employees, and agents (collectively in this Parag aph 10, "Indemnified
Persons") from and against all liabilities, losses, damages, claims, bligations, demands,
charges, costs, or expenses (including reasonable fees and di bursements of legal
counsel and accountants) (collectively, "Losses and Liabilities' awarded against or
incurred or suffered by Indemnified Persons arising directly or ' directly from or related
to the following : rN,
TM-2163 Wells Fargo Returned Item Services Service Description
Revised 0113112010 page 2 of 3
10.1. Any negligent or intentional act or omission by Company in the performance of its
obligations under this Service Description and the other Service Documentation
inciuding without limitation Company's obligation to provide Bank with information
about Company's locations.
10.2. Any material breach in a representation, warranty, covenant, or obligation of
Company contained in this Service Description and the other Service
Documentation;
10.3. The violation of any applicable law, statute, or regulation or of the Rules
Applicable to Bank's Returned Items Services including without limitation Reg
CC, Reg E and the NACHA Rules in the performance of Company's obligations
under this Service Description and the other Service Documentation; and
10.4. A breach of any warranty Bank makes under the NACHA Rules in connection
with Bank's Services under this Service Description, any failure by Bank to
assess the correct Returned Item Service fee based and any delay in the return
of any Returned Item.
11. Bank's Assessment of Services. Company agrees Bank may at any time or times
modify this Addendum with prior notice to Company, and the Addendum as modified
shall supersede this Addendum and be binding upon Company.
12. Survival. Sections 6, 7, 8, 9, and 10 of this Service Description will survive termination
of the Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-2163 Wells Fargo Returned Item Services Service Description page 3 of 3
Revised 0113112010
Electronic Returns Service Description
1. ACH Rules. Company acknowledges that it has had an opportunity to review and agrees to comply with and
be bound by the Operating Rules of the Automated Clearing House ("ACH") in which Bank is a participant,
as varied by this Service Description and the other Service Documentation, each as amended from time to
time (the "Rules"). By using the Service, in addition to any other warranties Company makes under the
Rules and this Service Description, Company represents and warrants to Bank that with respect to each item
Company attempts to collect through the Service:
• Company has good title to or is entitled to enforce the item to which the RCK entry relates or is authorized to
obtain payment or acceptance on behalf of one who has good title to or is entitled to enforce the item.
• All signatures on the item to which the RCK entry relates are authentic and authorized.
• The item to which the RCK entry relates has not been altered.
• The item to which the RCK entry relates is not subject to a defense or claim in recoupment of any party that can
be asserted against Company.
• Company has no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor, or, in
the case of an unaccepted draft, the drawer of the item to which the RCK entry relates.
• The item to which the RCIC entry relates is drawn on, payable through, or payable at the receiving depository
financial institution, and if Company originates the RCK entry, the amount of the item, the item number, and the
account number contained on the item have been accurately reflected in the RCK entry.
• Subsequent to the origination of an RCK entry, the item to which the RCK entry relates or a copy of such item will
not be presented to the receiving depository financial institution unless the related RCK entry has been returned by
the receiving depository financial institution.
• If Company encodes the item, the information encoded after issue in magnetic ink on the item is correct.
• Any restrictive endorsement made by Company or its agent on the item to which the RCK entry relates is void or
ineffective upon initiation of the RCK entry.
Company will be responsible for promptly obtaining all future amendments to the Rules.
2. Eligible Items.It is intended that the Service be provided only in connection with items that are "eligible
items", as that term is defined from time to time by the Rules. Company acknowledges that the term is
currently defined in the Rules to mean an item that:
• is an item within the meaning of Revised Article 4 of the Uniform Commercial Code (1990 Official Text);
• is a negotiable demand draft drawn on or payable through or at a participating depository financial institution,
other than a Federal Reserve Bank or Federal Home Loan Bank;
• is in an amount less than $2,500;
• indicates on the face of the document that the item was returned due to "Not Sufficient Funds," "NSF,"
"Uncollected Funds, " or comparable language;
• is dated 180 days or less from the date the entry is being transmitted to the receiving depository financial institu-
tion (i.e., the item to which the RCK entry relates is not stale dated);
• is drawn on a consumer account; and
• has been previously presented (i) no more than two times in its physical form, if the entry is an initial RCK entry;
or (ii) no more than one time in its physical form and no more than one time as an RCK entry, if the entry is a
reinitiated RCI< entry pursuant to subsection 2.10 of the Rules ("Reinitiation of Returned Entries by
Originators").
Company represents and warrants to Banlc that all items which Company requests Banlc to attempt to
collect as an RCK Entry (as that term is defined by the Rules from time to time) are eligible items.
TM-1433 Electronic Returns Service Description - Revised 2/1 S/2002 Page 1 of 2
3. Authorization. Company represents and warrants to Bank that far every RCK entry, the issuer of the check
has authorized Company to electronically represent the check and that such authorization is in all respects
legally sufficient under applicable law.
4. Representment/Returned Check Fees. Company acknowledges that the Rules do not allow collection of fees
associated with a represented item by means of a single RCK entry in the amount of both the represented
item and associated fees. Company represents and warrants that eacli RCK entry will only be for the
amount of the item, and will not include any amount for a fee. In the event Company inititaes an ACH
entry through Bank to collect fees associated with a represented item, Company represents and warrants to
Bank that (i) Company has read and understood the provisions in the Rules applicable to such an ACH
entry, and (ii) such an ACH Entry is in all r p cts authorized under the Rules.
5. Reimbursement.Unless it results s Iy~from~ Bank's negligence or intentional misconduct, Company will
md rom and against, and for any and all claims, demands, losses, liability, or
emnif and reimburse Bank f
A expense t incurs, including attorney's fees and costs, resulting directly or indirectly from (i) the breach of
,J any war anty Bank makes under the Rules or Company makes in this 5ervice Description, or (ii) any action
Compan asks Banlc to take in connection with the Service this Section S shall survive termination of the
Service. 4-- k-- -1~ e- ~ -k-,- e>_I..L -Z_~,~
6 Provisionai Credit.Any credit that Company receives in connection with an RCK Entry is provisional until
such time as settlement for the entry becomes final. In the event any RCK Entry is returned or an adjust-
ment memorandum is received with respect to such RCK Entry, Company wi11 immediately deposit with
Bank sufficient good and collected funds to cover the returned RCK Entry or adjustment memorandum.
Bank is authorized to debit Company's account(s) for the amount of any such returned RCK Entry or
adjustment memorandum.
7. Operating Procedures; Processing Schedules. Each RCK Entry, file of RCK Entries, or checlc for RCK initi-
ation must be prepared and delivered or transmitted by Company or its agent to Bank in accordance with
Bank's then current instructions and processing schedules. Company will retain a copy of each check sub-
tnitted for RCK initiation, RCK Entry, and file of RCK Entries sent to Banle, or will otherwise ensure that it
is able to reconstruct them for a period of five (5) Business Days after the applicable settlement date.
Connpany will submit such copy or such reconstructed check, RCK Entry, or file of RCK Entries to Bank
promptly upon request.
8. Rejected Entries. In the event any RCK Entry submitted by or on behalf of Company is rejected by the
ACH for any reason, it will be the responsibility of Company to remake the entry; provided, however, that
Bank will remake such entry in any case where rejection by the ACH was due to rnishandling of the entry
by Bank and sufficient data is available to Bank to permit it to remake the entry. Company will provide to
Bank on request all information necessary to remake any RCK Entry or file of RCK Entries.
Electronic Returns Service Description - O 2002 Wells Farga Banks, All rights reserved. Page 2 of 2
~
RETURNED ITEM DECISIONING SERVICE DESCRIPTION
This Service Description contains provisions which, in addition to the provisions
contained in the Master Agreement for Treasury Management Services between
Bank and Company (the "Agreement"), will govern the Returned Item Decisioning
Service (the "Service").
1. The Service. Using the Commercial Electronic Office° (CEO°) portal, Bank
will notify Company of returned items to its account(s) during the period specified
by Bank on each Banking Day. Returned items will be listed by the default
disposition (redeposit or chargeback) selected by Company. Company will
review items and accept or change each item's disposition prior to the daily
deadline specified by Bank. Returned items not accepted or changed by this
deadline will be processed according to their default deposition.
2. Reauirement for Service. Compan~r shall have met requirements for receiving
services offered through the CEO portal, including the execution of any
necessary documentation.
Returned Item Decisioning Service Description page 1 of 1
2/10/05
WIRE TRANSFER SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") wire transfer service ("Service") and Company's wire transfer
security procedure election(s). "Service Documentation" is defined in Bank's Master Agreement
for Treasury Management Services ("Master Agreement"). The Service Documentation
includes the Acceptance of Services ("Acceptance"), and "Company" is the company identified
in the Acceptance.
2. Description of the Service. The Service enables Company to instruct Bank to transfer funds
in accordance with Article 4A of the Uniform Commercial Code as amended from time to time
("UCC 4A") and the rules and regulations of any funds transfer system Bank uses to effect the
transfer. In this Service Description, an instruction to Bank (inciuding any communication
cancelling or amending an instruction) in Company's name to transfer funds from Company's
account at Bank or Bank's affiliate (each, an "AccounY") is a"Payment Order" (as defined in
UCC4A). The Acceptance sets forth Company's elections regarding (a) the communication
channel(s) Company wiil use to send Payment Orders to Bank and (b) the means Bank will use
to verify Company's authorization of a Payment Order (each, a"Security Procedure").
3. Preparation of Payment Orders; Processing Schedules. Company will prepare each
Payment Order in accordance with guidelines Bank separately makes available from time to
time. Bank will execute each Payment Order in accordance with Bank's then current processing
schedule and any instructions Company furnishes with the Payment Order regarding the date a
Payment Order is to be executed. A Payment Order will be deemed received by Bank when
Bank has verified it in compliance with the Security Procedure. If Bank receives a Payment
Order after Bank's applicable cutoff time on any Business Day, Bank will treat the Payment
Order as having been received prior to Bank's applicable cutoff time on Bank's next Business
Day. A"Business Day" is every day except Saturdays, Sundays, federal holidays.
4. Inconsistency of Name and Number. If a Payment Order describes the person to receive the
funds that are the subject of the Payment Orders both by name and identifying number, Bank
may execute the Payment Order on the basis of the identifying number, even if the number
identifies a person different from the named person. If a Payment Order describes a financial
institution both by name and identification number, the identification number may be relied upon
to identify the financial institution, even if the identification number refers to a financial institution
other than the named financial institution.
5. Initiation Methods and Security Procedures. This section lists the initiation methods the
Bank offers for wire transfers and describes the security procedures provided for each initiation
method. The security procedure(s) elected by Company (each, a"Security Procedure") is/are
set forth in the Acceptance.
5.1. Voice.
Bank's voice initiation security procedure consists of confirming the personal
identification number ("PIN") accompanying a Payment Order corresponds with a valid
PIN assigned to Company for voice-initiated Payment Orders.
S.I.I. Telephone Verification Service. If Bank receives a voice-initiated, non-
repetitive Payment Order that exceeds your pre-designated limit, Bank will
TM-1440 Wire Transfer Services Service Description Page 1 of 4
Revised 0113112010
make one attempt to telephone person(s) designated by Company on the most
current setup form for Company in Bank's records to verify the Payment Order.
If Bank is unable to complete the call, Bank will not process the Payment
Order.
5.2. Commercial Electronic Office°(CEO°).
CEO is Bank's electronic banking portal accessed via the Internet. Authorized users
may access Bank's CEO Wire Transfer Service through the portal. The CEO security
procedures include log-on credentials specified by Bank that may include a Company
ID, user ID and password and any other authentication or authorization process Bank
requires from time to time. Bank will use the CEO security procedures to verify each
Payment Order received through the CEO in Company's name.
5.3. Payment Managero or Direct Origination.
5.3.1. Secure Apalication File Exchanqe Transmission ("SAFE-T"). °fhis
transmission protocol offers a variety of transmission protocols including hyper
text transfer protocoi secured (https), FTP over SSL (FTP/S), secure FTP (S-
FTP), and Applicability Statement 2(AS2) that Bank uses to authenticate each
Payment Order transmitted to Bank in Company's name.
5.3.2. Machine-to-Machine ("M2M"). This transmission protocol uses an XML
message interface that is based on the Interactive Financial eXchange (IFX)
message standard using SOAP structured messages. Data is communicated
via the Internet using 128-bit encryption and Secure Socket Layers (SSL).
Bank uses digital certificates to verify each Payment Order transmitted to Bank
in Company's name.
5.3.3. Connect: Direct with Secure This transmission protocol is used to connect
Company's mainframe environment to Bank's mainframe environment.
Secure+ is an add-on to Connect:Direct to enhance seeurity by means of
Secure Socket Layer ("SSL") or Transport Layer Security ("TLS"). Bank uses
an agreed upon ID password combination and a token card to verify each
Payment Order transmitted to Bank in Company's name. Connect:Direct and
Secure + are trademarks of Sterling Commerce.
5.3.4. Value-Added Network ("VAN"). With this transmission protocol, a third party
serves as an intermediary for transmitting data between Company and Bank.
Procedures for transmitting files may vary by VAN. Bank follows the
procedures of the VAN selected by Company to verify each Payment Order
transmitted to Bank through the VAN in Company's name.
5.4. SWIFT°.
SWIFT has established procedures for controlling access to SWIFT messaging
services (each, an "Access Control") that may include without limitation access codes,
message authentication codes, secure card readers, digital signatures, and Hardware
Security Modules. In addition, SWIFT authenticates certain messages based on
SWIFT message type prior to accepting them for routing as SWIFT messages. This
authentication may include confirming the sender and recipient of the message have
exchanged bilateral keys ("BKE"), entered into a relationship management application
("RMA") agreement, or taken other steps to secure the transmission of SWIFT
messages between them as SWIFT requires from time to time.
TM-1440 Wire Transfer Services Service Description Page 2 of 4
Revised 0113112010
5.5. Non-Standard Security Procedure.
Company has refused to utilize any of the security procedures described above and
has elected to use the Security Procedure set forth in a separate document provided
to Bank previously.
6. Authorization to Pay. Company authorizes Bank to (a) execute any Payment Order Bank
verifies in accordance with the Security Procedure and (b) Payment Order to debit the account
specified in the Payment Order (and if no account is specified, the Account or any other account
of Company at Bank or an affiliate) even if a debit results in an overdraft on the execution date
(as defined in UCC4A). Company will maintain sufficient available funds in the account
specified in the Payment Order at the time of each debit.
7. Company's Duty to Report Erroneous or Unauthorized Tranfer Instructions. Company wili
exercise ordinary care to determine whether a Payment Order accepted by Bank was either
._.erroneous or not authorized and to notify Bank of the relevant facts within a reasonable time not
exceedin`g4eu4eeft~~days after Company receives notification from Bank that the Payment
Order was accepted or that the Account was debited with respect to the Payment Order,
whichever is earlier. Company will be liable to Bank for the loss Bank incurs as a result of
Company's failure to act in accordance with this section.
8. Rejected Payment Orders. If a Payment Order is rejected for any reason Bank w' attempt to CC 1~--~- ~
notify Company promptly so Company may cure the defect but will have no liability to Co any J-,
for a rejected Payment Order or any loss resulting from Bank's failure to provide notice. (0-"-5
9. Cancellation, Amendment, Reversal. A Payment Order wili be final and will not be subject to
cancellation, amendment or reversal by Company, except Bank may, at Company's request,
make an effort to effect such cancellation, amendment or reversal without incuring any liability
for its failure or inability to do so.
10. International Wire Transfers. A Payment Order expressed in U.S. Dollars will be sent in U.S.
Dollars. Company may request that prior to executing a Payment Order, Bank convert the
amount to be transferred from U.S. Dollars to the currency of a designated foreign government
or intergovernmental organization ("Foreign Currency") at Bank's sell rate for exchange in effect
on the date Bank executes the Payment Order. If the financial institution designated to receive
the funds does not pay the beneficiary specified in a Payment Order payable in Foreign
Currency and the funds are returned to Bank, Bank will not be liable for a sum in excess of the
value of the funds after they have been converted from Foreign Currency to U.S. Dollars at
Bank's buy rate for exchange at the time the cancellation of the Payment Order is confirmed by
Bank. Bank will not be liable for any failure or delay by any financial institution or other third
party in the designated foreign country in executing or failing to execute any Payment Order
Bank transmits to a foreign country.
11. Drawdown Requests. A"drawdown requesY' is an instruction from Company to another
depository institution to debit (a) an account at that institution and transfer the funds to Bank
(each, an "outgoing drawdown request") or (b) the Account and transfer the funds to that
institution (each, an "incoming drawdown requesY'). In this Service Description, "Payment
Order" includes drawdown requests. Bank may execute an incoming drawdown request that
conforms with instructions it receives through Fed Wire, SWIFT, CHIPs or any other funds
transfer system, provided such instructions are not inconsistent with instructions Company
separately provides in writing. The authority to execute the incoming drawdown request will
TM-1440 Wire Transfer Sefvices Service Description Page 3 of 4
Revised 0113112010
continue until Bank receives express written notice from Company that such authority is
revoked.
12. Limitation of Bank's Liability. If Bank executes Company's Payment Order by sending
instructions to another financial institution, Bank may send the payment order by any
transmission method and by any route Bank in its sole discretion considers reasonable. Bank
wili not be liable for any third party's failure to or delay or error in processing a Payment Order.
If the beneficiary bank does not pay the beneficiary specified in the Payment Order, a refund will
be made only after Bank has received confirmation of the effective canceliation of the Payment
Order and Bank is in free possession of the funds debited or earmarked in connection with the
Payment Order. If Bank is notified it did not transfer the full amount stated in a Payment Order,
Bank's sole obligation will be to promptly execute a second Payment Order in the amount of the
stated deficiency. If Bank executes a Payment Order in excess of the amount stated in the
Payment Order, to the extent Company does not receive the benefit of the Payment Order,
Bank will only be liable for any loss of the principal amount transferred in excess of the amount
stated in the Payment Order. Additionally, Bank will be liable for the amount of interest
Company has lost due to the transfer of the excess amount, computed at the then current
Federal Funds rate. However, Bank's liability for loss of interest will be limited to twenty (20)
calendar day's interest. This section sets forth Bank's complete liability for a Payment Order
issued or received under this Service Description.
13. Survival. Sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 will survive the termination of Services.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1440 Wire Transfer Seivices Service Description Page 4 of 4
Revised 0113112010
TARGE7 BALANCE ACCOUNT SERVICE DESCRIPTION
introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Payment Authorization Service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. If Company maintains multiple accounts at Bank, Company
may designate in writing one such account as its "Principal Account" and one or more
additional accounts as "Target Balance Accounts". For each Target Balance Account,
Company will separately specify to Bank in writing the Ledger Balance or Collected
Balance which Company wishes to maintain in such account (the "Target Balance"). At
the end of each Business Day, Bank will determine the appiicable balance on deposit in
each Target Balance Account. If the applicable balance in a Target Balance Account
exceeds its Target Balance, Bank will transfer from the Target Balance Account to the
Principal Account such funds as are necessary to bring the applicable balance to the
Target Balance. If the applicable balance is less than the Target Balance, Bank will
transfer from the Principal Account to the Target Balance Account such funds as are
necessary to bring the applicable balance to the Target Balance. Bank may, but will not
be required to, transfer funds if the transfer would create an overdraft or exceed the
Collected Balance then on deposit in the Principal Account.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1419- Target Balance Accounf Service Description Page 1 of 1
Revised 0113112010
DEPOSITORY PLEDGE AGREEMENT
742865080
Citv of Denton ("Depositor") has selected WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
as a depository for certain of its funds and Bank has agreed to act as the depository for those funds in accordance
with applicable laws, which require that Bank secure the deposited funds, to the extent not insured by the Federal
Deposit Insurance Corporation ("FDIC"), by pledging securities of any type permitted by applicable law and
identified in Schedule I, attached hereto ("Eligible Securities"). THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A. ("Custodian") has agreed to hold the pledged securities in safekeeping pursuant to the terms of
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants in this Agreement, Depositor,
Bank and Custodian agree as follows:
1. Grant of Securitv Interest: Instructions Reqardina Collateral. (a) Bank hereby grants to Depositor
a security interest in all Eligible Securities transferred to a separate custody account (the "Collateral AccounY")
established pursuant to this agreement (the "Collateral"). Custodian agrees to serve as collateral agent for
Depositor, pursuant to the terms of this Agreement. For the avoidance of doubt, Custodian acknowledges and
agrees that it does not have and will not acquire or assert at any time in the future, and hereby expressly waives,
any lien upon, security interest in, setoff right or other right to charge the Collateral held in the Collateral Account for
any obligation owed to Custodian by Bank or Depositor. Until Depositor has the right to compel sale of the
Collateral under Section 7 hereof, Custodian may act in accordance with the instructions of Bank, including, without
limitation, the right of Bank to unilaterally substitute Eligible Securities for the Collateral in accordance with Section
3 hereof. Addendum "A" contains the names and specimen signatures of individuals authorized to act on behalf of
Depositor, and Addendum "B" contains the names and specimen signatures of individuals authorized to act on
behalf of Bank. Either Depositor or Bank may add or remove authorized representatives without the consent of the
other at any time by providing Custodian with a replacement addendum, duly executed by an authorized individual,
In no event shall the Custodian be responsible for determining whether the pledged securities are "Eligible
Securities".
(b) Each of Depositor and Bank hereby appoints Custodian as custodian of all Collateral at any time
delivered to Custodian pursuant to this Agreement and to perForm its duties as hereinafter set forth and authorizes
Custodian to hold Collateral in the Collateral Account in registered form in its name or the name of its nominees.
Custodian hereby accepts such appointment and agrees to establish and maintain the Collateral Account and
appropriate records identifying the Collateral in the Collateral Account as pledged by Bank to Depositor.
(c) Bank, Depositor and Custodian agree that all Collateral delivered to or received by Custodian for
deposit in the Collateral Account may be in the form of credits to the accounts of Custodian at a Securities
Depository or by delivery to Custodian of physical certificates in a form suitable for transfer to Custodian or with an
assignment in blank. Bank and Depositor hereby authorize Custodian to utilize such Securities Depositories and to
hold such physical securities or any combination thereof in connection with its performance hereunder. Collateral
credited to the Coliateral Account and deposited in the Securities Depositories will be held, by book-entry notation,
in accounts that include only assets held by Custodian or its agent(s) for third parties, including but not limited to
accounts in which assets are held in a fiduciary, agency or representative capacity. Physical Collateral that is not
held through Securities Depositories will be held in Custodian's vault and physically segregated from securities and
other non-cash property belonging to Custodian. As used herein, the term "Securities Depository" or "Securities
Depositories" shall mean the Treasury/Reserve Automated Debt Entry System maintained at The Federal Reserve
Bank of New York for receiving and delivering securities, The Depository Trust Company and any other clearing
corporation within the meaning of Section 8-102 of the Uniform Commercial Code, as in effect in the State of New
York from time to time.
2. Amount of Collateral. The aggregate market value of Collateral held by Custodian at all times during
the term of this Agreement must be in an amount not less than (a) the amount of the collected funds on deposit,
increased by (b) the amount of accrued but uncredited interest, (c) reduced by that portion of the funds insured by
the FDIC, adjusted pursuant to the margin requirement or applicable discount specified in Schedule I. Such
amount is hereinafter called the "Required Collateral Value". in no event shall the Custodian be responsible for
determining whether the Collateral Account contains the Required Collateral Value or that the property posted to
the Collateral Account is eligible to serve as collateral pursuant to applicable law.
3. Substitutions and Withdrawals of Collateral. If the aggregate market value of Collateral held by
Custodian at any time exceeds the Required Collateral Value, Bank may unilaterally withdraw any excess Collateral
by providing Custodian with a withdrawal notice signed by an authorized representative of Bank, provided that after
- 1 -
the withdrawal of any such excess Collateral, the remaining Collateral equals or exceeds the Required Collateral
Value. Additionally, Bank may unilaterally substitute Eligible Securities for any of the Collateral held by Custodian
at any time by providing Custodian with a substitution notice signed by an authorized representative of Bank,
provided that the Bank determines that the market value of the Collateral following such substitution would equal or
exceed the Required Coliateral Value. If Bank elects to require Depositor's written consent on a notice in
connection with any withdrawal or substitution which complies with this Section 3, Depositor agrees to provide it
promptly upon Bank's request. Custodian shall be entitled to rely on, and Bank and Depositor agree to hold
Custodian harmless from, any actions taken pursuant to, and consistent with, the instructions given in a withdrawal
or substitution notice under this Section 3, whether unilateral or not.
4. Bank's Obliaations. Bank shall perform all of the duties and obligations required of a depository under
applicable law with respect to collateralization of the funds of Depositor on deposit with Bank. At the expiration of
the term of this Agreement, Bank shall turn over to any successor depository designated by Depositor all funds held
by Bank as depository. Bank will furnish to Depositor a monthly statement listing a description of the Collateral.
The statement will specify the par value, market value, and maturity date of each component of the Collateral.
Upon request, Bank shall provide to Depositor a copy of Bank's most recent publicly available quarterly or annual
financial statement.
5. Custodian's Obliaations. (a) Custodian shall perform the duties and obligations required of Custodian
hereunder. Upon transfer by Custodian of Eligible Securities to the Collateral Account, including Eligible Securities
substituted for other Collateral, Custodian shall promptly identify such Eligible Securities on its books and records
as being Collateral heid pursuant to this Agreement. Custodian shall provide Depositor each month with a
statement identifying all property held in the Collateral Account as of the date of such statement. Custodian shall
also provide to Depositor and Bank upon request, a written confirmation on any business day on which securities
are transferred to and from the Collateral Account. Such confirmation shall identify the specific securities which are
the subject of the confirmation. Depositor agrees that it shall promptly review all such confirmation statements and
shall promptly advise Custodian in writing of any error, omission or inaccuracy in such statements. In the event that
Custodian receives such a notice claiming that an error, omission or inaccuracy has occurred with respect to the
Collaterai Account, Custodian shall promptly undertake to investigate such claim and correct any errors, failures or
omissions which such investigation confirms have occurred. Any such corrections shall be reflected on subsequent
confirmation statements.
(b) Depositor agrees that, with respect to all securities held in the Collateral Account, Custodian by
itself, or through the use of the appropriate Securities Depository, shall, unless otherwise instructed to the contrary
by Bank or as provided in Section 7 hereof: (i) collect all payments reflecting interest and principal on the securities
in the Collateral Account; (ii) forward to Bank copies of all information or documents that it may receive from an
issuer of securities which, in the opinion of Custodian, is intended for the beneficial owner of the securities
including, without limitation all proxies and other authorizations properly executed and all proxy statements, notices
and reports; (iii) execute, as Custodian, any certificates of ownership, affidavits, declarations or other certificates
under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons; (iv) hold
directly, or through the Book Entry System or Depository, all rights issued with respect to any securities held by
Custodian hereunder; and (v) upon receipt of written instructions from Bank, Custodian will exchange securities
held hereunder for other securities and/or cash in connection with (A) any conversion privilege, reorganization,
recapitalization, redemption in kind, consolidation, tender offer or exchange offer, or (B) any exercise, subscription,
purchase or other similar rights; provided, however, such exchanged securities shall continue to be held by
Custodian hereunder for the benefit of Depositor if such exchanged securities constitute Collateral. Upon receipt of
payments reflecting principal and interest or dividends on the securities in the Collateral Account, Custodian shall
transfer to Bank such principal and interest or dividend payments (either by credit to Bank's custody account at
Custodian or otherwise).
(c) Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its
action or omission to act or othernrise, except for any loss or damage arising out of its own negligence or willful
misconduct, and shall have no obligation hereunder for any loss or damage, including counsel fees, which are
sustained or incurred by reason of any action or inaction by any Securities Depository, provided, however, that
such loss or damage is not the direct result of the negligence or willful misconduct of Custodian. In no event shall
Custodian be liable to Depositor, Bank or any third party for special, indirect or consequentia) damages, or lost
profits or loss of business, arising in connection with this Agreement. Both Depositor, to the extent permitted by
law, and Bank agree, jointly and severally, to indemnify Custodian and to hold it harmless against any and all costs,
expenses, damages, liabilities or claims, including reasonable fees and expenses of counsel, which Custodian may
sustain or incur with respect to any third party claim or which may be asserted by a third party against Custodian by
reason of or as a result of any action taken or omitted by Custodian in connection with operating under this
Agreement, except those costs, expenses, damages, liabilities or claims arising out of the negligence or willful
-2-
misconduct of Custodian or any of its empioyees or duly appointed agents. This indemnity shall be a continuing
obligation of Depositor and Bank notwithstanding the termination of this Agreement.
(d) Custodian is hereby authorized to assign its rights and delegate its duties hereunder to any of its
affiliates, whenever and on such terms and conditions as it deems necessary or appropriate to perForm its services
hereunder, without any further notice to Depositor or Bank. Depositor and Bank each agrees to be bound by all
actions taken by any such affiliate pursuant to the preceding sentence to the same extent as if they were taken by
Custodian, it being understood and agreed that no such assignment or delegation shall discharge Custodian from
its obligations hereunder. If so advised by Custodian, Depositor and Bank shall provide instructions or other
information to any such affiliate rather than to Custodian.
(e) Custodian may, with respect to questions of law specifically regarding the Collateral Account,
obtain the advice of reputable legal counsel and shall be fully protected with respect to anything done or omitted by
it reasonably and in good faith and without negligence, willful misconduct, bad faith or fraud in conformity with such
advice, provided, however, that nothing contained in this paragraph (e) shall be deemed to relieve Custodian of any
of its obligations pursuant to any other provision of this Agreement.
(e) Custodian shall not be responsible for, or considered to be custodian of, any securities received by
it for deposit in the Collateral Account until Custodian actually receives and collects such securities directly or by
the final crediting of Custodian's account on the books of the appropriate Securities Depository. Custodian will be
entitled to reverse any provisional credits to the Collateral Account that were made in anticipation of the receipt of
securities or cash which were not subsequently received by Custodian. Custodian shall be entitled to rely upon any
addendum, certificate or instruction actually received by Custodian and reasonably believed by Custodian to be
duly authorized and delivered.
(f) Custodian shall have no duties or responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against
Custodian in connection with this Agreement.
(g) In performing hereunder, Custodian may enter into subcontracts, agreements and understandings
with third parties whenever and on such terms and conditions as it deems necessary or appropriate and which are
consistent with applicable law. No such subcontract, agreement or understanding shall discharge Custodian from
its obligations hereunder.
6. Custodian's Reliance on Pricina Services. The Custodian is authorized to utilize one or more
generally recognized pricing information services (including brokers and dealers of securities) in order to provide
market values hereunder, and Bank and Depositor agree that Custodian shall not be liable for any loss, damage,
expense, liability or claim (including attorneys' fees) incurred as a result of errors or omissions of any such pricing
information service, broker or dealer.
7. Default and Remedies. If Bank defaults in performing its obligations under Section 4 above, or if Bank
is declared insolvent, or if a receiver is appointed for Bank, Depositor may, after providing Bank at least three (3)
business days prior written notice and opportunity to cure the default, and, if Bank fails to cure the default within
such (3) business day period, instruct Custodian to transfer the Collateral or any part thereof to a broker-dealer for
disposition in accordance with Depositor's instructions at a public or private sale. The proceeds of any such sale
shall be applied to satisfy any indebtedness owed by Bank to Depositor, and any excess proceeds shall be
returned to Bank. Depositor will also have any other remedies available under applicable law. The Custodian shall
be entitled to rely on and shall be held harmless from acts taken in accordance with such instructions from
Depositor.
8. Termination of Aareement. Any of the parties hereto may terminate this Agreement by giving ninety
(90) days prior written notice of termination to the other parties in writing specifying the date of such termination.
This Agreement shall terminate on the earlier of (i) the date specified in such notice of termination, or (ii) the date
on which the deposits of Depositor with Bank are paid in full. If upon termination of this Agreement Bank is still
holding deposits of Depositor, Custodian shall follow such reasonable written instructions as Bank and Depositor
may jointly give Custodian concerning transfer of custody of securities and related property and records; otherwise
Custodian will follow Bank's unilateral written instructions in that regard.
9. Aaalicable Law; Other Aareements. This Agreement shall be construed in accordance with the
substantive laws of the State in which Depositor is located, without regard to conflicts of laws principles thereof.
Bank, Depositor and Custodian hereby consent to the jurisdiction of a state or federal court situated in the State in
which Depositor is located, in connection with any dispute arising hereunder. Bank, Depositor and Custodian
hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which any one of them
-3-
may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient forum. All deposit accounts of
Depositor will be subject to Bank's Commercial Account Agreement, Business Account Agreement, or other
applicable deposit account agreement, as in effect from time to time.
10. Force Maieure. Custodian shall not be responsible or liable for any failure or delay in the performance
of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including without limitation, acts of God, earthquakes, fires, floods, wars, civil or military
disturbances, sabotage, epidemics, riots, loss or malfunctions of utilities, computer (hardware or software) or
communications service, labor disputes, acts of civil or military authority, or governmental, judicial or regulatory
action; provided however, that Custodian shall use its best efforts to resume normal performance as soon as
practicable under the circumstances.
11. Jurv Trial Waiver. EACH OF BANK, DEPOSITOR AND CUSTODIAN HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
12. Miscellaneous. The headings in this agreement are for convenience of reference only and should not
be used in interpreting this Agreement. If any provision of this agreement is illegal or unenforceable under
applicable law, that provision should be deemed reformed so as to be enforceable to the extent permitted by
applicable law, or if that is not possible, then this Agreement should be read as if that provision was never a part of
it, and the remainder of the Agreement will be enforceable. THIS AGREEMENT REPRESENTS THE FINAL
AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL
AGREEMENTS OF THE PARTIES. Notices given under this Agreement must be addressed as set forth below the
signature of each party, and will be effective upon actual receipt by the addressee or upon refusal of delivery during
the normal business hours of the addressee. To the extent that in any jurisdiction any party may now or hereafter
be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or
other legal process, each party irrevocably agrees, to the extent permitted by law, not to claim, and it hereby
waives, such immunity in connection with this Agreement.
Date of Agreement: , 20
DEPOSITOR: Citv of Denton
CUSTODIAN: THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
Signature:
Print
Name:
Title:
Address:
Signature:
Print
Name:
Title:
Address: C/O The Bank of New York Mellon
One Wall Street, 4Ih Floor
New York, NY 10286
Attn: Manager, BDS Collateral Management
BANK: WELLS FARGO BANK, NATIONAL ASSOCIATION
Signature:
Print
Name: Sheila Lynch
Title: Vice President
Address: 333 Market Street St.17Floor,
MAC: A0119-173
San Francisco, CA 94105
DepP1dgAgmt-MasterBNY-2010(1210)
-4-
ADDENDUM "A"
(Authorized Officers of Depositor)
One signature of any of the foliowing authorized officers of Depositor is required to authorize actions to be
taken pursuant to the foregoing Depository Pledge Agreement:
Print
1. Name: Signature:
Email: Phone:
Fax:
Print
2. Name: Signature:
Email: Phone:
Fax:
Print
3. Name: Signature:
Email: Phone:
Fax:
Print
4. Name: Signature:
Email: Phone:
Fax:
-5-
SCHEDULEI
LIST OF ELIGIBLE COLLATERAL AND MARGIN OR DISCOUNT RATE
Eliaible Collateral:
SEE ATTACHED SCHEDULE
ACCEPTED:
CITY OF DENTON
Signature:
Print Name:
Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION
Signature:
Print Name: Sheila Lynch
Title: Vice President
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Signature:
Print Name:
Title:
Applicable Marain or Discount Rate:
One hundred and two percent (102%) OF
ATTACHED SCHEDULE
Dated:
-6-
COLLATERALSCHEDULE
Sec. 2257.002. DEFINITIONS. In this chapter:
(1) "Bank holding company" has the meaning assigned by Section 31.002(a), Finance Code.
(2) "Control" has the meaning assigned by Section 31.002(a), Finance Code.
(3) "Deposit of public funds" means public funds of a public entity that:
(A) the comptroller does not manage under Chapter 404; and
(B) are held as a demand or time deposit by a depository institution expressly authorized
by law to accept a public entity's demand or time deposit.
(4) "Eligible security" means:
(A) a surety bond;
(B) an investment security;
(C) an ownership or beneficial interest in an investment security, other than an option
contract to purchase or sell an investment security;
(D) a fixed-rate collateralized mortgage obligation that has an expected weighted
average life of 10 years or less and does not constitute a high-risk mortgage security; or
(E) a floating-rate collateralized mortgage obligation that does not constitute a high-risk
mortgage security.
(5) "Investment security" means:
(A) an obligation that in the opinion of the attorney general of the United States is a
general obligation of the United States and backed by its full faith and credit;
(B) a general or special obligation issued by a public agency that is payable from taxes,
revenues, or a combination of taxes and revenues; or
(C) a security in which a public entity may invest under Subchapter A, Chapter 2256.
Sec. 2256.009. AUTHORIZED INVESTMENTS: OBLIGATIONS OF, OR GUARANTEED BY
GOVERNMENTAL ENTITIES. (a) Except as provided by Subsection (b), the following are authorized investments
under this subchapter:
(1) obligations, including letters of credit, of the United States or its agencies and
instrumentalities;
(2) direct obligations of this state or its agencies and instrumentalities;
(3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of
the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United
States;
(4) other obligations, the principal and interest of which are unconditionally guaranteed or insured
by, or backed by the full faith and credit of, this state or the United States or their respective agencies and
instrumentalities;
(5) obligations of states, agencies, counties, cities, and other political subdivisions of any state
rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent;
and
(6) bonds issued, assumed, or guaranteed by the State of Israel.
(b) The following are not authorized investments under this section:
(1) obligations whose payment represents the coupon payments on the outstanding principal
balance of the underlying mortgage-backed security collateral and pays no principal;
(2) obligations whose payment represents the principal stream of cash flow from the underlying
mortgage-backed security collateral and bears no interest;
(3) collateralized mortgage obligations that have a stated final maturity date of greater than 10
years; and
(4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to
the changes in a market index.
-7-
Government & Instihrtional Banlcing r T j
Public Fwids Collateral Unit
333 n'Iarket Sh•eet 17lh Flooi•
MAC: Ao119-173
San I'rancisco, CA 94105
Date: March 17, 2011
Customer Name: City of Denton Telephone:
Custody Acct: K3GQ Contra: PL-0000345 Fax:
SUBJECT: Request for Waiver of Consent to Release Collateral of Interest
Dear Wells Fargo Customer:
Wells Fargo Bank, N. A. will process releases of excess collateral securing your deposits with Wells Fargo
without providing prior notice and without obtaining your prior consent.
Wells Fargo Bank, N. A. agrees to initiate and process the release of excess collateral pledged to secure
your deposits, whenever the amount of such collateral pledged exceeds the amount required pursuant to your
agreement with Wells Fargo, or, in the absence of such agreement, whenever the amount of the collateral pledged
exceeds the amount necessary to secure your deposits. For purposes of determining the sufficiency of coilateral
pledged to secure your deposits, or whether the amount pledged is in excess of collateral requirements and may be
released, you agree that Wells Fargo shall be governed by the total collected balance of your deposits as of the
close of business on the banking day prior to the date of any release or proposed release. You agree that Wells
Fargo shall not be liable to you or any third-party for any losses or damages resulting from Wells Fargo's release of
excess collateral pursuant to this letter agreement, and that this letter agreement shall continue in effect and bind
you and Wells Fargo until you otherwise clearly provide in writing.
Please indicate your acceptance of and agreement with the terms of this letter agreement by signing as
indicated below. Please fax to 866-686-5441. If you have any questions you can reach us at 877-479-6603.
Sincerely,
Sheila Lynch
Vice President
(customer) Authorized Signature Print Name
Date
-8-
i -
1
t. ~
Mailing Address Wells Fargo Banlc, N.A.
GIB Public Flulds Collateral Uiut
333 Marlcet Street, 17°i Floor
MAC: A0119-173
San Francisco, CA 94105
Toll Free Numbe►•: 877-479-6603
Fax Number: 866-686-5441
GIB PUBLIC FUNDS COLLATERAL UNIT
CONTACT INFORMATION
Email Address: PublicPundsCollateral(u/!«~ellsfar~,-o.coil7
Contacts:
Sheila Lynch, Public Ftu7ds Collateral
Unit Manager
lvnchsh(cu.wellsfar~yo.coni
(415)371-3278
Jeana No, Public Funds Analyst
Tatiana Dayers, Public Ftulds Analyst
Mercy Lopez, Public Funds Analyst
Jeana.No(a?wellsfarw.coill
(415) 371-3277
rl-atialla.Davers(&,tivel Isfam o.co 1n
(415) 371-3276
louezmd(&.wellsfarao.coni
(415) 371-3273
-9-
~
City of Denton
Response to Request for Proposal for Bank Depository Services
October 4, 2010
Submitted by
Wells Fargo Banlc, N.A.
Government and Institutional Banlcing
Andy Deslcins
Senior Relationship Manager
(512)482 -4306
andrew.b.deskins((-t)wellsfar ,-,a.cam
Mike Crossley
Treasury Management Sales Consultant
(214)624-1740
michael.crasslev((-i)wellsfar ua.cam
DEN
r' ll"
ON
Government & Institutfonaf Banking
MAC T7042-080
48 San Jacinto elvd
Suite 850
Austin,TX 78701
1Vells fargo Bank, N.A.
OCtObCi' 4, 2010
City of Denton, Texas
ATTN: Kareja Smith, SeT110C BElyer
901-B 1'exas St.
Deiitoti, Texas 76209
RE: Proposal for BaiIk Depositoiy Agreeiiieiit RFP # 457$ afid 4579
Dear Karen:
Wells Fargo is pleased to pi•ovide tlie City of Deiitoii ("tlie City") with this Batilc Depository
Serviees proposal. As yotir iiictimbeait depasitary baiik, Wells Far•go {by merger of Wacllovia
Baiik} laoks forwa►•d to coiitinuing its i•elatiotisliip with the City. As of Juiie 30, 2010, we z•axiked
foiirtii in assets aud tliud in Ynarket value of oiir stock anioug oitr U,S, peers. As a Ieader in cash
iliaiiagemeiat, we provide our ctiskamer•s with products backed hy fijiancial strengtli, leading-edge
tecluiology, glabai processiiig capabilities, and an uiicomproinising commitillent to service
exeelleilce. Ws have cotinnitted exteiisive resources to Casli Managemeilt in capital, eqiiipment,
tecluioiogy and trained personnel.
The priinary goal of tlie proposal is to provicie the City with the most offieient cash mauageinent
system possible. More speeifieally, We IIave fOCUSed L1p011 I11aXIlI1IZtllg the US0 of Cc3Sh a27d
streainliiiiiig yoir operatioii for greater efficieucies. AdditionaIly, yoti witl receive a respaiise
from Wells Farga far merchant serviees.
Wells Fargo believes we affer the foliowing coinpetitive advantages to tlie Cify:
1. Oti►' Goveriuilen# Advantage Interest Clieckiiig accaunt siiiootlily incorpot-ates tlle
coilveiiience of fiill-service cliecking with tlle opportunity tO caIIl lI]fel'eSt 021
excess fiuids lieid in tlze accotint. It is fitlly autoinated, meaiiitig there is iio need
to nioiiitoz• balailces. Govei•tiziient Acivaiitage Interest Checking autoiiiatically
generates iiitecest an atl excess fixiids.
2, Wells Fargo will altow the district to rtin a11 fees related to bank supplies (checks,
deposit slips, tamper evident plastic, etc.) tliLtatigli aceaunt analysis for soft dollac
paymeiit.
3. Wells Fargo knows the City ajid its staff aild the stafFknows your cantacts at
Wells Fargo. Wliile no bati-k can exectite flawlessly 100% of the #ime, we
recogiiize tliat it is our people aild relafioiisliips that will tittimately correct any
errors or n;oclif~, service IeveIs. We are commitked to make thifigs right.
Adciitionally, the1'e 1S ll0 flSeCI tO CI1aIlge yOll2' eYlSkll]g aCCOll1"lt riU111beT'S aS We tl'ai15if1011
}rour accouiits to tiie ga forward platform eiilianceiiients as arestilt of the iiierger witli
Wells Farga aiui WacEiovia. As an iilceiitive ta inairitain yoEr►• accaunis with VVells Fargo
we ace williiig ta waive the first month of analysis cliarges after the begiiiiiixig of tlle iie«f
corltract.
We are con~'ideni tliat. the products and sez•vices atztlined iii tliis praposal will provide you «Tittz
iiicreased efficiencies that will benefit your persoiuiel in the day-to-ciay coElduct af bt►siness. Otir
proposal and pricing is valici for, 90 daJls fi•om today's date. Unless otllerwise noted iEi tlle bici,
Welis Fargo Bank is able to provide tlie services as requesteti.
Sincerely,
~
Aiidi-ew B. Deskiiis
Seiiioi• Vice Pi'esicient
Table of Contents
hltroductory Letter 2
Table of Contents 4
Bank Questionnaire 5
Account Descriptions 7
Safekeeping and Collateral Requirements 43
Overdrafts 47
h-iformation Services 49
Other Stipulations 52
Appendix:
Addenda Acknowledgement
Pricing Documents
Attachment B
Treasury Management Price Proposal
Safekeeping Pricing
Sample Statements-Statements and Notices Service
Availability Schedules
Cash Vault
Desktop Deposit
Retail Lockbox
Product Information
PayCard
Controlled Disbursement
Smart Decision
CEO Mobile
Depository Pledge Agreement and Customer Overview Letter
Legal Agreements
Wells Fargo Baiil1, N.A. 4
Bank Questionnaire
The Bank is requested to thoroughly answer the following questions. Additional pages
may be appended if space is inadequate.
L How is the Bank chartered?
Wells Fargo & Coinpany was founded in 1852, incorporated in the State
of Delaware (as were most corporations at that time). The original charter
date of Wells Fargo Banlc, N.A is November 30, 1870. On March ?0,
2010, the national bank charters of Wachovia Bank, N.A., and Wachovia
Banlc of Delaware inerged into Wells Fargo Banlc, N.A.
2. What percent of current loans are classified as non-performing?
As of June 30, 2010, total nonaccnial loans are 3.63% of total loans.
3. Does the Bank have any significant problems noted by regulatory agencies in the
past twenty-four (24) months? If "yes", please explain.
At tlus time, and to the best laiowledge of the Wells Fargo representatives
preparing tlus response, no regulatory agency has noted any sigiuficant
problems at Wells Fargo within the past twenty-four months that would
have a material adverse impact on Wells Fargo's ability to provide the
services requested in tlus RFP.
4. Lidicate the Bank's capital to assets ratio for the last five (5) years.
Year
Total Capital
Total Assets
Ratio
2009
$134,397
$1,243,646
10.81%
2008
$130,318
$1,309,639
9.95%
2007
$51,638
$575,442
8.97%
2006
$51,365
$481,996
10.66%
2005
$44,687
$481,741
9.28%
111 11ll1110115
5. What was the Ba
nk's 2009 return on
assets (ROA)?
0.97%.
Wells Fargo Baiil1, N.A. 5
6. Attach copies of the Bank's most recent FDIC (UPBR) call reports.
Our previous four quarterly call reports can be obtained by visiting the
followin~ site and usin~ the Wells Fargo FDIC Certificate No. 3511:
fdic.uav/Call TFR Rats/index.asa.
7. Does the Bank currently operate a branch bank(s) in the city of Denton? If so,
please indicate which services will be provided from the Bank's branch
location(s) and which will be provided from the main Bank. Also, please
indicate service location throughout the proposal where applicable.
Although Wells Fargo has several banlcing stores located in Denton, the
store closest to City Hall is our Denton Downtown Banlcing Store, located
at 101 S. Locust St., Denton, TX 762101. Full depository services are
available at tlus location.
8. Please list all service locations in Denton.
lii the table below, we have provided the location of full service Wells
Fargo banlcing stores located in Denton:
Banking Store Name
Address
Denton Downtown
101 S. Locust St.
Denton, TX 76201
Denton North
601 W University Dr.
Denton, TX 76201
Denton LTNT Union
1155 Union CIR 3rd FLR
Denton, TX 76203
Denton South
1001 S Interstate 35 E
Denton, TX 76205
Denton Crossine,
1727 S Loop 288,
Denton, TX 76205
Hickory Creek & Teasley
5009 Teasley LN,
Denton, TX 76210
Wells Fargo Baiil1, N.A. 6
Account Des criptions
A. General
The City intends to establish the following Bank accounts:
Account Name
Controlled Disbursement Account
Depository Account
Pay Flex Account
Utility Account
Control Concentration Account
Tvne
Zero-Balance Account
Zero-Balance Account
Zero-Balance Account
Zero-Balance Account
Super NOW Account
The Controlled Disbursement Account will be used to clear all disbursement checks for
the City. Automatic transfers from the City's Control Concentration Account will be
used to ftind checks and bring the balance back to zero. The bank is required to notify
the City via an Internet reporting system each morning no later than 10:00 a.m. CST. of
the total amount of checks clearing for that day. Please provide any specific Controlled
Disbursement Account agreement.
Wells Fargo can maintain the current account stnicture as described. The
Banlc's Zero Balance Account (ZBA) service simplifies the concentration
of funds. On a daily basis, the ZBA service automatically concentrates all
of the desi~nated account activity into your main concentration account.
Wells Fargo has several controlled disbursement endpoints available to
our clients. Of the endpoints available, we recommend our Van Wert,
Ohio point to best suit your needs. We operate this endpoint through our
affiliate banlc, Wells Fargo Banlc Oluo, N.A., wluch is 100% owned and
operated by Wells Fargo & Company. The Van Wert service offers you a
variety of available technologies, such as iinage access and electronic
reporting, to optimize your cash management activities. Additionally, it
also includes our premier Perfect Presentment service. With this service:
■ A summary of the day's disbursement total is available to you by 9:00
a.m. CT. (Presentment times are at 8:00 a.m. CT and 9:00 a.m. CT.)
■ You'll receive timely, complete iiiformation to accurately forecast
your daily cash needs. Early summary iiiformation enables you to ftind
your account with the amount necessary to cover daily check clearin~
totals and avoid excess balances, so your money works harder for you.
Your daily funding totals accurately match posting totals, and
adjustments due to encodin~ errors are virtually eliminated. The
Wells Fargo Baiil1, N.A.
Per fect Pr•eseratnzerat service compares checlcs to your issued checlc file
and our stop payment database prior to posting to your account. We
identify and correct encoding errors and report oiily "tnie"
exceptions to you. Because the Per fect Pr•eseramzerat service nins in
real time rather than at end-of-day, it can do in one day what other
positive pay services talce three days to do:
Day 'Perfect Presentment service
DAY Morning
1 ■ Checks are presented
■ Stop payments are identified
■ Positive Pay exceptions (uninatched checks)
are identified
■ Matched items are reported in fundine, totals
■ Operations scrubs items for encoding errors
and returns
Afternoon
■ Exceptions are reported
■ Pay/return decisions can be made
Evening
■ Only matched items are posted
DAY ' previous day pay/return decisions can be
2 made
■ Items decisioned to post by Operations are
posted
DAY ' Day 1 exceptions that you have reviewed and
3 authorized to pay are reported in the first
presentment totals
Controlled Disbursement Reporting
Traditional Positive Pay service
Morning
■ Checks are presented
■ All iteins are reported in funding totals
Evening
■ All other checks are posted
■ Positive Pay exceptions (unmatched
checks) are identified
■ Exceptions are reported
■ Pay/return decisions are made
■ Encoding errors are reversed
■ Corrected items are posted
■ Adjustinents are reported
The City will be able to access your controlled disbursement presentment
reports throu-h our C'EO Treasury Information Reporting service early in
the day, with the coiif'idence of laiowing that your presentment totals will
be consistently delivered by the stated deadlines. And with our Event
Messaging service, we can notify you immediately by e-mail, text
message, or fax, whenever your controlled disbursement summary report
is available or when you have positive pay eYCeptions to view.
C,olitrolledl)isbursemelit Service is subject to iliiticzl cz~i~a cz~i~iuczl scztisf~zctor~i~ a of'
tJze frluzliciczl stcztemelits of tJze C,iti% creditczpprovczl bi~ Fi"ellsFczrgo Bczlik czluascztisfizctori~
completioli of czln~ liecessczr.v docalmelitcztioli.
Wells Fargo Baiil1, N.A. 9
The City reserves the right to open or close any number or type of accoimts throughout
the period if necessary although no changes are anticipated.
Aclcnowledged.
B. Services and Fees
The City prefers a straight fee or direct payment method where analysis charges are
debited to the Control Concentration Accoimt. Under a compensating balance method,
all accounts would be tied to a main account and collected balances would be
maintained to offset service charges. Bidders should provide proposals for both the
straight fee/direct payment method and the compensating balance method. All account
balances should be grouped together for either calculation.
We suggest the City maintain its checlcing accounts as Goveriunent
Advantage Interest Checking (GAIC) accounts. Government Advantage
was developed exclusively for the inunicipal inarlcet and ineets the
requirements of all applicable TeYas statutes relating to public funds
deposits.
Incorporatin~ all of the convenience of full-service checlcin~ with a
compensating balance feature, tlus solution miiumizes your costs and
maYimizes investable funds. ILey features include:
■ A fully inte~rated checlcin~ and investment account, so there are no
transfers to and from the investment account, eiiliancing ease and
conveiuence.
■ No additional fee for the investinent feature - there is no sweep or
investment fee associated with the account.
■ The compensating balance automatically adjusts montlily based on
your activity, services used and interest rate in that month.
Designed specifically for goveriunents, GAIC uses balances to first offset
any service charges, then, all eYCess collected balances earn interest. All
interest rate calculations in GAIC will be based on avera~e daily collected
balances after deducting for float. We currently pay both our Earnings
Credit Rate and our interest rate on 100% of collected balances with no
reserves. liiterest will be paid on any balance in eYCess of tlus
compensating balance. Funds in GAIC are completely liquid.
Traditionally, banks have indexed government deposits to Fed Funds or
the 90-day T-Bill. Due to volatile market conditions, these indeYes (wluch
historically have allowed banks to pay ~overnments a premium for
deposits under contract) are not the best choice Wells Fargo has available
for clients today. We would like to suggest the following arrangement
until the marlcet stabilizes:
Wells Fargo Baiil1, N.A.
Wells Fargo will pay you our internal banlc-inanaged
rate, currently ECR of 35 basis points and interest rate
of 20 basis points, on your operating funds. liiterest
will be earned on 100% of your excess collected
balances (with no reserve requirement) after first usint-1,
balances to offset service charges. These rates are
applicable for balances greater than $1 million.
The Governinent Advantage Interest Checlcing banlc-inanaged rates and
the paying of interest on 100% (versus the traditiona190%) of the
collected balances are subject to change on a montlily basis at the banlc's
discretion.
Should marlcet conditions chan~e durin~ the term of this contract such that
we can offer you an indeYed rate that pays you more than your contracted
rate, we will inalce the necessary changes to ensure that you receive Wells
Fargo's highest available rate.
Attachment B contains the City's average bank depository services activity over the
past 12 months. Using Attachment B, please indicate the cost of providing each of these
services on a per-item basis and include the associated Treasury Management
Association (TMA) code, if different from those currently provided. If appropriate,
identify other services not listed with their associated costs and TMA code. Any service
not appearing or which does not have a fee indicated on the proposal form will be
considered to be free of charge in the bank depository contract. Please attach a sample
accoimt analysis statement.
Please refer to the Appendix for Attachinent B.
1. List any other applicable Bank charges: Only the Bank charges in Attachment B or
in this section will be acceptable in the monthly account analysis statement. Once
selected as the City's Bank, no additional or increased fees for these services in the
fee schedule may be charged to the City during the contract term.
All applicable banlc charges are included on Attaclunent B in the
AppendiY.
C. Automatic payroll deposit is a service the City offers its employees. The Bank
would be required to produce bi-weekly payroll transfers furnished by the City in
ACH format for the transfer of funds directly to the employee's bank, savings and
loan, or credit union account. Please state the Bank's procedure for this service and
list appropriate cut-off times that would apply. The City's net payroll is
approximately $2 million each pay period.
The City can ori~inate and transmit ACH direct deposit files to us usin~
a variety of inethods. Direct originators can transmit files using one of
our secure liiternet protocols. Customers who can't create NACHA
formatted files on their own systems can use our C'onznzer•cial Electr•oraic
Wells Fargo Banli, N.A. 10
Office'R' (C'EO'R') Internet portal to create and submit their ACH files. The
Treasury liiformation Reporting system witlun C,EO also lets you access
a comprehensive suite of ACH reports. This fleYibility lets you select the
delivery channel best suited to your needs. The systein provides
continuous processing, 24 hours a day, seven days a weelc, with
eYtended deadlines and no processing window restrictions. Electroiuc
file coiif'irmations are provided witlun 15 minutes of receipt of your files
and files can be warehoused for up to 45 days before the effective date.
This system sets the industry standard for both functionality and
reliability.
Wells Fargo offers a variety of secure transmission methods including
our supported Internet protocols-https, FTP/S, SFTP, and AS2-or
Coiuiect:Direct with Secure+. We also offer liiternet ACH though our
C,EO portal.
At Wells Fargo, we do accept files for next-day credit. In these cases, we
recommend you complete your transmission by 3:00 p.m. CT. However,
we generally advise against tlus because some receiving banlcs might
delay availability for your payees.
In general, we recoininend a two-day process for tiine-sensitive credit
files. Tlus ensures that receiving banlcs can be notified so they malce
funds available on the payment date.
The cut-off tiine for one day transactions would be 8:00 p.in. and for two
day transactions it would be 11:00 p.m. Settlement would occur on
business days oiily.
The City is required to fund ACH credits on the effective entry date for
the file.
D. Please provide information pertaining to payroll cards, if provided by the Bank.
The City desires to explore the use of payroll cards for employees not receiving
direct deposit.
We offer Wells Fargo PayCard services through a partnership with
Fidelity National Information Services, an organization that has provided
payroll card services since 1997. As of July 2010, Wells Fargo has
several hundred customers with tens of thousands of cardholders using
tlus service, in addition to 1,000 of our own employees.
As an alternative to payroll checks, Wells Fargo's PayCard gives you the
ability to pay all of your employees electroiucally, including those without
bank accounts. With PayCard, your employees have immediate and
convenient access to their pay via Wells Far~o or VisaR' ATMs and can
malce purchases everywhere Visa cards are accepted. PayCard helps you
reduce costs and increase employee conveiuence and satisfaction.
Wells Fargo Baiil1, N.A. 11
Reducing paper-based payinent processes also saves trees, which is good
for the enviroiunent.
How you benefit:
■ Lowers the cost of issuin~ company payroll
■ Integrates seainlessly with standard direct deposit process
■ Miniinizes fraud associated with paper checlcs
■ Enables easier out-of-cycle payinents
■ May eliininate the need for a first paper paycheclc
■ Helps your business reduce waste and conserve natural resources
■ Provides a new employee benefit
How it works:
■ Assign the employee a PayCard account. Depending on your payroll
needs, Wells Fargo's PayCard program gives you several options for
card distribution. Permanent cards can be issued to your employees
witlun seven business days, or instant issue cards can be given out
immediately upon program sign-up.
■ Transmit your payroll file electroiucally to Wells Fargo. Each payroll
period, you'll fund PayCard employee accounts electronically as part
of your regular direct deposit transmission.
■ Einployees use PayCard to withdraw part or all of their payroll. With
PayCard, employees can access their pay at Wells Fargo and Visa
ATMs worldwide. Additionally, they can malce purchases everywhere
Visa cards are accepted.
■ Add and maintain employee files. Wells Fargo provides access to a
user-friendly Web-based tool for easy maintenance of your employee
PayCard inforination.
When you hire a new employee, ask your employee to complete and sign
the Enrollment Form. Then, follow the standard account opening process
on the cardholder database of the Internet-based PayCard system to input
the employee's information and establish their PayCard account.
E. Please indicate if the Bank would offer any type of special checking, money market,
or loan account for City employees, and whether or not non-accoimt holders,
employees and/or vendors, will be charged a fee to cash disbursement checks.
Wells Fargo will waive the customary check cashint', fee for non-account
holders.
Wells Fargo Meinberslup`R' Banlcing program helps you reduce payroll
costs while offerin~ your employees additional benefits. Wells Far~o
commercial customers can now offer their employees an additional
benefit. Not oiily is there no additional cost to you as an employer, but by
Wells Fargo Baiil1, N.A. 12
encoura~in~ your employees to add Direct Deposit to their new account,
you may be able to reduce eYpenses. Your employees will benefit from
the discounts and services available through tlus program. Some of the
benefits offered with the Wells Fartlyo Pr•enziiinzll-(,nzber•shil)" Checlcing
Paclcagel are shown below.
Checking accounts. The Wells Fargo Meinberslup`" Banlcing checlcing
account offers many discounted and free services, including:
■ Monthly service fee waived with qualifyin~ Direct Deposit2 of $100 or
more OR montlily Automatic Transfer of $75 or more per transfer to
savings3, OR other options (see a Wells Fargo banlcer for details)
■ Interest earned on entire daily collected balance each day the minimum
balance is $500 or more
■ Free Wells Fargo Exclusive Checks or an $8 discount toward other
checlc styles
■ Uiilimited checlc writing
■ Free online stateinents or free paper stateinents with Checlc
Safelceeping
Savings accounts. Your employees can set up a savings account with no
inonthly service fee when they set up inonthly Autoinatic Transfers;.
Online services. Wells Fargo Memberslup Banlcing customers receive
free Wells Fargo OnlineR' banlcing with Bill Pay.
Credit options. Your employees may also benefit from a variety of loan
and line of credit services, including:
■ Optional Wells Fargo Eiilianced RewardsR, program'- earn
rewards points on purchases inade with both Wells Fargo Checlc
Card and Credit Card
■ Special interest rate discounts on loans or lines of credit with
automatic payment',`'
■ Overdraft Protection available from an eligible Wells Fargo
savings account or a Wells Fargo Credit Card
Mortgage services. Your einployees can choose a coinpliinentary gift
when closing a new inortgage loan or refinancing first inortgage loan
through Wells Fargo Home MortgageR lending services'.
Other services. Your einployees can save with no-fee cashier's/official
checlcs, personal inoney orders, single-signer traveler's cheques, and two
free non- Wells Fargo~R' ATM cash withdrawal transactions (U. S. ) per
statement cycleR.
Wells Fargo Baiil1, N.A. 13
Please note that services listed are available only to qualified applicants.
To find out whether they qualify for individual services, your employees
should visit one of our conveiuently located Wells Fargo banlcing stores or
call (800) WFB-OPEN (932-6736).
'Premiatm HembersJzij) Checking Package consists of a Premiitm HembersJzij) Checking account phis tluee
other qualify ing accounts or seivices. $100 miiumiim opeiung deposit reqiiired to open a neii- checking account.
A qualifying Direct Deposit is a Direct Deposit of y-our salaiti-, pension, Social Security, or other regular
montllly income of $100 or more per deposit, electroiucally deposited to y our Premium _llembersJzij) Checking
account by `our employ er or an outside agency. Transfers from one account to another, or deposits made at a
baiiliing location or ATM do not qualify as a Direct Deposit.
jA qualifying Automatic Transfer is a recui7ing inonttily Automatic Transfer of $75 or inore per transfer froin
y-our Pr°cmizrln HE~l0er°sliil? Checliing account to a Wells Fargo consumer savings account.
4 $5 discount on aimual program fee for Pr°eliiizaii llEl0Er°sliil? customers ($24 noiuefundable aimual program
fee applies). Rewards points are eained on net purchases oiily (purchases ininus rehn7is/credits). Purchases
made using a Personal Identification Nuinber (PIN) do not eai7i rewards points.
'Subject to credit qiialificarion.
'Reduced interest rate reqiiires continiied automatic pay ment from a Wells Fargo checking or savings accoimt.
If the automatic pay ment is not selected or is canceled at any time, the rate will increase.
~The Gift Choice offer and other benefits tluough the Emj)loYee -llortgqge Progr~zm''' camiot be combined ii-ith
the benefits of the Relocatioli _llort~zge Programsl\i or any other program or offer. The Gift Choice offer is not
available for assumption or modification loans, loans originated tluougli brol~ers, joint N enhires or otlier tlurd
parties, home equin loans, or home equin lines of credit The Gift Choice offer is N alid for new purchase or
refinance mortgage loan applications taken tluough Tlze Emj)loYee _llort~zge Program, subject to ii-hether the
offer is still available. Contact y our mortgage consultant for additional details, including cui7ent availabilin ,
tei7ns, and conditions. The Gift Choice offer promotion is adnuiustered by BI, ii-luch is not affiliated ii-ith TT"ells
Fczrgo Home HortgcWe and is subject to change or may be withdrawn at any time ii-ithout norice. A gift list can
be obtained by calling (877) -533-4-521 orby going to www.im-aiftchoice.coin.
"Non-Wells Fargo ATM oii-ners or operators may apply surcharges for ATM transactions.
F. Does the Bank offer any type of sweep account where excess City fimds could be
invested at a higher rate overnight than in a Super Now account arrangement?
Does the Bank have money market funds consisting of treasuries, agencies, prime
commercial paper, prime domestic bankers acceptances and collateralized or
insured certificates of deposit that the City could utilize daily as an investment
alternative? If so, please explain the fund's parameters and interest earnings
history or attach a separate prospectus.
Wells Fargo does offer a sweep service. The sweep service worlcs by
talcing remaiiung collected balances at the end of the day and investing the
funds automatically, eliminating the guesswork of manual investments.
Our sweep investinent service provides an easy and efficient investinent
system that eliminates anticipatory, idle balances in your operatin"
depository account. The primary benefit is that the automated system
requires no moiutoring and maYimizes interest income.
Wells Fargo Baiil1, N.A. 14
As an institutional entity, your sweep investinents are liinited to
repurchase agreements wluch pay sigiuficantly less than our Goveriunent
Advantage liiterest Checlcing account. Not oiily is the sweep rate lower
but there is a inonthly cost associated with the sweep service. Therefore,
we recommend our Government Advantage Interest Checking product
developed specifically to meet the needs of our goveriunent and
institutional clients. We have described tlus account in detail above in "B.
Services and Fees."
G. Automated Teller Machines (ATM)
The City desires that the Bank install and maintain ATM units at the following
locations:
• Denton Mimicipal Complex, 601 E. Hickory
• Water Works Park, 2400 Long Road
The City agrees to furnish a lighted, inside location and sufficient electrical power for
each machine installation. Additional locations may be added by mutual agreement as
they are identified. Please indicate the estimated annual cost to the City to have these
machines available at the above locations.
Wells Fargo will consider placement of a cash disbursing ATM for the
City. Estimated monthly cost is $1,500. The City may want to consider
usin,, PIN-based debit acceptance at these locations which may eliminate
the need for the ATM maclunes. Wells Fargo has ? ATMs wluch are
located witlun half a mile of the Muiucipal CompleY.
H. Retail Lockbox
The City desires retail lockbox services for the purpose of collecting and processing the
City's utility billing revenues. The utility lockbox service would be a year-round
operation. Specify if lockbox service is provided by the Bank or a third party. If third
party, please explain the relationship with the Bank, provide copies of related
agreements and explain how deposits will be credited to the City's account.
1. List any other applicable lockbox charges. Only the lockbox charges listed on
Attachment B and in this section will be acceptable in the monthly account
analysis statement. Once selected as the City's Depository, no additional or
increased fees for these services in the fee schedule may be charged to the City
during the contract term.
All applicable banlc charges are included on Attachinent B in the
Appendix.
Wells Fargo Banli, N.A. 15
2. Bank capability to meet the following requirements must be detailed in the
proposal. Please note all the following requirements must be met for full
consideration.
■ The provider must obtain one (1) post office box for utility payments.
Wells Fargo can maintain one (1) post office boY for City utility
payments.
■ All payments must be processed within 24 hours.
To ensure that all payments received are processed witlun 24 hours, the
sites track each item usin~ a first in/first out color-coded ta~~in~ system.
The provider must be capable of retrieving mail from the post office, opening
all correspondence, balancing contents, direct deposits to the City's bank
account, and transmitted updates/posting to the City of Denton customer
accounts.
Wells Fargo will provide tlus service.
■ The provider must be able to process the following payments:
- 1 check, 1 coupon
- 1 check, multiple coupons
- 1 check, 1 spreadsheet with listing of accounts
- multiple checks, 1 coupon
- check only
- electronic bill payments (Electronic Data Literchange or EDI)
- money order payments
- cashier checks
Wells Fargo can process these payment types.
The provider must be capable of accepting monthly billing transmission files
from the City to validate each customer accoimt number, occupancy code,
owner name, billing address, and billing amount and prepare a transmission
file with validated accounts. Unverified accounts must be forwarded to the
City daily for further research.
Wells Fargo can comply with tlus requirement.
Provider must have the capabilities of converting checks to ACH payments
for priority processing.
RetaillockboY is an ideal way to accelerate access to payments you
receive. Convertin~ consumer checlcs received throu~h the loclcbox into
electronic checlcs accelerates the process even further.
Wells Fargo offers Accounts Receivable Conversion (ARC ) in our retail
loclcbox networlc utilizin~ our ~Snzc~r•tDecisi~~raS~t service. With ~Snzc~r•t
DecisiOra service, eli~ible checlcs at our loclcbox sites are converted to
Wells Fargo Baiil1, N.A. 16
ACH debits, while non-eligible items, including payments from customers
who have opted out of the ARC process, are deposited through Checlc ? 1
worlcflows. Converting checlcs to ACH can give the City faster availability
of deposited funds, accelerated returned itein notification, and an
additional return re-presentment option. The City can present an opt-out
file through a direct transmission or using the Deposit Maintenance
application on the C,ommercial Electj•orjic (~ffice`R' (C,E0`R') portal. Opt-outs
are inanaged by coinparing the MICR data on the checlc to the iteins the
customer has provided either via direct transmission or online.
■ Provider must be capable of accepting monthly stop payment files which will
include a listing of accounts that the City will not accept payments on.
Wells Far~o can accept monthly stop files desi~natin~ accounts for which
the City will not accept payment.
■ The provider must have the capability to sort out coupons identified for
special processing (Plus One Program, change of mailing address, etc...).
Your specific processing instnictions are an important part of our
processin~ technique. At Wells Far~o, most customer-specific instnictions
are programmed into our operating software and require no human
intervention. Customer-specific instnictions that involve manual functions
such as customer output paclcaging are physically housed where those
functions are performed. The operators in those areas are trained in both
industry specific and custoiner-specific processing techniques. In these
areas, small groups of operators are assigned to process worlc for a select
nuinber of customers, enabling them to become processing eYperts for the
customers housed in their ~roups.
■ The provider must provide the City all miscellaneous correspondence
received through lockbox (i.e., address changes, payment extension requests,
etc...), bill stubs/coupons, and unprocessed payments within 24 hours.
All unprocessed items will be batched separately with an identifyin~ label
and sent baclc to the City in your daily remittance paclcage. Upon your
request, we will note account numbers and payment amounts on
correspondence that is received with processable payments
■ The provider must submit daily and monthly reports indicating the number
of pieces received and the total revenue deposited for the utilities accounts.
Retail loclcbox services are hi-hly automated and desit"ned to allow for
automatic posting to your receivables system. Data transmission is the
method used to provide your receivables iiiformation.
■ The provider must have the capability to transmit data and images
electronically through a billboard or web application, on a daily basis, by
1:00 p.m., in order to expedite cash flow and update customer accounts.
Wells Fargo Baiil1, N.A. 17
The following intraday lockbox reports are available through the ('EO
portal:
Lockbox Availability. Offers suininary-level inforination for lockbox
deposits, including float, on an intraday basis.
Lockbox Detail. Provides remitter iiiformation about received payments
witlun a lockbox deposit.
The provider must designate a dedicated on-site contact person for research
and issue resolution.
When you need to conduct research or initiate adjustinents, it's iinportant
that the process is as easy and efficient as possible. At Wells Fargo, we
offer two research and adjustment options.
Most research requests can be performed through our C,o1Tnnercial
Electr•oraic Office,' (('EO,') Internet portal. Because it is an online tool, the
C,EO portal makes it easy for you and your staff to research stop
payments, returned items, ACH transactions, cash vault requests, lockbox
items and more, regardless of time or day.
For clients who require additional assistance, you also have access to our
Treasury Management Client Services group. Client Services offers the
simplicity of a sin~le point of contact. Just as important, our
lcnowledgeable representatives have the training and resources to assist
you, no matter how complex your request may be.
The advantage of tlus multi-level approach is that you and your staff can
perform most research yourself, without having to work through someone
else. But, in those situations where you require additional support, you
have the confidence of laiowing that someone is available to assist you.
■ The provider must provide same day on-line viewing of all check images.
You can access your lockbox checkbox ima~es throu~h the C'onznzer•cic~l
Electi•oriic (y
,~ice`" ((,E(~~") portal witlun two hours of your deposit cutoff
time. We archive your images for seven years. You have immediate online
access to two years of iinage history. Five years of history are stored
offline and can be delivered to you oiiline witlun two hours of your
request. You can search your oiiline image files using seven preset fields
and up to 15 additional fields drawn from your coupon scan line.
■ The provider must have the capabilities to return payment envelopes.
All correspondence will be batched separately with an identifying label
and sent baclc to you in your daily remittance paclca~e. We can note
account numbers and payment amounts on correspondence that is received
with processable payments.
Wells Fargo Baiil1, N.A. 18
■ Provider must be capable of providing daily e-mail reports and on-line
detailed viewing of deposit adjustments and returned checks.
Returns can be provided in your daily remittance package, but we offer a
variety of return services that might benefit the City. It is important to
laiow as quicldy as possible when you receive return items on your
account. You also want the fleYibility to handle returns in a way that is
best suited to your particular needs. We offer options for return items that
can be inte~rated into the City's process.
Standard Redeposit Service
With our Standard Redeposit Service, items returned for non-sufficient
funds (NSF) are automatically redeposited once. You may specify the
dollar limit at wluch items are to be redeposited. You can also choose to
have either none or all items redeposited.
C'EUR Service Returned Item Decisioning
With C'omnzer•cial Electr•oraic Of~ce-(C'EO-) portal Returned Item
Decisioning, you review and dispose of returned items online. New returns
are posted daily on the C,EO portal between the hours of 8:00 a.m. and
2:00 p.m. CT. Tlus means that you have access to your returns sooner.
You have until 6:00 p.m. CT to review and decision the items. You can
also access images of your returns. The images can be viewed online or
stored on your computer.
Whichever service you choose, the ability to efficiently redeposit returned
checks will help to increase your collection rates and minimize the number
of checlcs that have to be collected manually.
Fees associated with returned items will depend on your choice of
services. Please refer to our pricin~ for additional information.
■ Provider must be capable of providing on-line detailed viewing of payments
that have not been allocated to an associated account for research and
decision by 12:00 p.m. CST each day. The City will decision those payments
so that they may be posted same day.
When you receive images of checlcs and remittance documents digitally
instead of receiving the original items, research and payment resolution is
faster and easier for the City.
We provide images of checlcs and remittance advices over the liiternet
throu~h our C'omnzer•cic~l Electr•~~raic Offce'R' (C'EO`R') Retail Loclcbox
lina,,e service. With our Retail Lockbox linage service, we archive images
for seven years. Most of our customers now use the Retail LoclcboY linage
service, wluch we introduced in 2001.
Wells Fargo Baiil1, N.A. 19
For inanaging your own iinage archive, you can receive daily single or
multiple batch image transmissions directly to a designated location in
blaclc-and-wlute TIFF format using our linage File linport service.
L Payment for Services
The City intends to pay for all account services provided by the Bank as set forth in
Section V, B. The method expected to be used for the payment of these services is the
direct payment method. The Bank should debit the appropriate account on a monthly
basis. The City will require an account analysis each month which will clearly show
volume counts, fees charged, and total price for servicing the account. The account
analysis should also show average ledger balances, average uncollected funds, and
average collected balances, interest rates and the amoimt of interest paid or credited to
the account (earnings credit). Please explain how the Bank will calculate the City's
earnings credit? Please submit a sample of the monthly account analysis statement.
As described in "B. Services and Fees" above, we suggest the City's
checlcing accounts be established as Goveriunent Advantage liiterest
Checlcin~ (GAIC ) accounts. Desi~ned specifically for ~overnments,
GAIC uses balances to first offset any service charges, then, all excess
collected balances earn interest. All interest rate calculations in GAIC
will be based on average daily collected balances after deducting for float.
We currently pay both our Earnings Credit Rate and our interest rate on
100% of collected balances with no reserves. Interest will be paid on any
balance in excess of this compensating balance.
Wells Fargo will pay you our internal banlc-managed rate, currently ECR
of 35 basis points and interest rate of 20 basis points, on your operating
funds. liiterest will be earned on 100% of your eYCess collected balances
(with no reserve requirement) after first using balances to offset service
charges. These rates are applicable for balances greater than $1 million.
The Governinent Advantage Interest Checlcing banlc-inanaged rates and
the paying of interest on 100% (versus the traditiona190%) of the
collected balances are subject to change on a montlily basis at the banlc's
discretion.
Ctclciiltctaon: liiterest payments are determined montlily. At the end of
each month, the account analysis system calculates the average ledger
balance, average float, and average positive collected balance. The balance
to offset services rendered is subtracted from the average positive
collected balance to arrive at a net balance available amount. The interest
is then paid on the dollars remaiiung after the service charges are covered.
The interest is paid to the account on the lOth of the followin~ month.
Required Monthly Compensatin~ Balance to Support $1 of services:
Wells Fargo Baiil1, N.A. 20
# davs in vear
ECR (035%) Y# days in month
Safekeeping fees for the City's investments shall be described on the accoimt analysis
statement and paid monthly. The City requires that all charges for securities clearance
and safekeeping, including fees passed on from the Federal Reserve Bank or the
Federal Home Loan Bank, be included in the account analysis statement rather than
deducted from each security settlement.
Aclaiowledged
J. Collected Funds Definition
The City desires to receive same day credit for all funds deposited by 3:00 p.m. CST.
The ftinds should be investable for any investment transactions that can be executed. If
not invested, the ftinds should earn interest at the rate paid for Super NOW accounts.
Please attach an availability schedule. Use a separate attachment, if necessary.
For banking store and cash vault deposits, we assign same-day availability
to checlcs drawn on Wells Fargo accounts, one-day availability to U.S.
goveriunent checlcs, and two-day availability to all other checlcs.
To address your specific concerns with regard to your ftinds availability,
we've included an availability schedule specific to your proposed
depositing location in the AppendiY.
K. Super NOW Rates
Please provide a detailed explanation of the Bank's policy and methodology used in the
setting of rates paid on Super NOW accoimts. Also, provide a schedule of all rates paid
on Super NOW accounts since January 1, 2010. Specifically indicate if the rates are
applied to ledger balances or collected balances and how it is calculated. Lidicate when
the rates change and if they are based on a market rate such as T-Bill discount or yield
rate. If the Bank proposes to pay the City a different rate on its Super NOW accounts,
please explain.
Traditionally, banlcs have indeYed goveriunent deposits to Fed Funds or
the 90-day T-Bill. Due to volatile inarlcet conditions, these indexes (which
historically have allowed banks to pay ~overnments a premium for
deposits under contract) are not the best choice Wells Fargo has available
for clients today. We would like to suggest the following arrangement
until the inarlcet stabilizes:
Wells Fargo will pay you our internal banlc-managed
rate, currently ECR of 35 basis points and interest rate
of 20 basis points, on your operating funds. Interest
Wells Fargo Baiil1, N.A. 21
will be earned on 100% of your excess collected
balances (with no reserve requirement) after first using
balances to offset service charges. These rates are
applicable for balances greater than $1 million.
The Goveriunent Advantage liiterest Checlcing banlc-managed rates and
the paying of interest on 100% (versus the traditiona190%) of the
collected balances are subject to change on a inonthly basis at the banlc's
discretion.
Should market conditions change during the term of tlus contract such that
we can offer you an indexed rate that pays you more than your contracted
rate, we will inalce the necessary changes to ensure that you receive Wells
Fargo's highest available rate.
A lustory of our banlc-managed interest rate and ECR is shown in the table
below:
Month
ECR
Interest Rate
January 2010
0.50%
0.40%
February 2010
0.50%
0.40%
March 2010
0.50%
0.40%
April 2010
0.50%
0.40%
May 2010
0.50%
0.40%
June 2010
0.50%
0.40%
July 2010
0.50%
0.40%
August 2010
0.50%
0.25%
Septeinber 2010
0.35%
0.20%
L. E-Lockbox Services
The City desires e-lockbox services for the purpose of collecting and processing the
City's utility billing revenues. The Utility e-lockbox service is a year-round operation.
Please list any applicable e-lockbox charges. Only the e-lockbox charges listed on
Attachment B and in this section will be acceptable in the monthly account analysis
statement. Once selected as the City's Depository, no additional or increased fees for
these services in the fee schedule may be charged to the City during the contract term.
liutiating bill payments through a single, tnisted banlcing site may be
convenient, simple, and paperless for your customers, but those electronic
payments could ultimately become paper checks delivered to your
remittance operation. These check-oiily payments create eYCeptions and
Wells Fargo Baiil1, N.A. 22
often have incomplete or inaccurate remittance details, which can result in
further processing delays.
The E-Boz" service from Wells Far~o mer~es your customers' online bill
payinents into a consolidated electronic data streain and applies additional
data transformations to increase your straight-through processing rate of
receivables and miiumize your eYCeptions.
The E-BozR' service offers:
Enhanced financial performance. Timely and accurate cash
application reinforces customer satisfaction by reducing inquiries and,
for some industries, avoiding accidental service disniption associated
with late postint', or misapplied payments, which carries the cost of
service reinstatement and of customer ill will. Reduced cycle time
lowers day's sales outstanding to facilitate worlcing capital
optimization. Customer retention and optimized worlcint', capital help
enhance bottoin-line perforinance.
Efficient exception management. Streamline your staff's worlcflow
around exception items to enhance process efficiency, improve
productivity, and minimize costs. Through the C'onznzer•cial Electr•oraic
(~ffice`R' ((,E(R') portal E-Box Decisioiung, view suspended payments
on a sameday basis, malce decisions about pending transactions,
initiate returns, view and research coinpleted transactions, and gain
access to inforination for purposes of reporting and trend analysis.
Extensive connectivity to major originating endpoints. Wells
Fargo's connectivity to all major originating endpoints-including our
extensive network of third-party concentrators-will help you
maYimize your electroiuc payment stream. Leverage the eYperience of
our dedicated E-Box staff in worlcing with billers from multiple
industries, including energy and power, financial services, inedia and
telecommunications, the public sector, and ori~inators to implement an
efficient electronic receivables solution.
■ Faster processing of walk-in bill payments. Accelerate receivables
postin~ for customer bill payments made in person at wallc-in centers.
The EYpedited E-Box service transforms in-person cash payments into
automated receivables management that yields cost savings, efficiency
gains, and customer satisfaction.
How the E-Box service worlcs:
1. Your customers pay their bills with online banlcing services.
Oiiline bill service providers send payments electroiucally to Wells
Fargo.
Wells Fargo Baiil1, N.A. 23
3. Wells Fargo applies an optional multistep validation process to
payments received, as appropriate. The process identifies, filters, and
repairs invalid payments or other eYCeptions.
4. Wells Fargo consolidates your receivables data from multiple sources
into a single file, and then translates it into your specific format.
5. You receive a customized remittance file with correct account
nuinbers and settlement. You apply credits to your customers'
accounts.
6. Wells Fargo processes a consolidated automated clearing house (ACH)
credit to your deposit account.
M. Other Services
Bank capability to meet the following requirements must be detailed in the proposal.
Please note that all the following requirements must be met for full consideration.
1. Point-of-Sale Denosit Services: The City desires services that will offer the latest
in cash, currency and check technology, that will convert paper checks to
electronic transactions at the point-of-sale, to improve cash flow, minimize
reconciliation efforts, reduce bank fees, and reduce returned checks. Bank
capability to meet the following requirements must be detailed in the proposal.
- Must have late deposit cut-off times (8:00 p.m. CST) and allow for same
day credit to the City's Control Concentration Account.
- Allows for check deposits to be processed as image replacement
documents, ACH, or both.
- All deposit batches must appear as a single credit to the bank statement
for reconciliation purposes.
- Must be able to scan standard-size checks and payment coupons.
- Must have the flexibility to include discretionary data fields for the input
of customized information.
- Must have reporting capabilities for all standardized deposit reports.
- Images of payments and coupons must be accessible for on-line viewing up
to 180 days.
- Software to allow for same day modification to add new user, change
authorization levels, and deletion of users.
- Provide an explanation and cost of these services, including the cost of
hardware and implementation/training.
Wells Fargo Merchant Services with our processing partner, First Data
Merchant Services, offers fully integrated processing. With our
recommended solution, the City would have a settlement cutoff of 1:00
a.m. CT. Settlement amounts can be listed on your banlc statement
separately by batch. They can also be listed by transaction or in a lump
sum. The City would also enjoy robust reportint', capabilities with our
online reporting tool, ClientLineR'. This tool allows for standard reporting
Wells Fargo Baiil1, N.A. 24
and custoin, ad hoc reportintly capabilities, with available data for up to 18
months witlun ClientLine.
The City would have the ability to process checks electronically, replacin~
the checlc as an ACH debit. We can also provide hardware to the City and
have provided such costs in the Wells Fargo Merchant Services response
to the City's request for proposal for merchant services, RFP 44578.
Also, an iinpleinentation project inanager will be assigned to the City. The
implementation proj ect manager with worlc with you throughout the
implementation process and will be responsible for any necessary traiiung
related to the iinpleinentation. Furtherinore, the City has an assigned
merchant relationship manager who will be the single point of contact for
all your questions training needs throughout our relationship with you.
Wells Fargo Merchant Services has provided all necessary iiiformation in
our response to request for inerchant services proposals, RFP 44578.
Please refer to our response for this detailed inforination.
2. Positive Pav.
- Must have capabilities to receive daily disbursement (payroll and accounts
payable) file from the City and verify the check number, check amount,
check date, and payee name.
linage Positive Pay works in conjunction with Full Account
Reconciliation to protect against fraud. It gives you immediate, complete
and efficient control over your checlc disbursement activity by allowin";
you to review all exception items before final aavment occurs. An
effective Positive Pay system is based upon early detection of all
unauthorized checks - prior to the banlc's Regulation CC rettirn deadline.
Positive Pay allows you to review, inalce on-the-spot corrections and
create retlyister entries for all exception items before final payment occurs.
The service also provides the City with the added conveiuence of
receiving oiily tnie "issue notice not received" eYCeptions whereby Wells
Fargo will correct all encoding errors prior to sending the exception
report. This ineans that only checlcs without a register on file at the banlc
are included on your eYCeption report for your review. If the serial
number, dollar amount and, with our payee validation feature, payee name
of a presented checlc inatch your issue file exactly, the checlc is
automatically paid.
Positave Pk>> at tlie Teller Line
Wells Fargo believes Positive Pay is a critical rislc control service that all
disbursement customers should use. As a result, we have fully integrated
our Positive Pay file with the banlc's teller system. Tlus integration enables
our tellers to verify that an issue is on file before an item is cashed,
helping to reduce potential fraudulent activity on your account. Because
Wells Fargo's Positive Pay service is fully incorporated into our teller
Wells Fargo Baiil1, N.A. 2-5
system, it is important that the bank receives your issue files prior to
distributing the checlcs to your payees. We update the database of your
issues every fifteen minutes to ensure we have the most recent iiiformation
on checks you have issued.
Puyee Vulidution
This enhancement to our Positive Pay process allows Wells Fart"o to
validate the payee name on the presented check to the payee name on your
issue file prior to encaslunent at the teller line and in our item processing
center. This means that if an item with an unmatched payee name is
presented for encashinent, it will be identified before cash is paid out,
helping to reduce potential payee alteration fraud activity on your account.
This service requires that you include payee name in the register file that
is transinitted to the banlc.
- Must provide daily e-mail or on-line notification services of daily exceptions.
Exception iteins will be reported to the City through the CEO portal. With
linage Positive Pay, you can view and download ima~es of your exception
items, helping you make iiiformed pay or no pay decisions. Our Event
Messaging service can send the City an email, faY, or teYt message that
you have positive pay exception iteins available for viewing. Our CEO
MobileSM service is also available to help you perform time-sensitive
treasury management functions froin wherever you are through your Web-
enabled cell phone or PDA, including viewing positive pay images and
submitting pay or return decisions. Reporting times and deadlines are
shown in the chart below.
Customer Reporting Image Available Deadline Customer Decision Deadline
Image Positive Pay Next Day Exception Reporting Times Via CEO
11:00 a.m. CT 11:00 a.m. CT 4:00 p.m. CT
Same Day Exception Reporting/Next Day Decision Deadlines for Controlled Disbursement
Accounts
2:00 p.m. CT (same day) 2:00 p.m. CT (same day) 1:00 p.m. CT (nezt day)
3. Accounts Pavable/ACH nrocessing. The City desires services that will allow
payment of City liabilities through ACH processing. Please identify the process,
costs, and on-line reporting/viewing services associated with this process.
Demonstration of ACH on-line services will be required during the bank
presentations as outlined in section II.
ACH services at Wells Fargo allow you to initiate and manage a wide
variety of transactions quicldy and conveiuently. With our electroiuc linlc
to the ACH, you can deposit employees' wages directly into their
checlcing accounts, inalce your state tax payinents, and boolc transfers and
vendor payinents.
Wells Fargo Baiil1, N.A. 26
You can also execute credit transactions to 14 countries-Australia,
Austria, Belgiuin, Canada, France, Germany, Ireland, MeYico, the
Netherlands, New Zealand, Spain, Switzerland, the Uiuted ILingdoin, and
the United States-and debits in the United States and Canada. Wells
Fargo can initiate or receive any ACH payment type authorized by
NACHA - The Electroiuc Payments Association.
The ACH Origination service offers:
All the benefits of electronic processing. Electroiuc processing reduces
the time and resources needed to process payments. The results are lower
costs, fewer errors, reduced risk of fraud, less labor, less paper, and less
impact on the environment.
Superior capacity and throughput. With 10 million items-per hour
capacity, even the largest ACH files don't slow us down.
Continuous transmission windows. Transmit files to us 24 hours a day, 7
days a weelc at your conveiuence. We process continuously.
Extended deadlines. Processing deadlines of 24 hours and 48 hours are
available.
Advance file warehousing. liutiate your files up to 45 days in advance,
and we will warehouse them until their effective date.
ACH inquiry. Research ACH transactions from at least 90 days of lustory
using multiple search criteria. To save you time in getting answers to
questions, we provide the contact name or department and phone number
at the financial institution to which your ACH transaction was sent. You
can also authorize different levels of access for each user and preset who
has access to certain ACH iiiformation.
ACH reject. We will notify you of transactions that reject during the
origination process due to problems with formatting. If an ACH reject
occurs, you will be notified via transmission file or Treasury liiformation
Reporting.
ACH delete and reversal. With a siinple online forin, delete and reverse
domestic transactions you have originated. Reports are available through
the C,ommerciaJ EJecti•oriic (yfice`R' ((,E(R') portal.
Return item handling. We match 99.6 percent of returns to original
transactions and deliver a consolidated eYCeption report to you early in the
business day, so you can position your account and maYimize investments.
We provide automatic redeposit of NSF and uncollected fund returns, as
well as automatic dishonor returns for transaction code mismatches,
duplicate rehirns, and untimely returns. Return Item Reporting is
available via transmission file or Treasury liiformation Reporting. Return
Reason Analysis Reporting is available for debit originators.
Wells Fargo Baiil1, N.A. 27
Global capabilities. Choose our ('EO Global Payinents service for low-
value electroiuc payments when doing business outside the Uiuted States.
Wells Fargo serves 14 countries and is the oiily U.S. banlc that allows you
to initiate all ACH payinents through the Internet.
- Must have on-line reporting and viewing capabilities
Wells Fargo makes ACH transaction information available through online,
Internet access and throu~h electronic transmission.
Lrternet Access
The C'onznzer•cial Electr•oraic Office,' (C'EO~') business portal is our primary
client access chaiuiel. The C,E(~ portal provides a secure liiternet gateway
to a wide range of financial services, including information reporting
services. The Treasury Information Reporting system, which is accessible
through the ('EO portal, provides comprehensive intraday and previous
day reporting of balance and transaction data.
With Treasury Inforination Reporting, you can view, print, and download
Intraday and Previous Day account information. Reports can also be
dowiiloaded in a variety of formats, including BAI Version Comma
Separated Variable (CSV), EYCeI, HTML, and PDF.
Intraday reports and the data they provide:
■ ACH Receive. Detail on all received ACH transactions that will
post to your account at the end of the current day.
■ EDI Payment Detail. ACH and EDI payinent data and EDI
remittance iiiformation.
■ ACH Origination. Suininary information by ACH coinpany ID
for ACH files submitted for processin~. Also includes detail
inforination on transactions accepted or rejected.
■ ACH Return/NOC. Detailed information by ACH company ID
for all ACH returns and notifications of change (NOCs).
Previous day report and the data it provides:
ACH Customer Activity. All ACH activity on your account,
including settlement information, adjustment detail, rejects, deletes
and reversals, and a summary of your return activity by account.
Electronic Transmission
Wells Fargo is currently worlcing with a large number of clients who
receive automatic file transmissions of previous and intra-day balance
reporting data through our Direct BAI file transfer service. BAI Version 2
or ANSI 23 is the standard forinat for this service.
Wells Fargo Baiil1, N.A. 29
- Must be able to submit electronic data for both debits and credits
We laiow that customers have different requirements for ACH service
delivery dependint', upon their volumes, technical capabilities and internal
guidelines. To meet those requirements, Wells Fargo offers a variety of
secure transmission methods including our supported liiternet protocols-
https, FTP/S, SFTP, and AS?-or Coiuiect:Direct with Secure+. We also
offer Internet ACH thou~h our C'omnzer•cic~l Electr•~~raic Of ce,(( 'EO')
portal.
- Must be able to reverse debits and credits
Wells Fargo offers a flexible, easy-to-use process for handling file, batch,
and item reversals and deletions.
Accessible through our C,o1Tnnercial Electi•oriic Office'((,EO') liiternet
portal, our ACH Deletes & Reversals Online service gives authorized
users the ability to iiutiate both delete and reversal requests. The deadline
for delete requests is 3:00 p.m. CT, two business days before the posting
date for two-day items, or one business day before the posting date for
one-day items. Per NACHA guidelines, reversal requests must be
submitted witlun five business days after settlement. The deadline for
reversal requests is 3:00 p.m. CT on the 5t', day after settlement.
Only authorized users can initiate delete and reversal requests. Your
Security Admiiustrator can restrict access to tlus service through the CEO
Self Admiiustration application.
There are several ways that we notify you of delete/reversal requests.
■ The ACH Deletes & Reversals Oiiline service delivers a confirmation
that your request has been iiutiated.
■ Settlement for deletes and reversals will be reflected on reports
accessed through the ('EO Treasury Inforination Reporting systein.
■ End of Day Processing Reports includes Delete/Reversal Summary,
Deleted Itein, and Reversal Itein reports.
■ The Customer Activity Report shows all ACH file activity from the
previous day. Tlus report includes a section for adjustment activity,
wluch includes all rejects, deletes, and reversals.
■ You can also call our ACH Customer Service group to confirin whole
file or single entry deletes and reversals.
4. Denositorv Services Reauirements. Bank capability to meet the following
requirements must be detailed in the proposal. Please note that all the following
requirements must be met for full consideration.
Wells Fargo Baiil1, N.A. 29
Bank statements must be available by the St'` working day and accessible
through on-line reporting service.
Bank statements are available online through the C'onznzer•cial Electr•oraic
Office'' (C'EO'') portal one business day after the accountin~ period ends.
Mailed banlc statements for accounts set up with check tnincation services
are postmarlced witlun three business days of your cutoff date. Checlc
tnincation is standard with our commercial checlcing account services.
- Wire transfers detailed information must be noted on the bank statement
and accessible through on-line reporting service.
Real time information on any incoming or outgoing wire is available via
the Wells Far~o C'onzlizer•cic~l Electr•~~raic Office'R' (C'EO'R') portal Treasury
liiformation Reporting service. The intraday Wire Transfer Detail report
shows comprehensive current-day memo-posted detail for all outgoing and
incoining wires, grouped by type: boolc transfers, doinestic wires, and
international wires.
Wires are also noted on your montlily banlc statement.
- ACH detailed information must be noted on the bank statement and
accessible through on-line reporting service.
Wells Fargo's Treasury liiformation Reporting tool, wluch is accessible
through the C,ommercial Electi•oriic Office'(C,EO') portal, provides
coinprehensive ACH reporting.
Standard reports are listed here.
■ ACH Receive Report
■ ACH Origination Report
■ ACH Customer Activity Report
■ ACH Return Notification of Change (NOC ) Report
The system also gives you the ability to dowiiload reports into your
accounting, treasury workstation, or spreadsheet applications. Reports can
be downloaded in a variety of the inost popular forinats, including BAI,
Coinina Separated Variable (CSV), Excel, HTML, and PDF.
ACH transactions are also noted on your montlily banlc statement.
- Credit card merchant IDs and/or location reference numbers must be noted
for deposits, adjustments, and chargebacks on the bank statement and
accessible through on-line reporting service.
The City will be able to view reporting information you require with our
online reportin~ solution. ClientLine lets you access your payments-
related data quicldy and easily so you can focus on putting that
Wells Fargo Banli, N.A. 30
information to worlc for you. Froin any Internet-based PC, you can access
and analyze transaction detail for all card types, conduct sales audits,
manage processing fees, reconcile your checlcing account, investigate
chargebaclcs, protect against losses, view historical information for
analysis, and inanage cash flow.
The ClientLine reporting tool provides access to centralized and
coinprehensive payinent processing information and allows you to analyze
the data on a PC Because it is a web-based tool, the ClientLine systein
can generate reports with data from multiple locations and then easily
share the reports you create. Data is available by location, selected groups,
or across all locations, for greater flexibility and effectiveness in inanaging
your business.
Wells Fargo Merchant Services has provided all necessary information in
our response to request for inerchant services proposal, RFP 44578. Please
refer to our response for this detailed inforination.
- Deposit Slips must be serialized and provide location identification numbers.
The ability to track deposits by location and transaction information ~ives
the City the ability to inore closely inonitor deposit activity. This is a
valuable management tool, especially for orgaiuzations with distributed
operations.
Wells Fargo deposit tickets can contain an auxiliary MICR field of up to
ten digits. You can use the auYiliary field to traclc deposits by location;
however, our subaccounting service eliminates the need to use tlus
additional field for that purpose. With subaccountin~, we identify your
deposit locations usin~ subaccount numbers encoded in the account
nuinber field on the deposit ticlcets.
If you use subaccounting for location reporting, you can use the auYiliary
field to track other transaction information such as transaction sequencing
or audit control numbers. Tlus service provides you with a more thorough
and accurate view of your deposit activity.
- Deposits must include the serialized numbers and location identifications on
the bank statements and on-line reporting service.
The City doesn't want to loolc at multiple systems or reports to get an
accurate view of deposit-related activity. You want your banlc to present
all relevant information in one place.
Wells Fargo deposit reports include all electroiuc transactions as well as
all paper documents. Further, if you choose to use our subaccountin~
service, we provide location numbers for all transaction types-includin~
merchant card deposits, ATM deposits, ACH, and wire-that post to your
subaccounts. Tlus simplifies work for your staff because it gives them all
Wells Fargo Baiil1, N.A. 31
of the information they need in one place and malces it easier to reconcile
activity for each individual location.
All deposit adjustments, returned checks, etc..., noted on the bank statement
and on-line reporting services must include original deposit information
(serialized deposit slip number and location identification).
For banlcing store deposit adjustments, your adjustment notice includes the
amount and reason for the adjustment. For deposits to a subaccount, we
also provide the location code.
If you have multiple locations, we recommend the use of subacccounting.
With subaccounting, we establish unique subaccounts for each of your
locations and link the subaccounts to your primary deposit account.
Transactions post to the parent account with a full description that
includes the subaccount number, location name, and number. Tlus will
make it easy for your staff to quicldy identify each deposit location
without havin~ to cross reference a location number.
Your location code is automatically attached to every transaction,
including deposits, adjustments and returned items.
If you subscribe to our Deposit Location Reporting service, you can access
your reconciliation reports oiiline through the C,ommercial Electi•orlic
Office'(C'EO') portal in PDF format, or you can download them in CSV
or Excel forinats. The reports are also available by transinission.
- Must receive daily notification of all ACH rejects, returned checks, deposit
adjustments, etc..., by fax, e-mail, and on-line notification service.
We provide deposit adjustinent inforination in several ways. In addition to
the advices that we mail to you, we identify deposit adjustments on:
■ Banlc stateinents
■ Balance and transaction reports
■ Deposit reconciliation reports
■ Detailed transaction file transmissions
Additionally, we provide deposit adjustment iiiformation through the
C'omnzer•cial Electr•oraic Of~ce,(C'EO') Event Messa~in~ and Statements
& Notices services.
For cash vault adjustments, you receive a mailed adjustment notice that
includes the deposit date, declared amount, verified currency total by
denomination, and location number (if applicable). You also have the
option to receive a deposit adjustment report by e-mail.
For standard paper item returns, we automatically redeposit eli~ible items
on the next business day. If the maker bank returns the item again, we
Wells Fargo Baiil1, N.A. 32
process the chargebaclc debit and inail the paper advice along with the
original or linage Replacement Documeirt (IRD) the same day we receive
the itein baclc from the malcer banlc.
Additional reporting and processing options include:
■ View daily online reporting using the ('EO Treasury Inforination
Reporting service. Reports include keyed information.
■ Receive a data transmission of returned item information, includint',
keyed iiiformation.
■ Automatically convert paper returns to ACH debits using the
Electroiuc Returns (RCIL) service.
■ View and change the default decision of your returned items using
Returned Itein Decisioning, available on the ('EO Returned Iteins
service.
■ Receive a returned itein detail fax or e-inail report that displays paper
returned iteins including iteins redeposited using RCIL.
- Must receive reconciliation files electronically.
ARP statements and reports are available by transmission or through our
C,ommercial Electi•oriic Office~' (C,EOliiternet portal. Through C,EO
Treasury liiformation Reporting, you can access your ARP statements and
optional reports-aracll)er fornz iratr•a-cycle qiter•ies on your ARP data
whenever and wherever you want.
5. Armored Truck Service. Please provide information regarding Bank partners
and/or affiliates that are able to provide this service. The City would prefer to
have this service as part of its bank depository contract. The City also desires to
receive information on all-inclusive intelligent safes and associated costs.
Wells Fargo maintains a good working relationship with numerous
armored carrier providers and will gladly worlc with the City to coordinate
service. The contract will be between the armored carrier and the City. At
your election, your montlily armored carrier fees can be included on your
account analysis statement at the cost you negotiated with the carrier. At
Wells Far~o, we offer this convenience without mark-up.
If you want to deliver un-encoded or pre-encoded checlc deposits directly
to our check processing facilities, you must use a ground courier. Wlule
we do not provide these services, durin~ the implementation process we
will be happy to share contact names and phone numbers for ground
courier services operating in your area.
The cutoff times for deposits delivered directly to check processing
centers vary by location and deposit type. The table below lists deadlines
for un-encoded and pre-encoded deposits.
Wells Fargo Baiil1, N.A. 33
Check processing Un-encoded Pre-encoded deposits
center location deposits
Tezas - Dallas 6:00 p.m. Mon-Thu: 10:00 p.m.
Fri: 11:30 p.m.
Tezas - Houston 6:00 p.m. Mon-Thu: 10:00 p.m.
Fri: 11:30 p.m.
6. On-line Banking Svstem. The City desires a fully hosted on-line banking system
in order to minimize impact on City servers.
a. Will the City have full authorization to add/delete users as needed or will it
require bank personnel assistance?
It is important that the City has the ability to administer your C'onznzer•cial
EJecti•oriic Office,' ((,EO,) portal applications without intervention from
Wells Fargo. Your designated admiiustrators can add and delete users and
perforin other adininistrative functions using our ('EO Self Adininistration
service. With CE0 Self Administration, you can stnicture authorization
controls to meet your orgaiuzation's needs and risk management
requirements. Usintly the CE0 Self Administration service, your pro"'ram
administrators can:
• Add new users or give users access to CE0 Self Admiiustration to
share admiiustrative responsibilities for handling change requests
• Group users to select groups and limit access to accounts and profiles
witlun groups
• Reset passwords
• Delete or disable users who have left your company or are on leave or
vacation
• Add and update user access to ('EO portal services. User profiles for
transactional services include account access restrictions and
transaction limits
• Establish standard dual controls requiring specified transactions and
functions to be reviewed and approved by a second admiiustrator
before the transaction's eYecution
• Set up forced dual controls for all taslcs performed through the CE0
Self Administration service
■ Run mana~ement reports showin~ current CE0 portal user access
levels and 90 days of adininistration activity history
• Set up multiple users needin~ the same level of CE0 portal access
• Reassign RSA SecurID fob to other user
Access to the CE0 Self Admiiustration service is luglily secure. Your
designated program admiiustrators are required to enter a SecurID tolcen
Wells Fargo Baiil1, N.A. 34
pass code each time they log in to the service. The service is easy to use
and includes oiiline help.
b. Does the system allow the City to date wire transfers for a future date? If so,
how many days?
Yes. Wells Fargo accepts future-dated domestic and international wire
transfers up to 60 calendar days in advance.
c. Does the system allow us to view images of cleared checks?
Yes. The C,ommercial Electi•oriic (ffice~' (C,EO-) portal supports the City
with these liiternet image applications:
■ Image Positive Pay. You can view, print, and save images of your
positive pay exception items to assist in malcing pay or return
decisions.
• Wholesale and Retail Lockbox Image. You can access seven years
of arcluved check images oiiline.
• Stops-Images-Search. You can search for and retrieve images of any
paid checks, deposits, debits, credits, or other items posted to your
account. Iinages of inany of these iteins are available the saine day
they are processed. Checlc images are available for seven years;
deposit images are available for 180 days.
• Treasury Liformation Reporting. You can access check images
froin the Previous Day Coinposite, Returned Iteins, and DDA Cycled
Statement reports.
■ Returned Item Decisioning. You can view images of returned items.
d. Does the system show transactions in real-time or are they prior business
day?
Wells Fargo understands that the City needs information about your
accounts throughout the day. We update intraday iiiformation
approYimately every 15 minutes throughout the day. Transactions that post
to your accounts throughout the day are reported via intraday reporting
within minutes or seconds of their posting. We also update current ledger
and available balances on a real-time basis. The eYact times will depend
on the specific transaction.
Wells Fargo provides the following intraday reports through C,ommercial
Electi•oriic Office'((,EO') Treasury liiformation Reporting service:
• Intraday Composite. Shows balance, summary, and detailed
transaction iiiformation, updated on a real-time basis throughout the
day.
• Lrtraday Position. Shows the aggregate of balances and summary of
intraday transactions of all selected accounts.
Wells Fargo Banli, N.A. 35
■ Wire Transfer Detail. Shows coinprehensive current-day ineino-
posted detail for all outgoing and incoming wires, grouped by type:
book transfers, domestic wires, and international wires.
■ ACH Origination. Provides summary information by ACH Customer
ID for ACH files subinitted for processing, details on transactions
accepted or rejected, CNotes (file confirmations), pre-edit rejects, and
end-of-day rej ects.
• ACH Receive. Details all received ACH transactions that will post to
your account at the end of the current day.
■ ACH Return/NOC. Details iiiformation by ACH Customer ID for all
ACH returns.
• EDI Payment Detail. Provides ACH and EDI payment data and EDI
remittance information.
■ Controlled Disbursement Summary. Shows a summary of the
current day's presentment totals and adjustment activity.
• Controlled Disbursement Detail. Provides controlled disbursement
transaction detail and location subtotals for each account selected.
■ Lockbox Availability. Offers suininary-level information for loclcbox
deposits, including float, on an intraday basis.
■ Lockbox Detail. Provides remitter iiiformation about received
payments witlun a loclcboY deposit.
■ Lrtraday Returned Item Detail. Offers detailed information on
checlcs that will be charged baclc to a customer's account for reasons
such as non-sufficient funds or stopped payinent.
• Cash Letter. Details funds availability information on pre-encoded
checlc deposits.
• Deposit Detail. Lists all electronically made deposits.
■ E-Bo.vre. Allows you to review and post payinents that originate
throu~h an online bill pay service.
We update previous day iiiformation by 6:00 a.m. CT on business days.
Wells Fargo provides access to the following previous day reports through
C'omnzer•cial Electr•oraic Office,' (C'EO,') portal Treasury Information
Reporting:
ACH Customer Activity. Coinplete access to all ACH activity on
your account includin~ domestic and international transactions,
including settlement iiiformation, adjustment detail, and a summary of
your return activity by account.
Express Balance. Snapshot of previous-day balance information for
your accounts, with an option to include sweep accounts, includin",
balances, total available funds and summaries of total debits and
credits for each account.
Wells Fargo Baiil1, N.A. 36
■ Month-To-Date Balance: Daily suininary of account balances,
aggregate float, and total transactions posted to your accounts for the
month-to-date, prior month, or a specific date range.
• Previous Day Composite. Comprehensive previous-day balance,
transaction summary, and transaction detail information for all your
Wells Fargo accounts, includint', sweep accounts and multicurrency
accounts. lii addition, tlus report can contain account balance and
transaction detail on your accounts that you would like reported from
other banks in the U.S. and around the world.
• Sweep Account Position. Complete sweep account iiiformation,
including investinent positions for the next day and end-of-day,
previous-day investment balance, previous-day dividends earned,
month-to-date dividend accnials, and total book value of cash for the
neYt day. The report includes Line of Credit iiiformation.
• Previous Day Returned Item Detail. Detailed information on checlcs
returned unpaid by the maker's bank due to non-sufficient funds or
stopped payinent.
■ Multi-bank Status. Wells Fargo is able to report balance and
transaction detail from other non-Wells Fargo banlc accounts you own
domestically and throughout the world. Tlus report displays if each
banlc's information has been yet received and if so, at what tiine it
arrived.
• DDA Cycled Statement. An electronic stateinent of DDA (checlcing)
activity, available the neYt business day after your statement cycle
cutoff, so you don't have to wait for statements to arrive in the mail.
• Account Reconciliation (ARP) Statements and Reports. Full and
partial ARP stateinents and reports available proinptly after
statement/report cycle cutoffs, eliminating the need to wait for reports
to arrive in the inail.
e. What are the bank's procedures for failed wire transfers (i.e., the recipient
bank rejects the wire)?
For outgoing wires, our Wire Transfer uiut will notify you of all wires that
are rejected by our systein, whether we repair the wire or not and
regardless of the reject reason. You will be notified if we've received
erroneous information and are making a correction or if we cannot send a
wire and need more iiiformation. You can see iiiformation on outgoing
repairs (corrected wires) or wires we are unable to process via the
C'omnzer•cial Electr•oraic Office,(C'EO,) Wire Transfer service Wire
Report.
For incoming wires, we will notify your Relationslup Manager if we
receive lar~e incomin~ wires or a hi~h number of incomin~ items that
require repair to confirm account number(s) for posting provided we have
adequate iiiformation to identify the beneficiary. Your Relationslup
Manager will contact you to confirm information if necessary. liicoming
Wells Fargo Baiil1, N.A. 37
wires that cannot be identified are returned to the sending bank so they can
obtain the missing iiiformation or correct the problem.
For both outgoing and incoming wires, our response assumes that wire
failure is due to invalid or erroneous inforination, which is virtually the
oiily reason, in our eYperience, that the receiving banlc rej ects wire
transfers.
f. Does the bank require dual authorization for wire transfers?
We encourage dual control and secondary approval on all non-repetitive
wires iiutiated via the C,ommercial Electi•oriic (~ffice`R' (C,EO R') Wire
Transfer service. The system can be set up to require one or two users to
log on and approve the wire prior to the release of the transaction.
g. Please fully explain the Bank's on-line system and be prepared to provide a
demonstration during the Bank presentation as outlined in Section II.
Wells Fargo can provide all of the services shown below through the
C,ommerciaJ EJecti•oriic Office (C,EO) business portal, our primary client
access channel. The ('EO portal provides a secure Internet gateway to a
wide range of financial services, including balance and detail reporting.
Services available on the C,EO portal include:
CEO Portal Tools
Ecent Messaging
Online Actication
Self Administration
Treasury Management
ACH Deletes & Reversals
ACH Fraud Filter
ACH Inquirv
ARP Register Maintenance
Basic Banking
Cash Vault on C E0 portal
CEO Workstation`R'
Client Analvsis Statement
Dealer Express Service`R' account system
Deposit Maintenance (.S'naartDecision)
Desktop Deposit
Electronic Document Deliveiv
Image Positice Pay
Internet ACH
Lockbox Image (Retail and Wholesale)
Payment and Delicerv Preferences
Returned Item Services
Reverse Positive Pay
Stops-Images-Search
Statements and Notices
Sweep Statement and Confirmations
Treasury Information Reporting
Cards
Commercial Card Ezpense Reporting
Visa Gift Card
Credit & Loan
Business Credit Services
Credit Management Service
Interest Rate Management
Wells Fargo Foothill Customer Reporting
Health Benefit Services
C E'0 Health Benefit Services
International Services
Foreign Exchange Online
Trade Sercices Online
Trust and Investment
Fed Funds Online
Institutional Incesting Online
Mortgage Information Reporting
Retirement Plan Payments
Retirement Solutions Online
Securities Lending Reporting
Trust (Information Deliceiv and Portfolio
Reporting)
Trust Transaction Management
Wells Capital Management
Wells Fargo Baiil1, N.A. 39
We11sTAX`R' Payments
Wire Transfer
7. Trust Account Services: Please provide information and pricing regarding trust
and/or escrow account services. By mutual agreement, the City of Denton
occasionally enters into agreements with private individuals and companies in
order to facilitate the completion of public projects. In such cases, each party
will make a contribution or contributions into a trust and/or escrow account
held by a third party.
Wells Fargo Corporate Tnist Services, a division of Wells Fargo Banlc,
N.A., a uiut of Wells Fargo & Company, provides corporate tnist services
for inore than 27,000 issues with bonds in excess of $2.75 trillion
outstanding. We are the third largest provider of corporate tnist services
in the nation, and are dedicated to the delivery of quality service at
competitive prices. Our growth has been through the acquisition of
people, not portfolios, and we maintain 3_2 locations nationwide.
Wells Fargo Corporate Tnist Services provides escrow-related services to
a wide variety of clients, ranging from muiucipal and public agencies, to
corporations and international entities. With relationslup management
teams located in 6 hubs across the United States, includint', Dallas, we
have the experience to meet all of your escrow and custody needs. We
average closing over 1,300 escrow engagements per year and are one of
the largest escrow providers in the corporate tnist industry. We have
template escrow and custody agreements that can be provided to you and
your counsel for review and drafting, prior to closing.
The TeYas Escrow Relationslup Management staff has served as escrow
agent for over fifty inunicipal bond issuers over the past 12-inonths,
holding proceeds in escrow for project constniction purposes. The Escrow
Agent, in these instances, is responsible to act as a disinterested 3r`~ party,
holding funds between the muiucipalities, a developer and, in some
instances, a state agency lilce Texas Water Developinent Board or Texas
Coininission on Environinental Control. The funds will be held in escrow
until such time as all of the parties with interest in the funds and the
project are satisfied that all of the trigger events required under the
governing documents have been satisfied. The overarching duty of the
Escrow Agent is to provide security and control to the parties at all times
by insuring compliance with the goveriung documentation. lii order to
accomplish tlus, an officer of the banlc maintains constant and vigilant
review of the documents and is the only gateway to release of funds from
the escrow account. There isn't a more secure way to maintain funds for
a business transaction witlun the banlcing industry!
Corporate Tnist places a hi~h priority on customer service and customer
satisfaction. In order to provide superior service and responsiveness to our
customers, Wells Fargo assigns an Escrow Account Team to every
relationslup. The team members service the account together, and act as
Wells Fargo Baiil1, N.A. 39
baclc-up to one another to provide a"seainless" level of service to the
customer. The Relationship Manager has overall responsibility for
admiiustering the accounts, negotiating the goveriung documents,
directin~ account set-up, monitorin~ day-to-day administration of the
accounts, and assisting with customer inquiries. The Relationship
Specialist handles the daily account processing, eYecutes and processes
investment trades, and assures liquid funds are "swept" into an overiught
investment sweep vehicle. By ensuring that team members are well trained
to handle a variety of accounts and have experience executin"; all types of
transactions, it helps mitigate any risks of service "slippage" if a team
member is out. Wells Fargo maintains a very eYperienced staff of
adininistrators having an average of ten years of experience and each has
baclcup in the event they are out of the office. Our goal is superior client
service. Pricing for tlus service is dependent on the type and level of
service required but will be provided upon request.
8. Cauital Leasing: Please provide information and tax-exempt pricing regarding
capital lease financing for the acquisition of a piece or package of equipment.
The lease agreement should allow the City to refinance or call the lease at no
more than reasonable cost.
Wells Fargo suggests that the City consider a credit facility to be used for
leases or short terin borrowing needs. Pending further credit due diligence
and credit approval we would consider a line of credit to be used for leases
or short term borrowings. Advances for the lease could be priced at the
then current fiYed rate for the appropriate term of the lease. Short term
borrowings would be quoted at the time of advance or tied to an agreed
upon index plus a spread. Your relationship manager would be your point
of contact for any credit needs. The Banlc will worlc with the city to size
the appropriate line but would suggest a line of $ l OMM with an aiuiual
renewal.
9. Line of Credit: Please provide information and pricing regarding the
establishment of a line of credit from which the City may decide to draw upon
for emergency or short-term financing. This line of credit is separate and apart
from any line of credit the bank may offer in conjunction with its day light
overdraft policy or agreement with the City (refer to Section VII, C of this
proposal).
Wells Fargo would be willing to consider a line of credit for the City
(subject to bank approval) that is appropriately approved by City Council
and has the appropriate le~al opinions. Typically pricin~ for a line would
be based on an unused fee for the availability of the line and a used fee
when the line drawn upon.
10. Red Flag Act Rules and Fair & Accurate Credit Transactions (FACT) Act: The
City's utility staff is required to receive annual training for compliance with the
FTC's Red Flag Rules. Lidicate if your bank is able to offer local training to
Wells Fargo Baiil1, N.A. 40
City staff in the areas of cash handling, identity theft prevention or coimterfeit
detection.
The Bank is required to comply with Red Flag Rules and the FACT Act. The
Bank must ensure that all nonpublic personal customer identity information
provided by the City remain confidential by maintaining safeguards for the
information received. The Bank will not disclose or use such information for
any purpose other than is reasonably necessary to fulfill the purpose for which
such information was provided by the City or as otherwise permitted by
applicable law. A signed service provider acknowledgement form must be
completed in conjunction with the Depository Services contract.
As your organization engages in one or more agreements with Wells
Fargo Banlc, N.A., under wluch we may have access to iiiformation about
your customers. We hereby agree that the following will apply to all
agreements under which you or any of your subsidiaries and affiliates
receive any goods or services froin Wells Fargo Banlc, N.A., under which
we maintain, process, or have access to information about your customers:
(1) As used herein, the term "Customer/C onsumer liiformation" shall
mean (a) any "nonpublic personal information" about the "customers"
and "consuiners," (as those terins are defined in Title V or GLBA and
the privacy regulations adopted there under) of the addressee, and (b)
any iiiformation subject to Section 628 of the Fair Credit Reporting
Act and any regulations or guidelines adopted there under about any
"consuiner" of the addressee of this response. "Wells Fargo" shall
mean Wells Fargo Banlc, N.A.
(2) Wells Fargo hereby agrees that, except as inay be reasonably
necessary in the ordinary course of business to carry out the activities
to be performed by it under its agreement (s) with you or as may be
required by law or legal process, it will not disclose any
Customer/Consumer Information to any third party other than the
affiliates and those of Wells Fargo.
(3) Wells Fargo agrees to take all reasonable measures, including without
limitation such measures as it takes to safeguard its own coiif'idential
information, to ensure the security and confidentiality of all Customer/
Consuiner Inforination, to protect against anticipated threats or hazards
to the security or integrity of such Customer/Consumer liiformation,
including but not limited to the proper disposal of such iiiformation.
Wells Fargo further agrees to maintain a program designed to detect,
assess, and contain any unauthorized person while in the custody of
Wells Fargo or any of its affiliates or subcontractors.
(4) Wells Fargo is both aware of and in compliance with the "red flag"
change of address and address discrepancy regulations promulgated
pursuant to the FACT Act. Please note, however, that this verification
relates solely to Wells Fargo's compliance with these regulations on its
Wells Fargo Baiil1, N.A. 41
own behal£ If you believe there are specific functions that Wells Fargo
should perform relating to your compliance with the "red flags"
regulation, we would be happy to discuss those specific items.
(5) These terms shall supplement but not supersede the provisions of any
prior written agreement between you and Wells Fargo.
11. Please specify any other services available to the City of Denton which may be
thought to be beneficial or that may apply to the City. State all related fees.
We have included iiiformation in the AppendiY regarding our PayCard,
Controlled Disbursement, Smart Decision, and C,EO Mobile services.
Pricin~ for optional services is included with the price list.
Wells Fargo Baiil1, N.A. 42
Safekeeping and Collateral Requirements
A. Securities Pledged
The City requires that all uninsured collected balances and/or the principal of
uninsured certificates of deposit plus accrued interest, if any, in deposit with the Bank
be secured in accordance with the requirements of Texas Government Code Chapter
2257, Collateral for Public Funds. Collateral will always be held by an independent
third party with which the City has a current custodial agreement and shall be
reviewed at least monthly to ensure that the market value of the pledged securities is
adequate. All deposits of City funds shall be secured by pledged collateral set at no less
than 110% of the market value of the principal plus accrued interest on the deposits
less an amoimt insured by FDIC. Pledged securities shall have maturities of five (5)
years or less. As security for the deposits of the City of Denton, the Bank shall pledge to
the City securities equal to the largest total ledger balances the City of Denton
maintains in the Bank. While the City prefers U.S. Treasury securities as its primary
source of collateral, agency debentures and discoimt notes would be acceptable
secondary sources. If neither is available, the following securities may be utilized imtil
preferred securities become available:
1. Direct obligations of the United States government.
2. Other obligations, the principal and interest of which are unconditionally
guaranteed or insured by, or backed by the full faith and credit of, the United
States government.
3. Direct obligations of agencies or instrumentalities of the United States
government, including letters of credit.
The City will reject adjustable rate mortgages (ARMs), collateralized mortgage
obligations (CMOs), Step-ups, variable rate instruments (except U.S. Treasury inflation
protected securities), or securities that are not found on common pricing systems.
Wells Fargo currently worlcs closely with the city to provide the
appropriate collateral required by State law and the City's liivestment
Policy. We will continue to meet all legal requirements and current
requirements of your Investment Policy. If the city requires more than
102% collateral coverage the Banlc will retain the right to charge (30 bps)
for eYCess collateral coverage above 1021%. Our process pledges collateral
based on net collected balances and is evaluated daily. Terms for our
securities vary and most are greater than 5 years. Should the City require
securities less than a 5 year term or the use of only U.S. Treasuries, the
banlc will reserve the right to charge (up to 200 bps) the City for non
standard collateral requirements.
Wells Fargo Baiil1, N.A. 43
B. Collateral Substitutions
Any substitutions of the securities or reductions in the total amount pledged may be
made only by and with proper written authorization approved by the Assistant City
Manager, Director of Finance, or their designated representative(s). In the case of
reduction, the Bank must provide in writing that collateral will be available when
needed to meet normal City balance increases throughout the year. The City must
approve all securities pledged.
The Banlc will work with the City to insure that acceptable collateral is
pledged to meet the requirements of the City's liivestment Policy. Due to
the sensitive timin~ required to meet daily collateral pled~in~, each
security cannot be approved prior to pledging.
C. Custodian of Collateral
Securities pledged as collateral must be retained by a third party custodian that is a
subscriber to the Fed Security Wire and is held in joint safekeeping for the Bank and
the City. The custodian must be approved by the City and be:
• a state or national bank domiciled in Texas,
• a Federal Home Loan Bank, or
• a Federal Reserve Bank or branch of a Federal Reserve Bank.
The City shall be provided a safekeeping receipt for pledged securities. Written release
by the City is required for all releases or substitutions of collateral for pledged
accounts.
Please see the attached Depository Pledge Agreement in the AppendiY.
D. Reporting Requirements
The Bank shall provide the City a report of securities pledged on a monthly basis or at
any time requested. This report should reflect the following information as of the end
of each month and be delivered to the City by the Sth of each month.
Total pledged securities itemized by:
• Name
• Type/Description/Cusip Number
• Par Value
• Current Market Value
• Maturity Date
• Moody's or Standard & Poors Rating (both, if available)
The collateral report is inailed 7-10 business days after inonth end.
We use investment grade securities but we do not provide the security
Wells Fargo Baiil1, N.A. 44
rating on our reporting. Bank of New York, as Custodian for the
collateral, may also be able to provide independent reporting to the City.
E. Collateral Provision of Financial Institution Reform, Recovery and Enforcement
Act (FIRREA)
The City of Denton will require the Bank to attach to the contract certified resolutions
of the board of directors or board authorized committee that set forth the City's
security interest in the collateral securing its deposits. The certification must meet all of
the requirements of FIRREA and FDIC policies, which apply to the City's security
interest in the pledged collateral and must specify the officers of the bank who are
authorized to sign agreements with the City.
The Certificate of Board Resolution is obtained once a fully eYecuted
Depository Pledge Agreeinent is presented and approved by the Banlc's
board of directors.
Safekeeping Requirements
The City, Bank, and the safekeeping bank shall operate in accordance with a master
safekeeping agreement signed by all three parties. The safekeeping agreement must
clearly state that the safekeeping bank is instructed to release the collateral securities to
the City if the City has determined that the Bank has failed to pay on any accounts, or
is in default of the Depository Services Contract, or the City has determined that the
City's funds are in jeopardy for whatever reason including involuntary closure or
change of ownership, and if the instructions for release have been formally requested by
the City Council by ordinance or resolution.
A copy of the safekeeping agreement along with the name of the safekeeping bank must
be submitted with the proposal.
Please see the attached Depository Pledge Agreement.
F. City to Handle Livestments
The City of Denton will be responsible for handling the investment bidding process.
The Bank, along with any eligible financial institution shall be included in the bidding
process as deemed appropriate and in accordance with the City's investment policies,
hereto attached.
Aclaiowledged.
Wells Fargo Baiil1, N.A. 4-5
G. Safekeeping/Wire Services
Bank capability to meet the following requirements must be detailed in the proposal.
Please note: all the following requirements must be met for full consideration.
- The Bank may act as transfer agent for some or all security transactions
undertaken by the City. All transfers made shall be executed deliverv versus
pavment (i.e. payment shall not be made until the security is received).
- The Bank must have the capability of executing security transactions on behalf
of the City using various settlement methods of physical delivery, DTC, and
Federal book entry security purchases and sales through the Federal Reserve
Bank or a New York correspondent bank.
- The City requires that the security purchase and sale instructions be transmitted
to the Bank through a web-based application (on-line).
- The City also requires the ability to review the status of security transactions on-
line.
- Controls for securities clearance will be established by mutual agreement.
- Please enclose a proposed security clearance/custody agreement with your RFP.
- Safekeeping confirmation of all City security transactions will be issued and
mailed to the City within two business days of settlement and must be available
on a web-based application for exporting/downloading.
- Written communication of all security call and put option notices will also be e-
mailed or faxed to the City as soon as the Bank receives the notice.
- A monthly report listing all City securities held in safekeeping will be mailed to
the City within seven working days of the end of each month. The report must
be available on a web-based application for exporting/downloading.
Aclaiowledged.
H. Literest Rates Paid - Certificates of Deposit
The City may choose to invest in collateralized or insured certificates of deposit in the
depository Bank or any other eligible financial institution. The depository Bank agrees
to accept time deposits from the City for investment purposes in the form of certificates
of deposits in varying amounts and maturities at rates determined by the depository's
competitive bid as submitted in accordance with periodic competitive bid solicitations
conducted by the City.
Aclcnowled~ed. Wells Far~o will evaluate certificate of deposit
competitive bid opportusuties on a case-by-case basis.
L Please specify any other services available to the City which may be thought to be
beneficial or that may apply to the City. State all related fees.
We have included iiiformation about additional Treasury Management
services in the Appendix.
Wells Fargo Baiil1, N.A. 46
Overdrafts
A. Definition
The City does not intend to have a net overdraft position throughout the course of the
contract. An overdraft is defined as a negative demand balance in the City accoimts
collectively, not by individual account.
Aclcnowled~ed. Wells Far~o typically calculates dayli~ht overdrafts
based on the City's current available balance. However, we can calculate
tlus position on an account level or a City relationslup stnicture level.
B. Terms
Should an overdraft occur in the aggregate, the following stipulations shall apply:
1. The maximum number of days the overdraft will be allowed is three (3) .
2. The maximum amount of the net overdraft to be allowed will be $ $1 inillion .
3. The interest rate charged for overdrafts will be Priine +?.00% per annum
computed on the actual day basis.
C. Daylight Overdrafts
The City actively invests in marketable securities and strives to maintain limited
amounts of cash on deposit. Outgoing wire transfers will be made in the morning for
the reinvestment of funds or payment of large disbursements (debt payments, power
purchase payments and other contractual payments), which will be funded by an
incoming wire transfer later in the day. The depository shall allow the City to reinvest
and to wire funds out in anticipation of an incoming wire transfer later in the day.
Please describe the bank's daylight overdraft policy with respect to such transfers
where the fimding for the transfer has not yet been credited. What is the bank's
internal review and approval process for releasing such transfers and will the bank
established a predetermined amount (i.e., line of credit)?
Wells Fargo is a full-service banlc. We continuously traclc all activity. Our
daylight overdraft moiutoring process consists of liitraday moiutoring of
the current balance in your DDA account. The process begins by adding
the openint', available balance in a DDA account to the daylight overdraft
limit. All ACH, wire, and other sigiuficant account activities such as
lockboY, investment and item processing update the balance. We compare
outgoing wire transfers to this updated balance. When the balance is
negative, all outgoing wire transfers are sent to the Risk Control area. We
Wells Fargo Baiil1, N.A. 47
release wire transfers after receiving approval froin a Credit
Admiiustrator, Relationslup Manager, or other individual with the
appropriate authority.
Wells Fargo Baiil1, N.A. 49
Information Services
A. Accoimt Reconciliation
The City will process its own reconciliation for its accounts but requires data as follows:
L Monthly statements on all accounts showing overall activity shall be mailed
within five (5) working days after the close of the calendar month and be
accessible through on-line reporting service. Statements shall include deposits
made on the last day of the period. The accompanying checks shall be arranged
in ascending numerical order for the Control Concentration Account which will
include operating checks and payroll checks. All other account statements
should include debit/credit advices which the City will be responsible for placing
in numerical order. The City requires a report reflecting all items paid in serial
number sequence, which is balanced to the Bank statement (partial account
reconciliation). (Please provide a sample monthly statement with your RFP).
Banlc statements are available oiiline through the C,ommercial Electi•oriic
(y
qice`R' ((,E(R') portal one business day after the accounting period ends.
Mailed banlc statements for accounts set up with checlc tnincation services
are postinarlced within three business days of your cutoff date. Checlc
tnincation is standard with our commercial checlcing account services.
Wells Fargo offers our disbursement customers both full and partial
account reconciliation (ARP). Our ARP services provide the most
comprehensive and fleYible reporting options available in the industry
today. The City can customize your account reconciliation to match your
accounting needs by choosing which optional reports you need from the
14 listed below.
ARP optional reports
Paid Checks
Deposit Location
Outstanding Checks*
Credits
Posted Items
Bank Originated Entries
Stop Payments
Recersed Checks * *
Issue Notices Not Received**
Matched Paid Items**
Voids and Cancels* Prior Payments*
Issues This Cvcle* Unpaid Checks
*.4railable ii-it1z Fir11ARP onli .
**4railable ii-it1z Fir11ARP orPartial.4RP ii-it1z Positire PaY onli.
Wells Fargo Baiil1, N.A. 49
2. The Bank shall also provide the City with a computer file of the transactions for
each account. The file is to be transmitted by modem, tape/disk, or e-mail.
Requirements for the file will be provided at a later date. A computer printout
of all activities should accompany the computer file. Each debit or credit item,
other than checks, deposits, or wire transfers, shall be supported by a written
explanation identifying such item.
ARP statements and reports are available by transmission or through our
C'omnzer•cial Electr•oraic Office,' (C'EO,') Internet portal. Throu~h C'EO
Treasury liiformation Reporting, you can access your ARP statements and
optional reports-aridpe~l'or1n iritra-cvcle q1rei•ies on your ARP data
whenever and wherever you want.
You can view samples of all ARP reports on the C'EO demo at:
littps://wellsaffice.wellsfar,-,a.cam/cea public/oartal dema/si,-,nan.litml
Simply "Si~n On" to access the Treasury Information Reportin~ demo,
and then select "ARP Activity Reports." You can view sainple reports in
PDF, CSV, or EYCeI formats.
B. Check Safekeeping Service
All paid checks shall be returned to the City monthly along with the monthly statement.
Li addition to the return of the checks, all checks shall be captured monthly on a
compact disk (2 copies) and sent to the City. This process should allow the City to
search for cleared checks and print the image of a cleared check. The checks returned
in the monthly statement do not require sorting, as long as the compact disk images are
available. Please include any software cost associated with this service in the fee
schedule section. The City may require a demonstration by the Bank of this service.
Wlule checlcs could be returned to you, the City does not currently utilize
this option. In order to minimize the cost and security rislcs associated
with the return and retention of physical checlcs, we recommend the City
of Denton continues to use one or more of the imaging options described
below.
We capture paid check ima,_1,es (front and back), and make them available
to the City through three delivery chaiuiels: oiiline via the C,ommercial
Electi•oriic Office portal, through our linage File linport service, and via
CD-ROM.
■ Online via the C'oninieNCicrl Electronic Qffice portal. Online ima~e
retrieval is available as part of our Stops-linages-Search service.
Accessible through our C,ommercial Electi•oriic Office portal, tlus
service makes images available for retrieval by 8:00 a.m. CT the day
after they're posted. Online images are available for seven years.
linages of checlcs posted to your account witlun the previous 180 days
are immediately available for viewing, dowiiloading, or printing.
Wells Fargo Banli, N.A. 50
Images of items older than 180 days will be delivered to you online
witlun 24 hours of your request.
Image File Import. Our Image File Import service provides you with a
daily transmission of paid checlc images and associated indeY
iiiformation. Your image files will be available for dowiiloading into
your own internal archive system as early as 10:00 a.m. CT the day
after posting. During the implementation phase, you choose whether
you want the files to be sent to you in X1V1L or PDF format.
We1lsImageR' CD. With our Weltslnzage CD service, you can access
digital images of your paid checlcs on CD-ROM. WelIsImage CDs,
wluch can hold up to 30,000 check images (front and back), can be
delivered on a weeldy, monthly, or fiscal calendar basis (up to 45 days
between cycles), and are available eleven business days after CD-ROM
cycle cut-off. Data and images can be arcluved and viewed via the
Banlc's state-of-the-art WelIsImage Viewer software.
Whichever service the City ultimately chooses, it will be both easy and
quick for your staff to locate a particular check and view, print, or email it.
Wells Fargo Banli, N.A. 51
Other Stipulations
A. Regulation Notices
The Bank will notify the City in writing within ten (10) days of any changes in Federal
or State regulations or laws that would thereafter affect the depository agreement. The
Bank shall also notify the City of any new services that become available to the City
throughout the contract period.
Wells Fargo will notify the City as soon as possible of any changes to the
depository agreement. Our relationslup management team will discuss
with the appropriate City personnel any new service offerings that inay of
benefit to the City.
B. Wire Transfers
The City shall submit all outgoing wire transfers to the Bank according to its published
cutoff times established for current customers. The Bank shall maintain wire transfer
facilities to the Federal Reserve Bank for investment purchases or sales and other
transactions with financial institutions. Written confirmation of such transactions will
be provided to the City and a duplicate copy of the debit or credit shall be furnished to
the City within twenty-four (24) hours. Notification to the City of incoming wire
transfers or problems with outgoing wire transfers shall be made within one (1) hour of
the transaction.
lii the table below, we have listed the opeiung times and cutoff times-by
transfer type-for same-day eYecution of initiated wires. The same times
apply for all of our wire transfer initiation inethods, including the Internet,
mobile service, file transmission, and telephone (voice) service.
Wire Type
Opening Time (CT)
Cutoff Time (CT)
Fedwire Intra-District
Fedwire Inter-District
Drawdown request
International SWIFT
Federal tai payments
Book transfer/internal
7:30 a.m.
7:30 a.m.
7:30 a.m.
7:30 a.m.
7:30 a.m.
7:30 a.m.
4:30 p.m.
4:30 p.m.
4:30 p.m.
4:30 p.m.
3:00 P.M.
7:00 p.m.
We accept all incoming wire activity from the Federal Reserve for as long
as the Fed stays open, wluch is until 4:30 p.m. CT. We credit the incoming
wires the same day we receive them from the Fed. We process incomint"
SWIFT transactions until 6:00 p.m. CT.
Wells Fargo Baiil1, N.A. 52
Wells Fargo provides payment confirmation information, including our
internal banlc and Fed reference numbers, via the C,ommercial Electi•oriic
Office'(C,EO') Treasury liiformation Reporting service in the Wire
Transfer Detail and/or Intraday Composite reports. Both reports provide
real-time data of incomin~ and out~oin~ wire transfers.
We also offer our customers a faY coiif'irmation report regardless of the
initiation method.
Further, for custoiners using our ('EO Wire Transfer service, a wire report
is also available. Tlus report indicates whether the wire has been iiutiated,
approved, and processed by the bank. If processed, the report shows our
internal confirination/sequence nuinber. After the Federal Reserve has
received the wire, the report will show the Federal Reserve reference
number. The Wire Report does not include incoming wires or outgoing
wires iiutiated via our other wire iiutiation methods.
With our optional Event Messa~in~ service, you can receive email, fax, or
teYt message notifications for wire transfer events such as transactions
requiring approval, rej ected transactions, and incoming/outgoing wires
exceeding a certain dollar threshold.
The City requires that all outgoing wire transfers be released within one hour. Li
addition, all wire transfers (both incoming and outgoing) must be properly noted on the
bank statement. (i.e., Wire Transfer - State Comptroller).
Our straight through processing and the speed of our wire release
procedures ineans we will handle all City wires as priority wires; however,
if you have a concern about a specific wire, you should contact your client
services officer. There is no additional char~e for this service.
The Director of Finance or the Treasury Manager and/or their designees must
authorize all wire transfers on behalf of the City through a dual authorization urocess.
In the event of contputeN pNOblents oN otheN une.xpectecl clifficulties, the Bcrnk shcrll use
wliatever yiieans necessary to ensiire tliat tlie Cit17's oiitgoing wire transfers are coylipleted
on tlze dute specifed tlzrOlfgIZ CltI7 1111t1(lte(I 111St1°aictions.
We encourage dual control and secondary approval on all non-repetitive
wires iiutiated via the C,ommercial Electi•oriic (~ffice`" (C,E0 R') Wire
Transfer service. The system can be set up to require one or two users to
log on and approve the wire prior to the release of the transaction.
Wells Fargo understands the importance of iiutiating and releasing wires
when your users caiuiot get to the main system. We offer remote iiutiation
and release with all of our initiation methods.
Please explain the Bank's process for wire transfers, levels of authorization to initiate
wire transfers, and any required security measures (i.e., security tokens, dual logins,
Wells Fargo Banli, N.A. 53
etc...). Please provide manual procedures for initiating wires when internet is not
available.
Wells Fargo offers several methods of wire initiation, including touch-tone
telephone, over-the-counter and Internet-based. We recommend that the
City use our liiternet wire transfer service through the C,o1Tnnercial
Electi•oriic Office ((,EO) business portal. Tlus is our most cost-effective
option. C'EO Wire Transfer allows you to transmit funds electronically
from your designated Wells Fargo accounts to third parties at Wells Fargo
or other banlcs, both domestically atid internationally, as well as to City
accounts. Payment types include: book transfers, domestic wires,
drawdowns, international single currency wires and international cross
currency wires. You have the option of sending same-day or future-dated
transfers, templated or freeform. As a baclciip, the City may call in wires
directly to the wire department using a PIN.
CEOA Wire Transfer service process flow
Our CEO Wire Transfer service process requires two-factor, City user
authentication. Before they can initiate wires, users must log on to the
CEO portal using a coinpany ID, user ID, and password. Then an RSA
SecurID fob-generated pass code is required. Once users have been
authenticated, the system allows the iiutiation process for either repetitive
wires or freeform wires to begin.
To iiutiate a repetitive wire, City users:
• Search for the appropriate template or select it from a dropdown list.
• Enter the value date (wluch can be future-dated up to 60 days), the
wire amount, and beneficiary information (if not already built into the
template). Hit-,,h-volume wire customers can use a sin,_1;le screen to
iiutiate repetitive wires from multiple templates.
■ Click the submit button. The system displays a confirmation, wluch
can be printed for the City's audit trail.
If the City does not require secondary approval, the systein releases the
wire on the value date. If the template has been set up to require secondary
approval, the wire is placed in the Pending Wires: Awaiting Verification
queue.
To initiate a freeform wire, City users:
• liiput all required wire transfer fields including credit currency, debit
account number, value date, wire amount, beneficiary account and
banlc inforination, optional beneficiary and interinediary banlc
iiiformation, and originator's reference data.
■ Search for financial institution inforination by naine or reference
nuinber (Fedwire/RTN nuinber or SWIFT address), and select and
Wells Fargo Baiil1, N.A. 54
insert into appropriate fields within the template using our bank lookup
tool.
■ Click the submit button. The system displays a confirmation.
If the City does not require secondary approval, the wire is released on the
value date. If the template has been set up to require secondary approval,
the wire is placed in the Pendin~ Wires: Awaitin~ Verification queue.
The City can set up approval levels for different wire types and accounts.
Once the wire initiation process is complete, the approval process can
begin. Authorized approvers log on to the CEO portal and enter SecurID
pass codes to access the Wire Transfer service.
Wires requiring approval by a secondary party are displayed in the
Pendin~ Wires: Awaitin~ Verification queue. This queue only displays
wires iiutiated by other users and that the user has the authority to approve
or reject. Pending wires in the Awaiting Verification queue display
summary information including value date, template name for repetitive
wires, debit account, wire amount, beneficiary name, and wire status
(entered or iiutial verification). Approvers can approve and reject one or
more wires from this summary list.
Before approving or rejecting a wire, approvers also have the option of
reviewing full wire details.
• If the approver chooses the full detail review, he or she can modify the
wire if he or she has been given the authority to do so.
■ If the wire requires an additional verifier, it will remain in the
Awaitintly Verification queue with a status of Ver-1 after the first
verifier approves it. Before a wire can be released, the second verifier,
now the actual approver, would need to access all Ver-1 status wires
and approve thein.
• If a wire is rejected, it appears in the Awaiting Repair queue. The
reject reason entered at the time the wire was rejected will be
displayed in the full detail review. If the wire is subsequently repaired,
it will be displayed in the Awaiting Verification queue for secondary
approval.
After approval, if necessary, the Wells Fargo Wire Transfer systein
automatically checlcs that there are adequate funds available in your debit
account and that the transfer is not going to a country or beneficiary on the
U.S. Treasury's Office of Foreign Assets Control (OFAC) Specially
Designated Nationals and Bloclced Persons list. Wires are released
immediately afterwards.
Telephone wire transfer process flow
Our Telephone (voice) Wire Transfer allows the City to iiutiate all types
of wire transfers by callin~ a sin~le toll-free number and spealcin~ directly
Wells Fargo Banli, N.A. 55
with a wire operator. With built-in redundancy in our three Wire Transfer
operations centers, an operator is always ready to take your calls.
Wire initiation: City users must provide an account number and Wire
PIN to our wire operator. The operator will then enter all initiation
iiiformation and verify its accuracy with you before continuing the
iiutiation process. Our system automatically verifies ABA nuinbers
and SWIFT addresses before wires are sent.
Wire approval: Wells Fargo offers optional secondary callbaclc
approval procedures to ensure the safety and accuracy of your wire
transfers.
Wire release: After approval, if necessary, our Wire Transfer systein
automatically checlcs that there are adequate funds available in your
debit account and that the transfer is not going to a country or
beneficiary on the U.S. Treasury's OFAC Specially Designated
Nationals and Bloclced Persons list. Wires are released iininediately
afterwards.
C. Wire and ACH Blocks
The City requires Wire and ACH blocks of all unauthorized debits. Provide details
regarding the set-up of authorized debits to the City's account, notification procedures
on attempts to debit the City's accoimt, and the process for approving or denying
exception debits.
Our ACH Fraud Filter service offers you an easy, inexpensive way to
protect your accounts from unauthorized ACH transactions. With the
systein's Review option, you are notified of all ACH transactions when
they are presented. You will then review those transactions and notify us if
you want a transaction returned. With the systein's Stop option, all ACH
transactions that have been pre-authorized will be automatically
processed, while all others will be automatically returned.
The City may view transactions identified as potentially fraudulent by the
ACH Fraud Filter service and submit pay or return decisions through the
C,ommercial Electi•oriic Office (C,EO) portal when you're at your deslc or
through our C,E0 Mobile service when you're on the go. Add our Event
Messaging service, and we'll notify you when a potentially fraudulent
transaction requires your review or has been stopped and returned.
D. Debit and Credit Adjustments
The City requires that a copy of all debit and credit adjustments be faxed or emailed to
the Treasury Manager with supporting documentation, as the entries are made
throughout each month. The documentation must include reference to the original
deposit slip number and location identifier. The City's monthly statement should also
Wells Fargo Baiil1, N.A. 56
include a copy of all debit and credit adjustments. Adjustments should include
descriptions, dates, and amounts in order for the City to properly adjust its books. The
City shall not be responsible for the cost of credit and debit adjustments necessitated by
Bank.
When an adjustment is necessary, we malce a separate debit or credit entry
to your account rather than adjusting the deposit amount. We also provide
you with adjustment advices, including relevant baclcup documents, by
maiL If you subscribe to our subaccountin(y service, your adjustment
notices will include your location number and location name (if
applicable). Depending on the amount of the discrepancy, we may
telephone your designated contact to report the difference.
For banlcin~ store deposit adjustments, your adjustment notice includes the
amount and reason for the adjustment. For deposits to a subaccount, we
also provide the location code.
We provide deposit adjustinent information in several ways. In addition to
the advices that we mail to you, we identify deposit adjustments on:
• Banlc statements
• Balance and transaction reports
• Deposit reconciliation reports
• Detailed transaction file transmissions
Additionally, we provide deposit adjustment information through the
C'onznzer•cial Electr•oraic Of~ce,' (C'EO'') Event Messa~in~ and Statements
& Notices services.
For cash vault adjustments, you receive a mailed adjustment notice that
includes the deposit date, declared ainount, verified currency total by
denomination, and location number (if applicable). You also have the
option to receive a deposit adjustment report by e-mail.
E. Account Balances
The Bank shall have a means of contacting the City prior to 9:00 a.m. CST each
business day to give the ending ledger balances for all accounts from the previous
working day.
It is important that the City has access to information as soon as it
becomes available. C'onznzer•cial Electr•oraic Office,(C'EO') Treasury
Inforination Reporting is available 24 hours a day, 7 days a weelc. We
update previous day iiiformation by 6:00 a.m. ET on business days. The
City can use C,EO to view previous day balance iiiformation.
Wells Fargo Baiil1, N.A. 57
F. Bank Statements
Bank statements or statement activity shall be rendered by the fifth working day after
the close of the calendar month and accessible through on-line reporting service. The
statement must include deposits made on the last day of the month.
Banlc statements are available oiiline through the C,ommercial Electi•oriic
Office,(C'EO') portal one business day after the accountin~ period ends.
Mailed bank statements for accounts set up with check tnincation services
are postmarlced witlun three business days of your cutoff date. Checlc
tnincation is standard with our commercial checlcing account services.
In addition, the City requires that all transactions (customer deposits, credit card
deposits, chargebacks) must be noted with a location name or unique identifiable
number on the bank statements specified by the City.
As part of our Account Reconciliation service, we offer Deposit Location
Reporting. Deposit Location Reporting provides sorting and subtotaling of
deposits by location. Additionally, the location name prints on the
statement and reports. Deposit Location Reporting is useful when you
have multiple locations initiatintly transactions through the same account.
We also support the reporting subtotaled by location if your MICR line
includes the location number.
G. Right to Audit Records
The Bank's records relating to the City of Denton accounts shall be open to review by
either City staff inembers or City-appointed independent auditors during normal
business hours.
The City can access their records during normal business hours, or online
at any time at your convenience. Per banlc policy, customer records are
maintained for 7 years after the date of creation. For any reviews the City
staff or auditors would like to conduct on banlc premises, your
Relationship Manager Andy Deskins will have to be given `reasonable
notice' so that he can malce any necessary arrangements
H. Financial Reports
The Bank will submit a copy of the last audited annual financial statements and the
subsequent quarterly supplements along with an annual year end uniform Bank
Performance Report.
Historical annual reports, financial statements, and SEC filin~s can be
found at IiYYi)s://www.wellsfar,-,a.cam/invesY relaYians/invesYar relaYians/.
Wells Fargo Baiil1, N.A. 59
L Security & Disaster Recovery
Wells Fargo has reinained a beacon of tnist and security since 1852. We
have a business continuity planning program in place, consisting of
multiple recovery strategies for each core line of business, function,
product, and service. lii the event of an uneYpected disaster or emergency,
every attempt will be made to restore and maintain normal service levels
as soon as possible. Our general philosophy is that the unexpected should
now be eYpected, and plaiuied for accordingly.
Our core processes and procedures regarding business continuity plaiuung
remain consistent for a wide variety of potential disasters or emergencies,
including earthquakes, fires, floods, and even pandemic disease. Although
components of our business continuity plan may vary based on the nature
of each specific event, we have identified four types of interniptions that
could impact your company the most:
■ Systems. To miiumize the severity of system interniptions, we have
instituted redundancies for business critical systems. lii the event a
Wells Far~o system experiences a temporary outa~e, we will allocate
available resources to the remediation of the impacted application(s).
■ Telecommunications and Power. Wells Fargo utilizes multiple
telecommuiucations and power compaiues to create a redundant
networlc, thereby miiumizing the lilcelihood of an outage. Should an
outa~e occur, however, we will talce reasonable action to implement
manual alternatives.
■ Operations Facilities. If there is a disaster at one of our primary
operations centers, we have alternate processing centers wluch are
prepared to talce over day-to-day processing and support until the
primary operational center is back to normal operating conditions.
■ Transportation. If either air or ground transportation is temporarily
unavailable, we will take reasonable action to use alternative methods,
given available transportation options.
1. Outline the security measures in place for the protection of data transmitted for
processing.
The security of the City's financial data is as important to us as it is to
you. At Wells Fargo, we employ a variety of ineasures to protect sensitive
financial data-whether it's in transit between your system and ours or
stored on our servers.
Transmission Security: It's critical that the appropriate measures are in
place to prevent non-authorized persoiuiel from accessing your files or
seeing the data that's included in them. We eiiforce strict encryption and
authentication standards for data transmissions of financial information.
By adhering to these standards, the City can be confident that the files you
Wells Fargo Baiil1, N.A. 59
exchange with our servers are secure from unauthorized access or
eavesdropping during transmission.
All of our supported Internet protocols require session-level encryption.
The encryption type varies based on the transmission method you select.
Our supported protocols use 128 bit Secure Soclcets Layer (SSL) or
Secure Shell (SSH) encryption to protect data in transit between the City
and Wells Fargo. We do not require additional encryption at the file level.
Our supported Connect:Direct options require a Secure+ add-on, which
encrypts the session with SSL. Two of the Coiuiect:Direct options also
require use of a Bank-provided encrypting router.
For all of our transmission methods, we issue specific credentials to each
customer to authenticate transmissions and grant access to our
transmission facilities.
2. Describe the security measures used to prevent unauthorized user access to
either the system or the data.
Liformation Security: The Enterprise Risk Management Group at
Wells Fargo sets the information security policy for the enterprise. Our
Wholesale liiternet and Treasury Solutions Security interpret and apply
corporate security policy to the C,ommercial Electi•oriic Office,(C,EO,)
portal. Wells Fargo Audit Services inonitors the ('EO portal for
compliance to the corporate information security policy.
Access to Customer Data: Wells Fargo limits team member access to
custoiner inforination to those who have a business reason to lcnow the
information. Team members are bound to a strict code of conduct, which
includes standards to protect customer confidentiality. If they fail to
follow our code of conduct, team members are subject to disciplinary
action.
Requests for Customer Credentials: We protect the privacy of customer
credentials in these ways:
We never request or respond to requests for password inforination over
email.
• The ('EO portal only uses child-browser windows to collect passwords
or personal iiiformation (never pop-up windows, wluch launch
automatically). The user must select the linlc to open it.
• We never request password iiiformation over the phone. For telephone
customer service, user identities are not authenticated with the
custoiner's credentials, but with "shared secrets"-answers to
questions asked durin~ the C'EO portal re~istration process.
Security Audits and Assessments: Wells Fargo Audit Services performs
regular reviews of the ('E() portal and issues findings and audit
suininaries. Our inanageinent and technical partners review each finding.
Wells Fargo Baiil1, N.A. 60
If changes are necessary, they are prioritized and scheduled for
implementation. Audit Services tracks and moiutors completion of
necessary changes.
A third party does penetration testing on the ('EO portal on an annual
basis. Our C,EO portal managers review the results and malce appropriate
changes to strengthen eYisting security controls. For security purposes, we
do not share penetration testing results.
The ('EO portal is subject to periodic examination by our internal
auditors, who have no reporting relationslup to the business usut
responsible for C'EO portal security. Internal audit examination typically
focuses on testint', for compliance with our corporate security policies,
wluch are based on industry-standard iiiformation security practices. lii
addition, Audit Services shares its worlc papers and findings with our
external auditor. These are talcen into consideration when the auditor's
statement is prepared for our annual reports.
Access Violations: We record operating system logins and access
violations and moiutor system logs for eYCeptions and suspicious activity.
We investigate these activities and take appropriate actions as necessary.
Virus Software: Our security policies mandate the use of vinis detection
software, with a preferred list of products that may be used.
3. Describe your local back up and/or redundant systems.
Wells Fargo maintains numerous "hot" baclciip processing sites, dependent
on each specific function. Each servicing center has an alternate recovery
site identified - with recovery sites dispersed across multiple ~eo~raphies
in order to miiumize potential disniption witlun a specific geograpluc
region.
4. What is the expected timeframe to become operational should a catastrophic
eventoccur?
Wells Fargo processing of core business functions will automatically
divert to identified baclcup sites as necessary in the event of an unexpected
disaster or emergency. Sufficient staff will be on hand (at both primary
and backup locations) to execute critical functions as needed.
5. Disclose any data breaches which have required notification under the 2003 Fair
and Accurate Credit Transactions Act?
It is against Wells Fargo's policy to provide details of security incidents
to individuals / orgaiuzations not involved in the actual incident. If Wells
Far~o is selected as the candidate we can discuss the controls we have in
place to protect against data breaches further.
Wells Fargo Baiil1, N.A. 61
J. Bank Failure
Should the Bank fail, close, or be forced into reorganization during the term of this
contract, City reserves the right to cancel the contract and re-bid for City's depository
services.
Aclaiowledged.
K. Research Requests
The City requests that all research requests be turned around within three (3) business
days of the request. The City requests that a specific Bank representative be assigned
to specifically research any City needs.
When you iiutiate a research inquiry with the banlc, you eYpect a prompt
and accurate response. lii general, research requests for transactions
processed within the previous 180 days will be completed within three
business days. The time it takes to respond can vary depending on the
specific request and the type of transaction being researched.
Your dedicated Relationship Associate, Sibit Stewart, will coordinate all
customer service research requests.
L. Returned Items
In order to fund check presentments and manage the City's bank accoimts and
investments, all checks deposited by the City that do not clear the first time should be
submitted a second time no later than 10:00 a.m. CST before returning them to the
City. Returned checks that do not clear on the second attempt shall be returned to the
City within two (2) business days and accessible through on-line reporting service. The
City shall receive same day telephone or e-mail notification of all return items in excess
of $5,000.
For standard paper item returns, we automatically redeposit eligible items
on the neYt business day. If the maker banlc returns the item again, we
process the chargebaclc debit and inail the paper advice along with the
ori~inal or lina~e Replacement Document (IRD) the same day we receive
the itein baclc from the malcer banlc.
We understand the importance of keeping track of payments and
collecting on returned checlcs. Therefore, Wells Fargo offers a variety of
methods for reporting returns information to you. With online, electronic,
and paper delivery, you choose the method that works best for you.
Wells Fargo Baiil1, N.A. 62
Online using the CommercialElectronic Offrce" (CEO")portal
■ Treasury Information Reporting. The Returned Itein Detail report is
available as both an intraday and previous day report and includes
detailed iiiformation about your returns.
• Returned Item Decisioning. View your returns and change the
default disposition (chargeback or redeposit) until 6:30 p.m. CT.
• Eveirt Messaging. Receive an e-mail notification when we receive
returned items or when items are ready to be decisioned. The e mail
prompts the user to log into the ('EO portal to view or decision
returned items.
• CEO Mobile-service. Access a mobile version of the liitraday
Returned Items report through the browser of your mobile device.
Electronic transmission
• Data Transmission. Receive an electroiuc transmission file with all
the options of the Returned Itein Detail report.
• Image File Import. Receive a transmission of returned check images
and associated index inforination.
Paper delivery
Mailed Advice. We mail returned items and standard notices through
U. S. inail to the stateinent address on our systein.
Fax or e-inail
LifoFax. Receive an intraday faY or e-mail report that displays your
paper returns including items redeposited through our Electroiuc
Returns (RCIL) service.
■ Receive a returned itein detail fax or e-inail report that displays paper
returned items including items redeposited using RCIL.
If an overdraft occurs due to a late notification by the bank, the City will not be
expected to pay overdraft charges. Please provide an estimate of the bank's clearing
times.
Wells Fargo will waive any overdraft fee resulting from late notification
of returned items. linages of returned items are available oiiline the same
day we receive them in our Returned Items Processing Center. The City
can search for and view ima(,es of returned items usin(, the C'onznzer•cial
Electr•oraic Office,' (C'EO,') Returned Item service. Please refer to the
availability schedule in the Appendix for applicable clearing times.
Wells Fargo Baiil1, N.A. 63
M. Transition Schedule
Please provide a schedule documenting the transition of transferring the City's banking
services from the current bank to your institution, as well as any associated costs and
proposals from the bank to help defray or eliminate said costs.
With Wachovia as the incuinbent provider, the City will be talcen through
a tightly inanaged conversion process to the new Wells Fargo platforin,
resulting in a better version of the products and services you have today.
A tremendous amount of time and resources have been dedicated to
building a process that puts the load on the banlc and ininiinizes the iinpact
on the City's resources.
Therefore, the more complicated transition details will have been
eliminated due to that conversion process. Your existing accounts and
services (that you wish to remain) will ~o on and the City can concentrate
the effort on establishing the enhanceinents it has expressed an interest in.
There will be no need to:
■ Chan~e account numbers
■ Order new checlcs or deposit ticlcets
■ Re-test files
■ Notify customers of a change in loclcboY address
■ Manage multiple accounts durint', transition
■ Manage out of the existing loclcbox
■ Notify originators of ACH and wire transfers of new account
information
■ Modify and transfer ACH and wire transfer templates
For the implementation of any rieii, products and accounts (such as the
controlled disbursement account), your relationship management teain will
design a project plan that respects the City's priorities and resources.
Wells Fargo Baiil1, N.A. 64
RFP # 4578 - ADDENDUM # 1
Addendum # 1 to be returned with Bid Proposal
Please see the attached pages for answers to questions submitted by
prospective bidders:
NO OTHER CHANGES AT THIS TIME.
Tlzis form shtall be signed tand returnedwith your bid
Nume: Andrew B. Deskins
S'ign utatre: 0
CoNZpuszt': Wells Far*o Bank, N.A.
Title: Senior Vice President
Dccte: Sentember 30, 2010
RFP # 4578 - ADDENDUM # 2
Addendum # 2 to be returned with Bid Proposal
Please see the clarification to Section III (B) as worded below:
The City of Denton hereby provides notice to all prospective banks that
Chapter 105 of the Texas Local Government Code authorizes national
banks or banks organized under the laws of this state or another state to
apply for the performance of depository services to the City. The City of
Denton hereby substitutes the introductory wording in Section III(B) of RFP
#4579 as follows: "In order to be considered, the Bank must be a national
bank or a bank organized under the laws of this state or another state."
NO OTHER CHANGES AT THIS TIME.
This form shull be signed und retrcrnedwith yorcr bid
NuNZe: Andrew B. Deskins
Slh l? llflll'C': k4l,-L-
Conipan.w Wells Far6o Bank, N.A.
Title: Senior Vice President
Dute: Sentember 30, 2010
Attachment B: Excel File to Enter Bank Depository Fees
Below is the City's average bank depository activity over the past 12 months. Please indicate the cost for providing each of these services on a per-
item basis. The formula entered for the estimated annual cost will calculate the cost using the 12-month average x fee per item x 12 months. If
appropriate, identify any other services not listed and their associated costs. Any service not appearing or which does not have a fee indicated on
the Proposal Form will be considered free of charge in the bank depository contract. Please attach a sample account analysis statement.
Service
Estimated
TMA
12 Mo.
Fee per
12
Annual
Code
Description
Avg.
Item
x
Mo. =
Cost
ACCOUNT RECONCILEMENT
20 99 99
OUTSTANDING ISSUE ITEMS ON FILE
203
0.0000
x
12 =
$
-
10 06 10
DEPOSIT RECONCILEMENT PER DEPOSIT
828
0.0300
x
12 =
$
298.08
10 06 00
DEPOSIT RECON MONTHLY MAINTENANCE
2
0.0000
x
12 =
$
-
15 00 30
POSITIVE PAY MONTHLY MAINT
1
0.0000
x
12 =
$
-
2001 10
FULL RECONCILEMENT PER ITEM
2466
0.0200
x
12 =
$
591.84
20 03 01
ACCOUNT RECON OUTPUT TRANSMISSION
1
5.0000
x
12 =
$
60.00
20 00 10
FULL RECON MONTHLY MAINTENANCE
1
0.0000
x
12 =
$
-
15 99 99
ARP PAYEE MATCH POSITIVE PAY/ITEM
2466
0.0100
x
12 =
$
295.92
15 13 52
POS PAY EXCEPTION ITEM IMAGE
2
1.0000
x
12 =
$
24.00
15 12 00
POSTAGE/MAILING-1ST CL/UPS/PRIORITY
1
0.0000
x
12 =
$
-
20 03 01
OUTGOING TRANSMISSION DETAIL PER IT
5528
0.0000
x
12 =
$
-
15 03 10
ARP PAID-NO ISSUE ITEMS
16
0.0000
x
12 =
$
-
15 07 24
POSITIVE PAY EXCEPTIONS
2
5.0000
x
12 =
$
120.00
40 02 10
ARP INTERNET ACCESS MAINTENANCE
3
0.0000
x
12 =
$
-
40 02 10
ARP NOTIFICATION SERVICE
3
0.5000
x
12 =
$
18.00
20 03 10
ARP PAPER REPORTS
1
0.0000
x
12 =
$
-
40 99 99
WC PLUS ARP ISSUE
26
0.0500
x
12 =
$
15.60
40 99 99
WC PLUS ARP CHECK CANCEL
21
0.0500
x
12 =
$
12.60
ARP STMTS & RPTS (CSV/EXCEL) / ITEM
0.0300
x
12 =
$
720.00
ARP STMTS & RPTS (CSV/EXCEL) BASE
0.0000
x
12 =
$
-
ACCOUNT RECONCILEMENT
$
2,156.04
AUTOMATED CLEARING HOUSE
25 02 00
MISCELLANEOUS ITEMS PAID
306
0.0400
x
12 =
$
146.88
25 05 01
FILE PROCESSED
25
0.0000
x
12 =
$
-
1of9
Service Estimated
TMA 12 Mo. Fee per 12 Annual
Code Description Avg. Item x Mo. = Cost
25 05 10
BLOCK ACH TRANSACTIONS
1
0.0000
x
12
-
25 05 01
ADDENDA ORIGINATED
120
0.0000
x
12
-
25 01 02
DEPOSITS
1094
0.0400
x
12
525.12
25 00 00
MAINTENANCE
7
20.0000
x
12
1,680.00
25 03 02
ACH RETURNS
26
1.0000
x
12
312.00
25 10 50
ACH POSITIVE PAY-MAINTENANCE
4
0.0000
x
12
-
25 10 50
ACH POSITIVE PAY MANUAL ISSUE
1
0.0000
x
12
-
25 01 02
ACH - WC PLUS SINGLE ITEM
1
0.0400
x
12
0.48
25 01 07
ACH ORIGINATED ITEMS-PPD DEBIT
3498
0.0400
x
12
1,679.04
25 01 07
ACH ORIGINATED ITEMS-PPD CREDIT
2826
0.0400
x
12
1,356.48
25 01 05
ACH ORIGINATED ITEMS-CCD DEBIT
1
0.0400
x
12
0.48
25 01 05
ACH ORIGINATED ITEMS-CCD CREDIT
118
0.0400
x
12
56.64
25 06 40
REVERSAL REQUEST PER FILE/ITEM
1
0.0000
x
12
-
25 10 70
NOTIFICATIONS OF CHANGE
7
0.2500
x
12
21.00
25 00 00
CONTROL TOTAL ENTRY
25
0.0000
x
12
-
ACH CEO FRAUD FILTER REVIEW MO BASE
10.0000
x
12
120.00
ACH CEO FRAUD FILTER STOP - ITEM
5.0000
x
12
120.00
ACH CEO FRAUD FILTER REVIEW - ITEM
5.0000
x
12
1,200.00
ACH DELETE/REVERSE - BATCH/FILE
10.0000
x
12
240.00
ACH REVERSAL - ITEM
1.0000
x
12
600.00
AUTOMATED CLEARING HOUSE
$
8,058.12
CASH SERVICES
10 01 00
MC-DISPOSABLE BAGS PROCESSED
722
0.4000
x
12
3,465.60
100141
MC-COIN CURRENCY ORDERS
7
4.0000
x
12
336.00
10 01 4A
MC-STRAPPED CURRENCY PROVIDED
29
0.0000
x
12
-
10 01 44
MC-ROLLED COIN PROVIDED
256
0.0800
x
12
245.76
10 05 00
MC-DEPOSIT CORRECTIONS
3
8.0000
x
12
288.00
10 01 02
MC-CASH DEPOSIT PROCESSING
10611
0.0000
x
12
-
10 01 11
MC-IPD MIXED DEPOSIT TICKET
281
0.0000
x
12
-
CASH VAULT CURRENCY FURNISHED (PER $1)
0.0012
x
12
14.40
CASH VAULT CURRENCY/COIN DEPOSITED (PER $1)
0.0004
x
12
4.80
CASH SERVICES
$
4,354.56
CUSTOMER CASH LETTER
2of9
Service Estimated
TMA 12 Mo. Fee per 12 Annual
Code Description Avg. Item x Mo. = Cost
10 00 00 DEPOSITS
828
0.4000
x
12
10 02 99 DALLAS DEP ITEMS
13304
0.0000
x
12
10 06 10 UNENC DEP RECON SVCTR DEP ITEMS
1950
0.0000
x
12
IMAGE CASH LETTER MAINTENANCE
0
x
12
DATA TRANSMISSION (MONTHLY MAINTENANCE - RETAIL LOCKBOX
1
x
12
RETURNED DEPOSITED ITEMS IMAGE MAINTENANCE - RETURNS
2
x
12
RETURNED DEPOSITED ITEMS REPORTED - RETURNS
35
x
12
DEPOSITED CHECKS - ON US
0.0200
x
12
DEPOSITED CHECKS - LOCAL CLEARING
0.0300
x
12
DEPOSITED CHECKS - REGIONAL
0.0400
x
12
DEPOSITED CHECKS - TRANSIT
0.0500
x
12
DEPOSITED CHECKS CASH VAULT - ON US
0.0300
x
12
DEPOSITED CHECKS CASH VLT - LOCAL CLR
0.0400
x
12
DEPOSITED CHECKS CASH VAULT - REGION
0.0500
x
12
DEPOSITED CHECKS CASH VAULT - TRANSIT
0.0600
x
12
CUSTOMER CASH LETTER
DEPOSIT ITEM IMAGE
15 01 03 DEPOSIT IMAGE VIEWED - WC PLUS
DEPOSIT ITEM IMAGE
EBOX
3,974.40
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
_ $ -
7,982.40
_ $ -
$ 11,956.80
23 1.0000 x 12 276.00
$ 276.00
05 00 99
CONCENTRATION PAYMENT
6356
0.0000
x
12
-
05 00 30
EBOX MONTHLY MAINTENANCE
1
75.0000
x
12
900.00
05 00 99
EBOX DATA CONSOLIDATION
1
125.0000
x
12
1,500.00
99 99 99
EBOX DATA TRANSMISSION MAINTENANCE
1
75.0000
x
12
900.00
99 99 99
EBOX FAX/E-MAIL DETAIL REPORT
137
0.5500
x
12
904.20
99 99 99
EBOX FAX/EMAIL DAILY SUMMARY REPORT
1
55.0000
x
12
660.00
99 99 99
EBOX STOP FILE
1
75.0000
x
12
900.00
99 99 99
EBOX PAYMENT RETURN
9
0.2500
x
12
27.00
99 99 99
EBOX FAX/E-MAIL REJECT REPORT
1
50.0000
x
12
600.00
EC BILLPAY ON US ITEMS
0.0850
x
12
1,020.00
E-BOX PAYMENT
0.1800
x
12
11,568.96
EBOX
$
18,980.16
3of9
TMA
Code Description
GENERAL SERVICES
15 01 02 CHECKS PAID
10 00 18 BR-CASH DEPOSIT FEE
Tier 1 To 50
Tier 2 To 99999999999
01 03 20 MULTIPLE STATEMENTS
Tier 1 To 1
Tier 2 To 99999999999
01 00 00 ACCOUNT MAINTENANCE
10 00 10 BR COIN DEPOSIT PROCESSING SURCHARGE
10 00 12 BR NON STANDARD CASH PROCESS SURCHARGE
10 00 42 BR CHANGE ORDERS
10 00 4A BR STRAPPED CURRENCY PROVIDED
10 00 44 BR ROLLED COINS
10 05 00 BR DEPOSIT CORRECTIONS
01 06 00 AUDIT CONFIRMATION FEE
40 03 00 BALANCE INQUIRIES
15 05 99 NON DEPOSITOR CHECK CASHING FEE
01 00 20 MASTER ACCOUNT MAINTENANCE
01 00 21 SUB ACCOUNT MAINTENANCE
10 02 00 DEPOSITED ITEMS
CONTROLLED DISBURSEMENT MONTHLY MAINTENANCE
CONTROLLED DISBURSEMENT PER ITEM
CONTROLLED DISBURSEMENT SUMMARY AND DETAIL REPORT
CONTROLLED DISBURSEMENT PER ITEM REPORTING
CONT DISB ACCT MAINT W/CHEXSTOR-OH
CONT DISB CREDIT POSTED-OH
CONT DISB IMAGE CHECKS PAID - OH
CONTROLLED DISBURSEMENT MICR REJECT
CONT DISB PERFECT PRESENT BASE-OH
CONT DISB PERFECT PRESNT CHK RTN-OH
CONT DISB PERFECT-POS-PAY EXCEPT-OH
CASH DEP/$1 VER AT TELLER WINDOW
CASH DEP/$1 VER AT TELLER WINDOW
CURRENCY ORDERED/$1 - BRANCH/STORE
Service
Estimated
12 Mo.
Fee per
12
Annual
Avg.
Item
x
Mo. =
Cost
2442
0.0800
x
12 =
$
-
91
0.0000
x
12 =
$
-
5
0.0000
x
12 =
$
-
5
10.0000
x
12 =
$
480.00
1
0.0000
x
12 =
$
-
6
0.0000
x
12 =
$
-
1
5.0000
x
12 =
$
60.00
3
0.0000
x
12 =
$
-
7
0.0000
x
12 =
$
-
1
8.0000
x
12 =
$
96.00
1
0.0000
x
12 =
$
-
1
0.0000
x
12 =
$
-
62
0.0000
x
12 =
$
-
1
0.0000
x
12 =
$
-
4
0.0000
x
12 =
$
-
1
0.0000
x
12 =
$
-
x
12 =
$
-
x
12 =
$
-
x
12 =
$
-
x
12 =
$
-
25.0000
x
12 =
$
300.00
0.9500
x
12 =
$
319.20
0.0800
x
12 =
$
2,344.32
0.8000
x
12 =
$
48.00
0.0000
x
12 =
$
-
3.0000
x
12 =
$
180.00
5.0000
x
12 =
$
300.00
0.0016
x
12 =
$
-
0.0016
x
12 =
$
-
0.0016
x
12 =
$
-
4of9
Service Estimated
TMA 12 Mo. Fee per 12 Annual
Code Description Avg. Item x Mo. = Cost
ROLLED COIN ORDERED - BRANCH/STORE PER ROLL
GENERAL SERVICES
0.1500 x 12 = $ -
$ 4,127.52
GLOBAL WIRE TRANSFER
35 01 04
WC DOMESTIC WIRE
47
5.0000
x
12
2,820.00
35 01 24
WC BOOK TRANSFER
3
3.0000
x
12
108.00
35 03 00
INCOMING WIRE
12
5.0000
x
12
720.00
35 03 20
BOOK TRANSFER CREDIT
1
0.0000
x
12
-
35 04 12
FAXADVICE OF INCOMING WIRE/BOOK
1
0.0000
x
12
-
35 04 12
FAXADVICE OF OUTGOING WIRE/BOOK
1
0.0000
x
12
-
01 01 00
DEBITS POSTED
50
0.0000
x
12
-
10 00 00
ELECTRONIC CREDITS POSTED
11
0.0000
x
12
-
35 05 60
WIRE INVESTIGATIONS
1
6.0000
x
12
72.00
ACH AUTHORIZATION MONTHLY MAINTENANCE
4
x
12
-
WIRE DETAIL RPT SUBSCRIPTION - ACCT
10.0000
x
12
120.00
WIRE DETAIL RPT SUBSCRIPTION - ITEM
1.0000
x
12
120.00
WIRE MONTHLY BASE
0.0000
x
12
-
WIRE INFOFAX & EMAIL RPT MTHLY BASE
10.0000
x
12
120.00
WIRE NOTIFICATION INFOFAX & EMAIL
5.0000
x
12
60.00
GLOBAL WIRE TRANSFER
$
4,140.00
PAID CHECK IMAGE
15 13 50
PAID CHECK IMAGE MAINTENANCE
1
0.0000
x
12
-
15 13 53
PAID CHK IMAGE: CD ROM/DVD PER ITEM
2363
0.0000
x
12
-
15 13 53
PAID CHECK IMAGE:CD-ROM PER CD
1
15.0000
x
12
180.00
15 13 52
PAID CHECK IMAGE VIEWED WC PLUS
15
1.0000
x
12
180.00
ONLINE IMAGE VIEW < 90 DAYS - ITEM
0.0000
x
12
-
ONLINE IMAGE VIEW > 90 DAYS - ITEM
0.0000
x
12
-
PAID CHE
CK IMAGE
$ 360.00
PAPER DISBURSEMENTS
15 03 00 PAID ITEM REJECTS OVER 1% THRU 2% 7 0.0000 x 12 -
15 03 00 PAID ITEM REJECTS OVER 2% 51 0.8000 x 12 489.60
15 03 00 PAID ITEM REJECTS THRU 1% 4 0.0000 x 12 -
PAPER DISBURSEMENTS $ 489.60
5of9
TMA
Code Description
REMOTE DEPOSIT CAPTURE
Service Estimated
12 Mo. Fee per 12 Annual
Avg. Item x Mo. = Cost
10 02 1 B
RDC VOLUME
1906
0.0000
x
12
-
Tier 1 To 2500
Tier 2 To 10000
Tier 3 To 50000
Tier 4 To 99999999999
DESKTOP DEPOSIT - WFARGO DEPOSIT ITEM
0.0000
x
12
-
DESKTOP DEPOSIT - NON WFARGO DEP ITEM
0.0000
x
12
-
10 02 30
RDC NONCONFORMING IMAGE
1
0.0000
x
12
-
10 02 40
RDC ON US ITEMS
345
0.0150
x
12
62.10
01 00 00
RDC LOCATIONS
2
0.0000
x
12
-
Tier 1 To 1
Tier 2 To 10
Tier 3 To 100
Tier 4 To 200
Tier 5 To 99999999999
10 02 40
RDC IMAGE ITEM CLEARING
1048
0.0000
x
12
-
10 02 40
RDC IRD ITEM CLEARING
832
0.0000
x
12
-
DESKTOP DEPOSIT IMAGES RETRIEVED
0.0000
x
12
-
DESKTOP DEPOSIT CREDIT POSTED
0.4000
x
12
4,800.00
DESKTOP DEPOSIT-NON WFARGO DEP ITEM
0.0500
x
12
1,200.00
REMOTE DEPOSIT CAPTURE
$
6,062.10
RETAIL LOCKBOX
05 00 00
MONTHLY MAINTENANCE
1
175.0000
x
12
2,100.00
05 02 OZ
ITEMS PROCESSED
14393
0.1600
x
12
27,634.56
05 02 02
PARTIAL PAYMENTS
1025
0.2000
x
12
2,460.00
05 02 02
MULTIPLE ITEMS
2644
0.2500
x
12
7,932.00
05 05 30
NON-PROCESSABLE ITEMS
158
0.2500
x
12
474.00
05 02 29
ITEMS TRANSMITTED
15780
0.0025
x
12
473.40
05 02 34
STOP FILE MONTHLY MAINTENANCE
1
0.0000
x
12
-
05 02 3A
CASH HANDLING
2
3.0000
x
12
72.00
05 02 36
PROGRAMMING
1
180.0000
x
12
2,160.00
05 02 39
INCOMING OVERNIGHT MAIL
153
1.2500
x
12
2,295.00
6of9
TMA
Code Description
05 02 3B
SAME DAY DECISION ITEMS
05 02 32
CHECK AND LIST
05 02 03
CHECK ONLY
05 04 01
DATA TRANSMISSION
05 04 24
CORRESPONDENCE-SCAN FOR IMAGE
05 05 30
OCR SCAN LINE REJECTS
05 00 15
IMAGE ARCHIVE MONTHLY MAINTENANCE
05 04 24
IMAGE RETRIEVAL
Tier 1 To 49999
Tier 2 To 99999
Tier 3 To 249999
Tier 4 To 499999
Tier 5 To 999999
Tier 6 To 99999999999
LOCKBOX DVD
RLBX IMAGE STORAGE
RLBX ITEM PROC OVERNIGHT MAIL
RLBX TRANSMISSION ITEM
RLBX CHECK ONLY TX
RLBX MATCHED ITEM TX
RLBX MONTHLY BASE TX
RLBX MULTIPLE ITEM TX
RLBX PKG EXPRESSMAIL DELIVERY
RLBX REJEC ITEM TX
RLBX STOP PROCESSING
RLBX TRANSMISSION BASE
RLBX UNMATCHED ITEM TX
DEPOSITED CHECKS RLBX - ON US
DEPOSITED CHECKS RLBX- LOCAL CLEARING
DEPOSITED CHECKS RLBX - REGIONAL
DEPOSITED CHECKS RLBX - TRANSIT
RTLBX STOP FILE PAYMENT
RETAIL LOCKBOX
RETURNS
Service
Estimated
12 Mo.
Fee per
12
Annual
Avg.
Item
x
Mo. =
Cost
167
0.2500
x
12 =
$
501.00
721
0.1500
x
12 =
$
1,297.80
665
0.1500
x
12 =
$
1,197.00
21
0.0000
x
12 =
$
-
514
0.3500
x
12 =
$
2,158.80
552
0.3000
x
12 =
$
1,987.20
2
250.0000
x
12 =
$
6,000.00
28602
0.0300
x
12 =
$
10,296.72
1
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
0.0000
x
12 =
$
-
1.0000
x
12 =
$
-
$
69,039.48
7of9
Service Estimated
TMA 12 Mo. Fee per 12 Annual
Code Description Avg. Item x Mo. = Cost
10 04 00
DEPOSITED ITEMS-CHARGED BACK
28
2.0000
x
12
672.00
10 04 02
REDEPOSITED ITEMS
44
2.0000
x
12
1,056.00
10 04 01
RETURNS SPECIAL INSTRUCTION-COMPLEX
4
0.0000
x
12
-
10 04 01
RETURNS SPECIAL INSTRUCTIONS-CUSTOM
1
0.0000
x
12
-
99 99 99
RETURNS-DUPLICATE ADVICE OR EOD FAX
1
0.0000
x
12
-
10 04 15
RETURN IMAGE VIEWED-WC PLUS
35
0.0000
x
12
-
RETURNS SPECIAL INSTRUCTION-MONTHLY BASE
10.0000
x
12
120.00
RETURNS SPECIAL INSTRUCTIONS-PER ITEM
0.2500
x
12
180.00
CEO RETN ITEM SUBSCRIPTION PER ACCOUNT
4.0000
x
12
240.00
CEO RETN ITEM SUBSCRIPTION PER ITEM
0.1400
x
12
100.80
RETURNS
$
2,368.80
INFORMATION SERVICES (WACHOVIA CONNECTION)
40 00 20
WCEML RETURN ITEM REPORT
4
0.0000
x
12
-
40 00 20
WCWML RETURN ACCOUNT
2
0.0000
x
12
-
40 00 21
WCEML RETURN ITEM
110
0.0000
x
12
-
CEO RETN ITEM SUBSCRIPTION PER ACCT
0.0000
x
12
-
CEO RETN ITEM SUBSCRIPTION PER ITEM
0.0000
x
12
-
40 00 05
WC PLUS LOADED CURRENT DAY ITEMS
1851
0.0000
x
12
-
40 02 70
WC PLUS PRIOR DAY ACCTS TIER 1
5
0.0000
x
12
-
40 02 75
WC PLUS CURRENT DAY ACCTS TIER 1
5
0.0000
x
12
-
40 02 7Z
WC PLUS PROACTIVE NOTIFICATION
10
0.0000
x
12
-
40 02 71
WCP LOADED PRIOR DAY ITEM TIER3
2355
0.0000
x
12
-
40 02 71
WCP LOADED PRIOR DAY ITEM TIER4
2597
0.0000
x
12
-
151341
WC PLUS CHECK COPY
1
0.0000
x
12
-
15 04 00
WC PLUS CHECK STATUS INQUIRY
3
0.0000
x
12
-
15 04 10
WC PLUS STOP PAYMENT
1
0.0000
x
12
-
ONLINE BANK STATEMENTS
5
x
12
-
CEO INTRADAY SUBSCRIPTION PER ITEM
0.0500
x
12
1,110.60
CEO INTRADAY SUBSCRIPTION PER ACCOUNT
10.0000
x
12
600.00
CEO PREV DAY SUBSCRIPTION PER ACCOUNT
10.0000
x
12
600.00
CEO PREV DAY SUBSCRIPTION PER ITEM
0.1400
x
12
8,319.36
STOP PAYMENT - ONLINE
6.0000
x
12
144.00
STOP PAYMENT - AUTO RENEWAL
1.0000
x
12
-
INFORMATION SERVICES
$
10,773.96
8of9
Service Estimated
TMA 12 Mo. Fee per 12 Annual
Code Description Avg. Item x Mo. = Cost
SECURITIES/SAFEKEEPING SERVICES
ACCOUNT MAINTENANCE
SECURITY HOLDINGS PER CUSIP
MORTGAGE BACKED SECURITIES (FNMA, GNMA, CMOs/REMICs)
MUNICIPAL/CORPORATE SECURITIES
OTHER: T-BILLS, T-NOTES, T-BONDS, AGENCIES, COMMERCIAL PAPER
(CP), EXCEPT WELLS FARGO CP
MATURITIES/PURCHASES
COUPON (INTEREST) PAYMENTS
SECURITY PLEDGES (INITIATING, SUBSTITUTING, RELEASING)
SECURITIES/SAFEKEEPING SERVICES
TOTAL GROSS FEES
ADJUSTMENTS
Waived First Month Bank Charges
TOTAL NET FEES
1
10.0000
x
12
120.00
26
0.0000
x
12
= $
-
8.0000
x
12
= $
1,920.00
2.0000
x
12
= $
-
1.0000
x
12
= $
72.00
8
7.0000
x
12
672.00
6
7.0000
x
12
504.00
1
20.0000
x
12
240.00
$
3,528.00
$ 146,671.14
$ (12,222.60)
$ 134,448.54
9of9
Wells Fargo Treasury
Management Proposal
City of Denton
Pricing as of September 2010
Monthly Activity
Service Descriation Charae Basis Price Volume Charaes
ACH
ACH MONTHLY BASE
Company ID
35.00000
9
315.00
ACH CEO RETURN SUBSCRIPTION - ITEM
Item accessed
0.25000
26
6.50
ACH ONE DAY ITEM
Transaction
0.04000
2,893
115.72
ACH TWO DAY ITEM
Transaction
0.04000
2,261
90.44
ACH SAME DAY
Transaction
1.50000
1
1.50
ACH ORIGINATED - ADDENDA REC
Transaction
0.03500
120
4.20
ACH RET ITEM-INFO REPORTING ADVICE
Transaction
1.00000
25
25.00
ACH RETURN ITEM-REDEPOSITED
Transaction
1.00000
1
1.00
ACH TRANSMISSION CHARGE
Batch/file
12.00000
25
300.00
ACH REVERSAL - ITEM
Reversal
15.00000
1
15.00
INTERNET ACH BASE FEE
Company ID
12.00000
9
108.00
INTERNET ACH BATCH RELEASE
Batch/file
5.00000
9
45.00
INTERNET ACH ONE DAY ITEM
Transaction
0.04000
3,616
144.64
INTERNET ACH SAME DAY ITEM
Transaction
0.04000
1
0.04
INTERNET ACH TWO DAY ITEM
Transaction
0.04000
2,826
113.04
ACH CUSTOMER REPORTS
Business day
5.00000
1
5.00
ACH DELETE/REVERSE - BATCH/FILE
Batch/file
10.00000
1
10.00
ACH CEO SUBSCRIPTION - ITEM
Item accessed
0.25000
1,401
350.25
ACH CEO RETURN SUBSCRIPTION-ACCOUNT
ACH company ID
20.00000
9
180.00
ACH CEO SUBSCRIPTION -ACCOUNT
AccounUach company ID
20.00000
2
40.00
ACH Fraud Filter
ACH CEO FRAUD FILTER REVIEW MO BASE
Account
15.00000
1
15.00
ACH CEO FRAUD FILTER REVIEW - ITEM
Transaction filtered
5.00000
1
5.00
Account Reconcilement
ARP REGISTER INPUT CEO - ITEM
Check issued
0.05000
641
32.05
ARP CHECKS PAID - FULL RECON
Check paid
0.09000
2,466
221.94
ARP FULL RECON-ITEM
Check issued
0.02028
2,466
50.01
ARP MONTHLY BASE - FULL
Account
10.00000
1
10.00
ARP OPTIONAL REPORTS
Report
12.50000
6
75.00
ARP OUTPUT - TRANSMISSION
Transmission
15.00000
1
15.00
ARP PAPER STATEMENT DELIVERY
Statement
15.00000
1
15.00
DEPOSIT LOCATION REPORTING - ITEM
Deposit
0.07000
828
57.96
Cash Branch/Store Channel
CHANGE ORDER CHARGE-BRANCH/STORE
order
5.00000
5
25.00
ROLLED COIN ORDERED - BRANCH/STORE
Coin roll
0.15000
7
1.05
CURRENCY ORDERED/$1 - BRANCH/STORE
Dollar
0.00160
3
0.00
CASH DEP/$1 VERIFY IN CASH VAULT T4
Dollar
0.00160
500,000
800.00
PAYEE VALID NON ACCT HLDER-CHK CASH
Checks cashed
0.00000
25
0.00
Customer Proposal Report
Monthly
Activity
Service Descrintion
Charae Basis
Price
Volume
Charaes
Cash Vault
CASH VAULT MIXED DEPOSIT SURCHARGE
Deposit
0.00000
1
0.00
CASH VAULT ADJ ADVICE - EMAIL
Adjustment
0.00000
0
0.00
CASH VAULT ADJ ADVICE - FAX
Adjustment
0.00000
0
0.00
CASH VAULT ADJ ADVICE - US MAIL
Adjustment
0.00000
0
0.00
CASH VAULT CASH DEP NIGHT DROP /$1
Dollar
0.00160
1
0.00
CASH VAULT CASH ORDERS-CEO
cash order
4.00000
7
28.00
CASH VAULT COIN DEP-STD HALF BAG
Coin bag
3.00000
1
3.00
CASH VAULT COIN DEPOSIT-STD BAG
Coin bag
3.50000
1
3.50
CASH VAULT COIN FURN-STD HALF BOX
Coin box
3.00000
1
3.00
CASH VAULT COIN FURNISHED - ROLLED
Coin roll
0.12000
1
0.12
CASH VAULT COIN FURNISHED-STD BOX
Coin box
4.00000
1
4.00
CASH VAULT CURRENCY FURN/$1-IND
Dollar
0.00120
1
0.00
CASH VAULT CURRENCY FURNISHED
Dollar
0.00120
29
0.03
CASH VAULT CURRENCY/COIN DEPOSITED
Dollar
0.00120
1
0.00
CASH VAULT DEPOSIT ADJUSTMENT
Adjustment
8.00000
4
32.00
CASH VAULT MONTHLY BASE
Location
Maximum
29
300.00
Controlled Disbursement
MICR REJECTS=1 % THRU 2%
Reject
0.80000
61
48.80
Desktop DeposiUElectronic Check
SMART DECISION ACH TRANSIT
Check deposited
0.11000
0
0.00
SMART DECISION EFATM ACH TRANSIT
Check deposited
0.11000
0
0.00
SMART DECISION LOCKBOX ACH TRANS Check deposited
Incremental
1 st 10000
0.07000
10001 to 35000
0.06000
Remaining
0.05000
SMART DECISION VAULT ACH TRANSIT
Check deposited
0.10000
0
0.00
SMART DECISN EXP NTWK VLT ACH TRP Check deposited
0.10000
0
0.00
SMART DECISION ELEC CHECK ACH ONl Check deposited
Aggregate
Up to 25000
0.07000
Up to 100000
0.05000
100001 +
0.04000
SMART DECISION ELEC CHK ACH TRANE Check deposited
Aggregate
Up to 25000
0.10000
Up to 100000
0.09000
100001 +
0.07000
DESKTOP DEPOSIT IMAGES RETRIEVED
Image
0.50000
15
7.50
DESKTOP DEPOSIT CREDIT POSTED
Credit
1.00000
22
22.00
DESKTOP DEPOSIT-WFARGO DEPOSIT ITEM
Check deposited
0.07500
286
21.45
DESKTOP DEPOSIT-NON WFARGO DEP ITEM
Check deposited
0.11000
1,620
178.20
Domestic UnEncoded Cash Letter
DEPOSITED CHECKS - ON US
Check deposited
0.05000
1,302
65.10
DEPOSITED CHECKS - LOCAL CLEARING
Check deposited
0.06000
2,864
171.84
DEPOSITED CHECKS - REGIONAL
Check deposited
0.07000
5,338
373.66
DEPOSITED CHECKS - TRANSIT
Check deposited
0.08000
3,516
281.28
DEPOSITED CHECKS CASH VAULT - ON US
Check deposited
0.06000
1,330
79.80
DEPOSITED CHECKS CASH VLT-LOCAL CLR
Check deposited
0.07000
3,592
251.44
DEPOSITED CHECKS CASH VAULT-REGION
Check deposited
0.08000
5,322
425.76
DEPOSITED CHECKS CASH VAULT-TRANSIT
Check deposited
0.09000
3,060
275.40
EDI Reporting
CEO TREAS INFO RPT BILL PAY ITEM
Item
0.35000
1
0.35
CEO TREAS INFO RPT BILL PAY MO BASE
Account
25.00000
1
25.00
CEO TREASURY INFO REPTING-EDI ITEM
Item accessed
0.35000
1
0.35
ELECTRONIC COMMERCE FAX REPORT-BASE
Account
100.00000
1
100.00
Customer Proposal Report
Service Descrintion Charae Basis
General Account Services
OVERDRAFT CHARGE-PAID ITEM
Item
ACCOUNT MAINTENANCE-CHEXSTOR
Account
ZERO BALANCE MONTHLY BASE
Account
DEBITS POSTED
Debit
CREDITS POSTED
Credit
ELECTRONIC CREDITS POSTED
Credit
ACH RECEIVED ITEM
Transaction
IMAGE PC REQUEST-MAIL DELIVERY
Photocopy
ONLINE IMAGE REQUEST - FAX DELIVERY
Photocopy
CEO CYCLED STMT SUBSRIPT RPT-MOBASE
Account
CEO E-STMT SUBSCRIPTION - ITEM
Item loaded
General Disbursement Services
STOP PAYMENT -AUTO RENEWAL
Stop payment
STOP PAYMENT - ONLINE
Stop payment
CHECKS RETURNED W/STATEMENT-ITEM
Check paid
Image Delivery
WELLSIMAGE PAID CHECK PER ITEM
Image
IFI PAID CHECKS - IMAGE
Image
ONLINE IMAGE VIEW < 90 DAYS - ITEM
Image retrieved
ONLINE IMAGE VIEW = 90 DAYS - ITEM
Image retrieved
WELLSIMAGE PAID CHECK MONTHLY BASE
CD ROM
WELLSIMAGE PAID CHECK DELUXE-ITEM
Image
WELLSIMAGE PAID CHECK PER CD
CD ROM
Information Reporting
CEO EVENT MESSAGING SERVICE - EMAIL
Item reported
CEO INTRADAY SUBSCRIPTION - ITEM
Item accessed
CEO INTRADAY SUBSCRIPTION MTHLYBASE
Account
CEO PREV DAY SUBSCRIPTION DETL ITEM
Item loaded
CEO PREV DAY SUBSCRIPTION MTHLYBASE
Account
CEO SEARCH
Inquiry
Perfect Receivables
ACH PERFECT NOC PER ITEM
Transaction
Positive Pay
PAYEE VALIDATION STANDARD-ITEM
Check
POSITIVE PAY EXCEPTION - CEO IMAGE
Image retrieved
POSITIVE PAY EXCEPTION CHECKS RETND
Check returned
POSITIVE PAY EXCEPTIONS - ITEM
Exception
POSITIVE PAY MONTHLY BASE
Account
Prepaid Card
PAYCARD ACTIVE CARD MONTHLY BASE Account
Receivables Manager
E-BOX PAYMENT
Item
E-BOX DAILY REPRT FAX/EMAIL MO BASE
Page
E-BOX PAYMENT RETURN
Return
E-BOX PAYMENT REVERSED
Transaction
E-BOX REPORTING PACKAGE MTHLY BASE
Account
E-BOX REVERSAL REJECT
Transaction
E-BOX REVERSAL REPORTING MTHLY BASE
Account
E-BOX STOP/REVERSE STOP FILE
Batch/file
EC BILLPAY ON US ITEMS
RECEIVABLES MANAGER MONTHLY BASE
Account
Monthly Activity
Price Volume Charaes
35.00000
1
35.00
10.00000
5
50.00
0.00000
1
0.00
0.04000
492
19.68
0.40000
1,958
783.20
0.30000
1,155
346.50
0.10000
1,120
112.00
4.50000
1
4.50
3.50000
1
3.50
10.00000
5
50.00
0.10000
5,959
595.90
3.00000
1
3.00
8.00000
1
8.00
0.11000
1
0.11
0.06000
2,466
147.96
0.05000
2,466
123.30
2.50000
45
112.50
10.00000
1
10.00
0.00000
1
0.00
0.02000
2,466
49.32
15.00000
1
15.00
0.00000
42
0.00
0.05000
5,959
297.95
10.00000
5
50.00
0.05000
5,959
297.95
10.00000
5
50.00
0.95000
15
14.25
0.02000
6,443
128.86
0.02000
2,466
49.32
2.00000
25
50.00
15.00000
1
15.00
3.00000
25
75.00
0.00000
1
0.00
1.50000
0
0.00
0.10000
6,357
635.70
0.55000
137
75.35
0.25000
1
0.25
0.25000
1
0.25
75.00000
1
75.00
0.25000
1
0.25
5.00000
1
5.00
75.00000
1
75.00
0.08500
1
0.09
75.00000
1
75.00
Customer Proposal Report
Monthly
Activity
Service Descrintion
Charae Basis
Price
Volume
Charaes
Retail Lockbox
RLBX IMAGE STORAGE
Image produced
0.03000
36,262
1,087.86
RLBX ITEM PROC OVERNIGHT MAIL
Remittance
6.00000
153
918.00
RLBX TRANSMISSION ITEM
Remittance
0.01000
18,210
182.10
RLBX CASH TRANSACTION
Remittance
8.00000
2
16.00
RLBX CHECK ONLY TX
Remittance
0.40500
158
63.99
RLBX MATCHED ITEM TX
Remittance
0.12000
14,383
1,725.96
RLBX MONTHLY BASE TX
Lockbox
175.00000
1
175.00
RLBX MULTIPLE ITEM TX
Remittance
0.36000
2,644
951.84
RLBX PKG EXPRESSMAIL DELIVERY
$ pass through
1.05000
420
441.00
RLBX REJEC ITEM TX
Reject
0.26500
364
96.46
RLBX STOP PROCESSING
stop payment
0.70000
1
0.70
RLBX TRANSMISSION BASE
Lockbox
20.00000
1
20.00
RLBX UNMATCHED ITEM TX
Remittance
0.20000
1,025
205.00
RTLBX ACCOUNT LOOKUP
Remittance
0.52000
1
0.52
RTLBX DATA ENTRY
Keystroke
0.01350
1
0.01
DEPOSITED CHECKS RLBX - ON US
Check deposited
0.05000
2,731
136.55
DEPOSITED CHECKS RLBX-LOCAL CLEARNG
Check deposited
0.06000
2,732
163.92
DEPOSITED CHECKS RLBX - REGIONAL
Check deposited
0.07000
7,284
509.88
DEPOSITED CHECKS RLBX - TRANSIT
Check deposited
0.08000
5,463
437.04
Returned Items
CEO RETURN ITEM RETRIEVAL-IMAGE
Item
1.00000
110
110.00
RETURNITEM - CHARGEBACK
Item
2.00000
929
1,858.00
RETURN ITEM SPECIAL INSTRUCTIONS
Item
0.18000
929
167.22
RETURN ITEM SPECIAL INST MTHLY BASE
Account
10.00000
1
10.00
RETURN ITEM WITH MAKER NAME
Item
0.25000
929
232.25
RETURN ITEM REDEPOSITED
Item
1.50000
464
696.00
CEO RETN ITEM SUBSCRIPTION PER ACCT
Account
40.00000
1
40.00
CEO RETN ITEM SUBSCRIPTION PER ITEM
Item accessed
1.00000
929
929.00
Wholesale Lockbox
LOCKBOX CEO SUBSCRIPTION MTHLY BASE
Account
120.00000
1
120.00
LOCKBOX CEO SUBSCRIPTION PER ITEM
Item accessed
0.25000
1
0.25
Wires
WIRE DETAIL RPT SUBSCRIPTION-ACCT
Account
10.00000
1
10.00
WIRE DETAIL RPT SUBSCRIPTION-ITEM
Item accessed
1.00000
63
63.00
WIRE MONTHLY BASE
Account
5.00000
1
5.00
WIRE IN DOMESTIC
Transfer
5.00000
12
60.00
WIRE OUT DOMESTIC-VOICE NONREPETIVE
Transfer
5.00000
1
5.00
WIRE - BOOK TRANSFER - CEO
Transfer
3.00000
3
9.00
WIRE-OUTGOING DOMESTIC-CEO
Transfer
5.00000
47
235.00
WIRE IN REPAIR SURCHARGE
Exception
6.00000
1
6.00
Total Monthly Activity Charges 22,022.17
Setup Charges
PAYCARD INSTANT ISSUE CARD STOCK Occurrence
1.50000
0
0.00
PAYCARD PLASTIC CARD ISSUANCE
Card
2.50000
0
0.00
PAYCARD SET UP
Account
500.00000
0
0.00
RTLBX PO BOX RENTAL
$ pass through
1.00000
1,020
1,020.00
RTLBX PROGRAMMING FEE
Setup
180.00000
0
0.00
Total Setup Charges
1,020.00
The above pricing estimate is based on certain assumptions drawn from projected volume, scope of services and/or other information
you have provided. The pricing is subject to change if the actual volume and/or scope of services differ from the assumptions upon
which the pricing estimate was based.
Customer Proposal Report
Investor Resources Fee Schedule
Wells Fargo Securities custoiiiers have the option of selecting Wells Fargo Bank, N.A., for safel:eeping senices.
The follo~~ing standard fee schedule applies to safel.eeping senices proNided bN- Wells Fargo Banl..
Bank safekeeping
MonthlyAccount Maintenance.... .$10.00
Monthly Security Holdings per CUSIP
Asset Bacl:ed Securities
(CARS/CARDS etc.) $8.00
Moi-tgage-Bacl:ed Secuiities (FNMA,
GNMA, CMOs/REMICs) $8.00
Municipal / Corporate Securities $2.00
All Other Secuiities
(T-Bills, T-Notes, T-Bonds, Agencies,
Coiiiiiiercial Paper (CP), except Wells Fargo
CP) .$i.oo
Security Transfers
Incoiiiing/Outgoing $7.00
Be-hveen Accounts $7.00
Security Pledges
(Initiating, Substituting, & Releasing) ..$20.00
Discotmts and payment options
All neiv accoturts benefit from waived fees for the
fiist tivo months. Other discotuiting or exception
pricing mati- applti-.
Fees are generallN- charged on a monthlN- basis
and N-ou maN° select one of the follo~~ing pa_y-ment
options:
ACH
Brokerage Account Debit
Wells Fargo Banl. Account AnalN-sis Charge
For more information
For more information, contact N-our Wells Fargo
Secuiities investment representative.
*Fees cn-e chcn-yed on u~~~- receipt busis.
Brokerage Seruices
Securities Registration* $50.00
Third Party Trade Clearing-
Incoming/Otitgoing $35.00
PhN-sical Sectwities Clearance $ioo.oo
Miscelleanous Services
Fees maN- be charged for anN- unusual or out of
pocl:et expenses
Inuestor Resources
Investment On-Line Reporting No charge
Portfolio Strategies
<$ioo,ooo,ooo in assets per quarter...... $500.00
>$ioo,ooo,ooo in assets per quarter...... $600.00
"The Tlzird Pcrty Trude Clecn-iny upplies only to
t1'CI72SQC't1012S lU}2C'1'C' SC'C'10'1t1C'S CII'C'
ptn-chnsecl/solcl to/frorn n thircl pnrty nncl
delitiered to/ftorn Wells Fcryo.
Wells Fnrgo reserties the right to chnnge the fees
on this schedule ut cnzy tirne upon thii-ty (30)
clnys turitten notice to ctistorners. A stnternent of
fees chnrgecl tuill be inclticlecl in ctistorners'
b1'OkC'1'CIyC' QC'C'0102t StQtC'712C'12t.
Wells Fargo Securities is the trade name for certain capital markets and investment banking services of Wells Fargo & Company
and its subsidiaries, including Wells Fargo Securities, LLC, a member of NYSE, FINRA and SIPC, Wells Fargo Institutional
Securities, LLC, a member of FINRA and SIPC, and Wells Fargo Bank, National Association. Wells Fargo Securities, LLC carries
and provides clearing services for Wells Fargo Institutional Securities, LLC customer accounts.
Investments: NOT FDIC Insured • May Lose Value • No Bank Guarantee
O 2010 Wells Fargo Securities. All rights reserved.
Treasury Management
Commercial Electronic Office°
Statements & Notices service
Providing comprehensive account information online so you can make business decisions more quickly
Streamline processes by accessing your statements and notices through the Conznzer-cial Electr-onic Office"''
(CEO`R) Internet portal. With paperless delivery of your statements, together we can help conserve natural
resources and reduce carbon emissions from transportation, while also saving administrative costs of paper
handling and storage.
In order to simplify and streamline your processes, you can submit one request to download multiple
statements and notices for your commercial checking and savings accounts, and stop payments and
deposit adjustment notices. You can also request statements individually. A message is delivered to your
designated e-mail address when your files are ready.
The Statements & Notices service
includes online access to:
Commercial checking, savings, and multicurrency account
statements. Receive your statements up to five days faster
than regular mai1. Statements are available online tiae
business day after tiae statement cycle's close date.
Stop-payment and stop-renewal notices. View these notices
when transactions post to your account or 30 days before stop
payments are available for renewal.
Deposit adjustment notices. Access your deposit adjustment
notices online when tiae adjustment transactions post to your
account. When a check image for an adjustment is available,
we'11 provide a copy online. If you use deposit-location
reportirzg, you carz further berzefit by viewirzg rzotices for
specific business locations defined under tiae same account.
Client Analysis Statement. View detailed product subtotals,
as we11 as volume and pricing for services you have used. This
interactive statement-available online within two business
days after tiae statement cycle's cutoff date-enables you to
TT10T11tOr £1- CCOUT1t SUTTITTI£1- ry 1T110rTT1£1-t10T1 lOr tiae CUrr2T1t TT10T1ti1
aT1C1 COTT11JaT'2 lt Wltil tiae 1JT'2V10US 12 TT10T1ti1S t0 S1JOt tT'2T1CIS 1T1
Cl12Ck1Tlg aCCOUTlt aCtlVlty.
Event Messaging. Use our Event Messaging service to
receive alerts by e-mai1, text message, or fax wherz your
statements, notices, and disclosures are available online.
Statements & Notices specifications
Types of accounts supported:
• Commercial checking
• Savings
• Multicurrency
Access to past statements and notices online:
• Commercial checking and savings account statements:
CUrr2T1t TT10T1ti1 IJI.US 12 TT10T1ti1S IJT70r
• Multicurrency account statements: 6 cycles"
• Stop-payment and stop-renewal notices: 30 days
• Deposit adjustment notices: 180 days
• C112T1t ATl£1-IyS1S St£1-t2TT12T1tS: CUYY2Tlt TT10T1ti11J1US 12
TT10T1ti1S 1JYlOY
Preferences. Set defaults for tiae information to be displayed
on your Statements & Notices home page, Stop Payment and
Renewal Notices page, Deposit Adjustment Notices, and
Commercial Checkirzg/Savirzgs/MulticurrerzcyAccourzt
Statements page.
`Mul`i,~urren, y ~-u°,°nun s -r~emFn`s ~-ire ~-rv-iil~-il,le fnr rnnnhly ~`y~'les nnly.
rontinued on reverse side
wellsfargo.com/com
~nln Wells Pirqn B-inlr, N.A. All riqh`s reser:e~;. Mernl,er FDI('.
Statements & Notices service (continued)
File format options
Commercial checking account statements
Savings account statements
Multicurrency account statements
Client analysis statements
Notices
Ele,rnni ,a`-t in`en,h-tnqe fnrrzz-t' is 1)1sPc. nn `he ANSI `M111;1r
PDF
✓
✓
`inn se` s HTML I Excel I CSV
✓
✓
✓
✓
✓
✓
Sample Client Analysis and Commercial Checking Account statements
Commercial Chockir~~ ~ccaunt
ClieVttA€t~lySj5' StateIrieGYt latA1T1E51@fCial El@CtroniuCOffiGe@ arr,•i~~1r,.irrrr t~t9~f r. .Iric"?i :fl's= . Ni<iGy,+
f-11
¢ 32a-.'o v~i ~ f. .Y1h~ i~,l 4§ v h ~~a..v Q418'S1NpIAi`P
..r. s .
. . . .,°r.~.~...,. ,:8A9~.TP1E:L5 f (4}
CIP-CV~[fi.~9~Iy8I~ SL3wkr~~Ct11! ~'luxrmqry
" 4~G411,
4=1t1.'~
~
u,.. . a.
Seu~aoma:ry fq,r 9FCEfilf AC7"J' ~f147 EST 541de1f:qJVR`V A
!&eeauht summary
L'J€l15 FAA~.t?Sxf4f4, H.A.
!~fPi€mr: P-.+~"nTT, GIA9V~.
s~o B~;x 63020
an.n~ ida~~;bop, 925-412-469
corFamertA~d C~pr ckdrag Accourat
Sial'd FR&fICeSC6~. C# 95~163.
_ .
.,~-~ee, ...axier^ ad~ nn~rs~.euwsn:e T9GS~ r:~~rr~ ~::~i~°deh°r:s
.
srJnq
BI{ETBRpV~IIfT~'E$4§I;f~F.1Px~PSRY'@
$2
5?.rIE7 .',•rmR.][ 53~'1E:2.'4~JC~
5~~e]
r'E sr $~rnTE~.~e~~r . Da r,t~x ~.~nIL
TEST STak4Ef,tEPai . C+O tIS7T N.3Af.~;L
6ULU7N, M.9~YI55€92-.A9+16
C'e~1i06..
rioce~.r~n.ic ae~r. s.ie.u~h~.nk cn~sert.u
~ . , ..r. R
`4r~::.;a ?~xs:ec
bW"t
~ . . .
. . . , :..,I~.
.~1de:." I:,,, l', P,`:fl1fF"~f~l'P.i~rf'$•I' ~IIIE./~..:,!-r"A '~f:bfY`
Ir..;Pr°~.1
, e... , . ,
.
, .
.
~I.n:'~ 1:.~J13r ~~1~P~ ~IL~i1~P11$ ~.tFfIY'~°'..:.itfYS~t" {~'4~,:D .~'II,~U
. . .
sn~e1SS1J~m:.i't+
S4S~.~A2.7~k.~ T~tei riccarr~~iit. 8.~~[~it~.l7ara4. etr~~15~
aiiaiysis au~nimary p, 4~.
a~s,,8a.aaa.ca rv=ni a~aGh~
T~Jg~eYlai`r~i CrfY~ruing c' h,5l,nri.,~al ~aFa c~t8 p nF,r isic~r: F,o
+eS 9tEi7 rk~C"4tf~irQn Trer7[9isl~
~fa3hffi
GM eks pa:irl
e~ A
;t
^
.
. F ~~r 5 psa'!Y D fA^ .J"•
hY
~.n~ . ftit• ..t
~ . !2
'
~
. .
1... w... E~. 714i.R.. .,.~Gv4 oa~r...
. .
w~..)~.~.LC..~
.,~~~~Sd.. ,-Ta;:o .yd...",:.'....4;',~..
= r~„ .,m.. ~,.V~
7ill•,.,. . 'fi2C.~ - 31L'l~:4" ry$G~C ~:d.tik `i Jvl:••
3_.L''R'.I 21
p• -..r ' ~ , _ ' . n . , s '
.r 7~ ,
$"a 4'8g,791.n~ F.^.qa~ehrtr,ASRni~l
e~~*
5
- et.
.a~ _ H
_ . . ~,,.a . . .,.a. y=s.
. [..:1
C~annerterl rke€N invurn,.~,trun
~.:h.e_=~. 'C'ia~?tr_lex~iU~rtaes
..✓...c. .._'.i,~'
_ ~ .
Itif3 N7 ~,CF
t31"„',^;~ 4`eyo-CyJ t ~a'"G'S:sf'€ft11f 13i~-` ?d~:y~'
Tme.~l.~nn~un'. Gtie.;
5 G.v~] r~
$3~,1~2'~."91.fi6 TatalceEaft5
ft' iN'~B t- ;'9,W'
34
I~a6ly l~gef 4YaIiYIC@ RUIRYR}aI'~j
r'Hn 'u?i
7.01?
For nior~e i~2forniatio~2 0~2 the Statenie~2ts & Notices service, co~2tactyot~r~ Wells Far-go tr~east~rv nia~2agenie~2t represe~2tative
or visit www.wellsfargo.com/com.
wellsfargo.com/com
Wells Faugo B~inl<, N.A. All ri~~lis reser.,e~~. Mer_i},er FDIC.
EDI 822 3010' 1 EDI 822 4010'
✓ I ✓
Cash vault deposit
Availability schedule
All cash vault electronic deposits made to a Commercial or National Bank account received before the
published cutoff time receive collected funds in accordance with the following schedule:
Collected funds
Wells Fargo Bank checks °Same;day
U.S. government checks ! One day
All other checks Two days
Collected funds are stated in business days. Collected funds on checks drawn on banks in Federal Reserve
areas closed in observance of a holiday are delayed one additional day.
This schedule is subject to change without notice.
wellsfargo.com/com
'nr~ Wells R-irqn B-inlr, N.A. All riqh`s resFrvF~;. Meml,er FDI('.
T'ogether epll go far
~
Desktop Deposit° service via the
Commercial Electronic Office° portal
Availability schedule
All Wells Fargo electronic deposits made to a Commercial or National Bank account received before the
published cutoff time of g p.m. (central time) receive collected funds in accordance with the following schedule:
Collected funds
Wells Fargo Bank checks
°Same;day
U.S. government checks
! One day
Select financial institutionsl
One day
All other checks
Two days
Collected funds are stated in business days. Collected funds on checks drawn on banks in Federal Reserve
areas closed in observance of a holiday are delayed one additional day.
This schedule is subject to change without notice.
' Please refer to the published Select Financial Institutions List for more details.
wellsfargo com/com
~nr,q We]]s F-trqn B-tnlr, N.A. All riqh`s resPrvP~. MerzzLer FDI('.
TM-i~n5e i~ jn~~
T'ogether wepll go far
~
Lockbox deposits received before the published ledger
deadlines receive collected funds in accordance with the
following schedule:
• We11s Fargo Bank items receive immediate availability.
• U.S. government and non-We11s Fargo Bank items
receive availability per published deadlines.
• Please see the attached availability schedule
for more details.
Coar:m].ete ].ist of z•outi.nq nuar:dbez•s zzaic~ fuaids zzvzzi.].abi.].i.tv
bv deposi.t dezzd].i.ne (E:x.cel fi].e 4t E0)
Ledger deadline (local time)
Monday-Friday: aaoo
wellsfargo.com/com
nln Wells Ftrqn B-tnlr, N.A. All riqh`s reser~. P~}. MerzzLer FDI('.
TTM-'_~_11T X
Fractional availability
Fractional availability is applied to not-on-us items to
account for anticipated delays in collection. Further
information about specific percentages applied may be
obtained from your relationship manager.
Collected funds are stated in business days.
Courier deposit delivery location
Texas Operations Center
2975 Regent B1vd.
Irvirzg, TX 75063
Questions?
Please contact your relationship manager.
Together egll go far
Treasury Management
PayCard
As an alternative to payroll checks, Wells Fargo's PayCard gives you the ability to pay all of your employees
electronically, including those without bank accounts. With PayCard, your employees have immediate and
convenient access to their pay via Wells Fargo or Visa`' ATMs and can make purchases everywhere Visa
cards are accepted. PayCard helps you reduce costs and increase employee convenience and satisfaction.
Reducing paper-based payment processes also saves trees, which is good for the environment.
How you benefzt:
• Lowers the cost of issuing company payroll
• Integrates seamlessly with standard direct
deposit process
• Minimizes fraud associated with paper checks
• Enables easier out-of-cycle payments
• May eliminate the need for a first paper paycheck
• He1ps your business reduce waste and conserve
rzatural resources
• Provides a new employee benefit
• Minimizes chance of theft; cash can be obtained
asneeded
• He1ps remote or mobile employees access pay
immediately
How it works:
Assign the employee a PayCard account. Depending on
yOUY 1J£1-yYOI.I. T122CIS, W2I.I.S F£1-Yg0'S P£1-yC£1-YCI1JYOgY£1-TTl g1V2S
you several options for card distribution. Permanent cards
can be issued to your employees within seven business
days, or instant issue cards can be given out immediately
uporz program sigrz-up.
How your employees benefzt:
Flexible access to pay-ATM withdrawals, POS, and the
ability to make purchases everywhere Visa cards are
accepted.
• Eliminates the need to wait in teller lines
• Offers access to cash 24 hours a day, 7 days
a week
• Provides a monthly account statement
• Enables immediate availability of payroll in the early
TT10YT11Tlg Ol 1J£1-yCl£1-y
Transmit your payroll file electronically to
Wells Fargo. Each payroll period, you'11 furzd PayCard
eznployee accounts electronically as part of your regular
direct deposit transmission.
Employees use PayCard to withdraw part or all of
their payroll. With PayCard, employees can access
their pay at We11s Fargo and Visa ATMs worldwide.
Additionally, they can make purchases everywhere
Visa cards are accepted.
Add and maintain employee files. We11s Fargo provides
access to a user-friendly Web-based tool for easy
maintenance of your employee PayCard information.
For niore b2forniatio72 072 PayCard, co72tact your Wells Far-go treasurv nim2agenie72t represe72tative or visit
www.wellsfargo.com/com.
wellsfargo.com/com
~nln Wells Pirqn B-inlr, N.A. All riqh`s reser:e~;. Mernl,er FDI('.
TM-138~_ - nt;i in
Treasury Management
Controlled disbursement
Controlled Disbursement solutions
Helping you get the information you need to manage your daily cash positioning and minimize your
reconcilement with accurate funding totals and accurate posting
Wells Fargo Controlled Disbursement solutions assist you in managing your check disbursements end to
end. We offer best-in-class products built on advanced technology for cash management, fraud protection,
and electronic reconciliation. Receive your check clearing totals early each business day for an accurate
cash picture that allows you to invest daily funds effectively. We'll help protect your account from fraud
by identifying checks that don't match your issue file. Plus, you'll save time and improve accuracy with
electronic reconciliation of your commercial checking account.
Our Controlled Disbursement
solutions can include:
Premier positive pay. Our Perfect Preseratmerat'` service-
the premium positive pay service offered at our Van
Wert, Ohio, Controlled Disbursement location-compares
checks to your issued check fi1e and to our stop payment
database prior to posting to your account. We identify and
correct encoding errors and report only true ez;ceptions to
you. Account reconciliation is simple because your ARP
statements contain no adjtzstments for incorrectly
encodedchecks.
Treasury Information Reporting. View, print, and down-
load reports including the Controlled Disbursement Detail
report, ARP statements and reports, Intraday and Previous
Day Composite reports, and the Controlled Disbursement
Summary report that provides your furzdirzg totals.
Check storage. We store and securely destroy checks for
you with our CheXstor'` service.
Image services. Your staff has check images at their
fingertips for fast research and proof of payment. Our
image services include:
Superior fraud protection. Payee Validation is an optional
feature that adds the security of knowing the payee
information on your check issue fi1e matches the payee
name on the check. When tzsed in conjtznction with otzr
Perfect Preseratmerat service, Payee Validation offers best-in
class fraud protection with your account.
Accurate funding. With our funding and reporting process,
you are required to fund only the transactions reported
on your daily Controlled Disbursement Summary report.
Know that your funding totals are accurate, and put your
cash to work early.
Integrated electronic delivery. A11 the services and
information yotz need to monitor and manage yotzr check
disbursement activity are delivered electronically through
otzr Commercial Electro».ic Office'": (CEO'") Internet portal.
Through the Event Messaging service, receive summary
presentment totals by e-mai1, tez;t message, or faz;
notification. Access the CEO portal anytime, anywhere-
with a single sign-on.
Intracycle images online. Our Stops-Image-Search and
Treasury Information Reporting services provide you
with online access to view images anytime. Images are
available through the CEO portal the nez;t business day
after they post to your account and are archived online
for seven years.
Daily image transmissions with Image File Import.
Receive a daily transmission of paid check images and
associated index. Choose from an archive-ready XML-
formatted fi1e with zipped images that can easily be
integrated into your image archive, or a PDF format
designed to facilitate searching, browsing, and printing
of your images. Our Wirzdows-based Wellslniage'` Viewer
software can be used to archive, store, and retrieve
images delivered by Image Fi1e Iznport.
continued on reverse side
wellsfargo.com/com
~nln Wells Pirqn B-inlr, N.A. All riqh`s reser:e~;. Mernl,er FDI('.
TM-~ias - n8,i in
Controlled Disbursement solutions (contimzed)
Statement cycle images on CD-ROM. Receive your
check images on CD-ROM delivered at weekly, monthly,
or semimorzthly cycles with our Wellsb7iage CD
service. Search the images quickly by date, serial
rzurnber, or arzother irzformatiorz field with our
Wellslmage Viewer software.
Choice of endpoints. The Van Wert, Ohio, endpoint is our
1JY2TT112Y 1JYOCIUCt 0112Y1T1g. It C1211V2YS £1- 11T1£1- 1 SUTTITTI£1- Yy Ol
the day's disbursement totals to you by lo:oo a.m. ET
(7:00 a.m. PT, 8:0o a.m. MT, or g:oo a.m. CT) through the
CEO portal. If you need to consider other alternatives, we
offer additional Controlled Disbursement endpoint options.
How Controlled Disbursement solutions work:
For more i».formation o». Co».trolled Disburseme».t solutio»s, co».tact your Wells Fargo treasurv ma».ageme».t represe».tative or
visit www.wellsfargo.comlcom.
wellsfargo.com/com
~nln Wells Pirqn B-inlr, N.A. All riqh`s reser:e~;. Mernl,er FDI('.
TM-~ias - n8,i in
Treasury Management
Controlled disbursement
Endpoints at a glance
~ Location profile
I Fe,leta1 Reserve,listt'i,°t
~ T1IY1E' ZUIlE'
I Nurtiberufrustumers%arruunts
I Average dai1y do11ar:,
~ P1luenix Her11t averar_le rleannr_1 tittie
I Check clearing totals
I l:,t pre:,entilient reporting tiilie
~ 21irl presentt7ient repurtinr_1 tir7ie
I Image Positive Pay
I Perfect PresentmenY''
~ Exceptiun repurt available
I Derlsiun dearlline
I Iiliage al.7ailahle
I Positive Pay
~ Exceptiun repurt available
I De,i:,ion deadline
~ Ir7iar_le available
I Basic Positive Pay
I E-i('P})t1011 Y'PpoY't cll.7clllcl4!lP
~ Decisiun rlearlline
~ Ir7iar_le available
I Check storage options
Ir7iar_Je Fi1e Ir7ipurt
~ Cheksror
lNellsbriaqe
~ Stups Ir7iar_Jes Search
I ARP features
~ Payee Validation
Input transrtiissiun witli auturtiaterl fi1e
,onfiriliation
I Output ttan:,ilii:,:,ion
I Statements available unline
~ Fu11 ARP statenient onlinej'niaile(l'"
I POsltl1.7P P3V statPR1P11t 0111111P,/R-lclllP(l*
~ Partial ARP statement unline%mailed
`Wih C}ae~st~_r ser.,ice
",th
Eastern
l.r g g;'<r~ .21?
billion
l.<ri5 rlays
F:oo a.ili. PT % y:oo a.ili. ET
?:oo a.m. PT % lo:oo a.m. ET
12:00 p.iii. PT %;:oo p.iii. ET saiiie day
ll:oo a.m. PT i`z:oo p.m. ET next day
1~i:oxo p.ni. PT,/3:oo p.ni. ET saniP rlay
°:oo a.m. PT % ll:oo a.m. ET
z:c~c~ p.ili. PT % F,:cxo p.ili. ET
°:oo a.m. PT % ll:oo a.m. ET
F,:oo a.ili. PT %R:oo a.ili. ET
12:00 p.m. PT %;:oo p.m. ET
F,:oo a.iii. PT;' 9:oo a.iii. ET
Transt7iissiun (ir7iar_le per iter7i fees
inclurlerl fur Van Wert custur7iers)
Ye:,
CD ROM (iiliage per iteili fee:, in(°1u(l
erl fur Van Wert custur7iers)
Internet
Yes
Yes
~atl1 1 l~lth
Muuntain I Pacific
$557.c)F, iliillion kl()~,'?l iliillion
1.E,0 days I l..r, Q days
a.ni. PT,/ a.ni. ET I a.ni. PT,/ p.ni. ET
9:oo a.m. PT % 12:00 p.m. ET I N;'A
°:oo a.iti. PT % ll:oo a.iti. ET jq:oo a.iti. PT % 1`z:oo p.iti. ET
`z:oo p.m. PT % S:oo p.m. ET I`z:oo p.m. PT % S:oo p.m. ET
R:cxo a.ili. PT % 11:oo a.ili. ET I y:oo a.ili. PT % 1z:oo p.ili. ET
S:oo a.iii. PT i°:oo a.iii. ET ~ S:oo a.iii. PT i°:oo a.iii. ET
1~i:oo p.ni. PT,/3:oo p.ni. ET ~ 1~i:oo p.ni. PT,/3:oo p.ni. ET
F,:oo a.iii. PT;' 9:oo a.iii. ET I F,:oo a.iii. PT;' 9:oo a.iii. ET
N%A
N%A
N%A
N;'A
N;'A
N;'A
Transmissiun
Ye:,
CD ROM
Internet
Yes
Yes
Transmissiun
Ye:,
CD ROM
Internet
Yes
Yes
F:oo a.ili. PT % y:oo a.ili. ET I F:cxo a.ili. PT % y:oo a.ili. ET I F:oo a.ili. PT % y:oo a.ili. ET I
Internet IInternet IInternet I
rl3V E d3Vs rl3V E d3Vs rl3V E d3Vs I
rl3V /C) d3Vs rl3V /C) d3Vs rl3V /C) d3Vs I
1 day % 1 day I 1 day % 1 day I 1 day % 1 day I
wellsfargo.com/com
~nln Wells R~irqn B-inlr, N.A. All riqh`s reser~:e~;. Mernl,er FDI('.
TM-i t;' 1d - n8,i i n
Treasury Management
Check disbursements
Perfect Presentment° service
Helping you save time and improve accuracy in exception processing
Per-fect Pr-esentnzent is a premium Wells Fargo service that helps make our check disbursement solution
best in class. The Per-fect Pr-esentnzent service provides the same fraud-fighting features as traditional
positive pay services, and it adds unique benefits. Because it runs in real time rather than at the end of the
day, the Perfect Presentment service can do in one day what other positive pay services can take three days
to do. Wells Fargo was the first to offer this service, which is featured at our Van Wert, Ohio, controlled
disbursement endpoint.
The Perfect Presentment service offers:
Time savings. You make pay or return decisions only on
true ez;ceptions to your check issue fi1e. You don't waste
time viewing misencoded checks.
Streamlined account reconciliation. We correct encoding
errors before postirzg to your accourzt, so your ARP
statements contain no adjustments for misencoded checks.
Absolute funding accuracy. Your daily check clearing
totals perfectly match your funding totals. There's no need
for overftznding and no risk of tznderftznding yotzr accotznt.
Improved funds use. You know precisely how much cash
is available, erzablirzg you to maximize irzvestmerzt or
TT11T11TT11Z2 UOYYOW1Tlg.
Perfect Presentment
Day 1 Morning
• Checks are presented
• Stop payments are identified
• Positive pay exceptions (unmatched checks) are identified
• Matched items are reported in funding totals
• Operations scrubs items for encoding errors and returns
Afternoon
• Ez;ceptions are reported
• Pay/return decisions can be made
Evening
• Matched items are posted
Day 2 • Previous-day pay/return decisions can be made
• Items decisioned to post by operations are posted
Day 3 Day 1 exceptions that you have reviewed and authorized to
1J£1-y £1- Y2 Y21JOYt2C1 1T1 ti12 11YSt 1JY2S2T1tTT12Tlt tOt£1-IS
Traditional Positive Pay
Morning
• Checks are presented
• A11 items are reported in funding totals
Evening
• A11 other checks are posted
• Positive pay ez;ceptions (unmatched checks)
are identified
• Ez;ceptions are reported
• Pay/return decisions are made
• ETICOCI1Tlg 2YYOYS £1- Y2 Y2V2YS2C1
• COYY2Ct2C1 1t2TT1S £1- Y2 1JOSt2C1
• ACI)UStTT12T1tS £1- Y2 Y21JOYt2C1
For more i».formation on the Perfect Prese».tme».t service, co».tact your Wells Fargo treasurv ma».ageme».t represe».tative or visit
www.wellsfargo.comlcom.
wellsfargo.com/com
~nln Wells Pirqn B-inlr, N.A. All riqh`s reser:e~;. Mernl,er FDI('.
Treasury Management
Depository service
Smart Decision service
Enabling you to take advantage of ACH check conversion through any Wells Fargo depository solution:
Desktop Deposit° service, Wells Fargo Electronic DepositSM service, Wells Fargo Cash Vaults, Lockbox
services, stores, or Envelope-FreeSM ATMs
When you couple the Smart Decision" service with your Wells Fargo depository solution, you can easily
convert checks received through the mail, at a dropbox, or in person to ACH Accounts Receivable
Conversion (ARC) or Back Office Conversion (BOC) debits. Simply notify your customers through a posted
or mailed notice. And after you make a deposit, we'll use our proprietary decision engine to identify eligible
checks and do the ACH conversion for you automatically. You'll see faster availability of deposited funds,
accelerated returned item notification, improved collection rates, lower costs, less environmental impact, and
simpler deposit research and reconciliation.
Smart Decision service includes:
Faster notification-and improved collection-of returned
items. Faster presentment and enhanced redeposit options
for electronic NSF returns can help your company improve
collection of returned items and decrease your write-offs,
saving you money.
Lower payment-reZated processing costs. With the
Smart Decision service, you can take advantage of more
efficient processing using ACH conversion, including an
additional redeposit option for your electronic NSF returns.
SimpZe deposit research and reconciZiation. You can use
the industry-leading Commercial Electronic Office'": (CEO'")
Internet portal to access Wells Fargo's online returned
item decisioning service, comprehensive information
reporting, and extended image access, allowing you to
streamline your deposit reconciliation process. No matter
how your checks are cleared, you'll see one deposit credit,
plus consolidated returned item and deposit detail reports
and images.
Use Wells Fargo depository solutions
and let us do the work
You can choose to use the Smart Decision service with any
of our depository solutions and leave the ACH conversion
process to Wells Fargo. Our deposit solutions include:
Remote deposit. Use Wells Fargo's industry-leading
remote deposit services-Desktop Deposit service or
Wells Fargo Electronic Deposit service-coupled with
Smart Decision service to help you eliminate trips to the
bank, decrease courier-related fees, and consolidate your
banking relationships. Take advantage of our extended
deposit deadline of lo:oo p.m. ET while reducing your
check processing costs through ACH check conversion.
Cash VauZt. You can use Wells Fargo's coast-to-coast
Cash Vault network to make your check and cash deposits.
Simply send your checks to the Cash Vault, and Wells Fargo
will automatically convert your eligible checks to ACH
debits. Wells Fargo will securely retain and destroy the
deposited checks on your behalf.
Broad-based efficiencies. Electronic processing reduces
the time and resources needed to process payments. The
results are lower costs, fewer errors, less labor, less paper,
and less impact on the environment.
contintzed on reverse side
wellsfargo.com/com
:201o Wells Fargo Bank, N.A. All righ's reservec'i. Met7iber FDIC.
TM-igig - oz/io
Smart Decision service (contintzed)
WeZZs Fargo stores and ATMs. Use our Stagecoach
Deposit'": service to make deposits to our extensive network
of stores and ATMs. For deposits made at our Envelope-Free
ATMs, Wells Fargo's Smart Decision service can convert
your eligible items to ACH debits.
Lockbox services. Accelerate your cash flow, improve
your collections, and reduce your payment processing costs
by using the Smart Decision service in conjunction with
Wells Fargo's expansive lockbox network.
How the Smart Decision service works:
For• mor•e infor•ination on the Smart Decision ser•vice, contact yottr• Wells Far•go tr•easttrv inanagement r•epr•esentative or• visit
www.wellsfargo.coin/com.
wellsfargo.com/com
:201o Wells Fargo Bank, N.A. All righ's reservec'i. Met7iber FDIC.
TM-igig - oz/io
Treasury Management
Mobile Technologies
CEO Mobileslm service
Making corporate banking easy for mobile executives
You can't always be at your desk or on your laptop; your job responsibilities may take you from meetings
to airports, across town or around the globe. When you're on the go, stay connected to your accounts
and banking services through our CEO Mobile` ' service. Wells Fargo is the first major U.S. bank to bring
you corporate mobile banking.
The CEO Mobile service provides:
MobiZe access to CEO portal services. Mobile versions
of select reports and services available through the
Commercia.l Electronic Office'": (CEO'"') portal are available
on the CEO Mobile service. To access them, go to
httbs://ceomobile.wf.com through the browser of your
mobile device, and enter your CEO portal login credentials.
Automatic authorization. If you are authorized for services
and reports on the CEO portal, you automatically are
authorized for the same services and reports on the CEO
Mobile service. No setup or implementation is required,
and most mobile devices are supported.
Snack size versus super size. CEO Mobile services and
reports are designed specifically for use and viewing
on the small screens of mobile devices. We extract key
information from CEO portal services and reports and
present it to you in easy to handle, bite-size chunks.
Increased efficiency. By enabling CFOs, treasurers,
cash managers, and other key decision makers to monitor
account balances and complete critical, time-sensitive
tasks through mobile devices, the CEO Mobile service
increases executive efficiency and convenience.
Patent-pending design. The CEO Mobile service includes
a time-saving feature that is so unique, we've filed for a
patent. The symbol next to the name of a service on
the CEO Mobile home page means there are transactions
that require your attention. Click on it to go directly
to them.
Growing service offering. The CEO Mobile service
delivers a growing array of mobile services and reports.
The offering currently includes:
• Wire initiation and approval/rejection
• Treasury Information Reporting
- Intraday and Previous Day Composite
- Controlled Disbursement Summary
• Image Positive Pay image viewing and
decision making
• ACH Fraud Filter transaction viewing and
decision making
• Self Administration password reset and
user administration
• Basic Banking
contintzed on reverse side
Security safeguards. Wells Fargo is committed to
the security of your information. Advanced security
safeguards-including 128-bit Secure Sockets Layer (SSL)
encryption and WAP 2.0 standard-help protect your data
while it is in transit across the Internet during a secure
CEO Mobile session.
wellsfargo.com/com
:2008 Wells Fargo Bank, N.A. All righ's reservec'i. Met7iber FDIC.
WIS-1-105 - 09/o8
CEO Mobile service (contintzed)
Step 1: Go to httbs://ceomobile.wf.com.
Enter your CEO portal credentials
and click Sign On.
For• mor•e infor•ination on ottr• indtistr-v-lea ding cor•porate mobile technologies, contact yottr• Wells Far•go tr•easttrv inanagement
representative or visit www.wellsfargo.co172/co/n.
wellsfargo.com/com
:2008 Wells Fargo Bank, N.A. All righ's reservec'i. Met7iber FDIC.
WIS-1-105 - 09/o8
Step 2: Services for which you are
authorized appear under My Mobile
Services. The symbol means there are
transactions that need your attention.
Click on any service or symbol.
Government & Institutional Banking
Public Funds Collateral iTnit
ggg blarket Street 17th Floor
blAl,: A0119-173
San Francisco, CA 94105
FuhlicFunasColluterul w wellsfurzo. coin
September 27, 2010
City of Denton
Attn: Purchasing Dept
Dear Wells Fargo Customer,
Wells Fargo Bank enjoys a reputation for strength and security. We are dedicated to ensuring that your public
funds deposits are collateralized as required by conforming to all applicable state and federal statutory
requirements. Our Public Funds Collateral Unit will work hard to know you, listen to you and provide seamless
collateralization of your public funds deposits.
The Public Funds Collateral Unit will monitor your collected balances each day, pledge collateral to protect
balances above FDIC coverage and provide you with a Pledge Report showing the securities pledged monthly.
The Federal Deposit Insurance Corporation provides each public funds customer up to $250.000 deposit
insurance in the aggregate for all time and savings deposits including NOW accounts, and $250.000 for all non-
interest bearing transaction accounts. °r,ttD:iiwww.fdic.aovideaositideDositsiinsurediownersniDs.ntmi Wells Fargo
collateralizes uninsured balances by pledging securities from its investment portfolio. This portfolio consists
primarily of investment grade securities. The market value of these securities is updated daily by an established
third-party service that provides valuation services to many market participants.
Enclosed are three (3) copies of the Depository Pledge Agreement (collateral agreement) covering deposits held
at Wells Fargo Bank, N.A. for City of Denton . In accordance with the applicable federal law (12 U.S.C. 1823),
this collateral agreement must be approved by the bank's board of directors or loan committee; the approval must
be reflected in the applicable meeting minutes; and the agreement must be an official record of the bank,
continuously from the time of its execution. lease siq t ree 631 copies of t e epositorv le qe qree e t
a retur all 3 oriqinals to u lic u s Collateral it. The Depository Pledge Agreement will be forwarded
to the custodian, Bank of New York Mellon for signature. The fully executed agreement will be submitted to the
Wells Fargo Bank N.A.'s Board of Directors/Loan Committee for approval. A fully signed and executed original of
the agreement and corporate resolution will be mailed to you upon completion.
r II s a e areas o ocu e t S e co lete for rocessi g
r axe co ies are NOT acce te as riginal gree e ts
Upon receipt of the above signed documents, we will pledge collateral to protect your deposit balances above
FDIC coverage.
We hope this information regarding the documents required for collateralization is clear. If you have additional
questions, please contact 877-479-6603. We look forward to serving you!
Sincerely,
Mercy Lopez, PFA Analyst
Public Funds Collateral Unit
Wells Fargo Bank, N.A.
T~~~ther we'U g~ ~ar
~
,
DEPOSITORY PLEDGE AGREEMENT
Citv of Denton ("Depositor") has selected WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
as a depository for certain of its funds and Bank has agreed to act as the depository for those funds in accordance
with applicable laws, which require that Bank secure the deposited funds, to the extent not insured by the Federal
Deposit Insurance Corporation ("FDIC"), by pledging securities ("Eligible Securities") of any type (including, without
limitation, surety bonds and investment securities) permitted by the applicable provisions of Texas law in effect
from time to time (the "Governing Statutes"). THE BANK OF NEW YORK MELLON TRUST COMPANY,
NATIONAL ASSOCIATION ("Custodian") has agreed to hold the pledged securities in safekeeping pursuant to the
terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants in this Agreement, Depositor,
Bank and Custodian agree as follows:
1. Grant of Securitv Interest: Instructions Reaardina Collateral. (a) Bank hereby grants to Depositor
a security interest in all Eligible Securities transferred to a collateral account (the "Collateral AccounY") established
pursuant to this agreement (the "Collateral"). Custodian agrees to serve as collateral agent for Depositor, pursuant
to the terms of this Agreement. For the avoidance of doubt, Custodian acknowledges and agrees that it does not
have and will not acquire or assert at any time in the future, and hereby expressly waives, any lien upon, security
interest in, setoff right or other right to charge the Collateral held in the collateral account for any obligation owed to
Custodian by Bank or Depositor. Until Depositor has the right to compel sale of the Collateral under Section 7
hereof, Custodian may act in accordance with the instructions of Bank, including, without limitation, the right of
Bank to unilaterally substitute Eligible Securities for the Collateral in accordance with Section 3 hereof. Addendum
"A" contains the names and specimen signatures of individuals authorized to act on behalf of Depositor, and
Addendum "B" contains the names and specimen signatures of individuals authorized to act on behalf of Bank.
Either Depositor or Bank may add or remove authorized representatives without the consent of the other at any
time by providing Custodian with a replacement addendum, duly executed by an authorized individual. In no event
shall the Custodian be responsible for determining whether the pledged securities are "Eligible Securities".
(b) Bank, Depositor and Custodian agree that all Collateral delivered to or received by Custodian for
deposit in the Collateral Account may be in the form of credits to the accounts of Custodian at a Securities
Depository or by delivery to Custodian of physical certificates in a form suitable for transfer to Custodian or with an
assignment in blank. Bank and Depositor hereby authorize Custodian to utilize such Securities Depositories and to
hold such physical securities or any combination thereof in connection with its performance hereunder. Collateral
credited to the Collateral Account and deposited in the Securities Depositories will be held, by book-entry notation,
in accounts that include only assets held by Custodian or its agent(s) for third parties, including but not limited to
accounts in which assets are held in a fiduciary, agency or representative capacity. Collateral that is not held in the
Securities Depositories will be held in Custodian's vault and physically segregated from securities and other non-
cash property belonging to Custodian. As used herein, the term "Securities Depository" or "Securities
Depositories" shall mean the Treasury/Reserve Automated Debt Entry System maintained at The Federal Reserve
Bank of New York for receiving and delivering securities, The Depository Trust Company and any other clearing
corporation within the meaning of Section 8-102 of the Uniform Commercial Code, as in effect from time to time.
2. Amount of Collateral. The aggregate market value of Collateral held by Custodian at all times during
the term of this Agreement must be in an amount not less than one hundred and two aercent (102%) of (a) the
amount of the collected funds on deposit, increased by (b) the amount of accrued but uncredited interest, (c)
reduced by that portion of the funds insured by the FDIC. Such amount is hereinafter called the "Required
Collateral Value". In no event shall the Custodian be responsible for determining whether the Collateral Account
contains the Required Collateral Value.
3. Substitutions and Withdrawals of Collateral. If the aggregate market value of Collateral held by
Custodian at any time exceeds the Required Collateral Value, Bank may unilaterally withdraw any excess
Collateral by providing Custodian with a withdrawal notice signed by an authorized representative of Bank,
provided that after the withdrawal of any such excess Collateral, the remaining Collateral equals or exceeds the
Required Collateral Value. Additionally, Bank may unilaterally substitute Eligible Securities for any of the Collateral
held by Custodian at any time by providing Custodian with a substitution notice signed by an authorized
representative of Bank, provided that the market value of the Collateral following such substitution would equal or
exceed the Required Collateral Value. If Bank elects to require Depositor's written consent on a notice in
- 1 -
connection with any withdrawal or substitution which complies with this Section 3, Depositor agrees to provide it
promptly upon Bank's request. Custodian shall be entitled to rely on, and Bank and Depositor agree to hold
Custodian harmless from, any actions taken pursuant to, and consistent with, the instructions given in a withdrawal
or substitution notice under this Section 3, whether unilateral or not.
4. Bank's Obliaations. Bank shall perform all of the duties and obligations required of a depository under
applicable law with respect to collateralization of the funds of Depositor on deposit with Bank, including the duties
and obligations required under the Governing Statutes. At the expiration of the term of this Agreement, Bank shall
turn over to any successor depository designated by Depositor all funds held by Bank as depository. Bank will
furnish to Depositor a monthly statement listing a description of the Collateral. The statement will specify the par
value, market value, and maturity date of each component of the Collateral. Upon request, Bank shall provide to
Depositor a copy of Bank's most recent publicly available quarterly or annual financial statement.
5. Custodian's Obliaations. (a) Custodian shall perform the duties and obligations required of
Custodian hereunder, in accordance with the provisions of the Governing Statutes. Upon transfer by Custodian of
Eligible Securities to the Collateral Account, including Eligible Securities substituted for other Collateral, Custodian
shall promptly identify such Eligible Securities on its books and records as being Collateral held pursuant to this
Agreement, and shall promptly issue and deliver to each of Bank and Depositor a duplicate receipt for such
Collateral. For the avoidance of doubt, it is understood and agreed that such receipts may be combined to identify
more than one transaction on any one business day and Custodian shall not be required to issue more than one
such receipt to Bank and Depositor on any business day. Bank and Depositor agree that they shall promptly
review all receipts delivered to them by Custodian and shall promptly advise Custodian of any error, omission or
inaccuracy in such receipts. In the event that Custodian receives such an advice, Custodian shall promptly
undertake to correct any errors, failures or omissions, provided that Custodian determines in its sole discretion that
such error, failure or omission actually occurred and shall notify Bank and Depositor of its action concerning each
such error, failure, or omission.
(b) Depositor agrees that, with respect to all securities held in the Collateral Account, Custodian by
itself, or through the use of the appropriate Securities Depository, shall, unless otherwise instructed to the contrary
by Bank or as provided in Section 7 hereof: (i) collect all payments reflecting interest and principal on the securities
in the Collateral Account; (ii) forward to Bank copies of all information or documents that it may receive from an
issuer of securities which, in the opinion of Custodian, is intended for the beneficial owner of the securities
including, without limitation all proxies and other authorizations properly executed and all proxy statements, notices
and reports; (iii) execute, as Custodian, any certificates of ownership, affidavits, declarations or other certificates
under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons; (iv) hold
directly, or through the Book Entry System or Depository, all rights issued with respect to any securities held by
Custodian hereunder; and (v) upon receipt of written instructions from Bank, Custodian will exchange securities
held hereunder for other securities and/or cash in connection with (A) any conversion privilege, reorganization,
recapitalization, redemption in kind, consolidation, tender offer or exchange offer, or (B) any exercise, subscription,
purchase or other similar rights; provided, however, such exchanged securities shall continue to be held by
Custodian hereunder for the benefit of Depositor if such exchanged securities constitute Collateral. Upon receipt of
payments reflecting principal and interest or dividends on the securities in the Collateral Account, Custodian shall
transfer to Bank such principal and interest or dividend payments (either by credit to Bank's custody account at
Custodian or otherwise).
(c) Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its
action or omission to act or otherwise, except for any loss or damage arising out of its own negligence or willful
misconduct, and shall have no obligation hereunder for any loss or damage, including counsel fees, which are
sustained or incurred by reason of any action or inaction by any Securities Depository, provided, however, that
such loss or damage is not caused by the negligence or willful misconduct of Custodian. In no event shall
Custodian be liable to Depositor, Bank or any third party for special, indirect or consequential damages, or lost
profits or loss of business, arising in connection with this Agreement. Both Depositor, to the extent permitted by
law, and Bank agree to indemnify Custodian and to hold it harmless against any and all costs, expenses, damages,
liabilities or claims, including reasonable fees and expenses of counsel, which Custodian may sustain or incur with
respect to any third party claim or which may be asserted by a third party against Custodian by reason of or as a
result of any action taken or omitted by Custodian in connection with operating under this Agreement, except those
costs, expenses, damages, liabilities or claims arising out of the negligence or willful misconduct of Custodian or
any of its employees or duly appointed agents. This indemnity shall be a continuing obligation of Depositor and
Bank notwithstanding the termination of this Agreement.
-2-
(d) Custodian may, with respect to questions of law specifically regarding the Collateral Account,
obtain the advice of reputable legal counsel and shall be fully protected with respect to anything done or omitted by
it reasonably and in good faith and without negligence, willful misconduct, bad faith or fraud in conformity with such
advice, provided, however, that nothing contained in this paragraph (d) shall be deemed to relieve Custodian of any
of its obligations pursuant to any other provision of this Agreement.
(e) Custodian shall not be responsible for, or considered to be custodian of, any securities received by
it for deposit in the Collateral Account until Custodian actually receives and collects such securities directly or by
the final crediting of Custodian's account on the books of the appropriate Securities Depository. Custodian will be
entitled to reverse any provisional credits to the Collateral Account that were made in anticipation of the receipt of
securities or cash which were not subsequently received by Custodian.
(fl Custodian shall have no duties or responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against
Custodian in connection with this Agreement.
(g) In performing hereunder, Custodian may enter into subcontracts, agreements and understandings
with third parties whenever and on such terms and conditions as it deems necessary or appropriate and which are
consistent with applicable law. If any of such subcontracts, agreements, or understandings with third parties are for
the deposit of Eligible Collateral for the benefit of Depositor, (i) such third party will qualify as a"permitted
institution" pursuant to the Texas Public Funds Collateral Act, (ii) Custodian shall cause such third party to provide
records to Custodian evidencing the deposit of Eligible Collateral with such third party, and (iii) records of the third
party relating to such Eligible Collateral will at all times state the name of Custodian. No such subcontract,
agreement or understanding shall discharge Custodian from its obligations hereunder.
6. Custodian's Reliance on Pricina Services. The Custodian is authorized to utilize one or more
generally recognized pricing information services (including brokers and dealers of securities) in order to provide
market values hereunder, and Bank and Depositor agree that Custodian shall not be liable for any loss, damage,
expense, liability or claim (including attorneys' fees) incurred as a result of errors or omissions of any such pricing
information service, broker or dealer.
7. Default and Remedies. If Bank defaults in performing its obligations under Section 4 above, or if Bank
is declared insolvent, or if a receiver is appointed for Bank, Depositor may, after providing Bank at least three (3)
business days prior written notice and opportunity to cure the default, and, if Bank fails to cure the default within
such (3) business day period, instruct Custodian to transfer the Collateral or any part thereof to a broker-dealer for
disposition in accordance with Depositor's instructions at a public or private sale. The proceeds of any such sale
shall be applied to satisfy any indebtedness owed by Bank to Depositor, and any excess proceeds shall be
returned to Bank. Depositor will also have any other remedies available under applicable law. The Custodian shall
be entitled to rely on and shall be held harmless from acts taken in accordance with such instructions from
Depositor.
8. Termination of Aareement. Any party to this Agreement may terminate this Agreement by giving thirty
(30) days prior written notice of termination to the other parties.
9. Aaalicable Law: Other Aareements. This Agreement is governed by the laws of the State of Texas.
All deposit accounts of Depositor will be subject to Bank's Commercial Account Agreement, Business Account
Agreement, or other applicable deposit account agreement, as in effect from time to time.
10. Force Maieure. Custodian shall not be responsible or liable for any failure or delay in the performance
of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including without limitation, acts of God, earthquakes, fires, floods, wars, civil or military
disturbances, sabotage, epidemics, riots, loss or malfunctions of utilities, computer (hardware or software) or
communications service, labor disputes, acts of civil or military authority, or governmental, judicial or regulatory
action; provided however, that Custodian shall use its best efforts to resume normal performance as soon as
practicable under the circumstances.
-3-
11. Jurv Trial Waiver. EACH OF BANK, DEPOSITOR AND CUSTODIAN HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
12. Miscellaneous. The headings in this agreement are for convenience of reference only and should not
be used in interpreting this Agreement. If any provision of this agreement is illegal or unenforceable under
applicable law, that provision should be deemed reformed so as to be enforceable to the extent permitted by
applicable law, or if that is not possible, then this Agreement should be read as if that provision was never a part of
it, and the remainder of the Agreement will be enforceable. THIS AGREEMENT REPRESENTS THE FINAL
AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL
AGREEMENTS OF THE PARTIES. Notices given under this Agreement must be addressed as set forth below the
signature of each party, and will be effective upon actual receipt by the addressee or upon refusal of delivery during
the normal business hours of the addressee. To the extent that in any jurisdiction any party may now or hereafter
be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or
other legal process, each party irrevocably agrees, to the extent permitted by law, not to claim, and it hereby
waives, such immunity in connection with this Agreement.
Date of Agreement: , 20
DEPOSITOR: Citv of Denton
CUSTODIAN: THE BANK OF NEW YORK MELLON
TRUST COMPANY,
NATIONAL ASSOCIATION
Signature
Print
Name:
Title:
Address:
Signature
Print
Name:
Title:
Address:
BANK: WELLS FARGO BANK, NATIONAL ASSOCIATION
Signature
Print
Name: Sheila Lynch
Title: Vice President
333 Market Street St.17"' Floor,
MAC: A0119-173
Address: San Francisco, CA 94105
1 Wall Street, Attn: BDS - Coll Mgr SFL
New York, NY 10286
DepPldgAgmt-TX-BNY-2006(0519)
-4-
ADDENDUM "A"
(Authorized Officers of Depositor)
One signature of any of the following authorized officers of Depositor is required to authorize actions to be
taken pursuant to the foregoing Depository Pledge Agreement:
Print
1. Name: Signature:
Phone/
Fax: Email:
Print
2. Name: Signature:
Phone/
Fax: Email:
Print
3. Name: Signature:
Phone/
Fax: Email:
Print
4. Name: Signature:
Phone/
Fax: Email:
-5-
ADDENDUM "B"
(Authorized Officers of Bank)
One signature of any of the following authorized officers of Bank is required to authorize actions to be
taken pursuant to the foregoing Depository Pledge Agreement:
(Name) (Signature)
2
4
(Name) (Signature)
(Name) (Signature)
(Name) (Signature)
-6-
Commercial Account Agreement
Effective May 1, 2005
Table of Contents
1. Terms Applicable to All Commercial Deposit Accounts
............s
~ Introduction
,
~ Defined Terms
~
rlffiliate
............5
Aiitllc>rizecj Sicyrier
.............j
liusiiiess llaN
5
Collected Balance
.............i
Cc>iiltllercial Depc>sit Accc>tint
llep<>sir Fl<>ar
lleposited ltetil
.............6
lnvestahle lialance
.............b
Item
.............6
Ledger lialance
,
Overdratt .................................................................................................................6
PLaper lteill
..............6
Sereice
..............6
~ ArUitratian Agreement
~
Agreeiiient tc> Arbitrate
..............6
Gc>verning Kules
..............6
Nc~ Waiver c~f Selt-Hel}~ c~r Prc~visic~nal ReiZledies
Arhitratc>r `ualificatic>ns and Pc>overs
7
llisCc>N%erN
,
Class rlctic>ns and Cc~nsc~lidaric~ns
PaN-itlent c>t rlrbitratic>n Cc>sts ancj Fees
...............7
illiscellanecn,s
~
Staternents and Other Account-Related Information
~
ltilailing Statenlents and Other rlcc<>unt-Kelated lnt<>rnlatic>n t<> Cc>tilpany
...............h
C<>tupany's Obligati<>n t<> Keview Statenlents and Other r'lcc<>unt-Relared lnf
<>rtllati<>n
and tu Nc>tif-\- Banl: c>f Errc>rs
...............5
Keturned, Unclaimed Sratetilents <>r Other rlccc>unt-Related lnt<>rmatic>n
...............h
r'lddress Changes f<>r Statenlents fc>r Cc>n1pam~'s rlcc<>unt and Other
rlccc>uiit-Kelated lnfc>rtllatic>ii
...............9
N<rtices and Other Mai1
...............9
Electrc>nic Cc>mtlltinicatic>iis
................1)
Fraud Prevention
. . ~
Prcrtecncnl Against llnautllc>nzeej ltems
~
.
Lc>st <>r St<>len Paper ltenls; Unauthc>rized lretils
Preveuting itilisuse <>f C<nmpan~,'s rlccc>unt
10
~ Claim of Unauthorized Transactions; Bank's Rights and LiaUility
,
lnNITestigatit>n t-)v liank; Cc>tilpan7's Agreen7ent tv Cc>c>perate
10
StLinclarci c>f CLire
11
Limirati<>n c>f Liabilin,;lndemnificatiOnl
11
rldverse Claitns
ll
Legal Prc>cess
11
,.Freezing„ Cotllpany's rlccount
11
Fc>rce iajeure
L
Cc>ttlpam-'s lnsurance Coverage
1?
~ Substitute Checks
~
~ Deposits to Company's Account
~
General
~
.1_
Cc>llectic>n lteiils
.1Z
Elldc>lselllellts
. 1?
itiIaterial r1ppearing on the Bacl: <>t lteiiis; Cllecl: Legends
.1 ~
.
lireach c>f \X'arranties
~
.
\w'hen llepc>sits are Credited tu Cc>m],any's rlcc<>unt
.13
Use c>t Ftlncis
. 1 ~
llepc>sits at rlffiliates
. l 3
llepc>sits c>f Nc>n-U.S. ltettls
. 13
ACTti 311d O1111SS1OllS Ot OTllel F1173llC1a1 IllST1tUTlU11S 14
llepc>sited ltetlls Renirned 14
llirect llepc>sits Keturned hN- liaiil: 14
Keconlstructing L<>st c>r llestr<>Nled llep<>sited ltenls
l4
~
Withdrawals from Company's Account
~
lletermining C<>mpanv's Acc<>unt's lialance; llebiting C<>mpanv's rlccc>unt
l4
Orcier c>t Pc>stiilg
-
15
Paper ltems Presented Over-the-C<>unter fc>r PaNlment by a N<>n-Cust<~n1er
..15
Large Cash W~ithdra«Tals
..1>
\X'irhdra~,vals ar rltfiliares
1>
ltems Resulting Frc>nl Cc>mpany's Discl<>sure <>f C<>mpany's rlccc>uut Number
15
Nlissing Signatures; rllteratic>iis; Forgeries 15
Dates and Special lnstrt-ictic>ns <>n Paper ltetils .........................................................16
Facsitllile or Nlechanical Signatures
...16
Cc>nsutller ACH llebit Entries
...16
2
Stop Payment Orders; Notices of Post-Dating
General
16
C<~nrent c>f Stop PaN-iilent Order
lb
Eftective Peric>d <>f St<>p Payment Order; Renewal; Rev<>cati<>n
16
Li~abilit~- tc~ Hc~lder in llue Cc,urse
1~
Paper Itenls Paid over Valid Stc>p Pavnlenr Orders
1- 1 7
~ Overdrafts; Security Interest; Bank's Right to Setoff
~
Overdratts and lnstitficient Ftinds
l-,'
Sectirin-lnterest; lianl:'s Kight r<> Set<>ff
17
~ Bank Fees and Expenses
,
General
1 8
Pavtnent <>f liank Fees and Expenses; Finance Charges
18
.
Earniiigs r111c>~~~ance
,
.1~
~ Checking Subaccounts
~
~ Miscellaneous
~
rlcceptable Fc>rm <>f Paper ltetiis; ll<~cutilent and lmage QualM
. 19
Clc>sing Cc>tilpam-'s rlcccnint
.19
CU11T13LT L'3ll-U3`;e
. 19
Cred1T RepUrTs
.19
llisclc>sure c>f lnfc>rtllaric>n
.19
llc>rnlanr and Unclaimed r1canints
.?0
Entire rlgreeitlent; Headings; Nc> 'l'hird Party lieneficiarN '
.?0
La~,vs Gc>vernilla Cc>ltlpallv's r1cccnint
..?0
Minitlluiil lialance Recluirenlents; Other Restrictic>ns
..?0
iti1<>dification <>t rl~reement; Acc<>unt Cc~i~~~ersicm
ZO
311Ci KeCOYC~lll~ ~,UIIlIIlUll1C~~t1UllS
T
AlO111tUT1ll~
~ 1
t
,
Nc> riduciary xelaric>nship
..?1
Keliance c>n liank's Kecc>rds
..?1
Rec>rderilig CIZecI:s
1
Transterring an lnterest in Cc~nzpanv's rlccounr
..<1
II. Additional Terms Applicable to All Commercial
Interest-Bearing, Savings and Time Accounts
..z1
~
Interest-Bearing Accounts
~
Variahle/Fixed-Kate rlccc>tints
...?1
A-lethod Used tc> Calculate Eariied lnterest
? 1
lnterest rlccrual
1
C(>lllp(>1111d111" 3lld Cled1T111` :
22
- ~
~c>tints
I arget l~a ance ' c„
.
lnterest rldjustiilents
~
)
"l'ax ldentificatic>n Nutnber Certificatic>n
~
Commercial Savings Accounts
Banl:'s Kight tc> Kecltiire Nc>rice
22
Limitati<>ns c>n Transters fr<>n1 C<>nlpanv's Savings rlcc<>unt
~ Commercial Time Accounts
~
Gener~ll
,
~
Certificated "I iiile rlccc>unts
?
~
i~-laturit~- Date
(I i111e Rec]uire111ellts
~
PaN-iilent c>t lnterest
3
rlcidiric>nal llepc>sirs
>
~'ithdrawal <>f lnterest Pric>r t<> 1~laturiz~~
...............Z~
Renewal Pc~licies
?3
III. Funds Transfers
...............?4
General
Z4
Ncrtice c>t Keceipt c>t Funcis
...............?4
Reliance c>n ldentificatic>n Nuinhers
................?4
llutp tc> Repc>rt Unauthc>rized ancj Errc>iiec>us Fund "I'ransfers
................?4
Errc>nec>us PaN-ltlent Orders
................?4
rlutottlLated Clearing Hcnise (r1CH) Transactic>ns
................?4
IV. SeleCted SeI'V1CeS
25
r11i~-1lle~,c>sit Service
Ireasur~- Ex~,ress llepc>sit'a Sercice
4
I. Terms Applicable to All Commercial Deposit Accounts
Introduction
ln this C<>tiitiiercial rlcc<nint rlgreement (`Agreement"), "C<>tnpanNl" reters t<> the <>wner
c>r acec>unthc>lder c>f a\w'ells Fargc> banl: ec>nlnlercial depc>sit acec>unt (`ilecc>unt"). "lianl:"
reters t<> the Wells Farg<> hank at which C<>mpany's rlcc<nint is tiiaintained. This rlgreement
includes the fc>llc>wing disclc>sures applicable tc> liank's cc>nlnlercial depc>sit accc>unts and
related services (each, a"Service"), that lianl: has separatelv prc>vided tc> Cc>nlpany : (i) the
schedule <>t liank's tees and <>ther acc<>unt-related int<>rmati<>n (the "tee and int<>rtnati<>n
schedule"), (ii) the cc>llectic>n schedule, (iii) the funds availability pc>licy, (iv) the privacy pc>licV,
(v) the rate sheets fc>r interest-bearing acec>unts, each as nlc>dified bN, lianl: frc>nl tinle tc> tinle,
and (vi) anNT additi<>nal discl<>sures regarding C<>mpany's rlcc<>unt that liank tnay pr<>vide
tc> Cc>nlpanNT Cc>nlpany is respc>nsible fc>r ensuring that each rluthc>rized Signer is fanliliar
with this rlgreement. Unless C<>mpany has instructed liank in writing t<> the c<>ntrarN; liank
tnay c<>nsider c<>mmunicati<>ns ab<>ut C<>mpanNI's rlcc<>unt tr<>tii an rluth<>rized Signer <>n
Cc>nlpany's rlecc>unt as ec>nlnlunicatic>ns frc>nl Cc>nlpanNT Cc>nlpany agrees tc> nc>tif-,~ lianl:
itiitiiediatelN, in writing it anN, rluth<>rized Signer's auth<>ritN, has been tertiiinated. Z'his
rlgreenlent replaces all pric>r agreenlents with lianl: regarding Cc>nlpany's rlecc>unt c>ther
T signing
than agreenlents regarding security interests in, c>r services utilizing, the rlccc>unt. liN
liank's signature card t<>r C<>mpany's rlcc<nint <>r by using C<>mpany's rlcc<nint <>r a Service,
Cc>nlpany will be deenled tc> have agreed tc> this rlgreenlent Cc>nlpany shc>uld retain a ec>py
c>f this rlgreenlent (and anNT infc>rnlatic>n that lianl: prc>vides Cc>nlpanN, regarding changes tc>
this rlgreement) t<>r as 1<>ng as C<>mpanN, tiiaintains its rlcc<>unt with liank.
llefined Terms
ln this rlgreenlent, certain wc>rds have a special nleaning and are therefc>re defined. Certain
ternls and their definitic>ns are fc>und in this Sectic>n, and c>thers are fc>und in the text c>f this
rlgreetTlent.
Affiliate.
r1n "ilffiliate" is a banl: that is, directlv c>r indirectlN; a whc>llv c>r substantiallv c>wned
subsidiarN, <>t Wells Farg<> & C<>mpanNT
Autllorized Signer.
r1n "Authc>rized Signer" is a persc>n whc> has Cc>nlpany's actual c>r apparent authc>rity tc>
transact business <>n C<>tnpanN~'s rlcc<>unt(s), whether <>r n<>t such pers<>n has signed the
signature card c>r c>ther dc>cunlentatic>n fc>r Cc>nlpany's rlecc>unt(s). lianl: nlav ec>ntinue tc>
recc>gnize an rluthc>rized Signer's authc>rit~, until lianl: has received and had a reasc>nable tinle
t<> act up<>n C<>mpany's written m<>dificati<>n <>r rev<>cati<>n <>t it.
Business llay.
r1 "liusiness llaN," is everN, daN, except Saturdays, Sundays and federal hc>lidaN~s.
Collected Balance.
Z'he "C<>llected Balance" is the Ledger Balance in C<>tzlpanNI's rlcc<>tmt less llep<>sit Fl<>at.
Commercial lleposit Account.
r1 "ec>nlnlercial depc>sit acec>unt" is any depc>sit acec>unt, c>ther than c>ne c>f liank's business
dep<>sit acc<>unts, that is n<>t held <>r tiiaintained primarilN, t<>r pers<>nal, tatiiilN, <>r h<>useh<>ld
purpc>ses. Exanlples c>f cc>nlnlercial depc>sit accc>unts include an accc>unt c>wned bN, an individual
acting as a s<>le pr<>priet<>r, apartnership, a litiiited partnership, a litiiited liability partnership, a
litiiited liability c<>mpany, a a>rp<>rati<n1, a j<>int venture, a n<n1-pr<>fit a>rp<>rati<n1, an etnpl<>yee
benefit plan c>r a gc>vernnlental unit including an lndian tribal entity
lleposit Float.
"llep<>sit Fl<>at" is the t<>tal d<>llar atil<>unt <>t ltetils dep<>sited in C<>mpany's rlcc<>unt t<>r
which, based c>n the cc>llectic>n schedule used bN, lianl: c>r the applicable rlffiliate fc>r this tNTpe
<>t acc<>unt, C<>mpanNI's rlcc<>unt has n<>t N~et been credited t<>r purp<>ses <>t calculating the
C<>llected lialance.
>
lleposited Item.
r1 "llepc>sited ltenl" is an ltenl (including a nc>n-U.S. ltenl) that lianl: cashes c>r ec>llects fc>r
C<>mpanN, <>r accepts t<>r dep<>sit t<> C<>mpanNI's rlcc<nint.
Investable Balance.
'1"he "lnvestable lialance" is the Cc>llected lialance in Cc>nlpanNl's rlccc>unt less (i) the pc>rtic>n
<>t such C<>llected lialance that liank is recluired hN, law t<> h<>ld in reserve at a Federal Reserve
lianl: and (ii) c>ther adjustnlents.
Item.
r1n "ltetii" includes a check, substitute check, purp<>rted substitute check, electr<>nic itetii,
draft, denland draft, preauthc>rized draft, renlc>tely created checl:, renlc>tely created itenl,
retn<>telN, created c<>nsutiier itetii, itiiage replacement d<>cument <>r <>ther <>rder <>r instructi<>n
t<>r the paN~tnent, transter, <>r withdrawal <>t tunds (includin(y a withdrawal slip), aut<>tiiatic
transfer, and electrc>nic transactic>n (including a ,vire transfer, an r1CH transfer and a Cc>nstiiiler
r1CH llebit EntrNT), anNT written d<>cument created <>r auth<>rized in C<>mpanNI's natile that
w<uld he a check <>r dratt hut t<>r the tact that it has n<>t been signed, and a cash-in ticket <>r a
depc>sit adjustnlent c>r a phc>tc>ec>p~, c>r an inlage c>f anN, c>f the fc>regc>ing.
Ledger Balance.
7''he "Ledger Balance" is the balance in C<>tzipany's rlcc<>tmt atter all debits and credits t<>r
the liusiness llav are p<>sted.
Overdraft.
r1n "Overdratt" is anN, event that results in a negative balance in C<>mpany's rlcc<nint.
Yaper Item.
r1 "Paper ltenl" is an ltenl that is in paper fc>rnl.
Service.
r1 "Service" is am, service lianl: prc>vides tc> Cc>nlpany including withc>ut linlitatic>n any
TieasurNT 1Managenlent Service.
ArUitration Agreement
Agreement to Arbitrate.
Except as stated in "Nc> \w'aiver c>f Self-Help c>r Prc>visic>nal Renledies" belc>w, Cc>nlpanNT and
liank agree, at C<>mpanNI's <>r liank's recluest, t<> subtnit t<> hinding arbitrati<>n all claitiis,
disputes and ec>ntrc>versies between c>r anlc>ng Cc>nlpany and lianl: (and their respective
enlplc>N,ees, c>fficers, directc>rs, attc>rnevs, and c>ther agents), whether in tc>rt, ec>ntract c>r
<>therwise arising <>ut <>t <>r relating in anNT wav t<> C<>mpanN,'s rlcc<>unt(s) and/<>r Service(s)
and their negc>tiatic>n, executic>n, adnlinistratic>n, nlc>dificatic>n, substitutic>n, fc>rnlatic>n,
inducetiient, ent<>rcetiient, detault <>r terminati<>n (each, a"llispute").
Governing Rules.
r1nN, arbitratic>n prc>ceeding will (i) prc>ceed in a lc>catic>n selected bN, the rlnlerican rlrbitratic>n
rlssc>ciatic>n (`i1r1r1') in the state whc>se laws gc>vern Cc>nlpam,'s rlecc>unt; (ii) be gc>verned bN~ the
Federal r1rbitrati<n1 rlct (Title 9<>t the United States C<>de), n<>twithstanding anN, c<nlflicting
chc>ice c>f law prc>visic>n in any c>f the dc>cunlents between Cc>nlpany and liank; and (iii) be
c<>nducted hN, the r1r1r1, <>r such <>ther adtiiinistrat<>r as C<>mpanN, and liank shall tnutuallN,
agree up<>n, in acc<>rdance with the r1r1r1s c<>tiitiiercial dispute res<>luti<>n pr<>cedures, unless
the clainl c>r cc>unterclainl is at least 51,000,000.00 exclusive c>f clainled interest, arbitratic>n
tees and c<>sts in which case the arbitrati<>n shall he c<>nducted in acc<>rdance with the
r1r1r1s c>ptic>nal prc>cedures fc>r large, ec>nlplex ec>nlnlercial disputes (the ec>nlnlercial dispute
resc>lutic>n prc>cedures c>r the c>ptic>nal prc>cedures fc>r large, ec>nlplex ec>nlnlercial disputes tc>
he reterred t<>, as applicable, as the "Rules"). lt there is anN, inc<>nsistencN, hetween the tertiis
herec>f and anN, such Rules, the ternls and prc>cedures set fc>rth herein shall ec>ntrc>l. r1ny partNl-
whc> fails c>r refuses tc> subnlit tc> arbitratic>n fc>llc>wing a lawful denland bN, am, c>ther party
shall hear all c<>sts and expenses incurred hN, such <>ther partN~ in c<>mpelling arbitrati<>n <>t anV
llispute. Nc>thing ec>ntained herein shall be deenled tc> be a waiver bN, lianl: c>f the prc>tectic>ns
att<>rded t<> it under L U.S.C. Secti<n1 91 <>r anN, sitiiilar applicable state law.
No Waiver of Self-Help or Yrovisional Remedies.
7''his arbitrati<>n recluiretzient d<>es n<>t litziit the right <>t either partN' t<> (i) exercise selt-hell)
retiiedies including set<>tt <>r (ii) <>htain pr<>visi<>nal <>r ancillarv retiiedies such as injunctiVe
relief c>r attachnlent, befc>re, during c>r after the pendeney c>f any arbitratic>n prc>ceeding. '1"his
exclusi<>n d<>es n<>t c<>nstitute a waiver <>t the right <>r <>hligati<>n <>t either partN' t<> subtnit any
llispute t<> arbitrati<>n <>r reterence hereunder, including th<>se arising tr<>tii the exercise <>t the
actic>ns detailed in (i) and (ii) c>f this subsectic>n.
Arbitrator Qualifications and Powers.
r1nN, llispute in which the atii<nint in c<>ntr<>versN' is 55,000,000.00 <>r less will he decided hN, a
single arbitratc>r selected acec>rding tc> the Rules, and whc> shall nc>t render an award c>f greater
than 55,000,000.00. r1ny llispute in which the atil<nint in c<>ntr<>versv exceeds 55,000,000.00
shall be decided by nlajc>rity vc>te c>f a panel c>f three arbitratc>rs; prc>vided hc>wever, that all
three arbitratc>rs nlust activelv
participate in all hearings and deliberatic>ns. Each arbitratc>r
will he a neutral att<>rneN, licensed in the state wh<>se laws g<>~~ern C<>mpany's rlcc<nint and
whc> has a nlininlunl c>f ten years experience in the substantive law applicable tc> the subject
nlatter c>f the llispute tc> be arbitrated. '1"he arbitratc>r(s) will deternline whether c>r nc>t an
issue is arbitratable and will give ettect t<> the statutes <>t limitati<n1 in determining any claitii.
ln am, arbitratic>n prc>ceeding the arbitratc>r(s) will decide (bN' dc>cunlents c>nlN, c>r with a
hearing at the discreti<>n <>t the arbitrat<>r(s)) an~, pre-hearing tn<>ti<>ns which are sitiiilar t<>
tn<>ti<>ns t<> distiiiss t<>r tailure t<> state a claitii <>r tn<>ti<>ns t<>r sutntnary adjudicati<>n. Z'he
arbitratc>r(s) shall resc>lve all llisputes in accc>rdance ~,vith the substantive la~'v c>f the state
w'llOSe 13w'S -OveTll COIIlp311p'S ACCOllllt 311Ci IIl3p (yY3llt 311p Yeliledp OY Yellet t113t 3 COl1Tt
c>f such state ec>uld c>rder c>r grant within the sec>pe herec>f and such ancillarN, relief as is
necessary tc> nlal:e effective anN, award. '1"he arbitratc>r(s) shall alsc> have the pc>wer tc> award
rec<>very <>t all c<>sts and tees, t<> itiii-mse sancti<nIS and t<> take such <>ther acti<>n as deetiied
necessary tc> the sanle extent a judge ec>uld pursuant tc> the Federal Rules c>f Civil Prc>cedure,
the state rules c>f civil prc>cedure fc>r the state whc>se laws gc>vern Cc>nlpanNI's rlecc>unt c>r c>ther
applicable law. Judgtnent ul-)<>n the award rendered by the arbitrat<>r(s) tnaN, he entered in any
ec>urt having jurisdictic>n. '1"he institutic>n and nlaintenance c>f an actic>n fc>r judicial relief c>r
pursuit <>t apr<>visi<>nal <>r ancillarN, retnedN, shall n<>t c<>nstitute a waiver <>t the right <>t an~,
party, including the plaintitt, t<> submit the c<>ntr<>versN, <>r claitii t<> arbitrati<>n it anN, <>ther
partN- cc>ntests such actic>n fc>r judicial relief.
lliscovery.
ln anN, arbitrati<>n pr<>ceeding, disc<>verN, will he permitted in acc<>rdance with the Rules. r111
disec>very shall be expresslN" linlited tc> nlatters directlN, relevant tc> the llispute being arbitrated
and tiiust he c<>mpleted n<> later than twentN, (20) davs bet<>re the hearing date and within 1h0
daN,s <>t the filing <>t the llispute with the r1r1r1. r1nN, recluests t<>r an extensi<>n <>t the disc(A'erNT
peric>ds, c>r anN, disec>very llisputes, will be subject tc> final deternlinatic>n bN, the arbitratc>r(s)
ul)<>n a sh<>wing that the recluest t<>r disc<>verN, is essential t<>r the partN"s presentati<>n and that
nc> alternative nleans fc>r c>btaining infc>rnlatic>n is available.
Class Actions and Consolidations.
C<>mpany and liank agree that the res<>luti<>n <>t am, llispute arising pursuant t<> the tertiis
c>f this rlgreenlent shall be resc>lved bN, a separate arbitratic>n prc>ceeding and shall nc>t be
c<>ns<>lidated with <>ther llisputes <>r treated as a class. Neither C<>mpanN, n<>r liank shall he
entitled t<> j<>in <>r c<nIS<>lidate llisputes hN, <>r against <>thers in am, arbitrati<n1, <>r t<> include
in anN, arbitratic>n anN, llispute as a representative c>r nlenlber c>f a class, c>r tc> act in any
arbitrati<n1 in the interest <>t the general public <>r in aprivate att<>rney general capacitNT
Payment of Arbitration Costs and Fees.
'1"he arbitratc>r(s) shall award all ec>sts and expenses c>f the arbitratic>n prc>ceeding.
Miscellaneous.
7'i> the tziaxitziutzi extent practicable, the r1r1r1, the arbitrat<>r(s), C<>tzipany and Bank shall
tal:e all actic>n required tc> ec>nclude am, arbitratic>n prc>ceeding within 180 daN's c>f the filing
<>t the llispute with the r1r1r1. Z'he arbitrat<>r(s), C<>mpanN; <>r liank tnav n<>t discl<>se the
existence, ec>ntent or results therec>f, except fc>r disclc>sures c>f infc>rnlatic>n bN1 Cc>nlpanN, or
liank recluired in the <>rdinar~T c<>urse <>t 1~usiness, 1~NT al~~~lical~le law <>r regulati<>n, <>r t<> the
extent necessary t<> exercise am, judicial review rights set t<>rth herein. lt tii<>re than <>ne
agreenlent fc>r arbitratic>n bN, or between Cc>nlpanN, and lianl: pc>tentialk, applies tc> a llispute,
the arbitrati<>n agreetiient tii<>st directlN, related t<> C<>mpanNI's rlcc<>unt <>r the subject tiiatter <>t
the llispute shall ec>ntrc>l. '1"his arbitratic>n agreenlent shall survive the clc>sing c>f Cc>nlpam,'s
rlecc>unt or ternlinatic>n c>f anN, Service or the relatic>nship between Cc>nlpany and liank.
Statements and Other Account-Related Information
Mailing Statements and Other Account-Related Information to Company.
Except as expresslNT prc>vided c>therwise in this rlgreenlent, lianl: will nlail (c>r c>therwise nlal:e
available t<> C<>tnpanNl) statetiients t<>r C<>mpanNI's rlcc<>unt and n<>tices and <>ther int<>rmati<>n
regarding C<>mpany's rlcc<>unt <>r anN, Service (c<>llectivelN; "Acc<>unt-Related lnt<>rmati<>n")
tc> the pc>stal or electrc>nic address reflected in lianl:'s recc>rds fc>r Cc>nlpany's rlecc>unt. r1nN,
statetiient <>r rlcc<>unt-Related lnt<>rmati<>n will he deetiied t<> have been sent t<> C<>mpany
<>n the first liusiness llaN, t<>ll<>wing the date <>n it. r1 statetiient <>r <>ther rlcc<>unt-Related
lnfc>rnlatic>n that is held fc>r Cc>nlpanN, tc> picl: up will be deenled tc> be delivered tc> Cc>nlpany
at the titiie that liank tiiakes it available t<>r pick up.
Company's Obligation to Review Statements and Other Account-Related Information and
to Notify Banlc of Errors.
C<>tnpanv agrees t<> pr<>mptly and caretullN, exatiiine each statetiient t<>r C<>mpany's rlcc<nint
and anN, c>ther rlecc>unt-Related lnfc>rnlatic>n and an~~ paid ltenls that are returned with (c>r
described in) the statenlent and anN, c>ther rlecc>unt-Related lnfc>rnlatic>n and tc> prc>nlptlNl-
n<>tih~ lianl< <>t, and reitnhurse liank t<>r, am, err<>ne<>us credit t<> C<>mpany's rlcc<>unt. \X,'ithin
thirtN, (30) davs after lianl: nlails or c>therwise nlal:es the statenlent or c>ther rlecc>unt-Related
lnfc>rnlatic>n available tc> Cc>nlpany ' Cc>nlpanN, will nc>tif-,~ lianl: c>f am, clainl fc>r credit or
retund due, t<>r example, t<> an err<n1e<nis <>r unauth<>rized dehit, a missing signature, an
unauthc>rized signature, or an alteratic>n (each, an "unauthc>rized transactic>n"). Aw'ithin six
(6) tii<>nths atter liank tiiails <>r <>therwise tiiakes the statetiient <>r <>ther rlcc<>unt-Related
lnt<>rmati<>n available t<> C<>mpanN; C<>mpanN, will n<>tih~ lianl< <>t am, claitii t<>r credit <>r
refund resulting frc>nl a fc>rged, unauthc>rized, or nlissing endc>rsenlent Such nc>tificatic>n is tc>
he tiiade hNT (i) calling the teleph<n1e number listed <>n the statetiient t<>r C<>mpanNI's rlcc<nint
or in the c>ther rlecc>unt-Related lnfc>rnlatic>n fc>r such purpc>se and (ii) subnlitting a written
repc>rt tc> lianl: as sc>c>n as pc>ssible, but, in anNT event, within the tinlefranles specified abc>ve. lf
C<>mpany tails t<> n<>tit-,~ liankwithin the titiietratiies specified ab<>ve, the balance sh<>wn <>n the
statenlent fc>r Cc>nlpanNl's rlecc>unt or c>ther rlecc>unt-Related lnfc>rnlatic>n will be ec>nclusivelN,
presunled tc> be ec>rrect, and Cc>nlpanN, will be deenled tc> have released lianl: frc>nl all liability
t<>r the ltetiis charged t<> C<>mpany's rlcc<>unt and t<>r all <>ther transacti<>ns c<>vered hN, the
statenlent or c>ther rlecc>unt-Related lnfc>rnlatic>n. ln additic>n, if Cc>nlpanNT fails tc> nc>tif-,~
lianl< <>t an unauth<>rized transacti<>n <>n C<>mpanNT's rlcc<>unt within thirty (30) daNTs atter
liank tiiails <>r <>therwise tiiakes the statetiient t<>r C<>mpany's rlcc<nint <>r <>ther rlcc<nint-
Related lnfc>rnlatic>n describing the unauthc>rized transactic>n available tc> Cc>nlpany, lianl:
will n<>t he liable t<> C<>mpany t<>r anN, unauth<>rized transacti<>ns <>n C<>mpany's rlcc<>unt by
the sanle persc>n that ec>uld have been prevented if Cc>nlpany had ec>nlplied with Cc>nlpany's
c>bligatic>ns under this subsectic>n. lf Cc>nlpany nc>tifies lianl: c>f am, clainl fc>r credit or
retund later than recluired hN, this subsecti<n1, liank tnaNT assert, at C<>mpanNI's recluest and
c>n Cc>nlpany's behalf, any clainl against a third party that lianl: deternlines in lianl:'s sc>le
discretic>n is pernlitted under the laws gc>verning Cc>nlpanNI's rlecc>unt or applicable rule.
Returned, Unclaimed Statements or Other Account-Related Information.
Unless c>therwise prc>hibited bN, the laws gc>verning Cc>nlpany's rlecc>unt, (i) if twc> or nlc>re
statenlents fc>r Cc>nlpany's rlecc>unt are returned, lianl: n1aN, disec>ntinue sending statenlents
t<>r C<>mpany's rlcc<>unt and <>ther rlcc<>unt-Related lnt<>rmati<>n t<> C<>mpanN, until C<>mpany
prc>vides a valid address tc> liank; (ii) lianl: nlaNl destrm, statenlents fc>r Cc>nlpanNI's rlecc>unt
S
and <>ther rlcc<>unt-Related lnt<>rmati<>n that are sent t<> C<>mpany and returned t<> liank
as undeliverable; and (iii) if lianl: hc>lds the statenlent fc>r Cc>nlpany's rlecc>unt c>r c>ther
rlcc<nint-Related lnt<>rmati<>n t<>r C<>mpanN, t<> pick up and the statetiient retiiains unclaitiied
t<>r sixtN, (60) davs, liank tnaN, send the statetiient t<> the address reflected in liank's rec<>rds t<>r
Cc>nlpam,'s rlccc>unt c>r destrc>V it.
Address Changes for Statements for Company's Account and Other Account-Related
Information.
Cc>nlpam, nlaN, instruct lianl: tc> change the address tc> which lianl: nlails (c>r the nleans
bN, which lianl< <>therwise tiiakes available) statetiients t<>r C<>mpany's rlcc<>unt and <>ther
rlcc<>unt-Related lnt<>rmati<>n at any titiie. liank tnaNT act <>n anNI, such instructi<>n purp<>rtedly
nlade c>n Cc>nlpany's behalf within a reasc>nable tinle after lianl: receives such instructic>n.
Unless C<>mpany instructs lianl< <>therwise, liank tnaN, in its s<>le discreti<>n change the address
c>nlN, fc>r the rlecc>unt(s) Cc>nlpany specifies c>r fc>r all c>r sc>nle c>f Cc>nlpany's c>ther rlecc>unts
with liank. lianl: nlaN, change Cc>nlpanNI's address c>f recc>rd if lianl: receives an address
change n<>tice tr<>tii the U.S. P<>stal Service <>r it liank receives int<>rmati<>n tr<>tii a third party
in the business c>f prc>viding ec>rrect address infc>rnlatic>n that the address in lianl:'s recc>rds nc>
1<>nger c<>rresp<>nds t<> C<>mpany's address.
Notices and Other Mail.
r1nN, nc>tice Cc>nlpanN, sends lianl: will nc>t be effective until lianl: actuallN, receives it and
has a reasc>nable c>ppc>rtunitNT tc> act c>n it lf there is nlc>re than c>ne rluthc>rized Signer c>n
C<>tnpanN,'s rlcc<>unt, liank tnaN, send statetiients and <>ther rlcc<>unt-Related lnt<>rtnati<>n
tc> anv c>ne c>f thenl (unless Cc>nlpany has c>therwise instructed lianl: in writing). Cc>nlpany
assutiies the risk <>t 1<>ss in the tiiail. r1nN, n<>tice liank sends C<>mpanN, will be ettective when
tiiailed <>r <>therwise tiiade available t<> C<>mpanNI.
Electronic Communications.
lt C<>tnpan~, pr<>vides liank with an electr<>nic address t<> which liank tnaN, send electr<>nic
COIIlIIll1111C3t1OllS, COIIlp311p 3gYeeS t113t 1i311k IIl3p Se11Ci tO COIIlp311p llp eleCtTO111C
ec>nlnlunicatic>n am, infc>rnlatic>n that the laws gc>verning Cc>nlpany's rlecc>unt require be sent
t<> C<>mpany in writing, pr<>vided such electr<nlic c<>mmunicati<n1 d<>es n<>t vi<>late the laws
(YOj'e1111IIy COIIlp311y'S ACCOllIIt. "EIeCtlO111C COIIlIIll1111C3t1OII" II1e311S 3 IIleSS3(ye tY311SIIlltteCl
electrc>nicalk, in a fc>rnlat that allc>ws visual text c>r inlages tc> be displayed c>n equipnlent such
as a pers<>nal c<>tnputer til<>nit<>r.
Fraud Prevention
Yrotection Against Unautllorized Items
Cc>nlpanN, acl:nc>wledges that there is a grc>wing risl: c>f lc>sses resulting frc>nl unauthc>rized
ltetiis. lianl< <>tters Services that pr<>vide ettective tiieans t<>r c<>ntr<>lling the risk tr<>tii
unauthc>rized ltenls. '1"hese Services include:
P<>sitive PaN; <>r P<>sitive PaN, with PaN~ee Validati<>n, <>r Reverse P<>sitive PaN, (each
c>ffered bN, lianl: in cc>njunctic>n with lianl:'s rlccc>unt Recc>nciliatic>n Plan Service);
r1CH Fraud Filter; and
Pavtnent rluth<>rizati<>n Service.
lf lianl: has expressly recc>nlnlended that Cc>nlpany use c>ne c>r nlc>re c>f these Services (c>r anNl-
<>ther Service related t<> traud preventi<>n that liank <>tters atter the date <>t this rlgreement), and
C<>mpanN, either decides n<>t t<> use the rec<>tiitiiended Service <>r tails t<> use the rec<>tiitiiended
Service in accc>rdance with the applicable Service llescriptic>n c>r c>ther lianl: dc>cunlentatic>n
applicable t<> the Service, C<>mpanN, will be treated as having assutiied the risl< <>t anN, 1<>sses
that cc>uld have been prevented if Cc>nlpany had used the recc>nlnlended Service in accc>rdance
with the applicable Service llescriptic>n c>r applicable dc>cunlentatic>n.
Lost or Stolen Paper Items; Unautllorized Items.
lf anN, c>f Cc>nlpany's unissued Paper ltenls has been lc>st c>r stc>len, c>r if Cc>nlpany learns
that unauthc>rized ltenls are being issued c>n Cc>nlpanNI's rlecc>unt, Cc>nlpanN, agrees tc> nc>tifIT
liank at <>nce. Zi> the extent that C<>tnpanN,'s tailure t<> s<> n<>tit-Y~ liank hampers liank's ability
9
t<> prevent 1<>ss, liank will he relieved <>t any liability t<>r such ltetiis. Up<>n receipt <>t anNl-
such nc>tice, lianl: nlay at its sc>le discretic>n and withc>ut anN, liability tc> Cc>nlpanN, tal:e c>ne
<>r tii<>re <>t the t<>ll<>wing acti<>ns: (i) cl<>se C<>mpanNI's rlcc<>unt and <>pen a new acc<>unt t<>r
C<>tnpanv; (ii) dish<>n<>r anN, Paper ltetii C<>mpanN, <>r an rluth<>rized Signer has indicated
nlaN, have been lc>st c>r stc>len (unless Cc>nlpany c>r an rluthc>rized Signer subsequently has
instructed liank t<> h<>n<>r such an ltetil); <>r (iii) pay any Paper ltetil presented t<>r paytnent
c>n Cc>nlpany's rlecc>unt, prc>vided Cc>nlpany has instructed lianl: tc> pay such Paper ltenl
and given lianl: the nunlber c>f that Paper ltenl. lf lianl: c>pens a new acec>unt fc>r Cc>nlpany
and C<>mpany has auth<>rized a third party t<> aut<>tnaticallN, tiiake regular del,<>sits t<> <>r
withdrawals frc>nl Cc>nlpany's rlecc>unt (such as wire c>r r1CH transfers), lianl: shall have nc>
liability t<> C<>mpany it C<>mpany d<>es n<>t receive anN, regularlN, scheduled dep<>sit <>r it a
regularlN, scheduled paytnent is n<>t tiiade t<>r C<>t~ipany due t<> C<>mpany's tailure t<> n<>tity~
that third party in a tinlelN, fashic>n c>f the nunlber c>f Cc>nlpany's new rlecc>unt.
Yreventing Misuse of Company's Account.
COIIlp311p 3gYeeS tO t3ke Ye3SOll3llle StepS tO ellSllYe tlle 1lltegY1tp Ot COIIlp311p'S 1llteTll31
prc>cedures with respect tc> Cc>nlpany's rlecc>unt and ltenls drawn c>n Cc>nlpanN" s rlecc>unt c>r
del-msited t<> it. Zi> help prevent embezzlement and pr<>tect C<>tnpanN,'s business assets, liank
YeCOIIlIIle11dS COIIlp311p:
• rlssign respc>nsibilities fc>r Cc>nlpany's rlecc>unt tc> nlultiple individuals. '1"hc>se whc>
recc>ncile statenlents fc>r Cc>nlpanN,'s rlecc>unt shc>uld be different frc>nl thc>se whc>
issue ltetils drawn <nl C<>mpany's rlcc<nint.
• Recc>ncile statenlents fc>r Cc>nlpany's rlccc>unt as received and nc>tif-,~ lianl:
itiitiiediatelN, <>t an~, pr<>blem.
• Cc>ntact lianl: inlnlediatelN, if Cc>nlpany dc>es nc>t receive the statenlent fc>r
C<>mpany's rlcc<>unt when C<>tnpanN, w<>uld n<>rtnallN, expect t<>.
• \w'atch fc>r Paper ltenls cashed c>ut c>f sequence c>r nlade c>ut tc> cash. '1"hese are
classic red flags fc>r enlbezzlenlent.
• Secure C<>mpanNI's supphl <>t Paper ltetils at all titiles. St<>len Paper ltetils are a
ec>nlnlc>n nlethc>d c>f enlbezzlenlent.
• Peri<>dicallv reassign acc<>unting duties such as rec<>nciling C<>mpanNI's rlcc<>unt <>r
nlal:ing a depc>sit.
• Review transacti<>n activity <>n C<>mpanv's rlcc<>unt t<>r unexpected fluctuati<>ns.
Fc>r exanlple, ec>nlpare the percentage c>f cash depc>sits tc> tc>tal depc>sit size.
N1c>st businesses will nlaintain a ec>nstant average. r1 large fluctuatic>n nlight
indicate embezzlement.
• llestrc>N, any Paper ltenl that Cc>nlpany dc>es nc>t intend tc> use.
• Use tatnper-resistant Paper ltetils at all titiles.
• Nc>tif-,~ lianl: inlnlediatelN, when an rluthc>rized Signer's authc>rin, ends sc> that
his/her natiie can he retn<n-ed tr<>tii all signature cards and Online lianking access,
and anv Cards that lianl: has issued tc> hinl/her can be cancelled.
• ll<> n<>t sign blank Paper ltetils.
• Obtain insurance cc>verage fc>r these risl:s.
Claim of Unauthorized Transactions; Bank's Rights and LiaUility
Investigation by Banlc; Company's Agreement to Cooperate.
liank shall investigate any transacti<n1 C<>mpany has rel,<>rted t<> liank as unauth<>rized (a
"Clainl c>f Unauthc>rized 'liansactic>n"). Cc>nlpanN, agrees tc> (i) subnlit Cc>nlpanNI's Clainl c>f
Unauth<>rized Ziansacti<>n in writing t<> liank hN, c<>mpleting <>r <>htaining a declarati<>n under
penaltN, <>t perjurN, describing C<>mpanNI's Claitii <>t Unauth<>rized Ziansacti<n1 (in an atfidavit
fc>rnl apprc>ved bN, liank, if sc> requested); (ii) file a pc>lice repc>rt; (iii) ec>nlplete and return
t<> liank anN, d<>cuments reciuested <>t C<>mpanN; and (iv) in all respects c<><>I,erate tullN, at
Cc>nlpany's expense with liank in liank's investigatic>n c>f Cc>nlpany's Clainl c>f Unauthc>rized
'liansactic>n.
stanaara of care.
lianl: will nleet its standard c>f care fc>r Cc>nlpany's rlccc>unt bNT exercising c>rdinarN, care in the
tY3llS3Ct1Oll 3t 1SSlle. \X'llell 1i311k t3keS 3ll Itelil tOY pTOCeSSlllg llp 3lltOIll3teCi Ille3llS, "OYd1ll3Tp
care" dc>es nc>t require lianl: tc> exanline the ltenl. ln all c>ther cases, "c>rdinarN, care" requires
c>nlN, that lianl: fc>llc>w standards that dc> nc>t vary unreasc>nablN, frc>nl the general standards
t<>ll<>wed hN, sitiiilarlN, situated hanks. liank's p<>licies and pr<>cedures are general internal
guidelines fc>r liank's use and dc> nc>t establish a higher standard c>f care fc>r lianl: than is
<>therwise established hN, the laws g<>verning C<>mpanNI's rlcc<>unt. r1 tiiere clerical err<>r <>r
an h<>nest tiiistake will n<>t he c<>nsidered a tailure <>t liank t<> pert<>rtn anN, <>t its <>bligati<>ns.
lf lianl: waives am, c>f its rights as tc> Cc>nlpany c>r Cc>nlpany's rlecc>unt c>n c>ne c>r nlc>re
<>ccasi<>ns, it will n<>t he c<>nsidered a waiver <>t liank's rights <>n anN, <>ther <>ccasi<>n.
Limitation of Liabiliry; Indemnification.
Wlletller in connection with Company's Account or a Service, in no event will eitller parry
to this Agreement or its respective directors, officers, employees, or agents be liable to the
other party for any special, consequential, indirect or punitive damages, whether any claim
is based on contract or tort or wlletller tlle lilcelillood of suc11 damages was laiown to eitller
party. Z'he t<>reg<>ing limitati<>n <>t liability will n<>t apply where expressly pr<>hibited hN1 the
laws gc>verning Cc>nlpanNI's rlecc>unt. lianl: will nc>t have am, liability tc> Cc>nlpanN, if there are
insufficient available funds in Cc>nlpany's rlecc>unt tc> paN, Cc>nlpanNI's ltenls due tc> actic>ns
taken hNT (i) liank in acc<>rdance with this rlgreetnent <>r (ii) anN~ third partN. Except t<> the
extent that lianl: fails tc> exercise c>rdinary care c>r breaches this rlgreenlent, Cc>nlpany agrees
tc> indenlnif-,~ and hc>ld lianl: and its directc>rs, c>fficers, enlplc>Nlees and agents harnlless frc>nl all
claitiis, detiiands, 1<>sses, liabilities, judgtnents, and expenses (including their att<>rneNIs' tees
and legal expenses) arising c>ut c>f c>r in any way ec>nnected with liank's perfc>rnlance under
this rlgreetnent. C<>mpany agrees this indetnnificati<>n will survive the cl<>sing <>t C<>tnpanN,'s
rlcc<>unt and the tertninati<>n <>t anv Service.
Adverse Claims.
lf any persc>n c>r entitN, nlal:es a clainl against funds in Cc>nlpany's rlecc>unt, c>r if lianl: believes
that a c<>nflict exists hetween <>r atn<>ng the rluth<>rized Signers <>n C<>mpanNI's rlcc<nint <>r that
there is a dispute c>ver nlatters such as the c>wnership c>f Cc>nlpanN,'s rlecc>unt c>r the authc>rity
t<> withdraw tunds tr<>tii C<>t~i~,anNT's rlcc<nint, liank t~ia~; with<n~t anN~ lial~ilit~~ t<> C<>mpany,
take <>ne <>r tii<>re <>t the t<>ll<>wing acti<>ns: (i) c<>ntinue t<> relNT <>n liank's rec<>rds t<> detertiiine
the c>wnership c>f c>r the identit~~ c>f the rluthc>rized Signer(s) fc>r Cc>nlpan~~'s rlecc>unt; (ii)
h<>n<>r the claitii u~~<>n recei~~t <>t evidence satistact<>rN, t<> liank t<> justit~~ such claitii; (iii)
freeze all c>r a part c>f the funds in Cc>nlpanN"s rlecc>unt until the dispute is resc>lved tc> lianl:'s
satisfactic>n; (iv) clc>se Cc>nlpanNl's rlccc>unt and send a checl: fc>r the available balance in
C<>mpany's rlcc<>unt paphle t<> C<>mpanN, <>r t<> C<>mpanN, and each claitiiant; <>r (v) paN, the
ftinds intc> an apprc>priate cc>tirt.
Legal Yrocess.
liank tnaNT accept and act <>n anN, legal pr<>cess it believes is valid, whether served in pers<>n,
bN, nlail c>r bN, electrc>nic nc>tificatic>n, at anN, lc>catic>n c>f liank. "Legal prc>cess" includes a
levN; garnishnlent c>r attachnlent, tax levN1 c>r withhc>lding c>rder, injunetic>n, restraining c>rder,
subp<>ena, search warrant, g<>verntnent agencN, recluest t<>r int<>rtnati<>n, t<>rteiture, seizure,
c>r c>ther legal prc>cess relating tc> Cc>nlpany's rlecc>unt. r1ny such legal prc>cess is subject tc>
liank's securitN, interest and right <>t set<>tt. liank will n<>t n<>titN, C<>mpany <>t a grand jurNl-
subp<>ena attecting C<>mpany <>r C<>mpany's rlcc<nint.
"Freezing" Company's Account.
r1s part c>f liank's lc>ss preventic>n prc>granl, when lianl: suspects that irregular, unauthc>rized,
OY 111113w'tlll 3Ct1V1t1eS IIl3p lle OCCl1TTlllg lll CO1111eCt1Oll w'ltll COIIlp311p'S ACCOllllt, 1i311k IIl3p
"freeze" (c>r place a hc>ld c>n) the balance in Cc>nlpany's rlecc>unt (and in c>ther rlecc>unt(s)
C<>tnpanN, tiiaintains with liank) pending an investigati<>n <>t such suspected activities. lt
liank treezes C<>mpany's rlcc<nint, liank will give anN, n<>tice recluired hN, the laws g<>N'Terning
Cc>nlpanN,'s rlccc>unt.
Force Majeure.
Neither party tc> this rlgreenlent shall be deenled tc> be in default c>f am, c>f its c>bligatic>ns under
this rlgreenlent if its perfc>rnlance is delayed, hindered c>r becc>nles inlpc>ssible because c>f am,
act c>f Gc>d c>r c>f any public enenn; hc>stilities, war (declared c>r undeclared), guerilla c>r terrc>rist
activities, act c>f sabc>tage, blc>cl:ade, earthqual:e, flc>c>d, landslide, avalanche, trenlc>r, grc>und
nlc>venlent, hurricane, stc>rnl, explc>sic>n, fire, labc>r disturbance, ric>t, insurrectic>n, stril:e,
sicl:ness, accident, civil cc>nlnlc>tic>n, epidenlic, act c>f gc>vernnlent c>r its agencies c>r c>fficers,
pc>wer interruptic>n c>r transnlissic>n failure c>r anN, cause beN~c>nd the ec>ntrc>l c>f either partNl-
Company's Insurance Coverage.
N1anN, businesses carrN, special insurance fc>r enlplc>yee fraud/enlbezzlenlent lf Cc>nlpany dc>es,
lianl: reserves the right tc> require Cc>nlpany tc> file a clainl with its insurance ec>nlpanN, befc>re
nlaking anN, clainl against liank. ln such event, lianl: will cc>nsider Cc>nlpam,'s clainl c>nlN, after
lianl: has reviewed Cc>nlpanN,'s insurance ec>nlpany's decisic>n, and liank's liabilitN, tc> Cc>nlpany,
if any, will be reduced bN, the anlc>unt Cc>nlpany's insurance ec>nlpany paNI-s Cc>nlpanNT
SuUstitute Checks
r1 federal law, l:nc>wn as the "Checl: Clearing fc>r the 21st CenturN, rlet" c>r "Checl: 21," tc>c>l:
effect c>n Octc>ber 28, 2004. '1"his law prc>vides fc>r an instrunlent called a"substitute checl:."
r1 substitute checl: cc>ntains an accurate cc>p~, c>f the frc>nt and bacl: c>f the c>riginal draft and
bears the legend: "'1"his is a legal ec>p~, c>f yc>ur check. Yc>u can use it the sanle waN, N~c>u wc>uld
use the c>riginal check." r1s nc>ted in the legend, a substitute checl: is the sanle as the c>riginal
draft fc>r all purpc>ses, including prc>ving that Cc>nlpanN, nlade a paNlnlent. r1nN, Paper ltenl
Cc>nlpanN, issues c>r depc>sits that is returned tc> Cc>nlpany n1aN, be returned in the fc>rn1 c>f
a substitute checl:. Even if Cc>nlpany has cancelled ltenls returned with the statenlents fc>r
Cc>nlpany's rlecc>unt, lianl: nlav in its sc>le discretic>n withhc>ld substitute checl:s therefrc>nl.
Cc>nlpan~, agrees Cc>nlpany will nc>t transfer a substitute checl: tc> lianl:, by depc>sit c>r
c>therwise, if lianl: wc>uld be the first financial institutic>n tc> tal:e the substitute check, unless
lianl: has expressl~~ agreed in writing tc> tal:e it.
Deposits to Company's Account
General.
Unless c>therwise agreed in writing, lianl: nlaN; withc>ut inquirN; accept a depc>sit tc> Cc>nlpam,'s
rlecc>unt at am, tinle, frc>nl any persc>n c>r entin; nlade in any nlanner including withc>ut
linlitatic>n a depc>sit based c>n an inlage c>f an ltenl. lianl: nlaN, alsc> refuse tc> accept all c>r any
part c>f any depc>sit. lianl: nlay require that Cc>nlpany depc>sit an ltenl that is nlade payable tc>
Cc>nlpanNT tc> Cc>nlpam,'s rlecc>unt, instead c>f pernlitting Cc>nlpanN, tc> cash the ltenl. lianl: is
nc>t respc>nsible fc>r a depc>sit until a lianl: enlplc>yee has received and verified it '1"he receipt
received at the tinle c>f depc>sit is nc>t evidence that a depc>sit has been verified. lianl: nlaN,
reverse c>r c>therwise adjust anN, credit lianl: believes it has errc>nec>uslN, nlade tc> Cc>nlpany's
rlecc>unt at anN, tinle withc>ut pric>r nc>tice tc> Cc>nlpanNT
Collection Items.
lianl: nlaN; in its sc>le discretic>n and with nc>tice tc> Cc>nlpanN; handle a Paper ltenl as a
ec>llectic>n ltenl, instead c>f as a depc>sit '1"his nleans lianl: sends the ltenl tc> the issuer's banl:
fc>r paynlent and credits Cc>nlpany's rlecc>unt fc>r the ltenl when lianl: receives paN, nlent fc>r the
ltenl. lf the ltenl is returned unpaid, lianl: will return the ltenl tc> Cc>nlpanNT
Endorsements.
'1"his subsectic>n applies if an endc>rsenlent is necessarN, fc>r the transfer c>r negc>tiatic>n c>f an
ltenl. Cc>nlpany authc>rizes liank tc> supply Cc>nlpany's endc>rsenlent c>n anN, ltenl liank takes
fc>r ec>llectic>n, pavnlent c>r depc>sit tc> Cc>nlpany's rlecc>unt Cc>nlpanN, alsc> authc>rizes lianl:
tc> ec>llect am, unendc>rsed ltenl that is nlade paNTable tc> Cc>nlpanNT withc>ut first supplN~ing
Cc>nlpany's endc>rsenlent, prc>vided the ltenl was depc>sited tc> Cc>nlpanNI's rlecc>unt. lianl: n1ay
refuse tc> paNT am, ltenl c>r accept any ltenl fc>r depc>sit c>r ec>llectic>n unless lianl: is able tc> verif-,~
tc> its satisfactic>n that all c>f the necessarN, endc>rsenlents are present c>n the ltenl. Fc>r exanlple,
lianl: nlay require that all endc>rsers be present at the tinle that an ltenl is presented tc> lianl:
t<>r paNltnent <>r accepted t<>r dep<>sit <>r c<>llecti<>n.
1?
Material Appearing on the Baclc of Paper Items; Legends on Paper Items.
Cc>nlpanN, is respc>nsible fc>r lc>sses incurred bN, anN, persc>n that cashes c>r accepts Cc>nlpanN,'s
Paper ltetiis t<>r dep<>sit, if: (i) the 1<>ss is due t<> a delaN, in the return <>t the ltetii; and (ii)
the delaN, is caused bN, nlaterial appearing c>n the bacl: c>f the ltenl when it was issued c>r
transferred by Cc>nlpanNT. '1"his nlaterial nlaN, include, but is nc>t linlited tc>, carbc>n bands,
blacked <ut areas, and printed <>r written text <>r numbers. C<>tnpanN, is resp<nlsible t<>r all
lc>sses, clainls, danlages c>r expenses that result frc>nl a restrictive legend c>r nc>tatic>n c>n
C<>mpanNI's Paper ltetils.
Breach of Warranties.
lf Cc>nlpanN, breaches am, warrantN, Cc>nlpanN, nlal:es under the laws gc>verning Cc>nlpanNI's
rlecc>unt c>r rule with respect tc> anN, ltenl, Cc>nlpanN, shall nc>t be released c>r c>therwise
discharged tr<>tii anN, liabilitN, t<>r such breach s<> 1<>ng as liank n<>tifies C<>mpanN, <>t the breach
within 120 da~~s after lianl: learns c>f the breach. lf lianl: fails tc> nc>tif~~ Cc>nlpan~~ within this
LO-daN, ~~eri<>d, C<>mpany shall be released tr<>tii liabilitN, and discharged <n11y t<> the extent
liank's tailure t<> n<>tit-,~ C<>mpanNT within such titiie peri<>d caused a 1<>ss t<> C<>tiij,aml-
Wl1en lleposits are Credited to Company's Account.
r111 <>ver-the-c<>unter dep<>sits <>r r17'1ti1 dep<>sits t<> C<>mpany's rlcc<>unt which are received
bet<>re liank's established cut-<>tt titiie <>n anN, liusiness llaN, will be credited (and will be
ec>nsidered depc>sited) tc> Cc>nlpany's rlecc>unt as c>f the clc>se c>f business that daN; and will
be reflected in that daN,'s Ledger lialance t<>r C<>mpanNI's rlcc<nint. r1ll <>ther dep<>sits (such as
cash letter <>r 1<>ckb<>x) will be pr<>cessed in acc<>rdance with the written a(yreetiients g<>verning
such depc>sits c>r, if there is nc> written agreenlent, banking practice. r1ll depc>sits received after
liank's established cut-<>tt titiie <>n a liusiness llav <>r at anv titiie <>n a dav which is n<>t a
liusiness llaN, will be credited (and will be ec>nsidered depc>sited) tc> Cc>nlpanNI's rlecc>unt at
the end c>f the next liusiness llav. llepc>sits placed in c>ne c>f lianl:'s "night depc>sitc>ries" befc>re
the established deadline <>n anN, liusiness llaN, will be credited t<> C<>tnpanN,'s rlcc<>unt at the
clc>se c>f business c>n that sanle daN,. r1ll c>ther depc>sits placed in the "night depc>sitc>rN, " will be
credited tc> Cc>nlpanNs rlecc>unt at the end c>f the next liusiness llaN,.
Use of Funds.
Cc>nlpany's use c>f funds depc>sited tc> Cc>nlpany's rlecc>unt will be gc>verned bN, lianl:'s
separatelN, disclc>sed cc>llectic>n schedule and, if Cc>nlpanNI's rlccc>unt is a checl:ing accc>unt,
tunds availabilit~~ I-)<>licN,. liank's c<>llecti<>n schedule describes when dep<>sits <>t ltetiis that
satisf-,~ certain criteria will be cc>nsidered cc>llected. r1 fee nlav be charged in cc>nnectic>n with
anN, use <>t unc<>llected tunds pertnitted bN, liank. Z'he then-current rate will appear <>n the
statetiient t<>r C<>mpany's rlcc<nint. liank's tunds availability p<>licN, describes when tunds
depc>sited tc> Cc>nlpam,'s checl:ing rlecc>unt will be available tc> be used fc>r all purpc>ses. lianl:
tnaN, change its c<>llecti<>n schedule and tunds availability p<>licN, tr<>tii titiie t<> titiie with<>ut
],ri<>r n<rtice t<> C<>tTl],anNT
lleposits at Affiliates.
C<>mpanN, tnaN, tiiake dep<>sits t<> C<>mpanNI's rlcc<>unt(s) at an rltfiliate, pr<>vided the rltfiliate
agrees. lt C<>mpany tiiakes a dep<>sit t<> C<>mpany's rlcc<>unt at an rltfiliate, that rltfiliate's
ec>llectic>n schedule and funds availabilitN, pc>licN, will deternline when the funds depc>sited tc>
C<>mpany's rlcc<>unt will be c<>nsidered c<>llected and available.
lleposits of Non-U.S. Items.
lianl: nlaN, refuse tc> accept fc>r depc>sit c>r ec>llectic>n an ltenl that is paNlable in curreneNl c>ther
than U.S. d<>llars <>r an ltetii that is n<>t drawn <>n a financial instituti<>n chartered in the United
States (each, a"n<>n-U.S. ltetil"). lt liank accepts a n<>n-U.S. ltetil t<>r dep<>sit t<> C<>tnpanN,'s
rlccc>unt c>r cc>llectic>n, Cc>nlpany accepts all risl: assc>ciated with fc>reign currency fluctuatic>n
(exC113ll(ye T3te Y1Sk) 311Ci 311p 13te YetllTll Ot tlle llOll-L).S. Itelil. COIIlp311p 3(yYeeS 1i311k IIl3p l1Se
liank's current bming and selling rate, as applicable, when prc>cessing a nc>n-U.S. ltenl and
nlaNT recc>ver frc>nl Cc>nlpany's rlecc>unt am, lc>ss lianl: incurs as a result c>f prc>cessing such an
ltetii t<>r C<>mpanN, liank reserves the ri(yht t<> place 1<>nger h<>lds <>n n<>n-U.S. ltetiis than the
tinlefranles specified in lianl:'s funds availability pc>licN, fc>r llepc>sited ltenls.
1.1)
Acts and Omissions of Other Financial Institutions.
lianl: is nc>t liable fc>r the insc>lveneN; neglect, nlisec>nduct, nlistal:e, c>r default c>f anc>ther banl:
<>r pers<nl, <>r t<>r the 1<>ss <>r destructi<>n <>t a llep<>sited ltetil <>r <>t a n<rtice <>t n<>npaytnent
relating theretc>. lf a llepc>sited ltenl is lc>st c>r nlisrc>uted during the ec>llectic>n prc>cess: (i) lianl:
shall have nc> respc>nsibility tc> Cc>nlpany fc>r the actic>ns c>r inactic>ns c>f anN, ec>llecting bank;
(ii) liank tnaNT charge C<>mpanNT's rlcc<>unt t<>r the atii<>unt <>t the llep<>sited ltetii (and reverse
any interest that nlaN, have accrued tc> Cc>nlpam~'s rlccc>unt in cc>nnectic>n with the llepc>sited
ltetil); and (iii) C<>mpan~, agrees t<> c<><>~~erate with lianl~ in recreating the lle~~<>sited ltetil.
lleposited Items Returned.
lianl: has the right tc> charge bacl: tc> c>r c>therwise debit anN, c>f Cc>nlpanNI's rlecc>unt(s) fc>r anv
llepc>sited ltenl that is returned (and tc> reverse c>r recc>ver any assc>ciated interest that nla~~
have accrued), even it C<>mpany has tiiade withdrawals against it. Z'his right <>t charge back
c>r debit is nc>t affected by the expiratic>n c>f anN, applicable nlidnight deadline, prc>vided lianl:
d<>es n<>t have actual kn<>wledge that such deadline has expired <>r, having such kn<>wledge,
liank c<>ncludes that (i) the llep<>sited ltetii is returned in acc<>rdance with the laws g<>verning
Cc>nlpany's rlccc>unt c>r a rule (including a clearinghc>use rule); c>r (ii) lianl: has received a clainl
that C<>mpany has breached a warrantN, tiiade in c<>nnecti<>n with the llep<>sited ltetii. liank
has the right tc> pursue ec>llectic>n c>f such llepc>sited ltenl, even tc> the extent c>f allc>wing the
payc>r banl: tc> hc>ld the llepc>sited ltenl beyc>nd the nlidnight deadline in an attenlpt tc> recc>ver
paytnent. liank tnaNT redep<>sit a returned llep<>sited ltetil and re-present it t<>r paN, tilent hN, anN,
nleans (including electrc>nic nleans), unless lianl: has received instructic>ns frc>nl Cc>nlpany
nc>t tc> redepc>sit such llepc>sited ltenl. lianl: will have nc> liability fc>r taking c>r failing tc> tal:e
any acti<>n t<> rec<>ver paNltnent <>t a returned llep<>sited ltetil. lt <>ne <>t C<>mpanNI's llep<>sited
ltenls is returned with a clainl that there is a breach c>f warrantN, (fc>r exanlple, that it bears
a t<>rged end<>rsetnent <>r is altered in any way), liank tnav dehit C<>mpany's rlcc<>unt t<>r the
atii<>unt <>t the ltetii (plus anNT ass<>ciated tees) and pay the atii<>unt t<> the pers<>n <>r entity
nlaking the clainl. lianl: is under nc> dutN, tc> questic>n the truth c>f the facts that are being
asserted, t<> assess the titiieliness <>t the claitii, <>r t<> assert anv detense. liank need n<>t giVe
Cc>nlpany any pric>r nc>tificatic>n c>f its actic>ns with respect tc> the clainl. Cc>nlpany agrees tc>
inlnlediately repay anN, Overdraft caused bN, the return c>f a llepc>sited ltenl.
llirect lleposits Returned by Banlc.
lt, in c<nlnecti<>n with a direct dep<>sit plan tunds are dep<>sited t<> C<>mpany's rlcc<nint and
later returned tc> the c>riginatc>r, lianl: nlaN, deduct the anlc>unt frc>nl that c>r anv c>ther rlecc>unt
C<>tnpanN, tiiaintains at liank, with<>ut pri<>r n<>tice and at anN, titiie, except as pr<>hibited hN,
the laws gc>verning Cc>nlpanNI's rlecc>unt. lianl: nlaN, alsc> use anN, c>ther legal renledN, tc> recc>ver
the anlc>unt.
Reconstructing Lost or llestroyed lleposited Items.
lt a llep<>sited ltetii is 1<>st <>r destr<>N~ed during pr<>cessing <>r c<>llecti<>n (either at lianl< <>r
at anc>ther pc>int in the paynlents svstenl), Cc>nlpanNT agrees tc> ec>c>perate fullNT with lianl: tc>
rec<nlstruct the llep<>sited ltetii 1~~T pr<>tnptly: (i) pr<>viding liank with a c<>py <>t the tr<>nt and
bacl: c>f the llepc>sited ltenl frc>nl Cc>nlpany's c>r the issuer's recc>rds; (ii) asl:ing the issuer tc>
place a stc>p paynlent c>n it (at lianl:'s expense) and issue a replacenlent ltenl tc> Cc>nlpany
(it the llep<>sited ltetii has n<>t been paid); <>r (iii) reviewing C<>mpanNI's rec<>rds and <>ther
infc>rnlatic>n and ec>nducting anN, additic>nal research as nlaN, be reasc>nable tc> deternline the
issuer's identity (it C<>tnpanv d<>es n<>t kn<>w the identitN, <>t the issuer <>t the llep<>sited ltetii).
lt C<>mpany tails t<> c<><>perate with liank, liank tnaN; at any titiie and with<>ut advance n<>tice
tc> Cc>nlpanN; reverse c>r c>therwise adjust anN, credit nlade tc> Cc>nlpanNl's rlecc>unt fc>r a lc>st c>r
destr<>N,ed llep<>sited ltetii.
Withdrawals from Company's Account
lletermining Company's Account's Balance; llebiting Company's Account.
ln deternlining the balance in Cc>nlpany's rlccc>unt that is available tc> paN, ltenls, lianl: nla~~
reduce the available balance hN, the atii<>unt <>t anN, h<>ld that liank has placed <>n C<>mpanNI's
rlecc>unt under this rlgreenlent. rldditic>nalk; lianl: nlay place a hc>ld c>n Cc>nlpanNI's rlecc>unt
14
it liank receives an electr<>nic n<>tice that an ltetii will he presented t<>r paytnent <>r c<>llecti<>n
against Cc>nlpan~T's rlecc>unt (a "Nc>tice c>f Presentnlent"). '1"he hc>ld nla~~ renlain in effect frc>nl
the titiie the N<>tice <>t Presenttiient is received until the ltetii is presented <>r n<>tice is received
that the ltetii will n<>t he presented, whichever first <>ccurs. liank tnaN, c<>nclusively rely <>n the
infc>rnlatic>n it receives in an electrc>nic presentnlent c>r nc>tificatic>n when deternlining the
available balance in C<>mpany's rlcc<nint, and liank will n<>t have am, liahilitN, t<>r retusing
tc> hc>nc>r anN, c>f Cc>nlpany's ltenls because c>f insufficient funds, even if the electrc>nic
presentnlent c>r nc>tificatic>n incc>rrectlN, describes the ltenl, including its anlc>unt. lianl:
tnaN, debit C<>mpany's rlcc<nint <>n the dav an ltetii is presented hN, am, tiieans, including
withc>ut linlitatic>n electrc>nicallN; c>r at an earlier tinle based c>n nc>tificatic>n received bv lianl:
that an ltetii drawn <>n C<>tnpanN,'s rlcc<>unt will he presented t<>r payment <>r c<>llecti<>n. r1
determinati<>n <>t the balance in C<>mpanNI's rlcc<>unt t<>r purp<>ses <>t making a decisi<>n t<>
dishc>nc>r an ltenl fc>r insufficienev c>r unavailabilitv c>f funds nlav be nlade at anv tinle between
the ~~resentt~lent <>t the ltetil (<>r~earlier up<>n receipt <>t anN, N<>tice <>t Presenttilent) and the
titiie <>t return <>t the ltetii. N<> tii<>re than <n1e such determinati<>n need he tiiade.
Order of Yosting.
liank tnaNT p<>st ltetiis presented against C<>mpany's rlcc<>unt in any <>rder liank ch<><>ses,
unless the laws g<>verning C<>mpany's rlcc<>unt either reciuire <>r pr<>hibit aparticular <>rder.
Fc>r exanlple, lianl: nlay, if it chc>c>ses, pc>st ltenls in the c>rder c>f highest dc>llar anlc>unt tc>
1<>west d<>llar atii<nint. liank tnaN, change the <>rder <>t p<>sting ltetiis t<> C<>mpany's rlcc<nint
at anv titiie with<>ut n<>tice.
Yaper Items Yresented Over-tlle-Counter for Yayment by a Non-Customer.
lt a Paper ltetii drawn against C<>mpany's rlcc<nint is presented <>ver-the-c<ninter t<>r paytnent
by apers<>n wh<> d<>es n<>t have a dep<>sit acc<>unt at liank, liank tnaNT charge a tee t<> the
persc>n presenting the Paper ltenl as a ec>nditic>n fc>r paynlent c>f the Paper ltenl. Cc>nlpany
sh<>uld c<>ntact its hanker it C<>mpany has c1uesti<>ns <>r it C<>mpany is recluired t<>r anN, reas<>n
tc> have a place where Cc>nlpany's Paper ltenls can be cashed withc>ut a fee. '1"he anlc>unt
c>f the fee is disclc>sed in the fee and infc>rnlatic>n schedule. lianl: nlaN, require identificatic>n
acceptable t<> liank and n<>t pr<>hibited hN, the laws g<>verning C<>mpanNI's rlcc<nint, including
a fingerprint c>f the persc>n presenting the Paper ltenl. lianl: nlaN, dishc>nc>r the Paper ltenl if
the persc>n refuses tc> paN, this fee c>r prc>vide the identificatic>n lianl: requests.
Large Cash Withdrawals.
lf Cc>nlpany wants tc> cash a checl: (c>r nlal:e a cash withdrawal frc>nl Cc>nlpany's rlecc>unt) fc>r
a verN, large anlc>unt, liank nlay require five (5) liusiness llaNls' advance nc>tice sc> that it can
<>rder the cash tr<>tii its vault. liank tnaN;hut is n<>t <>bligated t<>, recluire that C<>mpany pr<>vide
adequate securitN~ when Cc>nlpan~T picl:s up the cash and nla~~ alsc> require Cc>nlpan~~ tc> picl:
up the cash at lianl:'s central vault c>r c>ther lc>catic>n.
Withdrawals at Affiliates.
Cc>nlpanN, nlaN, nlal:e withdrawals frc>nl Cc>nlpanNl's rlecc>unt at an rlffiliate, prc>vided the
rlffiliate agrees. lf an rlffiliate cashes an ltenl fc>r Cc>nlpanN; lianl: nlaN, place a hc>ld c>n
C<>tnpam,'s rlcc<>unt(s) t<>r a c<>rresp<>nding atil<>unt <>t tunds. lt the ltetil is later returned
tc> the rlffiliate fc>r anN, reasc>n, lianl: nlaNT debit c>ne c>r nlc>re c>f Cc>nlpan~~'s rlecc>unts fc>r the
atii<>unt <>t the ltetii.
Items Resulting From Company's llisclosure of Company's Account Number.
lf Cc>nlpanN, vc>luntarilN" disclc>ses Cc>nlpanNl's rlecc>unt nunlber tc> anc>ther persc>n c>rallN;
electrc>nicalh; in writing, c>r bN, sc>nle c>ther nleans, and lianl: deternlines that the ec>ntext c>f
such discl<>sure implies C<>mpany's auth<>rizati<>n t<> dehit C<>mpany's rlcc<>unt, liank tiiaNl-
treat such disclc>sure as Cc>nlpany's authc>rizatic>n tc> that persc>n tc> issue ltenls drawn c>n
C<>mpany's rlcc<nint.
Missing Signatures; Alterations; Forgeries.
lianl: will have nc> respc>nsibilitN, fc>r reviewing the nunlber c>r ec>nlbinatic>n c>f signatures c>n
an ltenl drawn c>n Cc>nlpanNI's rlecc>unt '1"his nleans that if Cc>nlpanN, has indicated that nlc>re
than <n1e signature is reciuired in c<nlnecti<>n with an ltetii drawn <>n C<>mpanNI's rlcc<nint,
15
liank will have n<> liability t<> C<>mpany it a transacti<>n is c<>nducted <>n <>r thr<>ugh C<>mpany's
rlecc>unt ec>ntrarv tc> the signature requirenlents Cc>nlpany has specified, prc>vided at least c>ne
<>t the recluired signatures appears <>n the ltetii. liank will have n<> liability t<> C<>mpany t<>r
tailing t<> detect a t<>rgerN, <>t the signature <>t an rluth<>rized Signer <>r an alterati<>n <>t <>ne
c>f Cc>nlpany's ltenls, if the fc>rgerN, c>r alteratic>n is such that a reasc>nable persc>n ec>uld nc>t
reas<>nably he expected t<> detect it.
llates and Special Instructions on Paper Items.
lianl: nlaN; withc>ut inquirv c>r liability I pay c>ne c>f Cc>nlpany's Paper ltenls even thc>ugh: (i)
special instructi<nIS written <>n the Paper ltetii indicate that liank sh<nild retuse paytnent (e.g.,
"V<>id atter thirty (30) davs," "Paid-ln-Full," <>r "V<>id <>ver 5100"); (ii) the Paper ltetil is stale-
dated it bears a date that is nlc>re than six (6) nlc>nths in the past), even if lianl: has
kn<>wledge <>t the date <>n the Paper ltetii; (iii) the Paper ltetii is p<>st-dated (e.g., it hears a date
in the future), unless an rluthc>rized Signer has given lianl: a nc>tice c>f pc>st-dating; c>r (iv) the
Paper ltenl is nc>t dated. ln additic>n, lianl: nlay pay in U.S. dc>llars the anlc>unt that has been
iti11CR-enc<>ded <>n C<>mpany's Paper ltetii, even th<>ugh C<>mpany has purp<>rtedlN, drawn the
Paper ltenl in a fc>reign currencNl,
Facsimile or Mecllanical Signatures.
lt C<>mpany has elected t<> use a tacsitiiile <>r <>ther tiiechanical signature (includin(y a statnp) t<>
sign c>r endc>rse Paper ltenls, lianl: nlay rely c>n that signature (c>r anN, signature that purpc>rts
tc> be the facsinlile c>r c>ther nlechanical signature c>f an rluthc>rized Signer) as Cc>nlpany's
auth<>rized signature with<>ut regard t<> when <>r hN, wh<>tn <>r hN, what tiieans <>r in what ink
ec>lc>r such signature nlav have been nlade c>r affixed tc> a Paper ltenl depc>sited tc>, drawn c>n
<>r <>therwise del~ited t<> C<>t~i~,anNI's rlcc<nint.
Consumer ACH llebit Entries.
Under the r1CH Operating Rules, certain tNlpes c>f r1CH entries nlaN, c>nlN, be presented c>n a
c<>nsutiler acc<>unt. Z'hese entries (each, a"C<>nsutiler r1CH llehit Entry") include with<>ut
limitati<>n P<>int <>t Purchase ("POP"), acc<>unt receivable (`ARC"), destr<>ved check ("XCK")
and returned checl: ("RCK") entries. lianl: shall have nc> c>bligatic>n tc> pay; and nc> liabilin, fc>r
paying, anN, C<nlsutiler r1CH llehit EntrN, <nl C<>mpany's rlcc<nint.
Stop Payment Orders; Notices of Post-Dating
General.
"Stc>p paynlent c>rder" refers tc> bc>th an c>rder tc> lianl: nc>t tc> paN, a Paper ltenl and tc> a nc>tice
<>t p<>st-dating. Zi> he ettective, a st<>p payment <>rder tinist he received in a titiie and tiianner
that gives lianl: a reasc>nable c>ppc>rtunitNT tc> act c>n it befc>re paNTing, accepting, certif~~ing,
cashing c>r c>therwise becc>nling c>bligated tc> paN, Cc>nlpanNI's Paper ltenl as prc>vided in the
Unit<>rtii C<>tiitiiercial C<>de. Each st<>p paN~tnent <>rder is subject t<> liank's verificati<>n that the
Paper ltenl described in the c>rder has nc>t been paid. '1"his verificatic>n nlaNT c>ccur subsequent
t<> the titiie liank accepts the st<>p paNltnent <>rder.
Content of Stop Payment Order.
lianl: requires the exact (i) nanle c>f the pavee, (ii) nunlber c>f Cc>nlpanNI's rlecc>unt c>n which
Paper ltenl is drawn, (iii) Paper ltenl anlc>unt and (iv) the Paper ltenl nunlber c>r a range c>f
Paper ltetii numbers. liank tnaN; at its s<>le discreti<>n, use <>nlN, ap<>rti<>n <>t the recluired
infc>rnlatic>n in c>rder tc> identib,~ a Paper ltenl. Failure tc> prc>vide ec>rrect and ec>nlplete
int<>rmati<>n tnaN, tilake it imp<>ssible t<>r liank t<> st<>p paNltnent <>t a Paper ltetil. C<>mpany
agrees t<> indetnnit-,~ and h<>ld liank hartiiless tr<>tii and against anN, 1<>ss incurred hN, liank as a
result c>f liank's paN~ing a Paper ltenl if anN, c>f the infc>rnlatic>n relied upc>n in the stc>p paN~nlent
<>rder is inc<>rrect <>r inc<>mplete (<>r as a result <>t liank's n<rt paying a Paper ltetii t<>r which a
valid stc>p paN, nlent c>rder is in effect).
Effective Yeriod of Stop Yayment Order; Renewal; Revocation.
liank need n<>t h<>n<>r a written st<>p paNytnent <>rder t<>r tii<>re than six (6) tii<>nths. F<>r
acc<nints that d<> n<rt have liank's STOP r1UTO -RENEWr1L Service, C<>mpanN, tilust renew a
stc>p paynlent c>rder if Cc>nlpany dc>es nc>t want the stc>p paynlent c>rder tc> expire after six (6)
16
m<>nths. Each renewal is treated as a new st<>p paN, tiient <>rder. F<>r acc<nints with liank's STOP
r1UT0-RENE\w'r1L Service, a stc>p paynlent c>rder is subject tc> annual renewals fc>r up tc> six
(6) twelve-tn<>nth peri<>ds, unless C<>mpany has <>therwise n<>tified liank in writing. liank tiia~~
pay a Paper ltetii atter a st<>p paytnent <>rder has expired, even th<>ugh the Paper ltetii is 1110re
than six (6) nlc>nths c>ld. r1n instructic>n tc> revc>l:e a stc>p paynlent c>rder nlust be received in a
titiie and tiianner that gives liank a reas<>nable <>pp<>rtunitNT t<> act <>n it.
Liabiliry to Holder in llue Course.
Nc>twithstanding liank's tinleh, return c>f anN, Paper ltenl due tc> a valid stc>p paNlnlent c>rder,
C<>mpany tnaNT still he liable under the laws g<>verning C<>mpany's rlcc<nint t<>r the atii<nint
<>t that ltetii.
Yaper Items Yaid Over Valid Stop Yayment Orders.
lt liank pays a Paper ltetil <>ver a valid st<>p payment <>rder, liank tnaN, recluire C<>mpanN, t<>
pr<>vide liank with an atfidavit describing in detail C<>mpany's dispute with the payee. lt liank
credits Cc>nlpany's rlecc>unt after paN~ing a pc>st-dated Paper ltenl c>ver a valid and tinlelv
n<>tice <>t p<>st-dating, liank tnaN, charge C<>mpany's rlcc<>unt t<>r the atii<>unt <>t the Paper
ltenl as c>f the date c>f the Paper ltenl.
Overdrafts; Security Interest; Bank's Right to Setoff
Overdrafts and Insufficient Funds.
liank tnaN; at its <>pti<>n, pay <>r rehise t<> pay any ltetil it it w<>uld create an Overdratt <>n
Cc>nlpam"s rlecc>unt, withc>ut regard tc> whether lianl: nlay have previc>uslN, established a
pattern <>t h<>n<>ring <>r dish<>n<>ring such an ltetii. liank tnaN, take either <>t the t<>ll<>wing
acti<nIS it liank receives an ltetii drawn <n1 C<>mpany's rlcc<nint and there are insutficient
available funds in Cc>nlpany's rlecc>unt tc> ec>ver the ltenl, withc>ut pric>r nc>tice tc> Cc>nlpam
Pay the Item and create an Overdratt <nl C<>mpany's rlcc<nint.
Return the Item it the ltetil w<nild create an Overdratt <nl C<>mpanNI's rlcc<nint.
Cc>nlpanN, agrees tc> paN, lianl:'s fee that nlaN, varN, depending c>n the actic>n lianl: tal:es. r1nN,
Overdratt <>n C<>tnpanN,'s rlcc<>unt is itiitiiediatelN, due and paNlahle, unless liank agrees
<>therwise in writing. C<>mpany agrees t<> reitiihurse liank t<>r the att<>rneN~s' tees and <>ther
cc>sts and expenses lianl: incurs in recc>vering the Overdraft (including Overdraft and assc>ciated
tees). 011 a liusiness llaN, when liank detertiiines that there are sutficient tunds in C<>mpanNI's
rlecc>unt tc> paN, c>ne c>r n1c>re but nc>t all c>f the ltenls presented fc>r paynlent c>n Cc>nlpanN"s
rlccc>unt, the c>rder in which lianl: pc>sts such ltenls nlay affect the nunlber c>f ltenls paid and
the Overdratt and returned ltetii tees assessed. \X'hen liank p<>sts ltetiis in the <>rder <>t highest
tc> lc>west dc>llar anlc>unt, the Overdraft and returned ltenl fees nlav be nlc>re than these fees
wc>uld be if lianl: were tc> pc>st the ltenls in the c>rder c>f lc>west tc> highest dc>llar anlc>unt.
Security Interest; Banlc's Rigllt to Setoff.
TO secure Cc>nlpany's perfc>rnlance c>f this rlgreenlent, Cc>nlpany grants lianl: a lien c>n
and securitN~ interest in Cc>nlpan~~'s rlccc>unt and Cc>nlpan~,'s accc>unts with an~, rlffiliate.
Ill 3ddlt1O11, COIIlp311p 3CkllOw'IedgeS 1i311k IIl3p SetOtt 3g31llSt 311p ACCOl1llt(S) (1llClllCilll(Y
nlatured and unnlatured tinle rlecc>unt(s)) fc>r anNT c>bligatic>n Cc>nlpany c>wes lianl: at am, tinle
and t<>r anNT reas<>n as all<>wed hN, the laws g<>verning C<>tnpanNs rlcc<>unt. Z'hese <>1-)ligati<>ns
include b<>th secured and unsecured debts and debts C<>mpany <>wes individuallN, <>r t<>gether
with anc>ther persc>n. lianl: n1ay ec>nsider this rlgreenlent as Cc>nlpany's ec>nsent tc> lianl:'s
asserting its securinT interest <>r exercising its right <>t set<>tt sh<nild the laws g<>verning
C<>tnpanN,'s rlcc<>unt recluire C<>mpany's c<>nsent. lt C<>mpany's rlcc<>unt is an untiiatured
tinle accc>unt, lianl: nlav deduct anv earlv withdrawal fee that nlav be due as a result c>f
liank having exercised its right <>t set<>t£ lt C<>mpany has a Sweep rlcc<>unt, C<>tnpanv als<>
authc>rizes lianl: tc> redeenl Cc>nlpany's shares in the llesignated 1\1c>neN, 1Marl:et Fund and
applNT the prc>ceeds tc> anNT c>bligatic>n Cc>nlpan~~ c>wes lianl:. '1"he rights described in this
subsecti<>n are in additi<>n t<> and apart tr<>tii any <>ther rights, including anN, rights granted
under anV securitV interest that Cc>nlpanV nlaV have granted tc> lianl:.
Bank Fees and Expenses
General.
Cc>nlpany agrees tc> paNT lianl: in acec>rdance with the fee and infc>rnlatic>n schedule. Cc>nlpany
als<> agrees t<> pay an atii<>unt eclual t<> any applicable taxes, h<>wever designated, exclusive <>t
taxes based c>n the net inec>nle c>f liank.
Yayment of Banlc Fees and Expenses; Finance Charges.
liank tnaN, either directlN, debit C<>mpany's rlcc<nint <>r inv<>ice C<>mpanN, t<>r liank tees and
expenses and taxes incurred in cc>nnectic>n with Cc>nlpany's rlccc>unt and anN, Service. lf an
Earnings rlllc>wance accrues c>n Cc>nlpany's rlccc>unt, lianl: will peric>dicallyapply Cc>nlpam"s
accrued Earnings r1ll<>wance t<> liank tees and expenses (unless lianl< <>therwise indicates in
writing). liank nlav debit Cc>nlpanv's rlecc>unt (c>r anv c>ther rlecc>unt Cc>nlpanv nlaintains at
liank) <>r inv<>ice C<>mpanN, t<>r anN, atii<>unt bN1 which the tees and expenses exceed the accrued
Earnings r111<>wance <n1 C<>mpam"s rlcc<nint. liank tnaN, als<> debit C<>mpany's rlcc<nint (and
anv c>ther acec>unt Cc>nlpany nlaintains at lianl:) fc>r attc>rnevs' fees and anv c>ther fees and
expenses liank incurs in exercising its rights under this rlgreetlient including liank's rights
in c<>nnecti<>n with Overdratts, r1dverse Claitiis, Legal Pr<>cess and "Freezing" C<>mpanNI's
rlccc>unt lf there are insufficient funds in Cc>nlpanNI's rlccc>unt tc> cc>ver the debit, lianl: nla~~
<>verdraw C<>mpany's rlcc<>unt. C<>mpany agrees t<> pr<>tnptly paN, ann, inv<>iced atii<>unt. liank
nlaN, assess finance charges c>n am, invc>iced anlc>unts that are nc>t paid within fc>rtNl-five (45)
davs c>f the date c>f invc>ice. Finance charges are assessed at a rate c>f 1.5% per nlc>nth (18%
per annutii) <>r the highest atii<nint pert~iitted bN, the laws g<>verning C<>mpany's rlcc<nint,
whichever is less. Charges fc>r accrued and unpaid interest and previc>usly assessed finance
charges will n<>t be included when calculating finance charges. PaN~tnents and <>ther reducti<>ns
<>t atii<>unts <>wed will be applied first t<> that 1)<>rti<>n <>t <>utstanding tees attributable t<>
charges fc>r accrued and unpaid interest and previc>uslN, assessed finance charges, then tc> c>ther
tees and expenses. llebiting <>t service tees <>ccurs <>n the twentieth (20"') daN1 <>t each tii<>nth,
<>r it the twentieth (20"') daNT is n<>t a liusiness llaN; <>n the next succeeding liusiness llaN,.
Earnings Allowance.
Each tii<>nth, the average tii<>nthlN, lnvestable lialance in a c<>tiitiiercial detiiand del-msit acc<nint
tnaN, earn an "Earnings r1ll<>wance" which, depending <>n the arrangetiient with liank, tnay
be applied against that nlc>nth's fees fc>r the acec>unt. r1n Earnings rlllc>wance in excess c>f
the t<>tal tii<>nthlv tees cann<>t be credited t<> the acc<nint as interest and tnav n<>t be carried
t<>rward t<> the t<>ll<>wing tii<>nth. Earnings r1ll<>wances are calculated <>n a365/366-daN, N~ear
basis using an "Earnings rlllc>wance Rate," which is a variable rate established bN, lianl: (and
which tnaN, be as 1<>w as zer<> percent). liank reserves the right t<> change this rate at anN, titiie
withc>ut nc>tice tc> Cc>nlpanNT lf the acec>unt is an interest-bearing acec>unt, the acec>unt is nc>t
eligible tc> earn an Earnings rlllc>wance.
Checking SuUaccounts
F<>r each checking acc<nint, liank tnaN, establish <n1 C<>mpanNI's behalt a tiiaster acc<nint and
twc> subacec>unts. r111 infc>rnlatic>n that is nlade available tc> Cc>nlpany abc>ut Cc>nlpany's
rlcc<>unt will be at the tiiaster acc<>unt level. Z'he subacc<>unts are c<>mprised <>t a savings
acc<>unt and a transacti<>n acc<>unt. 011 the first dav <>t each tii<>nth, liank will all<>cate tunds
between the twc> subaccc>unts as it deenls apprc>priate. ltenls received bN, lianl: that are drawn
against C<>mpany's tiiaster acc<>unt will be presented t<>r paytnent against the transacti<>n
subaccc>unt. Funds will be transferred frc>nl the savings subaccc>unt tc> cc>ver ltenls presented
against the transactic>n subaccc>unt as nlaN, be needed. On the sixth (6111) transfer frc>nl the
savings subacc<>unt during a statetiient peri<>d all <>t the tunds <>n del,<>sit in the savings
subaccc>unt will be transferred tc> the transactic>n subaccc>unt lf Cc>nlpanNl's rlccc>unt earns
interest, the use c>f subacec>unts will nc>t affect the interest Cc>nlpanN, earns.
15
Miscellaneous
Acceptable Form of Yaper Items; llocument and Image Qualiry.
Cc>nlpan~~ agrees tc> ec>nlplN~ with liank's specificatic>ns fc>r Paper ltenls, including withc>ut
lit~iitati<>n paper st<>ck , ditnensi<>ns, and <>ther generally applicable industry standards t<>r
Paper ltenls and tc> include c>n Cc>nlpany's Paper ltenls lianl:'s nanle and address as directed bN,
liank. Certain features (such as securin, features) c>f an c>riginallNT issued ltenl c>r a llepc>sited
ltetii tnaN, impair the image qualitN, <>t a suhstitute check, purp<>rted substitute checl< <>r
electrc>nic ltenl created bN, lianl: c>r anN, third partN~ lianl: will nc>t be liable fc>r anN, clainls,
detiiands, judgments <>r expenses paid, suttered <>r incurred hN, C<>tnpanN; and C<>mpanN, will
indetnnit-,~ liank tr<>tii and h<>ld liank hartiiless against any claitiis, detiiands, judgments <>r
expenses paid, suffered c>r incurred bN, lianl:, arising directlN, c>r indirectlN, as a result c>f c>r in
c<>nnecti<>n with (i) the untimeh, return <>t anNT Paper ltetil C<>mpany has issued as a result <>t,
and am, presentnlent-related prc>blenl resulting frc>nl, the failure c>f the Paper ltenl tc> ec>nfc>rnl
in anv respect tc> lianl:'s Paper ltenl specificatic>ns, including withc>ut linlitatic>n, failure tc>
include liank's tull natiie and address <>n the Paper ltetii, and (ii) anN, claitii hased <>n the itiiage
qualitN, c>f a substitute check, purpc>rted substitute checl: c>r electrc>nic ltenl, whether created
bN, lianl: c>r anN, third partNl-
Closing Company's Account.
Cc>nlpanV nlaV clc>se Cc>nlpanV's rlecc>unt at anV tinle. lianl: nlaN; in its sc>le discretic>n, clc>se
Cc>nlpanN,'s rlccc>unt at anN, tinle. lf lianl: clc>ses Cc>nlpany's rlccc>unt, lianl: nlay send the
C<>llected lialance <>n dep<>sit in C<>mpany's rlcc<>unt hN, <>rdinarN, tiiail t<> C<>mpany's tii<>st
recent address shc>wn c>n lianl:'s acec>unt recc>rds. Aw'hether Cc>nlpany c>r lianl: clc>ses Cc>nlpanN"s
rlcc<nint, C<>mpanNT agrees t<> tiiaintain <n1 dep<>sit in C<>mpany's rlcc<nint sutficient tunds
(detertiiined in liank's s<>le discreti<>n) t<> c<>ver <>utstanding ltetiis t<> he paid tr<>tii C<>mpany's
rlccc>unt, charge-bacl:s including withc>ut linlitatic>n returned llepc>sited ltenls and lianl:'s
tees and expenses. Z'his rlgreetnent shall c<>ntinue t<> g<>vern C<>mpany's rlcc<>unt until liank
tiiakes a final dishursetnent tr<>tii it. ln additi<>n, liank will n<>t he liable t<>r anN, 1<>ss <>r datiiage
that nlaN, result frc>nl dishc>nc>ring am, c>f Cc>nlpany's ltenls that are presented c>r c>therwise
received atter C<>mpanNI's rlcc<>unt is cl<>sed.
Contract Language.
English is the ec>ntrc>lling language c>f the relatic>nship between Cc>nlpam~ and lianl:. lianl:
tnay translate its agreetiients, t<>rtlis, discl<>sures and advertisetnents int<> an<>ther language
t<>r C<>mpan~~'s c<>n~Tenience. H<>we~Ter, it there is a discre~~ancN, 1~etween lianl~'s English
language nlaterials and the nlaterials in anc>ther language, the English language versic>n
is c<>ntr<>lling, unless (i) liank <>therwise agrees with C<>mpany in writing; <>r (ii) the laws
gc>verning Cc>nlpany's rlecc>unt specificalk, prc>vide fc>r a different result.
Credit Reports.
C<>mpany auth<>rizes liank t<> tiiake anN, incluiries that liank c<>nsiders appr<>priate t<>
deternline if lianl: shc>uld c>pen and nlaintain an rlecc>unt fc>r Cc>nlpanNT. '1"his nlaN1 include
c>rdering a credit (c>r c>ther) repc>rt infc>rnlatic>n frc>nl anNT nlc>tc>r vehicle departnlent c>r
<>ther state agency) <n1 C<>mpanNT
llisclosure of Information.
GenerallN; absent Cc>nlpany's ec>nsent, lianl: will nc>t disclc>se infc>rnlatic>n abc>ut Cc>nlpany's
rlcc<nint, hut tnaN, d<> s<> under the t<>ll<>wing circutiistances: (i) t<> c<>mplN, with the laws
gc>verning Cc>nlpany's rlecc>unt; (ii) in ec>nnectic>n with exanlinatic>ns bN, state and federal
banking authc>rities; (iii) tc> ec>nlplN, with anN, legal prc>cess, including withc>ut linlitatic>n a
suhp<>ena, search warrant <>r <>ther <>rder <>t a g<>verntnent agencv <>r c<>urt; (iv) when liank
deternlines that disclc>sure is necessary c>r apprc>priate in c>rder tc> ec>nlplete a transactic>n;
(v) tc> verifv, the existence and ec>nditic>n c>f Cc>nlpanN~'s rlecc>unt fc>r a third parn; such as a
tiierchant <>r credit bureau; (vi) t<> pr<>vide int<>rtnati<>n t<> C<>tnpanN,'s legal representatiVe <>r
successc>r; (vii) when repc>rting the invc>luntarN, clc>sure c>f Cc>nlpanNI's rlecc>unt; (viii) when
liank c<>ncludes that discl<>sure is necessary t<> pr<>tect C<>mpany, C<>mpany's rlcc<>unt, <>r
the interests <>t liank; (ix) t<> agents, independent c<>ntract<>rs, and <>ther representatives <>t
19
liank in c<nlnecti<>n with the servicing <>r Pr<>cessing <>t C<>mpany's rlcc<nint <>r rlcc<nint
transactic>ns, rlecc>unt analN'sis, c>r sinlilar purpc>ses; (x) tc> liank's rlffiliates and affiliated
c<>t~lpanies; <>r (xi) it C<>tnpanv gives C<>tnpanv's permissi<>n.
llormant and Unclaimed Accounts.
Cc>nlpany's rlecc>unt is dc>rnlant if, fc>r c>ne vear fc>r a checking acec>unt c>r three N~ears fc>r a
C<>tiitiiercial savings <>r titiie acc<>unt, there is n<> cust<>tiier initiated activity (except where the
laws g<>verning C<>mpanNI's rlcc<nint recluire <>therwise). lt C<>mpanNI's rlcc<nint is d<>rmant,
lianl: n1aN, hc>ld all statenlents c>n Cc>nlpany's rlecc>unt, but liank's nc>rnlal nlaintenance and
<>ther tees will c<>ntinue t<> be assessed except where pr<>hibited and r17'1ti1 and P<>int-<>t-Sale
("POS") access tnaN, be bl<>cked. lt C<>mpanNI's rlcc<nint retiiains d<>rmant and is unclaitiied
bN, Cc>nlpanN, fc>r the peric>d required under the laws gc>verning Cc>nlpany's rlecc>unt, lianl:
is recluired by th<>se laws t<> "escheat" the tunds; that is, t<> deliver the tunds in C<>mpany's
rlecc>unt tc> the state whc>se laws gc>vern Cc>nlpany's rlecc>unt. lianl: nlay charge a fee tc>
Cc>nlpam,'s rlccc>unt fc>r nlailing an escheat nc>tice. Aw'hen the funds in Cc>nlpany's rlccc>unt
are delivered t<> the state, C<>tnpanv's rlcc<>unt is cl<>sed, and n<> interest accrues. Zi> rec<>ver
funds delivered tc> the state, Cc>nlpanN, nlust file a clainl with the state.
Entire Agreement; Headings; No Tllird Yarry Beneficiary.
7''his rlgreetzient c<>nstitutes the entire a(yreetzient between C<>tzipany and Bank regarding
the subjects addressed in it and supersedes pric>r c>ral c>r ~,vritten representatic>ns, cc>nditic>ns,
warranties, understandings, prc>pc>sals c>r agreenlents regarding Cc>nlpamT's rlecc>unt. Headings
d<> n<>t c<>nstitute apart <>t this rlgreement. N<> pers<>n <>r entity will be deetiied t<> be a third
partV beneficiarV under this rlgreenlent.
Laws Governing Company's Account.
7''he laws g<>N"erning C<>tzipanN~'s rlcc<>tmt include the laws and regulati<>ns <>t the United States
and, tc> the extent applicable, the laws c>f the state in which the lianl: c>ffice that nlaintains
C<>mpany's rlcc<>unt is 1<>cated (unless liank has n<>tified C<>mpany in writin(y that the laws <>t
an<>ther state shall g<>vern C<>mpany's rlcc<>unt), with<>ut regard t<> c<>nflicts <>t laws I,rinciI,les.
lf Cc>nlpany's rlecc>unt was nc>t c>pened in persc>n at a lianl: c>ffice (fc>r exanlple, if Cc>nlpany
<>pened its rlcc<nint by ph<n1e, thr<>u(yh the tiiail, <>r <>ver the lnternet), C<>mpanNI's rlcc<nint will
be g<>verned bN, the laws <>t the state in which liank's tiiain <>tfice is 1<>cated, unless liank n<>tifies
Cc>nlpanN, that its rlccc>unt has been assigned tc> a particular lianl: c>ffice, in which event the
laws <>t the state in which that <>tfice is 1<>cated will g<>vern C<>mpany's rlcc<nint. r1nN, lawsuits,
clainls, c>r c>ther prc>ceedings relating in anNT wa~~ tc> Cc>nlpanv's rlecc>unt, anN~ Service c>r this
rlgreenlent, including withc>ut linlitatic>n, the enfc>rcenlent c>f the rlrbitratic>n rlgreenlent in
this rlgreement and the entry <>t judgtiient <>n any arbitrati<>n award shall be venued exclusively
in the ec>urts c>f the state whc>se laws gc>vern Cc>nlpany's rlecc>unt, withc>ut regard tc> ec>nflict
c>f laws principles. Each prc>visic>n c>f this rlgreenlent stands alc>ne. r1nNT
prc>visic>n c>f this
rlgreement which is inc<>nsistent with the laws g<>verning C<>mpanNI's rlcc<>unt, either in its
entirety c>r with respect tc> a particular type c>f transactic>n c>r ltenl, will be deenled nlc>dified
and applied in a tiianner c<>nsistent with the laws g<>verning C<>mpany's rlcc<>unt. r1ny Pr<>Visi<>n
<>t this rlgreement which a c<>urt <>t c<>mpetent jurisdicti<>n detertiiines t<> be unent<>rceable <>r
invalid, either in its entirety c>r with respect tc> a particular type c>f transactic>n c>r ltenl, will nc>t
attect the ent<>rceabilitN, <>r validitN, <>t the retiiaining Pr<>visi<nIS <>t this rlgreetnent.
Minimum Balance Requirements; Other Restrictions.
lianl: nlay inlpc>se nlininlunl balance requirenlents c>r c>ther applicable linlitatic>ns, c>r
restricti<>ns <>n C<>mpany's rlcc<>unt, pr<>vided such recluiretiients, limitati<>ns, <>r restricti<>ns
are discl<>sed t<> C<>t~ipanNT
Modification of Agreement; Account Conversion.
liank tnay in its s<>le discreti<>n tr<>tii titiie t<> titiie change this rlgreement bv adding new
pr<>visi<>ns <>r hN, tn<>dit-,"ing <>r deleting existing pr<>visi<>ns. Each such additi<>n, m<>dificati<>n
c>r deletic>n is referred tc> in this rlgreenlent as a"nlc>dificatic>n." \w'hen applicable law
recluires liank t<> n<>ti1--,~ C<>mpanN~ <>t a m<>dificati<>n, liank tiiaN~ d<> s<> 1~~~ p<>sting n<>tice
c>f the nlc>dificatic>n in lianl: c>r at liank's hc>nle page (www.wellsfargc>.ec>nl), bNT including
?O
a tiiessage <>n <>r with the statetiient t<>r C<>mpany's rlcc<nlnt, <>r hN~ anN~ <>ther tiieans that
lianl: ec>nsiders apprc>priate, unless the laws gc>verning Cc>nlpany's rlecc>unt requires nc>tice
by a specific tiieans. ln additi<>n, liank tnay agree in writing t<> waive apr<>visi<>n <>t this
rlgreement including with<>ut limitati<>n a tee (a "waiver"). liank tnaN; up<>n pri<>r written
nc>tice tc> Cc>nlpany, revc>l:e any waiver. Cc>nlpany's ec>ntinued use c>f Cc>nlpany's rlecc>unt c>r
a related Service t<>ll<>wing the ettective date <>t anN, m<>dificati<>n <>r rev<>cati<>n <>t anN, waiVer
will shc>w Cc>nlpany's ec>nsent tc> that nlc>dificatic>n c>r revc>catic>n c>f waiver. lianl: nlay ec>nvert
Cc>nlpany's rlecc>unt tc> anc>ther type c>f acec>unt at anv tinle, prc>vided lianl: gives Cc>nlpany
anN, advance n<>tice that tnaN, he recluired.
Monitoring and Recording Communications.
lianl: nlaN, withc>ut liabilitN, nlc>nitc>r, recc>rd and retain telephc>ne ec>nversatic>ns, electrc>nic
tiiessages, electr<nlic rec<>rds and <>ther data transmissi<nIS hetween C<>mpany and liank at
any tinle withc>ut further nc>tice tc> Cc>nlpany, unless further nc>tice is c>therwise required bN,
the laws gc>verning Cc>nlpanNI's rlecc>unt.
No Fiduciary Relationsllip.
liank's relatic>nship with Cc>nlpany ec>ncerning Cc>nlpanNI's rlecc>unt is that c>f debtc>r and
creditc>r; nc> fiduciary, quasi-fiduciarNT, c>r special relatic>nship exists between Cc>nlpany
and liank.
Reliance on Bank Records.
lianl: nlaN, relN, sc>lelN, c>n its recc>rds tc> deternline the fc>rnl c>f c>wnership c>f and the rluthc>rized
Si(xners <>n C<>mpany's rlcc<nint.
Reordering Checlcs.
Cc>nlpany can rec>rder checl:s bN, nlailing the rec>rder fc>rnl enclc>sed in Cc>nlpany's current
<>rder <>t checks <>r by calling liank at the teleph<>ne number sh<>wn <>n the statetiient t<>r
C<>mpany's rlcc<>unt. lt C<>mpany <>r a third party prints its checks, liank shall have n<>
liabilin, tc> Cc>nlpany if lianl: is unable tc> prc>cess such checl:s by autc>nlated nleans.
Transferring an Interest in Company's Account.
C<>mpany's rlcc<>unt tnav n<>t he pledged, assigned, <>r in ann, <>ther tiianner transterred,
whether in whc>le c>r in part, withc>ut liank's written agreenlent.
II. Additional Terms Applicable to All Commercial
Interest-Bearing, Savings and Time Accounts
Interest-Bearing Accounts
Variable/Fixed-Rate Accounts.
Cc>nlpany's interest-bearing rlccc>unt nlaN, be either a variable-rate c>r fixed-rate accc>unt.
Unless lianl: has specified c>therwise in writing, Cc>nlpany's rlccc>unt will be a variable-rate
acc<>unt. Z'hat tiieans liank tnaN, in its s<>le discreti<>n chan(ye the interest rate <>n C<>mpany's
rlccc>unt at anN, tinle. lf Cc>nlpany's rlccc>unt is a fixed-rate accc>unt and it is nc>t a tinle
acc<>unt, C<>mpanN~ will 1-)e paid the sl-)ecified interest rate t<>r at least thirtNT (3 0) daN~s.
Metllod Used to Calculate Earned Interest.
lianl: nlaN, use either the average daik, balance c>r dailN, balance nlethc>d tc> calculate interest.
'1"he average daik, balance nlethc>d applies a peric>dic rate tc> the average daily cc>llected
balance t<>r the peri<>d. Z'he average dailN, balance is calculated by adding principal t<>r each
daN, and dividing bN, the nunlber c>f daN, s in the peric>d. '1"he daik, balance nlethc>d applies a
dail~' peri<>dic rate t<> principal each daNI. Unless liank has specified <>therwise in writing, it
will use the dailN, balance tiieth<>d t<> calculate interest. lt C<>tnpanNl's rlcc<>unt is a tiered-rate
acec>unt, lianl: nlaV paV the sanle interest rate c>n nlc>re than c>ne tier.
Interest Accrttal.
lt C<>mpany dep<>sits a n<n1-cash ltetii, such as a check, interest begins t<> accrue n<> later than
the liusiness llaN, lianl: receives credit fc>r the depc>sit c>f that ltenl. '1"his nlaN, nc>t be the sanle
daN, that C<>tnpanN, dep<>sits the n<n1-cash ltetii t<> C<>mpany's rlcc<nint.
?1
Compounding and Crediting.
lnterest will cc>nlpc>und c>n a dailN, basis. Fc>r checking and savings accc>unts, interest will be
credited <>n a tii<>nthlN, basis. F<>r titiie acc<>unts, liank will n<>tit-,~ C<>mpany separately as t<>
the frequency with which interest will be credited tc> Cc>nlpanN,'s rlccc>unt.
Target Balance Accounts.
lt C<>mpan~~ tiiaintains t~iulti~,le acc<nints at liank, C<>t~i~,an~~ t~ia~; with liank's c<nlsent,
designate in writing c>ne such acec>unt as its "Principal rlecc>unt" and c>ne c>r nlc>re additic>nal
accc>unts as "'Farget lialance rlccc>unts." Fc>r each Target lialance rlccc>unt, Cc>nlpany will
separately specit-,~ t<> liank in writing the Ledger lialance <>r C<>llected lialance which C<>mpany
wishes tc> nlaintain in such accc>unt (the "'1"arget lialance"). r1t the end c>f each liusiness llaN;
lianl: will deternline the applicable balance c>n depc>sit in each '1"arget lialance rlccc>unt lf the
applicable balance in a Target lialance rlcc<>unt exceeds its Target lialance, liankwill transter
frc>nl the '1"arget lialance rlccc>unt tc> the Principal rlccc>unt such funds as are necessarN, tc>
bring the applicable balance t<> the Target lialance. lt the applicable balance is less than the
Z'arget Balance, Bank will transter tr<>tzi the Principal rlcc<>tmt t<> the Target Balance rlcc<>tmt
such funds as are necessarN, tc> bring the applicable balance tc> the '1"arget lialance. lianl: nlaN;
hut will n<>t he reciuired t<>, transter tunds it the transter w<n]ld create an Overdratt <>r exceed
the Cc>llected lialance then c>n dep<>sit in the Principal rlccc>unt.
Interest Adjustments.
r1n interest adjusttiient tnaN, he reflected <>n the statetiient t<>r C<>mpany's rlcc<>unt t<>r the
tii<>nth atter it <>ccurs rather than the tii<>nth in which it <>ccurs.
Tax Identification Number Certification.
ln til<>st instances, Zieasurv regulati<>ns reciuire liank t<> <>btain a Tax ldentificati<>n Number
("Z'1N") t<>r each acc<>unt. Zi> av<>id backup withh<>lding tax <>n acc<>unts that earn interest
c>r dividends, Cc>nlpanN, nlust subnlit lnternal Revenue Service ("1RS") Fc>rnl \w'-9 c>r Fc>rnl
W-hliEN t<> liank. U.S. citizens <>r <rther U.S. pers<nls, including resident alien individuals,
nlust prc>vide a Fc>rnl \w'-9. lf Cc>nlpany is a nc>n-resident alien, Cc>nlpany nlust prc>vide a
Fc>rnl \w'-811EN. Other additic>nal fc>rnls nlay be required if Cc>nlpany is a fc>reign partnership,
t<>reign g<>verntnent, <>r is claitliing an exetnpti<>n hased <>n Ettectiveh, C<>nnected lnc<>tiie.
Until lianl: has received the ec>nlpleted and signed Fc>rnl(s) \w'-9 c>r \w'-8liEN, lianl: nlaN, either
nc>t pav interest c>r pay interest and ec>nlply with the bacl:up withhc>lding requirenlents c>f
the 1RS. lt C<>tnpanN,'s rlcc<nint is an interest-hearing checking <>r savings acc<ni nt, it will
begin earning interest at the rate in effect c>n the date lianl: receives Cc>nlpany's Fc>rnl(s)
\V-9 <>r \V-hliEN. lt C<>mpan~~'s rlcc<>unt is a titile acc<>unt, it will earn interest at the rate in
ettect <>n the date <>~~ened <>r the date <>t last tnaturitN; whiche~Ter is later. lt, at any titiie, liank
receives infc>rnlatic>n which indicates that sc>nlec>ne c>ther than Cc>nlpany is using the sanle
7''1N that C<>tzipanN, certified as its 7''1N <>n F<>rtzi W-9, and Bank is n<>t able t<> detertziine t<>
its c>wn satisfactic>n that the '1"1N has been assigned tc> Cc>nlpany lianl: nlay at its c>ptic>n and
Ting interest c>n Cc>nlpam~'s rlecc>unt, (ii) ec>ntinue paN~ing interest
withc>ut nc>tice (i) stc>p paN
hut c( >tn I )lNT with the backup withh<>lding recluiretiients <>t the 1RS and/<>r, (iii) take anN, <>ther
actic>n which lianl: believes is reasc>nable in the circunlstances. lf Cc>nlpan~, is an individual
whc> c>wns its rlecc>unt as a sc>le prc>prietc>r, upc>n that individual's death, lianl: nlust be
p r<n-ided with the individual's estate's <>r success<>r's Z'1N <>r liank tnaN, either retuse t<> pay
interest earned c>n Cc>nlpany's rlecc>unt since the date c>f the individual's death c>r withhc>ld
ap<>rti<>n <>t the interest that has been earned <>n C<>mpany's rlcc<>unt since the date <>t the
individual's death.
Commercial Savings Accounts
Banlc's Rigllt to Require Notice.
liank has the right t<> recluire seven (7) davs' written n<>tice bet<>re C<>mpany withdraws 111<>n
frc>nl Cc>nlpam,'s savings rlccc>unt.
Limitations on Transfers from Company's Savings Account.
Preauth<>rized transters, aut<>tiiatic transters, <>nline transters, paNltnents t<> <>ther pers<>ns,
and transfers bv telephc>ne frc>nl Cc>nlpam,'s savings rlecc>unt are linlited tc> six (6) a nlc>nth.
»
Preauth<>rized transters include aut<>tiiatic bill payments, transters t<> C<>mpany's <>ther
rlecc>unts with liank, c>r autc>nlatic transfers tc> c>ther persc>ns that Cc>nlpany has authc>rized
liank t<> tiiake. lt liank permits transters tr<>tii C<>tnpanN,'s savings rlcc<nint bN, check, dratt,
I,<>int <>t sale POS purchases, check card <>r any sitiiilar <>rder t<>r withdrawal, n<> tii<>re than
three (3) c>f the six (6) transfers nlay be nlade by such nleans in a calendar nlc>nth c>r statenlent
cN,cle. lt liank detertiiines that C<>mpany is exceeding the litiiits described a1-)<>N,-e <>n tii<>re
than an c>ecasic>nal basis, lianl: will, at its c>ptic>n, either clc>se Cc>nlpam,'s savings rlecc>unt,
transfer the funds c>n depc>sit in Cc>nlpany's rlecc>unt tc> anc>ther acec>unt that Cc>nlpany is
eligible t<> tiiaintain, <>r tertiiinate C<>tnpanN,'s right t<> tiiake transters and write ltetiis a(yainst
Cc>nlpam,'s savings rlccc>unt.
Commercial Time Accounts
General.
C<>tiitiiercial Z'itiie ("titiie") rlcc<>unts include del-)<>sits which are payable, either <>n a specified
date c>r at the expiratic>n c>f a specified tinle, nc> less than seven (7) calendar daN~s after the date
<>t del,<>sit. liank tnay reter t<> a titiie acc<>unt as a"certificate <>t del,<>sit" <>r a"C;ll," even
th<>ugh the titiie acc<>unt is n<>t represented bN, a certificate.
Certificated Time Accounts.
lt C<>tnpanN, receives a certificate evidencing C<>mpany's titiie rlcc<>unt, liank tnay reciuire
C<>mpany t<> present the certificate and anN, atiiendtiients t<> receive paNltnent <>r transter
mvnership.
Maturity llate.
C<>mpany's titiie rlcc<>unt will tiiature at the end <>t the tertii stated <>n C<>mpany's receipt,
disclc>sure c>r certificate, as applicable.
Time Requirements.
C<>tnpanv agrees t<> keep C<>mpanNI's hinds <>n del,<>sit until the tnaturitN, date. C<>mpanN, tnay
nlal:e withdrawals frc>nl Cc>nlpam,'s tinle rlecc>unt c>n the nlaturin, date c>r within the grace
peri<>d atter that date. liank will n<>t agree in advance t<> all<>w withdrawal bet<>re tiiaturitNl,
Payment of Interest.
lf Cc>nlpanN, has elected a paN, nlent c>f interest c>ther than a credit tc> Cc>nlpanNl's tinle rlecc>unt,
lianl: nlaN, in its sc>le discretic>n ternlinate it in favc>r c>f crediting Cc>nlpanNl's tinle rlecc>unt.
OrdinarilN; such discreti<>n will be exercised when an interest paytnent tiiailed t<> C<>tnpanN,'s
rlccc>unt address has been returned undelivered c>r when an rlccc>unt tc> which Cc>nlpany's
interest payments were aut<>tnatically credited has been cl<>sed, <>r it the interest paytnent
atii<>unt is less than anv tiiinitiiutii atii<>unt discl<>sed in the tee and int<>rtnati<>n schedule.
Additional lleposits.
Other than during the grace peri<>d, C<>mpany tnaN, n<>t tiiake additi<>nal del-)<>sits t<>
COIIlp311p'S tllile ACCOllllt, 11111eSS 1i311k OtlleTw'1Se 3(yYeeS lll w'Yltlllg.
Witlldrawal of Interest Yrior to Maturiry.
r1 withdrawal c>f interest pric>r tc> nlaturity will reduce earnings.
Renewal Policies.
lf Cc>nlpanNl's tinle rlecc>unt is autc>nlaticallN, renewable, at nlaturity it will renew (i) fc>r a
lil:e ternl; and (ii) at lianl:'s interest rate in effect c>n the nlaturitN, date fc>r a new tinle depc>sit
<>t the satiie tertii and atii<nint, unless liank has n<>tified C<>mpanN, that it will n<>t renew
Cc>nlpany's rlecc>unt Cc>nlpany nlaN, withdraw Cc>nlpam"s funds am~tinle during the grace
peric>d withc>ut a fee. lf Cc>nlpany dc>es, lianl: will nc>t paN, interest fc>r that peric>d c>n the
tunds withdrawn. lt C<>mpany's titiie rlcc<>unt is n<>t aut<>tnaticallN, renewable and C<>mpany
dc>es nc>t withdraw the funds c>n the nlaturin, date, the funds will nc> lc>nger earn interest after
the tnaturitN, date and will be placed in a n<n1-interest-bearing checking rlcc<nint.
III. Funds Transfers
General.
Funds transters t<> <>r tr<>tii C<>mpanNI's rlcc<>unt will he g<>verned hN, the rules <>t anN, tunds
transfer sN~stenl thrc>ugh which the transfers are nlade, as anlended frc>nl tinle tc> tinle,
including, with<ut limitati<n1, the Nati<>nal rlut<>tiiated Clearing H<nise rlss<>ciati<>n and
any regi<>nal ass<>ciati<>n (each, an "i1CH") and Clearing H<>use lnterhank Paytnents SN~stetn
("CH1PS"). '1"he fc>llc>wing ternls are in additic>n tc>, and nc>t in place c>f, any c>ther agreenlents
hetween C<>mpany and liank regarding tunds transters.
Notice of Receipt of Funds.
Unless lianl: has c>therwise agreed in writing, it will nc>tib,~ Cc>nlpany c>f funds electrc>nically
debited c>r credited tc> Cc>nlpany's rlecc>unt thrc>ugh the statenlent fc>r Cc>nlpany's rlecc>unt
c<>vering the peri<>d in which the transacti<>n <>ccurred. liank is under n<> <>bligati<>n t<> pr<>vide
Cc>nlpanN, with anN, additic>nal nc>tice c>r receipt.
Reliance on Identification Numbers.
lf a transfer instructic>n describes the persc>n tc> receive paynlent incc>nsistently by nanle
and acc<>unt number, paytnent tnaN, he tiiade <>n the hasis <>t the acc<>unt number even it the
acec>unt nunlber identifies a persc>n different frc>nl the nanled persc>n. lf a transfer instructic>n
describes aparticipating financial instituti<>n inc<>nsistentlN, hN, natiie and identificati<>n
number the identificati<>n number tnaN, he relied up<>n as the pr<>per identificati<>n <>t the
financial institutic>n.
llury to Report Unautllorized and Erroneous Fund Transfers.
C<>mpany agrees t<> exercise <>rdinarN, care t<> detertiiine whether a tund transter t<> <>r tr<>tii
C<>mpany's rlcc<>unt was either err<>ne<>us <>r n<>t auth<>rized and will n<>tit-,- lianl< <>t the
facts within a reasc>nable tinle nc>t exceeding fc>urteen (14) days after lianl: sends c>r nlal:es
available t<> C<>mpanN, the statetiient t<>r C<>mpanNI's rlcc<nint <>n which the transter appears
c>r Cc>nlpanN, c>therwise has nc>tice c>f the transfer, whichever is earlier. Cc>nlpany will be
precluded frc>nl asserting that lianl: is nc>t entitled tc> retain paynlent unless Cc>nlpanN, c>bjects
t<> pavtnent within the t<>urteen (l+ da~T peri<>d.
Erroneous Payment Orders.
lianl: has nc> c>bligatic>n tc> detect errc>rs in paynlent c>rders (fc>r exanlple, an errc>nec>us
instructic>n tc> paV a beneficiarV nc>t intended bp Cc>nlpanV c>r tc> paV an anlc>unt greater than
the atii<nint intended hN, C<>mpany, <>r an err<n1e<us transtnissi<>n <>t a duplicate paNltnent
c>rder previc>usly sent bN1 Cc>nlpanNI). Shc>uld lianl: detect an errc>r c>n c>ne c>r nlc>re c>ecasic>ns,
it shall n<>t he c<>nstrued as <>bligating liank t<> detect err<>rs in anN, tuture paNltnent <>rder.
Automated Clearing House (ACH) Transactions.
7''he t<>ll<>wing tertzis apphy~ t<> paNltzients t<> <>r tr<>tzi C<>tzipanNI's rlcc<>tmt that are transtziitted
thrc>ugh an r1CH:
• C<>tnpanN,'s rights as t<> paytnents t<> <>r tr<>til C<>mpany's rlcc<>unt will he g<>verned
bN, the laws that gc>vern Cc>nlpany's rlecc>unt.
• CYeCllt g1Vell llp 3 YeCelVlllg 11311k tO 1tS Cl1StOIIleT tOY 3p3plilellt tTOIIl COIIlp311p'S
rlcc<nint is pr<>visi<>nal until final settletiient has been tiiade <>r until paNltnent is
cc>nsidered received under the laws that gc>vern Cc>nlpany's rlccc>unt.
• lt final settletiient <>r pavtnent is n<>t tiiade <>r received, the receiving hank will he
entitled tc> a refund frc>nl its custc>nler and Cc>nlpanN; as the c>riginatc>r c>f the
paytnent will n<>t he c<>nsidered t<> have paid C<>mpany's cust<>tiier.
• lf a paynlent is nlade tc> Cc>nlpany's rlecc>unt and lianl: dc>es nc>t receive final
settlenlent c>r pavnlent is nc>t received under the laws gc>verning Cc>nlpany's
rlcc<>unt, C<>mpanN, will n<>t he c<>nsidered t<> have received paNltnent, and liank
will be entitled tc> reinlbursenlent frc>n1 Cc>nlpanN, fc>r that paNlnlent.
• C<>mpany herehN, auth<>rizes anN, Originating llep<>sitarN, Financial lnstituti<>n
(OllFl) tc> initiate, ptirsuant tc> r1CH Operating Rtiles, r1CH debit entries tc>
Cc>nlpany's rlecc>unt fc>r electrc>nic presentnlent c>r re-presentnlent c>f ltenls
written <>r auth<>rized by C<>tnpanv
24
IV. Selected Services
ATM lleposit Service.
C<>mpanN, maN, elect t<> utilize liank's r17'1ti1 llep<>sit Service bN1 c<>mpleting and returning t<>
liank an r17'1ti1 llep<>sit Service Setup F<>rtil. Z'his Service all<>ws C<>mpanN, t<> tilake dep<>sits
tc> Cc>nlpam~'s rlecc>unt using a TieasurN, Express llepc>sit'" card ("llepc>sit Card") and a
designated \X'ells Farg<>'" r17'2ti1 C<>mpanN, shall tiiake such dep<>sits acc<>rding t<>
the instructic>ns lianl: prc>vides and shall gain access tc> the r1'1"1\1 using the llepc>sit Card and
a Persc>nal ldentificatic>n Nunlber ("P1N"), the risl: c>f nlisuse c>f bc>th c>f which Cc>nlpany
assutiies. liank will pr<>visi<>nallN, credit each dep<>sit t<> C<>mpanNI's rlcc<>unt based <>n the
anlc>unt Cc>nlpany l:eN~s intc> the r1'1"1\1. Cc>nlpany will receive sanle-daNl availability fc>r cash
subject t<> the standard cut-<>tt titiie established t<>r the r17'1ti1 int<> which the dep<>sit was tiiade
and liank's tunds availability p<>licN, applicable t<> C<>mpany's rlcc<nint. lt the d<>llar atii<nint
c>f Cc>nlpany's depc>sit as deternlined bN, lianl: differs frc>n1 Cc>nlpanNI's tc>tal (as shc>wn c>n
C<>tnpanN,'s r17'1ti1 receipt), liank will send C<>mpany a statetilent sh<>wing the atil<>unt <>t
this ditterence. C<>mpanN, agrees liank's c<>unt <>t the d<>llar atii<>unt <>t C<>mpany's dep<>sit
will be ec>nclusive and binding c>n Cc>nlpanNT Cc>nlpamy~ will have full respc>nsibilitN, fc>r each
dep<>sit and its c<>ntents until the dep<>sit has been c<>mpletely and phN'sically accepted int<>
the r11"1\1. lf Cc>nlpany clainls am, pc>rtic>n c>f a depc>sit was lc>st c>r stc>len while in lianl:'s
custc>dN; Cc>nlpany acl:nc>wledges Cc>nlpany has the burden c>f prc>ving its clainl. lf Cc>nlpany
<>rders supplies t<>r the r17'1ti1 llep<>sit Service thr<>ugh the r17'1ti1, C<>mpany auth<>rizes liank
tc> initiate debits tc> Cc>nlpany's rlecc>unt and credits tc> the acec>unts c>f third party vendc>rs
tc> ec>ver the ec>st c>f such supplies prc>vided tc> Cc>nlpanN, Such transfers nlaN, be prc>cessed
thr<>ugh an aut<>tiiated clearing h<>use <>r anN, <>ther tiieans ch<>sen bN, liank and will be subject
tc> the rules c>f the funds transfer sN~stenl used bN, liank. Cc>nlpany's authc>rizatic>n will
retiiain in tull t<>rce and ettect until liank has received written n<>tificati<>n tr<>tii C<>mpany
<>t its terminati<n1 in such titiie and tiianner as t<> att<>rd liank and anN, third partN1 vend<>r a
reasc>nable c>pp<>rttinitv tc> act c>n it.
Treasury Express lleposit"" Service.
lt C<>mpanN, elects t<> utilize liank's ZieasurNl Express llep<>sit ("TEll") Service, C<>mpanN, will
prepare, pacl:age and deliver '1"Ell depc>sits tc> lianl: in accc>rdance with lianl:'s instructic>ns.
lianl: will prc>visic>nallN, credit Cc>nlpany's rlecc>unt fc>r the curreneN, shc>wn c>n the depc>sit
ticket encl<>sed in C<>tnpam,'s TEll bag as t<>ll<>ws: (i) satiie daN~ credit t<>r dep<>sits delivered t<>
an c>ffice c>f lianl: befc>re that c>ffice's cut-c>ff tinle c>n anN, liusiness llaN, c>r fc>r depc>sits placed
in night depc>sitc>rN, c>f lianl: befc>re 6:00 a.nl. c>n any liusiness llav; c>r (ii) next liusiness llav
credit t<>r dep<>sits delivered t<> an <>tfice <>t lianl< <>n anN, liusiness llaN, <>n <>r atter liank's
c>ffice's cut-c>ff tinle c>r c>n anN, nc>n-liusiness llaN,. r111 '1"Ell depc>sits are subject tc> lianl:'s
acceptance and verificati<n1. liank will verit-,~ the currency in C<>tnpam,'s TEll bag either at
a later titiie in liank's <>tfice <>r when C<>tnpanN" s Z'Ell bag is delivered t<> liank's cash vault.
Checl:s will be verified when theN, are delivered tc> lianl:'s checl: prc>cessing center. lianl:
reserves the right t<> adjust (debit <>r credit) C<>mpanNI's rlcc<>unt it liank detertiiines that the
anlc>unt shc>wn c>n Cc>nlpany's depc>sit ticl:et is inec>rrect. liecause the frequeney c>f arnlc>red
ec>urier transpc>rtatic>n frc>nl lianl:'s c>ffices tc> lianl:'s vaults varies frc>nl c>ffice tc> c>ffice, the
titiie it takes t<> verit-,~ C<>mpam~'s Z'Ell dep<>sit may vary depending <>n the <>tfice t<> which
Cc>nlpam~'s '1"Ell bag is delivered. ln nlc>st cases, adjustnlents will be nlade and nc>tificatic>n
will be sent within three (3) liusiness llavs. rldjustnlents will be effective when they are
prc>ceSSed.
~c"': 2005 \w'ells Fargc> lianl:, N.A.
\Vells Farg<> liank N<>rthwest, N.A.
r111 rights reserved.
1Men1bers Fll1C C0M1416 (5/0S)
Addendum to
Wells Fargo Bank's Commercial
Account Agreement
This Addendum amends Wells Fargo Bank's Commercial
Account Agreeinent ("Agreeinent" ) dated iVlay 1, 2005.
All terms defined in the Agreement will have the same
ilieaning when used in this Addendtuli. If there is a conflict
between this Addenduin and the Agreement, this Addenduin
will control. Except as expressly amended by this Addenduin,
the Agreement remains in full force and effect.
Effective April 1, 2008
The following language is added at the end of the section titled
"Bank Fees and Expenses," immediately following the
subsection titled "Earnings Allowance":
"FDIC Assessment.
Coilipany is charged an FllIC Assessment based on the rate
the FllIC charges the Banlc. The FllIC Assessment may
include deposit insurance charges, financing corporation
(FICO) charges and other charges provided by law. The
FDIC Assessment is disclosed on the regular statement or
Client Analysis Statement for Company's account This
charge is variable and is subject to change by the Banlc at
any time without notice. The charge is assessed periodically
and is based upon the average ledger balances Company
maintains in Company's accottnt."
Effective February 15, 2007
In the section of the Agreement titled "Miscellaneous," the
following language is added at the end of the subsection titled
"Closing Company's Accottnt":
"If Company's account is an interest bearing account,
Coilipany's accotult will cease eariung interest froili the
date Company requests it be closed. If Company's account
balance does not reach zero within three (3 months from
the date of Company's request, Bank may close Company's
account and send Company the balance as described above
or return Company's account to active status."
2008 Wells Fargo Bank, N.A. All rights reserved. Member FDIC COM4466 (4/08)
Addendum to
Commercial Account Agreement
Effective J u ly 1, 2006
Addendum to Commercial Account Agreement
This Addendum is ettective July 1, 2006. It amends Wells Fargo Bank's Commercial
Account Agreement dated May 1, 2005 (the "Agreement"). All terms defined in the
Agreement have the same meaning when used in this Addendum. It there is a conflict
between this Addendum and the Agreement, this Addendum will control. Except as
expressly amended by this Addendum, the Agreement remains in tull torce and ettect.
In Part I, in the section titled "Deposits to Company's Account," delete the second
sentence and replace it with:
T11is rigllt ot cllarge back or debit is not attected by t11e expiration ot any applicable
midnigllt deadline, provided Bank does not llave actual knowledge t11at suc11 deadline
has expired or, having such knowledge, (i) Bank concludes that the Deposited Item has
been returned in accordance with the laws governing Company's Account or a rule
(including a clearing 1louse rule); or (ii) Bank 11as received a breacll ot warranty claim in
connection with the Deposited Item.
Immediately after the end of Part IV on page 25 of the Agreement, add a new Part V,
reading:
V. Electronic Banking Disclosures
Introduction
This Part describes Bank's account-related electronic banking Services and the additional
tertns applicable to these Services. In general, these Services provide various ways to
transter tunds electronically to and trotn a Wells Fargo Cotntnercial deposit and/or
credit account using an ATM card or check card linked to the account and/or a Personal
Identification Nutnber ("PIN" Bank tnav litnit the availabilitv ot these Services at anv
titne, and all ot these Services mav not be available at each Bank location. Bank mav
require Company to sign a separate agreetnent to obtain these Services. It there is a
conflict between the separate agreement and this Agreement, the separate agreement will
control. Additional terms, it any, applicable to these Services are provided in the Fee and
Intormation Schedule.
ATM Cards and Check Cards
Definition of "Card."
"Card" tneans every type ot ATM card that Bank issues including: Business Check Cards
(Wells Fargo Business ATM cCheck Card and Wells Fargo Business Platinutn Check
Card), Business ATM Cards (Wells Fargo Business ATM), Business Deposit Cards (Wells
Fargo Business Deposit), and Inst~zntl-`~ ATM Cards.
Eligibility for a Card and/or PIN.
Unless otherwise provided in this Agreetnent, only an Authorized Signer on at least one
Wells Fargo Cotntnercial deposit account is eligible tor a Card and/or PIN, which that
Authorized Signer tnay use to access that Account. Issuance ot a Card and/or PIN is
subject to such additional requiretnents as Bank tnay trotn titne to titne establish with
respect to that Card or PIN.
Illegal Transactions.
Each person to whotn a Card is issued (a "Cardholder" ) agrees not to use his or her Card
or any credit or deposit account linked to his or her Card (each, a"Linked Account" ) tor
any transaction that is illegal under applicable law.
Use of a Card.
The specific tunctions that can be pertormed depend on the type ot Card that Bank
issues. The Business Check Card enables a Cardholder to make:
Purchases at tnerchants that accept Visa"' credit cards and business cards and
at tnerchants in participating regional proprietary Point ot Sale ("POS" ) net-
works.
• Cash withdrawals trom, balance inquiries on, and tunds transters between
Company's Linked Accounts that are deposit accounts as well as advances and
balance inquiries on and payments to Company's Linked Accounts that are line
ot credit account(s) and credit card account(s) at Wells Fargo ATMs.
• Cash withdrawals trom and balance inquiries on Company's Linked Accounts
designated as pritnary checking and pritnary savings at non-Wells Fargo ATMs
that participate in shared ATM networks to which Bank belongs (and, which
are identified on the ATM and the back ot the Card) and Atnerican Express"'
cash dispensers. In addition, deposits (with cash back), ATM statetnents, pur-
chases ot U.S. postage statnps, and paytnents to accounts not linked to the
Card using the "Paytnent in Envelope" tunction are available at tnost Wells
Fargo ATMs.
The Business ATM Card provides the same ATM access as the Business Check Card and,
where available, can be used to make purchases at merchants in participating regional
proprietary P()S networks.
The Business Deposit Card provides deposit access onl,v to Cotnpan,v's Accounts that are
deposit accounts tor those persons designated by Cotnpany or an Authorized Signer. The
Business Deposit Card is not available to sole proprietors.
T11e Irzstcirzt ATM Card is a temporary Card providing limited tunctions t11at Bank may
issue tor use until the Cardholder receives his or her permanent Card by mail. An Instant
ATM Card expires twenty-one (21) days atter issuance. The daily withdrawal and P()S
purcllase limits applicable to an Irzstcirzt ATM Card will be disclosed upon issuance by
Bank.
Termination of Card Privileges.
Each Card is the property ot Bank. Bank may terminate a Cardholder's Card privileges
at any time without notice. A Cardholder may terminate his or her Card privileges at any
time by writing Bank at the address provided in the statement tor Company's account.
Company agrees to immediately notity Bank in writing it a Cardholder's authorization
to use a Card and/or PIN has been terminated and to return that Cardholder's Card
to Bank. It a Cardholder's Card privileges are terminated, that Cardholder agrees to
immediately surrender his or her Card(s) to Bank. Termination ot Card privileges will
not attect any rights and obligations tor transactions made with a Card betore the
privileges were terminated.
Loss Prevention Guidelines
Protecting the Card and PIN.
Each Cardholder is responsible tor caring tor his or her Card and/or PIN as he or
she would care tor checks and other Paper Items. Each Cardholder is responsible tor
tnaintaining the confidentiality ot his or her PIN. Each Cardholder is advised to (i)
tnetnorize his or her PIN; (ii) never write his or her PIN on his or her Card; or (iii)
not to share his or her Card and/or PIN with anyone, including Bank personneL It a
Cardholder gives his or her Card or PIN to another person, Cotnpany will be responsible
tor all transactions tnade by that person or anyone else to whotn that person gives the
Cardholder's Card and/or PIN. Notity Bank itntnediately it a Card tied to Cotnpany's
Linked Accounts is lost or stolen or is no longer secure.
~
ATM Safety.
Bank advises each Cardholder to retnetnber the tollowing tips:
• Be aware ot your surroundings, particularly at night.
• Consider having sotneone accotnpany you when using an ATM atter dark.
• Vary the titne and route you use when making deposits at an ATM to avoid
establishing a pattern.
• It you observe or sense suspicious persons or circumstances, do not use the
ATM at that time. It vou are in the middle ot a transaction, cancel the transac-
tion, leave the area, and come back at another time or use an ATM at another
location.
• When using the ATM at night, park close to the ATM in a well-lighted are~~.
• Alwavs lock vour car.
• It the lights on or around the ATM are not working, select another ATM and
notitv Bank.
• It shrubberv or trees block vour view, select another ATM and notitv Bank.
• It you are using a drive-up ATM, be sure all passenger windows are closed and
doors locked.
• At all titnes, have your transaction ready and cotnplete it protnptly, then leave
the area. Do not display tnoney taken trotn the ATM. Put it away and verity
the atnount later.
Account Linkages and Designation of Accounts
Account Linlcages.
To open and maintain any type ot Card, at least one qualified Wells Fargo Commercial
deposit account must be linked to the Card. A Cardholder may link such additional
deposit or credit accounts to his or her Card as Bank permits trom time to time. The
permitted linkages may vary depending on the type ot Card. Bank may link any or all ot
the Accounts on which a Cardholder is an Authorized Signer to the Cardholder's Card
unless Company requests Bank not to link specific Accounts. In addition, it Company
is a sole proprietor, Company may also link personal account(s) maintained at Bank to
a Card so long as the personal and business accounts are established under the satne
Tax Identification Nutnber. For a Business Check Card, the primar,v checking account
linked to the Card tnust be a qualified Cotntnercial checking account. It the pritnary
business checking account linked to the Card should be closed tor any reason, Bank
may designate any additional business checking account that is linked to the Card as the
primary account on the Card. It no additional qualified Cotntnercial checking account is
linked to the Card, the Business Check Card linked to the closed checking account will
be cancelled. It the Card is linked to other business checking, savings or Market Rate
Account (MRA)/Money Market Access (MMA) accounts, the Card will be cancelled and
a Business ATM Card will be tnailed to the Cardholder.
Establishing "Primary" Accounts.
It only one deposit account ot each type (e.g., checking, savings, or MRA) is linked to
a Card, that account is autotnatically designated as the "pritnary" account ot that type
tor purposes ot making electronic tund transters and displaying the accounts at Wells
Fargo ATMs.
Primary vs. Other Accounts.
It tnore than one account ot a single type is linked to a Card, Cotnpany will be asked
to designate a pritnary account, secondary account, and other accounts. For exatnple, it
tour Cotntnercial checking accounts are linked to a Card, one will be designated as the
"pritnary" checking account, another will be designated as the "secondary" checking
account and the retnaining two accounts will be designated as "other accounts." It
Cotnpany does not designate one account as the pritnary account ot a particular type ot
account, the first account ot that type linked to a Card is considered the primary account
tor that type ot Account. Certain transactions are autotnatically debited trotn the Linked
Accounts designated as pritnary.
Linlced Credit Card and Line of Credit Accounts.
It Bank pertnits Cotnpany to link a Cardholder's business or personal Wells Fargo credit
card or line ot credit account (each, a"Credit Account") to the Cardholder's Card,
that Cardholder mav use the Card to access the linked Credit Account to obtain cash
or transter tunds trom a linked Credit Account, as long as the linked Credit Account is
in good standing and has available credit. Each transaction with the Card involving the
linked Credit Account is subject to the provisions ot the agreement between Company
and Bank applicable to the linked Credit Account.
Card Transactions
Daily Limits.
It a Card is used to make ATM withdrawals or transters or P()S purchases, the tollowing
rules apply: There is no limit on the number ot times a Card may be used each day so
long as t11e separately disclosed daily dollar limits are not exceeded. T11e ATM daily
dollar limit is t11e maximum U.S. dollar amount ot cas11 t11at can be witlldrawn trom anv
combination ot Company's Linked Accounts using a Card. The P()S daily purchase limit
is t11e maximum U.S. dollar amount ot purcllases (including cas11 back, it any) t11at can
be debited trom Company's P()S Access Account (including overdratt protection plan
tunds used). For purposes ot these daily limits only, a"day" is defined as the 24-hour
period trom midnight to midnight, Pacific Time. It a transaction is initiated in another
time zone, it will be processed w11en Bank receives it. Bank will send notification it
Bank decreases these dailv limits. It a Card is linked to one or more Credit Accounts,
the agreements governing the Credit Accounts govern cash advances trom the Credit
Accounts made with a Card.
Overdraft Protection Plan Funds.
"()verdratt Protection Plan Funds" are tunds available in Company's savings Account
or sweep Account (each, an "Eligible Account") and/or business line ot credit and/or
business credit card that Company has elected in writing to link to Company's P()S
Access Account. It Cotnpany chooses to receive overdratt protection trotn an Eligible
Account and trotn a line ot credit and does not indicate which account Bank should
advance tunds trotn first, Bank will first advance available tunds trotn Cotnpany's line ot
credit, up to Cotnpany's POS daily purchase litnit. Bank will advance either $25 or the
exact atnount ot the overdratt on Cotnpany's POS Access Account, whichever is larger,
to cover the overdratt on Cotnpany's POS Access Account, up to Cotnpany's POS daily
purchase litnit. It the atnount ot available tunds is less than $25, the atnount ot available
balance may be advanced. It additional tunds are required to cover the overdraft on
Cotnpany's POS Access Account, Bank will then advance available tunds trotn Cotnpany's
Eligible Account, up to Cotnpany's daily POS purchase litnit. Advances trotn Cotnpany's
savings Account to cover overdrafts on Company's POS Access Account are included in
the total nutnber ot withdrawals pertnitted trotn Company's savings Account.
Point of Sale ("POS") Access Account.
Company's "POS Access Account" is Company's Linked Account to which POS
transactions post. For a Business Check Card, the POS Access Account is Cotnpany's
Linked Account designated as "pritnary checking." For a Business ATM Card, the POS
Access Account is either (i) Cotnpany's Linked Account designated as pritnary checking;
or (ii) it Cotnpany's Linked Accounts do not include a checking account, Cotnpany's
Linked Account designated as primary savings; or (iii) it Company's Linked Accounts
do not include a checking or savings account, Company's Linked Account designated as
primary MRA/MMA.
Rewards Program for Business Checlc Cards.
Frotn titne to titne, Bank may, at its sole discretion, otter, and without prior notice,
tnodity or tertninate, rewards progratns (e~~ch, a"Progratn") tor certain Cardholders.
Complete Progratn tertns are provided upon enrolltnent in the Program and online at
www.wellstargorewards.cotn/checkcard.
Malcing Purchases with a Business Checlc Card.
Business Check Cards can be used to make POS purchases in two ways described below.
The tunds used tor these purchases are deducted trotn Company's POS Access Account,
and, it needed, any linked Overdraft protection plan tunds.
Visa POS Purchase. Purchases can be made at merchants or service providers
that accept Visa credit cards or business cards in retail outlets, over the Inter-
net, through mail orders, and on the phone. To do so, the Card is presented to
the merchant and a receipt to authorize the purchase is signed. At merchants
with PIN pads, a Card is swiped, the credit button is selected, and a receipt
to authorize the purchase is signed. For Internet, phone, and tnail orders, the
Card nutnber and the expiration date are provided. There is no cash back tea-
ture when making a Visa purchase.
POS Network Purchase. Purchases can be made at tnerchants that accept pay-
tnent over regional proprietary POS networks in which Bank participates."
The logos identitying these networks are displayed on the back ot the Card. To
make such a purchase, the Card is presented to the merchant. When prompted,
the PIN is entered to authorize the purchase. Merchants participating in these
networks may allow cash back with the purchase amount. Some merchants
mav assess a tee tor each transaction made via these networks at their termi-
nals, and it so, a notice describing any tee should be posted at the merchant's
terminaL This tee will be included in the total purchase amount shown on the
statement tor Company's POS Access Account and reflected on the receipt is-
sued at the time ot the transaction.
"Not available tor cards issued in IN, MI, MN, OH, and SD.
Malcing Purchases with a Business ATM Card.
A Business ATM Card can be used to make purchases at merchants that accept payment
over regional proprietary P()S networks in which Bank participates.'` Reter to the
intormation under "P()S Network Purchase," above, tor intormation about how to use
a Business ATM Card to make purchases. The purchase and any applicable tees will be
described on the statetnent tor Company's POS Access Account.
"Not available tor cards issued in IN, MI, MN, OH, and SD.
Electronic Notice of Purchase.
It Bank receives an electronic notice that a purchase has occurred, a hold tnay be placed
on Cotnpany's POS Access Account. The hold will be tor the actual atnount ot the
purchase or, depending on the tnerchant's practice, tor the anticipated atnount ot the
purchase (which may be greater than the actual atnount ot the purchase). The hold may
retnain in ettect trotn the titne the notice is received until the tnerchant dratt or other
itetn is presented to Bank. The atnount ot each purchase will be deducted trotn the
available tunds in Company's P()S Access Account.
Overdrafts.
It tunds in Company's POS Access Account are insutficient tor a requested purchase
and an Overdraft protection plan has been established tor that Account, then tunds
trotn the Overdratt protection plan will be accessed, it available, up to the atnount ot
the requested purchase. It a requested purchase creates an overdratt on Cotnpan,v's POS
Access Account, Bank tnav, in its sole discretion, take anv ot the actions described in the
section titled "Overdratts and Insutficient Funds" in Part I ot this Agreetnent.
Paying Bills with a Business Checlc Card.
A Cardholder tnay arrange with tnerchants or service providers to tnake one-titne or
recurring paytnents using a Business Check Card. A one-titne paytnent can be made
anytitne via the Internet or by phone by authorizing the tnerchant to bill the paytnent to
the Business Check Card nutnber. Recurring paytnents can also be tnade autotnatically
on a periodic basis (e.g., monthly).
Visa Account Updater System.
Bank subscribes to the Visa Account Updater system ("VAU" Under this system,
it a Cardholder gives a merchant or other billing entity his or her Card number and
authorizes it to periodically bill his or her Card tor automatic bill paytnents and the
Card nutnber changes due to replacetnent ot a datnaged Card or updated Card nutnber,
the new Card number will automaticallv be sent to those merchants. Because not all
merchants subscribe to the VAU service, it an old Card number changes, the Cardholder
should notity each individual tnerchant ot the new Card nutnber. Changes to a Card
number as a result ot a lost/stolen Card will not be updated using Visa's VAU service.
Stop Payments on Purchase; Changes to Recurring Payments.
Stop payments cannot be requested on one-time purchases made using a Business Check
Card. It a Cardholder has told a tnerchant or other billing entity in advance to tnake
recurring debits to his or her Card, the Cardholder can stop any ot these debits by
contacting the merchant or other billing entity directly to cancel or discontinue any
scheduled autotnatic bill paytnent. Sotne tnerchants require an advance notice to
discontinue autotnatic paytnents, so Bank recotntnends a Cardholder allow sutficient
advance time tor any changes to his or her payment service.
Transactions Outside the United States.
It a Card is used to make an ATM withdrawal or a POS purchase outside the United
States, the network that handles the transaction will convert the local currencv atnount
ot the transaction to U.S. dollars (or, in the case ot a P()S purchase only, the merchant
that handles the transaction mav convert the currencv). It the network converts the
currency, it will use either a rate selected by the network trotn the range ot rates available
in wholesale currency markets tor the applicable central processing date, which rate
may vary trom the rate the network itselt receives, or the government-mandated rate
in ettect tor the applicable central processing date. It the tnerchant that handles the
POS purchase converts the currency, then the tnerchant will detertnine the currency
conversion rate. For each purchase transaction in a toreign currency, Bank may also
charge a Foreign Currency Conversion Fee, which is based on the amount provided to
Bank bv the network in U.S. dollars (the "Network Transaction Atnount").
Transactions at Non-Wells Fargo ATMs.
It a Card is used at non-Wells Fargo ATMs, transactions will be limited to the account
access, withdrawal limit(s) and currency denomination(s) provided by the non-Wells
Fargo ATM. It a non-Wells Fargo ATM does not provide the option ot account type
(e.g., checking or savings), the cash withdrawal will be trom Company's Linked Account
designated as "primary checking." It a checking account is not linked to the Card, or
it Company's Linked Account designated as "primary checking" has insutficient tunds,
the request will be rejected unless sutficient tunds are available in Cotnpany's Linked
Account designated as "pritnary savings." All withdrawals tnade at non-Wells Fargo
ATMs outside t11e United States will be in local currencv, and balances will be sllown in
local currencv. Bank will debit cas11 witlldrawals in currencies otller t11an U.S. dollars
trotn Company's Account atter conversion into U.S. dollars at prevailing rates as
detertnined bv the Network and Bank on the dav ot conversion.
ATM Statements at Wells Fargo ATMs.
A Card may be used to obtain Wells Fargo EXPRESS 10"" (last ten (10) transactions)
statetnents, each ot which is a printout ot the ten (10) tnost recent tnonetar,v transactions
(within the last torty-five (45) days) on any ot Company's Linked Accounts. An
EXPRESS 10 statement should not be used in lieu ot the statement on Company's
Account tor balancing Company's Account. A Card may also be used to obtain Wells
Fargo EXPRESS BALANCES"' (balances ot Linked Accounts) statetnents, each ot which
is a printout ot the balances ot all ot Company's Linked Accounts. The transactions and
Company's Linked Account balance may include deposits still subject to verification
or collection by Bank and tnay ditter trotn Cotnpany's records because ot deposits in
progress, outstanding checks or other withdrawals, paytnents or tees. Certain Itetns
attect the balance on Company's Linked Accounts as shown on an ATM statement:
•"Deposits/Credits in Process" retlects a cutnulative total ot all credits to Cotn-
pany's Account using a Card since the ATM cut-ott on the tnost recent Business
Day, including ATM deposits and ATM transters into Company's Account.
• "Withdrawal s/D ebits in Process" reflects a cumulative total ot all debits to
Company's Linked Accounts using a Card or Remittance Cash Card since the
ATM cut-ott on the most recent Business Day, including ATM withdrawals,
ATM transters trom Company's Linked Accounts, and P()S purchases and
cash withdrawals trom Company's Linked Accounts.
•"Preauthorized Deposits/Pa,vtnents in Process" retlects the net atnount ot an,v
deposits or paytnents (preauthorized by Cotnpany or an Authorized Signer)
that the Bank has received but has not yet posted to Company's Account.
•"Funds on Hold" mav include anv amounts not vet available tor withdrawal.
"Payment in Envelope" Transactions.
It a Card is used tor "Paytnent in Envelope" transactions, a paytnent coupon or return
paytnent stub should always be included to ensure proper posting ot a paytnent. An
additional Business Day should be allowed tor these paytnents to post. Occasionally,
paytnents made using this tunction may be delayed one (1) Business Day or tnore due to
applicable cut-ott times or other tactors.
U.S. Postage Stamp Purchases.
It a Card is used to purchase sheets ot U.S. postage statnps at designated Wells Fargo
ATMs, the purchase price will be deducted trotn the Linked Account selected and appear
on the statetnent tor that Account. Stamp purchases are subject to the Card's daily dollar
limit tor cas11 witlldrawals at ATMs.
ATM and POS Malfunctions.
Company agrees not to hold Bank responsible tor damages that result trotn or are a
consequence ot an ATM or POS maltunction. Company agrees to promptly notity Bank
it an ATM tails to dispense the correct atnount ot cash or provide a proper receipt by
calling or writing Bank at the phone number or address provided in the statement tor
Company's account.
~
Liability for Unauthorized Card Transactions (WellsProtect" Program)
General.
The jVellsh-otect program provides protection to Company tor unauthorized transactions
tor charges to Cotnpany's Account(s) subject to the conditions described below. Cotnpany
is responsible tor each Card linked to Cotnpany's Account(s). Cotnpany will not be
liable tor unauthorized transactions except as explained below.
Unauthorized Transactions.
An "Unauthorized Transaction" is a transaction that does not benefit Company and is
tnade by a person who does not have Cotnpany's actual, itnplied, or apparent authority
to use a Card. Under the jVellsPi-otect progratn, Unauthorized Transactions do not
include (that is, Cotnpany is liable tor):
• Any transaction by a co-owner (even though that co-owner is not a Cardhold-
er), a Cardholder or person authorized by a Cardholder, or other person with
an interest in or authorit,v to transact business on Compan,v's Account.
• Any transaction by a Cardholder that exceeded the authority given by Com-
pany.
• Any transaction that resulted trom inadequate internal controls in Company's
organization.
• Any transaction a tnerchant has processed in error, or a transaction involving
goods or services with which the Cardholder is not satisfied.
It a Cardholder suspects that his or her Card has been lost or stolen, or that an
Unauthorized Transaction has been made with his or her Card or Card number, notitv
Bank as soon as possible by calling the Wells Fargo National Business Banking Center
nutnber listed on the back ot the Business Check Card. The sooner Bank is notified,
the sooner Bank can protect Company's Linked Accounts. A delay in reporting the
Unauthorized Transaction may attect Company's liability protection, as defined below.
Banlc Notified Within Sixty (60) Days of Mailing of First Statement.
Cotnpany has zero liability tor an Unauthorized Transaction tnade with a Card or Card
nutnber as defined above it Bank is notified ot the Unauthorized Transaction within sixtv
(60) days ot when the first statetnent tor Cotnpany's Account showing the Unauthorized
Transaction was tnailed.
Banlc Notified More Than Sixty (60) Days After Mailing of First Statement.
It Bank is not notified within sixt,v (60) da,vs ot when the first statetnent tor Cotnpan,v's
Account showing the Unauthorized Transaction was mailed, Company will have the
burden ot proving that an Unauthorized Transaction occurred. Company may be
required to provide documentation in support ot its claim, including an atfidavit ot
unauthorized use and a police report. Additionally, in evaluating Company's claim, Bank
will consider whether any negligence on the part ot the Cardholders within Company's
organization has contributed to the transaction in question. Some ot the tactors that
Bank will consider in connection with this evaluation include:
1. Timely YepoYting o f lost CaYd. Whether any loss or thett ot the Card was re-
ported to Bank within torty-eight (48) hours ot discovery ot the loss or thett.
2. PYOTiipt Yeview o f stateTitents. Whetller Company promptly reviewed t11e state-
ments tor Company's Linked Account(s).
3. PYOTitpt YepoYt o f UnauthoYitied TYansaction. W11et11er, tollowing discovery ot
an unauthorized use ot the Card on a statement, the Unauthorized Transaction
was reported to Bank within torty-eight (48) hours ot the discovery.
4. Sa fegziaYd CaYd and PIN. Whether the Cardholder exercised reasonable care
in sateguarding his or her Card, Card nutnber, and PIN trotn loss or thett.
5. Multiple pYioY incidents. W11et11er Company llas reported multiple incidents
ot Unauthorized Transactions to Bank within the 12-month period immedi-
ately preceding a claim and the tacts and circumstances surrounding those in-
cidents.
6. Sole PYOpYietoYS. It Cotnpany is a sole proprietor and has linked Cotnpany's
business and personal accounts to a Business Check Card, Business ATM
Card, or Business Deposit Card, reter to the Wells Fargo Consutner Account
Agreetnent regarding the jVellshotect progratn tor sole proprietor's liability
tor Unauthorized Transactions on consutner deposit accounts.
Telephone Banking Transactions
General.
This Section describes the special rules applicable to Bank's telephone banking Services.
These Services may be accessed by telephoning Bank at the number provided on the back
ot Company's Business Check Card and either using Bank's voice-prompted Automated
Phone Systetn (the "Autotnated Systetn" ) and/or speaking with a phone banker.
Questions regarding Cotnpany's Account should be directed to the Custotner Service
number listed on the statement tor Company's Account.
Security Procedure.
Bank will use a security procedure to autllenticate eac11 caller using t11e Automated
Svstem. T11e security procedure will be used only to autllenticate t11e caller. It will not
be used to detect any errors in any paytnent instructions that tnav be given by the caller.
It the caller has a PIN and is using the Automated Systetn, Bank will use the PIN as the
security procedure to authenticate the caller. It the caller does not have a PIN and is
using Bank's Autotnated Svstetn and/or speaking with a phone banker, the caller will be
asked to verity certain intortnation in Bank's records regarding Cotnpany, Cotnpany's
Authorized Signer or Company's Account as the security procedure to authenticate the
caller.
PIN.
The holder ot a Business Check Card or Business ATM Card will use the PIN associated
with that Card to access Bank's Automated Svstem. A person who is not a holder ot a
Business Check Card or Business ATM Card may request a PIN trom the Wells Fargo
National Business Banking Center. Because this PIN is not tied to any Card it cannot be
used to access Company's Account(s) at ATMs or to make POS purchases. Bank may
cancel a PIN at an,v titne without notice to the holder or Compan,v. However, a PIN that
is not tied to any Card will not usually be cancelled so long as it is used at least once
during a preceding six-tnonth period.
Authorization.
Cotnpany authorizes Bank to cotnply with any request ot a caller using Bank's telephone
banking Services, including without litnitation a request to transter tunds between or
atnong Company's Accounts, provided Bank authenticates the caller in compliance with
one ot the security procedures described above.
Unauthorized Telephone Banlcing Transactions.
Company agrees to notity Bank IMMEDIATELY by calling or writing Bank at the
telephone nutnber or address listed on the statetnent tor Cotnpany's Account it Cotnpany
thinks the statement is wrong, or it Company needs more intormation about a telephone
banking transaction described on the statement Company must, in anv event, report
any unauthorized telephone transaction to Bank within tourteen (14) days atter Bank
mails or makes available to Company the statement on which the transaction appears or
Coiiipaiiv otherwise has notice ot the transaction, unless the laws governing Cotnpany's
Account otherwise provide. It Company does not, Company will be deetned to have
authorized the transaction. Bank will investigate any telephone banking transaction tor
which it has received titnely notification trotn Company. When Bank's investigation is
cotnplete, Bank will notity Cotnpany ot its findings and the action, it any, it will take.
Termination of Electronic Banking Privileges
All ot Company's electronic banking privileges will be tertninated it Company's Account
is closed. Bank, Company, or an Authorized Signer on Company's account(s) may
tertninate specific electronic banking Services without closing Company's Account. A
Service tnay be tertninated by calling or writing Bank at the phone nutnber or address
provided in the statetnent tor Cotnpan,v's Account. Bank tna,v cancel a Card, PIN, or
access to electronic banking Services at any time without notice to Company or any
attected Authorized Signer. It Bank cancels a Card, Company agrees to immediately
return the cancelled Card to Bank.
10
O 2006 Wells Fargo Bank, N.A.
Wells Fargo Bank Northwest, N.A.
All rights reserved.
Members FDIC
COM7196 (4/06)
ACCEPTANCE OF SERVICES
Bank: Wells Fargo Bank, N. A.
Each person signing this Acceptance of Services ("Acceptance") certifies that:
(a) the company identified in the signature block of this Acceptance ("Company") has
received and agrees to be bound by the Service Documentation, as defined in Bank's
Master Agreement for Treasury Management Services;
(a) he or she has full authority to execute this Acceptance on beha/f of Company, to enter
into other agreements with Bank for Treasury Management services now or hereafter
offered by Bank (each, a"Service") and to amend, terminate or otherwise act on behalf
of Company with respect to such agreements and Services; and
(c) Company's use of any Service, including without limitation each Service that Company
commences using after the Effective Date of this Acceptance, confirms Company's
agreement to be bound by the Service Documentation relating to that Service.
All terms defined in the Agreement shall have the same meaning when used in this
Acceptance.
Agreed To and Accepted By:
Company:
ey:
Name:
Tit/e:
Date:
TM-1521 Acceptance ofServices 1 of 1
Revrsed 1011 0'
O 2007 WeIIs Fargo Bank, N.A. AII rights reserved
MASTER AGREEMENT FOR TREASURY MANAGEMENT SERVICES
The Service Documentation described below contains the terms under which Wells Fargo Bank,
National Association ("Bank") provides treasury management services ("Services"). The Bank
customer to which the Services will be provided ("Company") is identified in the Acceptance of Services
("Acceptance").
Bank and Company agree:
Service Documentation. The Service Documentation for each Service includes:
1.1. The Service Description.
1.2. The Acceptance.
1.3. This Master Agreement for Treasury Management Services ("Master Agreement").
1.4. The account agreement for the deposit account(s) (each, an "Account") that Company or
Company's affiliate or subsidiary maintains at Bank or Bank's affiliate in connection with
a Service. The account agreement includes the Dispute Resolution Program that
Company and Bank agree to use to resolve any disagreements between Company and
Bank regarding accounts and Services governed by the Service Documentation.
1.5. User Guides which include Terms of Use, software, software licenses, price schedules,
specifications, instructions, and notices.
1.6. The set-up form(s) for each Service.
The Service Documentation also applies to a Service that is provided by an affiliate of Bank and
a Service that is used by an affiliate or a subsidiary of Company. "Bank" includes each such
affiliate, and "Company" includes each such affiliate and subsidiary. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order
set forth above. Company acknowledges receiving a copy of the Service Documentation for
each Service Bank provides to Company.
2. Services. Bank and Company will agree upon the Service(s) to be provided.
3. Changes to Services. Bank may change (or add to) the terms and fees in the Service
Documentation at any time upon prior written notification to Company. If Company discontinues
using the affected Service before the change becomes effective, it will not be bound by the
change. If Company continues to use a Service after the change becomes effective, it will be
bound by the change.
4. Term and Termination. Unless terminated sooner in accordance with the Service
Documentation, this Master Agreement and all Services will continue in effect until terminated
by either party upon thirty (30) days prior written notice to the other party (unless a Service is
terminated sooner in accordance with the Service Documentation). Bank may terminate any
Service (a) following notice to Company of a breach of any provision of the Service
Documentation and Company's failure to cure the breach within fifteen (15) days of the date of
TM-1450 Master Agreement for Treasury Management Services Page 1 of 4
Revised 09-02-2010
such notice, or (b) without notice to Company if (i) Company is subject to a petition under the U.
S. Bankruptcy Code or (ii) Bank determines in its sole discretion that a material adverse change
has occurred in Company's ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Company's or Bank's rights with respect to
transactions occurring before termination. Bank will not be liable to Company for any losses or
damages Company may incur as a result of any termination of any Service.
5. Service Fees. Company will pay Bank the fees described in the Service Documentation and
any taxes applicable to each Service however designated exclusive of taxes based on Bank's
net income. Bank may debit Company's account(s) with Bank for any fees not covered by
earnings credits and any taxes that are due, or it may send an invoice to Company for such
amounts, which Company shall promptly pay. Bank may assess finance charges at a rate of
1.5% per month (18% per annum) or the highest rate permitted under applicable law
(determined in accordance with section 8.1), whichever is less, on any invoiced fees or taxes
not paid within thirty (30) days of the due date and will apply payments and other reductions of
amounts owed first to unpaid interest and then to other fees and charges.
6. Confidential Information. Unless otherwise provided in the Service Documentation, all User
Guides and software constitute Bank's or its vendor's confidential information ("Confidential
Information"), and Company will not acquire any ownership interest in or rights to Confidential
Information as a result of Company's use of any Service. Company will (a) maintain the
confidentiality of the Confidential Information; (b) not disclose (or permit its employees or agents
to disclose), copy, transfer, sublicense or otherwise make any of it available to any person or
entity, other than Company's employees who have a need to use the Confidential Information in
connection with the applicable Service; and (c) not decompile, reverse engineer, disassemble,
modify, or create derivative works of any Confidential Information. Company will notify Bank
immediately if it knows or suspects that there has been any unauthorized disclosure,
possession, use or knowledge (each, an "Unauthorized Use") of any Confidential Information. If
Company (or its employees or agents) is responsible for the Unauthorized Use, Company will,
at its expense, promptly take all actions, including without limitation initiating court proceedings
to recover possession and prevent further Unauthorized Use of the Confidential Information and
obtain redress for any injury caused to Bank as a result of such Unauthorized Use.
7. Liability and Indemnification.
7.1. Bank will perform each Service in accordance with reasonable commercial standards
applicable to Bank's business; laws, regulations and operating circulars governing the
activities of Bank; applicable funds transfer system(s) and clearinghouse rules; and the
Service Documentation.
7.2. Bank is under no obligation to honor, in whole or in part, any entry, file, batch release,
transfer instruction, payment order, transaction or instruction that (a) exceeds the
available balance in the Account, unless otherwise provided in the Service
Documentation; b) is not in accordance with the Service Documentation or Bank's
applicable policies, procedures or practices as made available to Company; c) Bank has
reason to believe may not have been duly authorized, should not be honored for its or
Company's protection, or involves funds subject to a hold, dispute, restriction or legal
process; or d) would possibly result in Bank violating any applicable rule or regulation of
any federal or state regulatory authority including without limitation any Federal Reserve
guidelines such as the limitations on Bank's intra-day net funds position.
7.3. All uses of Services through Company's ID codes, passwords, token cards, PINs, or
passcodes (each, a"Code") will be deemed to be authorized by and binding on
Company. Company's failure to protect Codes may allow an unauthorized party to (a)
TM-1450 Master Agreement for Treasury Management Services Page 2 of 4
Revised 09-02-2010
use the Services, (b) access Company's electronic communications and financial data,
and (c) send or receive information and communications to Bank. Company assumes
the entire risk of unauthorized use of Codes and unencrypted electronic transmissions.
7.4. Neither Bank nor any software vendor makes any express or implied representations or
warranties with respect to the Services or any software used in connection with the
Services including without limitation any warranty as to the merchantability or fitness for
a particular purpose, other than those expressly set forth in the Service Documentation.
7.5. Company will promptly furnish written proof of loss to Bank and notify Bank if it becomes
aware of any third party claim related to a Service. Company will cooperate fully (and at
its own expense) with Bank in recovering a loss. If Company is reimbursed by or on
behalf of Bank, Bank or its designee will be subrogated to all rights of Company.
7.6. Any claim, action or proceeding against Bank for losses or damages arising from a
Service, including Bank's honoring or dishonoring a check covered by a Service, must
be brought within one (1) year from the date of the act or omission or in the case of a
check from the date the check was first paid or returned by Bank.
7.7. Bank will have no liability for failure to perform or delay in performing a Service if the
failure or delay is due to circumstances beyond Bank's reasonable control. If Bank
determines that any funds transfer or communications network, Internet service provider,
or other system(s) it has selected to provide a Service is unavailable, inaccessible or
otherwise unsuitable for use by Bank or Company, Bank may, upon notice to Company,
suspend or discontinue the affected Service.
7.8. Except in the case of Bank's negligence or intentional misconduct, Company will
indemnify and hold Bank, its directors, officers, employees and agents harmless from all
losses or damages that arise out of (a) the performance of a Service in accordance with
the Service Documentation including without limitation any warranty Bank is required to
make to a third party in connection with a Service; (b) an act or omission of any agent,
courier or authorized representative of Company; and (c) if the Service includes a
license or sublicense of any software to Company, the use or distribution of the software
by Company or any person gaining access to the software through Company that is
inconsistent with the license or sublicense.
7.9. Bank will only be liable to Company for Company's direct monetary losses due to Bank's
negligence or intentional misconduct. Except in the case of Bank's gross negligence or
intentional misconduct, Bank's liability to Company will be limited to an amount not to
exceed ten (10) times Bank fees incurred during the calendar month immediately
preceding the calendar month in which such loss or damages were incurred (or, if no
Bank fees were incurred in such month, Bank fees incurred in the month in which the
losses or damages were incurred). Except as expressly provided otherwise in the
Service Documentation, neither party to this Master Agreement will be liable to the other
party for any special, consequential, incidental (including without limitation court costs
and attorneys' fees), indirect, or punitive losses or damages, whether any claim is based
on contract or tort, or whether the likelihood of such losses or damages was known to
the other party and regardless of the form of the claim or action.
TM-1450 Master Agreement for Treasury Management Services Page 3 of 4
Revised 09-02-2010
8. Miscellaneous.
8.1. The Service Documentation will be governed by substantive federal laws, regulations
and rules and, to the extent such laws, regulations and rules are not applicable, those of
the state in which the office of Bank that maintains the Account is located, without regard
to conflicts of laws principles. Any portion of the Service Documentation which is
inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and Bank will incur no liability to Company as
a result of the inconsistency or modification and application. If any portion of the Service
Documentation is deemed unenforceable, it will not affect the enforceability of the
remaining Service Documentation.
8.2. The Service Documentation is the entire agreement between Bank and Company and
supersedes all prior representations, conditions, warranties, understandings, proposals
or agreements regarding a Service. No course of dealing or waiver of any right on one
occasion will constitute a modification of the Service Documentation or be a waiver of
that right on a subsequent occasion.
8.3. Company will provide Bank promptly upon Bank's request any existing financial
statements or other information pertaining to Company's financial condition or any
previously unprepared financial statements which Bank may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants
acceptable to Bank.
8.4. Company warrants it will not use any Service in a manner which violates any federal or
state law including without limitation any sanction or control administered by the Office of
Foreign Assets Control or Bureau of Export Administration.
8.5. If Company employs an agent in connection with its use of any Service, Company
represents and warrants to Bank that (a) Company's governing body has duly authorized
the agent and (b) Company will exercise appropriate controls to ensure each agent so
authorized does not exceed the authority so granted to it. Any communication to Bank
regarding Company's use of a Service from Company's agent will be deemed to be a
communication from Company, and Company authorizes Bank to communicate with
Company's agent regarding any such communication or Service.
8.6. Either party may provide notice to the other party by mail, personal delivery, or electronic
transmission. Bank will use the most recent address for Company in Bank's records,
and any notice from Bank will be effective when sent. Company will use the address
where Company's relationship manager or other manager is located and address any
notice to the attention of such manager. Any notice from Company will be effective
when actually received by Bank. Bank will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of
Company and, except as expressly stated in the Service Documentation, will have no
obligation to verify the signature (including an electronic signature). Each party will have
a reasonable time after receipt of any notice to act on it.
8.7. Sections 1, 4, 5, 6, 7, and 8 will survive termination of this Master Agreement.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1450 Master Agreement for Treasury Management Services Page 4 of 4
Revised 09-02-2010
WELLS FARGO BANK N.A.
COMMERCIAL ACCOUNT AUTHORIZATION & AGREEMENT (SIGNATURE CARD)
(Ttus document to be used iihen establistung a neii account oiily.)
L ACCOUNT NUMBER(S)
IL ACCOUNT TITLE(S)
(CoID)
III. ACCOUNTTYPE(Checl.OneBox Un1y)
❑ Conunercial Checl:ing (Non liiterest ) ❑ Conunercial Checl:iiig Ni-ith liiterest ❑ Conunercial Monev Marl.et Account
I IV. BUSINESS INFORMATION
Customer Name ("Accountholder" )
Business Locatioii/Street Address Cin State Zip
Mailing Address Cin State Zip
Business Phone A1tei7iate Phone Piimaiti- Contact Naine
( ) - Ext.
Type of Entitv ( Checl. One Bos 0111v)
Business
( ) - Ext.
❑
Corporation
❑
Business Tnist
❑
Corporation ( Frofessionail )
❑
Real Estate Investinent Tnist
❑
Corporation (Nonprofit)
❑
Association
❑
Partnership ( ('Teneral )
❑
c )ther ( )
❑
Partriership (Luniteii)
Foreign
❑
Joint Venhue
❑
Corporation
❑
I, lllllted I, lAbllltt" COlIlpa11C
❑
Flll 1 I11StLtU.t1011
Business Orgaiuzed under tlie Law s of
(Jiirisdiction)
Date Business Established
Date Cui7ent 0ii ner Since / Mgmt Started
I
~ Business License Dated:
~ Fictitious Name Statement Date
I V. TAX REPORTING & CERTIFICATION
Taxpayer ldentificatiun Number ("TIN"): _
Public Funds
❑
Citv/ Municipalitv
❑
Couno
❑
State
❑
Federal (TTS ('Tovernment)
❑ Indian Tribal Entit'y
Ammal Sales $
Number of Employees
Financial Institution
❑ Commercial Banlc
❑ Savings Baiil.
❑ Cre1itTTnion
Internxl
❑ WF & Co Sub
❑ WFB SUbsllllalti
Wells Farau Banker tu Cumplete
~ Date of Last Banl.er Visit to Business Address:
~ Banl.er Name & Customer Contact/Visiteii
TAX INFORMATION CERTIFICATION: (TI-IE INTEFtNAL FtEVENT TE SERVICE( IRS ) FtE(1T TIFtES Y( )T TR EXEMPTI( )N
CERTIFICATI( )N BEL( )W T( ) AV( )ID BACIOTP WITHH( )LDINC'r. ) On behalf of the above-naunecl Accotmtholder, I certift that (i) the
Accountholder is a TT.S. person (includes TT.S. resident ailiens), (ii) the Tax-payer ldentification Number shoNN-n above is the Accotmtholder's correct
taxpayer identification, and (iii) the Accountholder is (check on1y one box): ❑ not subject to bacl.up withholding because it is exempt from bacl.up
withholding (nom-esident aliens and foreign corporations aue generally exempt - see beloNv); or ❑ not subject to backup withholding because it has
not been notified bv the IRS that it is subject to bacl.up withholding. (Note: Do not check either box if the Accountholder has been notified bv the
IRS that it is currently subject to backup withholding because of underreporting interest or dividends on its tax rehirn. )
The fulluwing sectiun must alsu be cumpleted if the Accuunthulder is exempt frum back-up withhulding based un fureign status: To reinaui
exeinpt from back-up Nvithliolilulg anil/or reiiuceii Ni-ithliolilitt-, rates baseii on income tax treaties or LT.S. Law, noiiresiiient aliens anii otlier foreign
nom-esiilent entities must certih• foreigil status by tiliit-, Form W-8 Ni-ith Wells Farlo Baiil. N.A. Un behalf of tlie above-nameii Accountholiler,
I certifv tliat tlie Accountliolder uniierstaniis anii Ni-ill proinptlv coinply Ni-ith the tilitig requu-ement in the preceilulg sentence, anii that tlie
Page 1 of 2 Revisecl 04/)1/2003
Accountlioliier is (check only one box): ❑ a non-resiiient alien uliliviiiual or non-resiiient foreign corporation ( Form W-813EN ❑ a forei-~-,11
partriership (Form W-8ECI or Fonn W-8IMY ❑ a forei-~-yn tax-exeinpt oQ-yanization or govenunent (Fonn W-8ECI or Form W-8EXP): ❑ actilt-Y
as an intermeilian• ( Form W-8IMY or ❑ claining exemption baseii on income effectivelv comlecteii Ni-ith the coniiuct of a traiie or busuless
Ni-itliiil the LTniteii States. (Form W-8ECI).
The Accountholder's permanent address is:
By signing below, I certify under penalty of perjun, that the information gii-en in this Tas Reporting section is correct.
X
Sil-nature Position / Tit1e Date
VL AUTHORIZED SIGNERS
(Sign ii-itlun Box)
Signature 1 Frinted Naune Position / Title
Sil-nature 2 Prulteii Name Position / Tit1e
Signature i Frinted Naune Position / Title
Sil-nature 4 Prulteii Name Position / Tit1e
Signature > Frinted Naune Position / Title
Sil-nature 6 Prulteii Name Position / Tit1e
VIIL VIL ACKNOWLEDGEMENT & AGREEMENT I
Un behalf of the Accountlioliier, I hereb-,• certiYv, bv m-,• si-nature below, that each of the uliliviiiuals iiesiDlateii in Section VI above as an
"Authorizeii Siuner" is autliorizeii, actulg alone, to (i) sign checks ilraNi-n oii, anii mal.e cash Ni-itliilraNi-als from, the Account. (ii) request stop
payment orders for checl.s ilraNi-n on tlie Account. anii (iii) uiitiate tunils transfers by ACH, Ni-ire or other means out of tlie Account in accordance
Ni-itli the Accountlioliier's contractual arrangements Ni-itli Wells FaQ-yo regardinu tliese seivices.
Wells FaQgo may cibtain creilit reports or otlier uiYormation about the Accountlioliier. Wells Fargo may ilisclose uiYormation about each account to
its aftiliates, to creilit reporting agencies, anii to otlier persons or agencies tliat, in Wells Fargo's juiigement, have a legitimate purpose for cibtaining
the itiYormation.
I acknuwledge that the Accuunthulder has receii-ed a Cummercial Accuunt Agreement and agree that its terms and cunditiuns, as amended
frum time tu time, wi11 gui-ern the Accuunt.
X
Authoiized Signahare
Piinted Name
~
~
Date Received
/ /20
AU RAU
BANK USE ONLY
Baiiker Name
Officer Niimber
Position / Title
Date
I ACCOUNT NO(S):
~
Baiiker Telephone
( ) -
Fanulv Name
~
~
Baiiker MAC
Fanulv Niimber
FORWARD VIA GOLD BAG TO DOCUMENT MANAGEMENT OR MAC N9777-133
Page 2 of 2 Revised 04/01/2003
Page 2 of 2
FORWARD VIA GOLD BAG TO DOCUMENT MANAGEMENT OR MAC N9777-133
Revised 04/01/2003
COMMERCIAL ELECTRONIC OFFICE° ("CEO"O)
SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Commercial Electronic Office Service ("CEO"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. The CEO is Bank's electronic banking portal that is accessed via the
Internet. Authorized Representatives (see section 3) may use the CEO to access (a) Bank
Services in which Company has seperately enrolled (each, an "Accessed Service") and (b)
third-party sites Bank may make available through the CEO. Bank offers different channels
through which Company may access the CEO that may include without limitation personal
computers and mobile devices. Bank may add or eliminate channels at any time. A Bank
Service or third party site accessible through one channel may not be accessible through
another channel. The Service Documentation includes the Service Description for each
Accessed Service. In the event of a conflict between the Service Description for the Accessed
Service and this Service Description, the Service Description for the Accessed Service will
contol.
3. Access to the CEO. When Company enrolls in the CEO and as Bank may determine is
necessary after enrollment, Bank will (in accordance with section 4) provide one or more secure
means of accessing the Services (each, a"Log-On Credential") to the persons who are
authorized to access the CEO on Company's behalf (each an, "Authorized Representative").
Log-On Credentials may include without limitation Company and user IDs, passwords, token
IDs and other means of providing secure access to the CEO Service that Bank adopts after the
date Company begins using the CEO and may be changed by Bank at any time. Bank will have
no obligation to Company to authenticate separately any communication Bank receives in
Company's name through the CEO, whether or not an Authorized Representative actually
issued the communication. Bank may, at Bank's sole option, contact Company with respect to
any communication Bank receives in Company's name, but Bank's election to contact Company
with respect to one or more communication will not obligate Bank to contact Company with
respect to any subsequent communication Bank receives in Company's name.
4. Administration of the CEO.
4.1. General. Bank offers two options for administering the CEO: (a) self-administration and
(b) Bank administration.
4.2. Self-Administration. If Company enrolls in Bank's self-administration option, there are
three categories of Authorized Representatives: Company Administrator, Administrator
or User. Bank provides Bank's then-current Log-On Credentials only to Company's
initial Company Administrator(s) who will (a) assign Bank's Log-On Credentials to other
individuals and (b) designate each such individual as (i) a Company Administrator, who
may perform all functions of Company's initial Company Administrator; (ii) an
Administrator, who may perform all the functions of an Administrator including without
limitation designating other Administrator(s) and User(s); or (iii) a User, who may access
those Services as designated by a Company Administrator or an Administrator and
TM-1426 Commercia/ E/ectronic Office ("CEO') Service Description Page 1 of 3
Revised 0113112010
those in which Bank permits a User to self-enroll. Each Company Administrator and
Administrator has the authority to enroll Company in additional Services. Company will
promptly revoke the Log-On Credentials of any Authorized Representative when that
individual is no longer an Authorized Representative.
4.3. Bank Administration. If Company does not enroll in Bank's self-administration option,
there is one category of Authorized Representatives: Users. Bank will assign Bank's
then-current Log-On credentials to each User Company designates. Each User
Company designates will remain authorized until Bank has a reasonable time to act after
receiving Company's notification that the User is no longer so authorized.
5. Restricting or Terminating Access to the CEO. Bank will not be obligated to permit any
Authorized Representative to use any Service through the CEO if Bank determines such use is
(a) not in accordance with any term applicable to the CEO, (b) not permitted by any state or
federal law or regulation, (c) not authorized by Company or any third person whose
authorization Bank believes is necessary for such use, or (d) should be denied for Company's or
Bank's protection (without Bank's agreeing to, or being required to, make this determination in
any circumstance).
6. Financial Information. Financial market data, quotes, news, research, and other financial
information developed by third parties and transmitted to Bank (collectively, "Financial
Information") may be available to Company at the CEO. The posting of any Financial
Information or any other information or data at the CEO will not be a recommendation by Bank
of any particular Service or transaction. Bank does not guarantee the accuracy or
completeness, (a) of any Financial Information, (b) is not responsible for the actions or
omissions of the third parties developing or transmitting Financial Information or (c) for any
decision made or action taken by Company in reliance on any Financial Information.
7. CEO Workstation Service. This section contains additional terms applicable to Bank's CEO
Workstation Service. The CEO Workstation enables Company to view and use for global cash
positioning, forecasting and trending data that (a) Bank automatically populates from
Company's deposit account(s) at Bank and other financial institutions Company directs to
provide data to Bank and (b) Company manually populates. Bank will not verify the accuracy
of information from other financial institutions, customer-populated data or forecasting
information. Forecasting information is not a guarantee of actual performance. If
Company uses the Workstation to convert funds in an account to a currency other than the
currency in which the account is denominated, the rate used through the Workstation may differ
from the rate actually used when the funds are converted on a given Business Day.
8. Company's Representations and Warranties. Company represents and warrants to Bank:
8.1. Company's governing body has duly authorized each Authorized Representative,
regardless of whether Company enrolls in Bank's self-administration option, Bank
Administration or whether the individual is designated to act as Company Administrator,
Administrator or User; and
8.2. Company will preserve the confidentiality of the Log-On Credentials and immediately
notify Bank if Company becomes aware or suspects that any Log-On Credential may
have been compromised.
TM-1426 Commercia/ E/ectronic Office ("CEO') Service Description Page 2 of 3
Revised 0113112010
9. Company's Agreement to Indemnify Bank. Company will
company, and its affiliates and each of their respective
agents harmless from and against all losses, damages, cl
expenses (including reasonable fees and disbursements
awarded against or incurred or suffered by any of them ~
related to any material breach in a representation, warranty,
contained in this Service Description.
indemnify and hold Bank, its parent
lirectors, officers, employees, and
3ims, demands, charges, costs, or
)f legal counsel and accountants)
rising directly or indirectly from or
::ovenant, or obligation of Company
10. Survival. Sections 3, 4, 5, 6, 7, 8 and 9 will survive termination of the Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1426 Commercial Electronic Office ("CEO') Service Descnption
Revised 0113112010
Page 3 of 3
CASH LETTER SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Cash Letter Service ("Service"). "Service Documentation" is
defined in Bank's Master Agreement for Treasury Management Services ("Master Agreement").
The Service Documentation includes the Acceptance of Services ("Acceptance"), and
"Company" is the company identified in the Acceptance.
2. Description of Service. With the Service, Company may present cash letters ("Cash Letters")
to Bank containing pre-encoded and properly endorsed U.S. dollar checks drawn on Bank or
other U. S. domestic financial institutions (each a, "Check") which conform to all applicable
requirements imposed by the Federal Reserve Banks and Bank's Cash Letter User Guide.
Bank will deposit the aggregate amount of Checks contained in a Cash Letter into Company's
deposit account with Bank designated in such Cash Letter in accordance with the provisions of
the account agreement governing the account.
3. Encoding Responsibilities. Company is responsible for accurately encoding the dollar
amount on each Check presented with a Cash Letter. The dollar amount and applicable paying
bank or nonbank payor routing number must be printed on each Check in Magnetic Ink
Character Recognition ("MICR") numbers. The form, content and placement of this MICR
printing must conform to all applicable technical standards established by the American National
Standards Institute and the American Bankers Association ("Industry Standards").
4. Service Charges and Collected Funds Availability for Reject Items. Checks contained in
Cash Letters which are rejected by Bank's processing equipment because they have not been
encoded in accordance with Industry Standards or which require repair and/or reentry (each, a
"Reject Item") are subject to a per-Check service charge. The service charge is assessed for
those Reject Items exceeding one percent (1.0%) of the total volume of Checks deposited in an
individual Cash Letter. In addition, all Reject Items will be made available as collected funds
one Business Day after they otherwise would have been made available under the applicable
collected funds schedule.
5. Liability; Indemnification. In addition to the limitation of liability and indemnification provisions
set forth in the Master Agreement, Bank will not be liable for, and Company will indemnify and
hold Bank, its directors, officers, employees and agents harmless from all loss, liability, claims,
demands, judgments and expenses paid or suffered or incurred by any such indemnified party
arising directly or indirectly as a result of or in connection with: (a) Bank's processing of
photocopies of Checks from a Cash Letter, (b) Bank's return unpaid of any Check in a Cash
Letter, (c) Bank's not notifying Company of any returned Check that is represented and then
paid as provided in the Cash Letter User Guide, (d) the late reclamation of any returned Check
caused by Bank's depositing the Check more than once in accordance with the Cash Letter
User Guide, (e) the late reclamation of any Check caused by the delay of another bank or
financial institution, (fl Company's failure to accurately encode any Check in accordance with
the requirements of section 4 of this Service Description, or (g) any breach by Bank of encoding
warranties under the Uniform Commercial Code which is attributable to Company's failure to
accurately encode any Check. Company acknowledges that this indemnification will survive
termination of this Service.
6. Survival. Sections 5 and 6 will survive the termination of Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1409 Cash Letter Service Description Page 1 of 1
Revised 0113112010
COMMERCIAL DEPOSITORY SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") commercial depository services (each, a"Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. With the Service, Company may order currency and coin (collectively,
"cash") from Bank's cash vault and Bank will make such cash available to an armored car
service acting as Company's agent ("Agent") at Bank's cash vault.
3. Cash Orders from Bank's Cash Vault.
3.1. Cash Requests. Company may request in writing, telephonically by operator-assisted
call or by touch tone/automated response, or electronically via transmission, facsimile, or
Bank's Commercia/ E/ectronic Office° (CEO°) portal (each a"Cash Request") that Bank
make available to Company's Agent at Bank's cash vault, in an amount designated in
the Cash Request, shipments of cash (each a"Cash Shipment") in bags or other
containers ("Cash Bags"). Bank is authorized to act upon any Cash Request Bank
receives in accordance with this Service Description, and which Bank believes in good
faith to have been made by an authorized representative of Company. Bank has no
obligation whatsoever to verify, and will not be liable for its failure to verify or investigate,
any Cash Request.
3.2. Making Cash Available to Company's Agent. Bank is authorized to make Cash
Shipments available to any person whom Bank in good faith believes to be Company's
Agent. Bank will have no further responsibility, and Company assumes all risk of loss,
for cash made available to any such person. Bank will make Cash Shipments available
only at the locations, on days, and during the hours published by Bank from time to time.
Bank reserves the right to suspend the Service at any time without notice.
3.3. Company's Authorized Representatives. Company will promptly certify to Bank the
identity of: (a) the person with whom Bank is authorized to communicate regarding
authorization codes or other security procedures; (b) Company's Agent authorized to
accept delivery of cash; and ( c) where applicable, the persons who are authorized users
of the Service. Company will give prior written notice to Bank of any change in the
person(s) or Agent so authorized by Company. Bank will be fully protected in relying on
each such notification and on the obligation of Company to promptly notify Bank of any
change in the person(s) or Agent so authorized by Company.
3.4. Security Procedures. For requests made in writing or by facsimile, operator-assisted
telephone call or transmission, a Customer ID assigned by Bank is required. For CEO
requests, a User ID assigned by Bank is required. For touch-tone/automatic response
telephone requests, an Access Code is required which can be assigned either by Bank
or by Company. Operator limits may also be required. It is Company's responsibility to
put into place internal procedures that will minimize the risk of an unauthorized person
gaining access to the Customer ID, User ID(s) and Access Code(s). Such internal
TM-1416 Commercial Depository Service Description Page 1 of 5
Revised 0113112010
procedures include without limitation requiring users to maintain such number(s) and
code(s) in strict confidence. Company will notify Bank immediately in the event a breach
of security is suspected.
3.5. Debit of Account. On the Business Day that Bank makes available any Cash Shipment
to Company's Agent, Bank is authorized to debit Company's designated account at
Bank's or Bank's affiliate ("Designated Account") for the aggregate amount of the
shipment. Company will maintain collected balances in the Designated Account
sufficient at all times to cover fully any debit. Bank has no obligation to release a
requested Cash Shipment or any portion thereof to Company's Agent unless there are
sufficient collected funds in the Designated Account to fully cover the amount of the
Shipment at the time the Shipment is to be made available to Company's Agent. If
Company fails to specify a Designated Account to Bank, Bank may debit any account
which Company maintains with Bank for the amount of a requested Cash Shipment.
3.6. Packing Slip; Differences in Shipment Amount. Each Cash Shipment will be
accompanied by a packing slip. The packing slip will disclose the aggregate amount of
the Cash Shipment, the overall number of containers included in the Cash Shipment,
and the number of containers delivered to Company's Agent for transmittal to Company.
With respect to any Cash Shipment made available to Company's Agent, Company will
notify Bank immediately in writing of any difference between the amount specified on the
packing slip for that Shipment and the amount, as counted by Company, of the
Shipment. In the event that the difference cannot be resolved, Bank's count of the
amount of the disputed Shipment will be conclusive and binding on Company.
4. Delivery and Processing of Deposit Shipments at Bank's Cash Vault. The following
procedures will govern Company's delivery of currency, coin, checks, other negotiable
instruments or food coupons (each a"Deposit Shipment") to Bank's cash vault locations, and
Bank's processing of such Deposit Shipments:
4.1. Use of Agent to Deliver Shipments. Company will deliver Deposit Shipments in
deposit bags or other containers ("Deposit Bags") to one of Bank's cash vaults via an
armored car service acting as Company's agent ("Agent"). Company is responsible for
making all arrangements with its Agent for delivery of Deposit Shipments. Bank may
accept Deposit Shipments from any person Bank believes in good faith to be Company's
Agent. The delivery of a Deposit Bag to Bank or Bank's receipt for it on a manifest will
not be deemed proof of Bank's receipt of the contents listed on the deposit slip
contained in the Deposit Bag or Company's records. Bank will have no responsibility for
any Deposit Bag or its contents delivered to one of Bank's cash vaults until the Deposit
Bag is accepted by Bank in accordance with its procedures and the contents of the
Deposit Bag are counted by Bank.
4.2. Delivery Procedures. In delivering a Deposit Shipment to Bank's cash vault, Company
agrees to comply (and to cause its Agent to comply) with the following procedures:
Deliver Deposit Bags only at the locations, on the days, and during the hours
published by Bank from time to time;
Properly endorse all checks and other negotiable instruments included in a
Deposit Shipment;
Use only Bank-approved Deposit Bags that are properly secured;
TM-1416 Commercial Depository Service Description Page 2 of 5
Revised 0113112010
Specify the number of Deposit Bags belonging to Company which are included in
the overall shipment delivered to Bank, as well as the contents of each Deposit
Bag, on a delivery manifest, a copy of which Company's Agent will provide to
Bank at the time of delivery;
Obtain the signature of Bank's employee who accepts delivery on that portion of
the delivery manifest which the Agent retains; and
Retain a copy of the receipt or other document covering each Deposit Bag
delivered by Company to its Agent for at least one year from the date of delivery
to Company's Agent.
Company agrees that Deposit Bags will be used only for the deposit of currency, coin,
checks, other negotiable instruments or food coupons (collectively "items"), and will not
be used in any unauthorized manner or for any unlawful purpose. As to any property
other than items included in a Deposit Bag, Bank will not be deemed a bailee and will
have no liability for any loss of or damage to such property which may occur.
4.3. Cut-off Time; Deposit to Designated Account. If a Deposit Shipment is received at
one of Bank's cash vaults on a Business Day before Bank's published "cut-off time" for
that cash vault, the aggregate amount of the deposits in such Shipment will be credited
on that Business Day to the account with Bank specified on the deposit slip for that
Shipment (the "Depository Account"). If a Deposit Shipment is received at a cash vault
on a Business Day after Bank's "cut-off time," the aggregate amount of the deposits in
that Shipment will be credited to the Depository Account on the next succeeding
Business Day. Bank will not deposit any items received in any Deposit Shipment unless
the account number of the Depository Account into which the deposit is to be made is
specified on the deposit slip for that Shipment.
4.4. Processing of Deposit Shipments. Company authorizes Bank to open each Deposit
Bag, count the contents, credit the amount of items to the Depository Account indicated
on the deposit slip contained in the Deposit Bag and process any food coupons, all in
accordance with Bank's customary procedures. All deposits are subject to verification,
and Bank's count of the items will be conclusively deemed to be correct and complete
for all purposes. No relationship of debtor and creditor will arise between Bank and
Company until the count has been completed and the deposit credited to the Depository
Account. Company acknowledges that it has had an opportunity to have Bank's
applicable count and verification procedures explained to its representative and agrees
that the same will be deemed commercially reasonable. Company understands that no
photocopying or microfilming of items will be performed at any cash vault location.
4.5. Adjustment Procedures. If the aggregate amount of the items in any Deposit
Shipment, as counted by Bank, is less than that reported on the deposit slip covering
that Shipment, Bank will debit the Depository Account specified on the deposit slip by
such difference and report the difference to Company. If that Depository Account has an
insufficient collected and available balance to cover the debit, Bank will debit any of
Company's other accounts with Bank for the difference, and Company agrees to
promptly reimburse Bank for the difference (or any portion thereof) for which there are
insufficient available balances in Company's accounts with Bank. If the aggregate
amount of the items in any Deposit Shipment, as counted by Bank, is more than that
reported on the deposit slip covering the Shipment, Bank will credit the Depository
Account specified on the deposit slip for the difference and notify Company of the
difference.
TM-1416 Commercial Depository Service Description Page 3 of 5
Revised 0113112010
5. Delivery and Processing of Deposit Shipments at Bank's Night Depository Locations.
The following procedures will govern Company's delivery of currency, coin, checks, other
negotiable instruments or food coupons (each a"Night Deposit") to Bank's night depository
locations, and Bank's processing of Night Deposits.
5.1. Night Depository Locations; Issuance of Keys. Company may make Night Deposits
to its deposit account(s) with Bank by placing the items to be deposited into disposable
bags furnished by Bank (each a"Night Bag") and then placing the Night Bags in the
night depository receptacle ("Night Depository") at one of Bank's branches/stores (each
a"Store") listed on Bank's Night Depository Set-up Form. Each office of Company listed
on the Night Depository Set-up Form will receive one key to the Night Depository at a
designated Store. Company will designate in writing to Bank the individuals to receive
the key for each of its offices; Bank may require such individuals to sign a receipt for the
keys they receive.
5.2. Contents of Night Bags; Deposit of Night Bags. Company agrees that Night Bags
will be used only for the deposit of currency, coin, food coupons, checks or negotiable
instruments properly endorsed by Company (collectively "items"), and will not be used in
any unauthorized manner or for any unlawful purpose. As to any property other than
items included in a Night Bag, Bank will not be deemed a bailee and will have no liability
for any loss of or damage to such property which may occur. Each Night Bag must
contain one or more deposit slips listing all the items contained in that Bag and their total
dollar amount, and identifying the deposit account of Company into which the dollar
amount of the deposit is to be credited (the "Designated Account"). After each Night Bag
is placed in a Night Depository, the Night Depository must be securely locked. At the
time each Night Bag is placed in a Night Depository the Bag must be securely closed
and placed completely in the Night Depository.
5.3. Processing of Night Deposits. Bank may open each Night Bag and remove its
contents without Company or any of its representatives being present. The contents of
each Night Bag will be processed in accordance with Bank's standard procedures, and if
placed in a Night Depository before Bank's established "cut-off time" on any Business
Day, those items acceptable for deposit will be deposited into the Designated Account
as of the close of business on that same Business Day. The cut-off time for deposits
made through the night depository may be different from that for deposits made at the
teller line. Night Deposits placed in a Night Depository after Bank's established "cut-off
time" will be credited to the Designated Account on the next succeeding Business Day.
Company understands and agrees that the contents of a Night Bag will not be credited
to the Designated Account, nor will the relationship between Company and Bank be that
of a debtor to a creditor with respect to any item in a Bag, until Bank has accepted the
item for deposit into the Designated Account after counting all the items in the Bag and
calculating the total dollar amount of all such items.
5.4. Counting and Adjustment Procedures. If Company's records regarding the total
dollar amount of the items in any Night Bag differ from Bank's calculation of the total
dollar amount of the items in the Bag, Company has the burden of proving that its
records show the correct amount in the Bag or Bank's total will be accepted as final. If
there is a difference between Bank's total and Company's total for the amount of items in
a Night Bag (as Company's total is shown on the deposit slip or slips in the Bag), Bank
will send Company a statement indicating the amount of the difference. In the event that
the difference cannot be resolved, Bank's count of the dollar amount will be conclusive
and binding on Company.
TM-1416 Commercial Depository Service Description Page 4 of 5
Revised 0113112010
5.5. Claims of Lost or Stolen Items. Company will have the burden of proving the amount
of any item which it claims was lost or stolen while it was at a designated Store and that
disappearance of the item occurred while it was at the designated Store. Company
agrees to notify Bank immediately if Company determines that any Night Bag or any
item in a Night Bag has been lost or stolen while at one of Bank's Stores. Company
agrees that it will have total responsibility for each Night Bag and its contents until the
Bag has dropped completely into a Night Depository.
6. Special Instructions. Company may submit to Bank in writing any special handling
instructions it may have in connection with cash orders or deposits of items at Bank's cash vault
or night depository locations. Bank may at its option accept or reject the instructions and so
notify Company. Even if accepted, Bank may stop complying with the instructions upon prior
notice to Company if, in Bank's opinion, continued compliance would increase Bank's costs or
risks, interfere with its established or revised procedures, or diminish the efficiency of Bank's
operations. Any loss attributable to increased risk resulting from a special handling procedure
will be borne solely by Company.
7. Survival. Sections 3.6, 4.4., 4.5., 5.4., 5.5., and 7 will survive termination of the Service.
OO 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1416 Commercial Depository Service Description Page 5 of 5
Revised 0113112010
RETAIL IMAGE LOCKBOX SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the applicable documentation ("Service
Documentation") governing the Wells Fargo Bank, N.A. ("Bank") Retail Image Lockbox service
("Service"). For treasury management relationships governed by Bank's Master Agreement
for Treasury Management Services, the Service Documentation includes the Acceptance of
Services, and "Company" is the company identified in the Acceptance of Services. For
treasury management relationships governed by Bank's Deposit Agreement and Disclosures
for Commercial Accounts, the Service Documentation includes the related Depository
Authorization & Agreement Certificate and/or Signature Card, as applicable (each an
"Authorization Certificate"), and "Company" is the company identified in the Authorization
Certificate. As used in this Service Description, the term "Master Agreement" refers to either
Bank's Master Agreement for Treasury Management Services or Bank's Deposit Agreement
and Disclosures for Commercial Accounts, as applicable.
2. Scope of Service. The Service covers the processing of (i) checks and other instruments
submitted in payment of obligations to Company ("Remittances") and (ii) written authorizations
to charge payments due Company to the payors' credit cards ("Charge Authorizations").
However, processing of Charge Authorizations is not available at all processing sites. To the
extent Company is not using the Service to process Charge Authorizations, the references to
Charge Authorizations throughout this Service Description will not apply to Company.
3. Commencement of Service. The Service will start on the date separately agreed to by Bank
and Company if the following events have occurred before such date:
3.1. The United States Postal Service has assigned the Lockbox (as defined in Section 4
below) to Company with the number and at the address specified by Bank to
Company;
3.2. The Account (as defined in Section 6 below) has been opened and is in good standing;
3.3. Company has designated to Bank in writing the processing options selected by
Company for the Service; and
3.4. Company has provided to Bank such other information and documents as Bank
requests to enable Bank to commence and operate the Service for Company and to
enable Bank to comply with its other obligations under this Service Description.
4. Lockbox. Company will direct its customers to mail Remittances and (if applicable) Charge
Authorizations to the post office box identified in the Lockbox Service Set-up Form, or
otherwise identified in writing to Company (the "Lockbox"). Bank (including any subcontractor
of Bank) will have exclusive access to the Lockbox. Bank will give appropriate instructions
concerning the Lockbox to the United States Post Office where the Lockbox is located.
5. Processing Lockbox Mail. Each Business Day (a day on which Bank is open to conduct its
regular banking business, other than a Saturday, Sunday or public holiday), Bank or its
subcontractor will pick up at, and transport from, the Lockbox to the processing site or sites
designated by Bank (each a"Processing Site") the Remittances and Charge Authorizations
addressed to the Lockbox. Except as otherwise specifically provided in this Service
TM-2350 Retail Image Lockbox Service Description Page 1 of 8
Revised 03-24-10
Description, Bank or its subcontractor will open the Remittances and Charge Authorizations
and process them in accordance with the lockbox processing procedures set forth in this
Section 5(the "Processing Procedures"). Company agrees to instruct its customers and other
obligors not to send cash to the Lockbox.
5.1. Disposition of Remittance Materials. On each day Bank offers the Service, Bank will
collect from the Lockbox the envelopes and other contents of the Lockbox. Bank will
open the envelopes and determine whether they contain any Charge Authorizations,
Remittances, remittance statements, invoices, correspondence, checks, cash, papers,
documents, or other items. Unless otherwise requested by Company (the business
entity receiving the Service) and agreed to by Bank, if cash is sent with any remittance
materials the cash will be removed from the envelope containing the remittance
materials and a credit advice of the amount of the cash will be placed in such envelope
with the remainder of the envelope's contents. Except as otherwise specifically
provided in these Processing Procedures or elsewhere in this Service Description, or
as specifically requested by Company and agreed to by Bank, Bank will not reconcile
the Charge Authorizations, checks, cash or other items in the envelopes to invoices, to
remittance statements, or to any other documents or papers in the envelopes or
elsewhere. Bank will process any checks, instruments, Charge Authorizations and any
cash in the envelopes by automated means, unless an envelope does not contain a
remittance statement or invoice or coupon, in which case the checks or cash will be
processed manually (a "Manually Processed Check"), as otherwise provided in these
Processing Procedures and, if so provided in these Processing Procedures, deposit
such checks and cash in the Account.
5.2. Document Identification, Imaging, and Data Capture. Bank or its subcontractor will
(i) print an audit trail idenfication number on each of the remittance documents that it
processes, (ii) image all checks, Charge Authorizations, remittance stubs and
correspondence included among the remittance materials, and (iii) electronically
capture OCR data from remittance documents, such as account number and amount
due.
5.3. Checks Deposited under Automated Processing. Unless Company gives Bank
timely instructions to the contrary using the Retail Lockbox Client Decision Module
available through Bank, with regard to a particular check, each check processed under
automated check processing procedures will be deposited as provided in Section 5.6 of
these Processing Procedures even if (i) the numerical and written amounts of the
check are not the same, (ii) the numerical and written amounts on the check do not
correspond to the amount on any invoice or remittance statement sent with the check,
(iii) there is no payee on the check, (iv) the check is postdated or staledated, (v) the
drawer of the check cannot be determined, (vi) the check does not have a date or a
signature, or (vii) the check contains alterations or restrictive notations.
5.4. Handling of Rejected Checks. Bank will evaluate each check or remittance
document which it could not initially process electronically, and if Bank determines, in
its sole discretion, that such check or remittance document can reasonably be
corrected, repaired or otherwise processed, Bank will attempt to correct, repair, or
complete the processing of such check or remittance document. If Company has
requested special handling of rejected checks, Bank will process such checks manually
in accordance with Company's written instructions to Bank; provided, however, that
Bank will not deposit a rejected check listed in an electronic stop payment file which
Bank has received from Company in accordance with Bank's specifications for such
files.
TM-2350 Retail Image Lockbox Service Description Page 2 of 8
Revised 03-24-10
5.5. Restrictive Notations. Bank will not inspect checks, whether processed by
automated means or processed manually, to determine whether they bear restrictive
notations, such as "Paid in Full". Bank will have no liability whatsoever, despite
anything to the contrary in this Service Description, for depositing or otherwise handling
any check bearing a restrictive notation in accordance with these Processing
Procedures, regardless of whether Bank has knowledge of such restrictive notation.
5.6. Deposits of Checks and Cash. During each Business Day, Bank will make deposits
of the acceptable checks and cash received in the Lockbox by crediting the Account for
the amount of such checks and cash. If a check is processed by automated means,
Bank or its subcontractor will capture the information on the scan line on the remittance
statement or invoice or coupon accompanying the check and transmit such information
to Company electronically on a daily basis. Company will determine what information
is placed on the scan line of Company's remittance statements, invoices or coupons. If
the check is a Manually Processed Check, Bank will manually enter into its database
the account number and amount of the check and transmit such information to
Company electronically on a daily basis. Except as otherwise specifically provided in
this Service Description, the normal and customary laws, rules, practices and
procedures for handling deposits to checking accounts will apply to these Processing
Procedures and the Service.
5.7. Eligibility Requirements for Processing Charge Authorizations. In order to be
eligible for processing by Bank, a Charge Authorization received in the Lockbox must
contain the name of the account debtor, the account debtor's credit card number, the
expiration date, the three digit security code, and the amount of the payment
authorized, all of which must be written or imprinted on the authorization form in a
reasonably legible manner. If any one of these items of information is missing from a
Credit Card Charge Authorization, or is, in the sole judgement of Bank or its
subcontractor, not sufficiently legible for processing purposes, the Credit Card Charge
Authorization will not be processed, and will be forwarded to Company as set forth
below.
5.8. Processing Charge Authorizations for Approval. Bank will proceed to process for
approval each Charge Authorization received in the Lockbox which contains the
information required in Section 5.7 above and is otherwise eligible for processing.
Bank will seek approval from the issuer of the applicable credit card for the payment
transaction set forth on the Charge Authorization. Bank will submit for settlement each
Charge Authorization approved in this manner.
5.9. Settlement Report for Charge Authorizations. Following processing of Charge
Authorizations for approval, Bank will segregate those Charge Authorizations which are
approved from those Charge Authorizations which are declined. Bank will generate a
settlement report for all approved Charge Authorizations and will make it available to
Company in the manner mutually agreed upon during implementation of the Service.
5.10. Imaging. Bank or its subcontractor will electronically image checks, Charge
Authorizations, remittance stubs and correspondence received in the Lockbox.
Company acknowledges and agrees that the images are not works made for hire and
are the property of Bank and not of Company.
5.11. Transmission of Information from Processed Remittances. Each Business Day
that Bank offers the Service, Bank will electronically transmit to Company, in
TM-2350 Retail Image Lockbox Service Description Page 3 of 8
Revised 03-24-10
accordance with the transmission method and file format agreed upon between Bank
and Company, information from processed remittances, including credit card
transaction data, and each settlement report applicable to approved Charge
Authorizations.
5.12. Mailing Checks to Company. Unless otherwise specified by Company in writing to
Bank, Bank will mail to Company, in accordance with the terms of this Service
Description, any checks enclosed in an envelope with remittance materials which are
not deposited in accordance with these Processing Procedures.
6. Account. Company will maintain a deposit account with Bank, which Company will designate
in the Lockbox Service Set-up Form or otherwise in writing, to which Bank or its subcontractor
will (i) deposit Remittances received through the Lockbox, and (ii) credit amounts attributable
to settlement of Charge Authorizations received through the Lockbox, throughout the term of
the Service (the "Account"). Company understands that this Service Description covers the
lockbox service to be provided by Bank and, except as specifically provided in this Service
Description, does not cover the handling of the Account or the processing of checks drawn on
the Account. Except as otherwise specifically provided in this Service Description, the
Account will be handled and checks drawn on the Account will be processed by Bank as Bank
would perform such responsibilities with respect to any other demand deposit account at Bank.
As a result, the Account will be subject to, and Bank's operation of the Account will be in
accordance with, the terms and provisions of Bank's deposit account agreement governing the
Account (the "Account Agreement"), a copy of which Company acknowledges having received.
7. Deposits and Confirmations. Company authorizes Bank to endorse checks and other
payment instruments received at the Lockbox, and to deposit them into the Account as
provided in the Processing Procedures. If any payee of a check or other payment instrument
received in the Lockbox is a legal entity other than Company, Company represents and
warrants to Bank that Company has the proper authorization from the payee to have the check
endorsed for deposit, and deposited, into the Account, and Company agrees to indemnify
Bank against any losses, liabilities, damages, claims, demands, obligations, actions, suits,
judgments, penalties, costs or expenses, including, but not limited to, attorneys' fees
(collectively, "Losses and Liabilities") suffered or incurred by Bank as a result of, or in
connection with, Company's failure to have proper authorization. Company also authorizes
Bank to process and settle Charge Authorizations received at the Lockbox, and to cause the
amounts received on account of settlements of such Charge Authorizations to be credited to
the Account as provided in the Processing Procedures. Bank will provide to Company an
advice of deposits and other credits made to the Account. Company agrees to notify Bank's
customer service center, whose address and telephone number is available upon request from
Bank, (i) of any error in an advice of deposit within fourteen (14) calendar days after Company
receives such advice of deposit and (ii) of any error in a bank statement, or of any failure of a
bank statement to show a deposit that should have been made during the period covered by
the statement, within thirty (30) calendar days after Company receives such bank statement.
The liability of Bank for such errors is limited as provided in Section 17 of this Service
Description.
8. Accounts Receivable Conversion. If Company utilizes Bank's Smart Decision° service or
another method of accounts receivable conversion offered by Bank, Bank or its subcontractor
will, on each Business Day, create an "Electronic File" that includes electronic images of
Remittances that are received in the Lockbox (each, an "Electronic Image") and other
information regarding Remittances, and will process the Electronic File and Remittances
according to the processing criteria Bank has on file for Company, the issuer of an Electronic
Image or Remittance, and Bank (each, respectively, a"Company Preference," "Issuer
TM-2350 Retail Image Lockbox Service Description Page 4 of 8
Revised 03-24-10
Preference," or "Bank Preference.") Based on these Preferences, Bank will (a) convert each
eligible Electronic Image and Remittance to an ACH debit entry on the deposit account on
which it was drawn, in which case the conversion and processing of such ACH debit entry will
be governed by and subject to Bank's separate ACH Origination Service Description,
including, without limitation, the indemnity provisions thereunder; (b) process remaining
Electronic Images in accordance with Bank's separate Service Documentation, as selected by
Company for non-eligible Electronic Images and Items; or (c) process remaining Items in
accordance with Bank's Commercial Account Agreement or other applicable deposit account
agreement. If a Company Preference or an Issuer Preference conflicts with a Bank
Preference, with respect to an Electronic Image or an Item, Bank will process the Electronic
Image or Item in accordance with the Bank Preference.
9. Access to Lockbox Images. The Service will allow Company to enter a website hosted by
Bank or its subcontractor (the "Website") for the purpose of accessing archival images of
Charge Authorizations, Remittances and other remittance materials processed through the
Lockbox, and giving Bank or its subcontractor certain types of instructions with regard to the
processing of such remittance materials. Company agrees to use the Website only in
accordance with this Service Description and any notices and information posted on the
Website (collectively, the "Website Use Documentation"). Persons entering the Website for
Company (the "Users") must also accept any "terms of use" for the Website which appear on
the Website when a User initially logs on.
10. Security Procedures.
10.1. Bank or its subcontractor will provide each User with a multi-factor authentication
compliant access method (which may consist of a combination of user names,
passwords, passphrases, digital certificates and/or tokens) to be used whenever the
User enters the Website.
10.2. It is Company's responsibility to ensure that any user names, passwords, passphrases,
digital certificates and tokens provided in connection with use of the Website
(collectively, "Security Devices") are known to, and used only by, persons who have
been properly authorized by Company to access the Website and use the Service
through the Website.
10.3. FAILURE TO PROTECT SECURITY DEVICES MAY ALLOW AN UNAUTHORIZED
PARTY TO (1) USE THE SERVICE, (2) CORRECT, CHANGE, VERIFY, OR SEND
DATA USED WITH THE SERVICE, (3) SEND INFORMATION AND COMMUNICA-
TIONS TO, OR RECEIVE INFORMATION AND COMMUNICATIONS FROM, BANK
OR (4) ACCESS COMPANY'S ELECTRONIC COMMUNICATIONS AND FINANCIAL
DATA. ALL ENTRIES INTO THE WEBSITE, ALL COMMUNICATIONS SENT, AND
ALL USES OF THE SERVICES, THROUGH COMPANY'S SECURITY DEVICES WILL
BE DEEMED TO BE ENTRIES, USES, AND COMMUNICATIONS AUTHORIZED BY
COMPANY AND SHALL BE BINDING UPON COMPANY. COMPANY ASSUMES
THE ENTIRE RISK FOR THE FRAUDULENT OR UNAUTHORIZED USE OF ALL
SECURITY DEVICES. Company acknowledges the importance of developing internal
procedures to limit such risk, which procedures will include, at a minimum, (a) notifying
Bank immediately when any new person becomes a User or when any existing User
stops being a User, (b) disabling access to the Website immediately for each User who
stops being a User, and (c) not keeping, in any form or in any place, lists of Security
Devices.
TM-2350 Retail Image Lockbox Service Description Page 5 of 8
Revised 03-24-10
10.4. Company agrees to notify Bank immediately when Company becomes aware of any
loss or theft of, or any unauthorized use of, any Security Device. Company also
agrees to notify Bank immediately when Company becomes aware of any
unauthorized entry into the Website.
11. Use of Certain Software to Access the Website. In using the Website, Company will be
sending financial and other data as well as electronic messages directly to Bank or Bank's
subcontractor through the Internet. Company acknowledges that when the Internet, or other
electronic communications facilities, are used to transmit or receive data and messages, the
data and the messages may be accessed by unauthorized third parties. To reduce the
likelihood of such third party access, Company agrees to transmit and receive data and
messages through the Website using only software, including, but not limited to, browser
software, or other access devices that support the Secure Socket Layer (SSL) protocol or
other protocols required by, or acceptable to, Bank, and to follow the log-on procedures
established by Bank or its subcontractor that support such protocols.
12. Restricting or Terminating Access to the Website. In addition to, and not in substitution
for, any provision in this Service Description or the other Service Documentation, Company
understands and agrees neither Bank nor its subcontractor will in any way be obligated to
permit Users access to the Service through the Website if (a) such use or access is
inconsistent with any term or condition applicable to the Service or the Website or to the
information to be accessed, (b) such use or access is not permitted by applicable state or
federal law or regulation, (c) Bank has reasonable cause to believe that such use or access
may not be authorized by Company or any third person whose authorization Bank believes is
necessary for such use or access, or (d) Bank has reasonable cause to deny such use or
access for Company's protection or the protection of Bank or Bank's subcontractor. If the
Service cannot be used through the Website, Bank will make reasonable efforts for the
Service to be used by other means. Neither Bank nor its subcontractor shall have any liability
to Company for any losses or damages Company may suffer or incur as a result of any such
termination.
13. Decisioning Module. If Bank's decisioning module is available to Company, and Company
elects to it in connection with the Service, Company will be able to send instructions through
the Website to Bank or its subcontractor as to how to process certain Remittances or Charge
Authorizations which Bank classifies as either "processable suspend" or "unprocessable"
(collectively, the "Unprocessable Items"). Company will have several options for instructions,
as agreed upon in advance by Bank and Company. Such options may include one or more of
the following: (i) apply the Unprocessable Item to a specific customer account, (ii) apply the
Unprocessable Item to Company's suspense account, (iii) reject the Unprocessable Item and
have it placed in Company's reject package, or (iv) direct Bank to issue a letter of pre-
arranged content to the remitter of the Unprocessable Item. Each message related to the
processing of an Unprocessable Item (a "Decisioning Instruction") must be received by Bank
or its subcontractor by the cutoff time for deposit or processing of such item which Bank and
Company have mutually agreed upon during implementation of the Service. If no Decisioning
Instruction is received by the specified deadline, the Unprocessable Item will be handled in
accordance with the Processing Procedures or any other standing instructions applicable such
items. Bank will have no liability or responsibility whatsoever for any keying errors, Company
system issues, or misapplied payments resulting from Company's Decisioning Instructions.
14. Customer Service. Any questions or problems that Company has with respect to the Service
should be addressed to Bank's customer service center at the telephone number and address
separately disclosed to Company.
TM-2350 Retail Image Lockbox Service Description Page 6 of 8
Revised 03-24-10
15. Claims, Legal Progress and Notices. If Bank receives any claim, notice, legal process or
court order relating to the Charge Authorizations, the Remittances, the Lockbox or the
Account, Bank will comply with it if Bank determines in its sole discretion that the legal
process, legal notice or court order is legally binding on it.
16. Indemnification. Company agrees to indemnify Bank and its officers, directors, employees,
agents and subcontractors (collectively, "Indemnified Parties") and hold each of the
Indemnified Parties harmless from and against any and all losses, liabilities, claims, damages,
demands, obligations, actions, suits, judgments, penalties, costs or expenses, including, but
not limited to, attorneys' fees (collectively, "Losses and Liabilities") which any one or more of
the Indemnified Parties suffers or incurs in relation to (i) the processing of Charge
Authorizations, (ii) any keying errors, Company system issues, or misapplied payments
resulting from Company's Decisioning Instructions, or (iii) any action taken by Bank or its
subcontractor in response to a Decisioning Instruction, except to the extent that any such
Losses and Liabilities are directly caused by Bank's gross negligence or willful misconduct.
17. Limitation of Liability. Company understands and agrees that, absent manifest evidence of
fraud, Bank is entitled to assume that each Charge Authorization received at the Lockbox is
legitimate and duly authorized by the account debtor purporting on its face to give the Charge
Authorization, and Bank will have no liability for processing such Authorization in accordance
with the Processing Procedures. In addition to the other limitations on Bank's liability
contained in the Master Agreement, if Company incurs a material loss which results directly
from Bank's or its subcontractor's negligence or breach in performing the Service and (i) if
such negligence or breach is a failure to deposit any check which should have been deposited
or to process any Charge Authorization which should have been processed, pursuant to this
Service Description, the liability of Bank and its subcontractor shall be limited to direct money
damages in an amount not to exceed interest on the amount of the check or the amount of the
payment authorized under the Charge Authorization at a rate equal to the cost of funds (at a
reserve adjusted daily interest rate which Bank will determine in good faith) for the time period
such amount is not in the Account, which time period for the purpose of calculating the interest
will not extend beyond the end of the thirty (30) calendar day notice period referred to in
Section 7 of this Service Description, and (ii) if such negligence or breach results from any
other action or failure to act by Bank or its subcontractor, the liability of Bank and its
subcontractor shall, unless otherwise provided by any law which cannot be varied by contract,
be limited to direct money damages in an amount not to exceed the lesser of (A) three (3)
times all the Service Fees charged or incurred in relation to the Service during the calendar
month immediately preceding the calendar month in which the loss occurred (or, if no such
fees were charged or incurred in the preceding month, such fees charged or incurred in the
month in which the loss occurred), or (B) Two Hundred Thousand Dollars ($200,000.00).
18. Termination. Upon termination of the Service, Bank will (i) close the Lockbox, and (ii) dispose
of the mail addressed to the Lockbox in the manner instructed by Company for a period of
three (3) months after the termination date, unless arranged otherwise between Company and
Bank, with Service Fees with respect to such disposition based on Bank's estimate being
prepaid directly to Bank at the time of such termination in immediately available funds or by
another payment method acceptable to Bank in its sole discretion.
19. Assignment. Notwithstanding anything to the contrary in the Agreement, the rights and
obligations of Bank with respect to the Service shall be assignable to any successor in interest
without restriction.
20. Instructions. Bank is authorized to act on any instructions received by Bank if (i) such
instructions purport to be made in the name of Company, (ii) Bank reasonably believes that
TM-2350 Retail Image Lockbox Service Description Page 7 of 8
Revised 03-24-10
they are so made, and (iii) they do not conflict with the terms of this Service Description,
including, but not limited to, the Processing Procedures, as such terms may be amended from
time to time, unless the conflicting instructions are supported by a court order.
21. Authorized Persons. Any person identified by Company in the Lockbox Service Set-up Form
or any certification, notice or other communication delivered to Bank may receive information,
communications and notices regarding the Service, and is authorized to transact all business,
make all agreements and sign and deliver all documents in connection with the Service. If the
identity of such a person changes Company will promptly notify Bank in writing. Bank will
have a reasonable time after receipt of a certification, notice or other communication to act on
it.
22. Software, Hardware and Backup Requirements. Upon notice from Bank of a failure of any
software, hardware or other equipment necessary for Bank to perform in accordance with this
Service Description, Company will as soon as reasonably possible deliver to Bank all data in
Company's possession or under its control which Bank reasonably requests in order for Bank
to continue to provide the Service.
23. Survival. Sections 7, 8, 10, 12, 16, 17 and 23 of this Service Description will survive
termination of the Service.
24. Terminology. As used in this Service Description and in the Agreement as applied to this
Service, "negligence" will mean a material failure to use that degree of care that would be used
under the same or similar circumstances by a national banking association having
substantially the same volume and type of lockbox activity and approximately the same
number, size and diversity of lockbox customers.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-2350 Retail Image Lockbox Service Description Page 8 of 8
Revised 03-24-10
DESKTOP DEPOSITg'" - CE00 SERVICE DESCRIPTION
1. Introduction. This Service Description together with the other Service
Documentation as defined in the Master Agreement for Treasury Management
Services and Acceptance of Services (collectively, the "Master Agreement")
between Bank and Company govern Bank's Desktop Deposit CEO Service (the
"Service").
2. Description of Service. The Service enables Company to use hardware
provided by Bank in conjunction with Bank's Commercia/ E/ectronic Office0
("CEO") portal to create electronic images of certain Paper Items (each, an
"Electronic Image") and to transmit an electronic file of such Electronic Images
and other information (collectively, the "Electronic File") to Bank for deposit to
Company's checking account with Bank ("Company's Account"). After Bank
receives Company's Electronic File, Bank, at its sole option, uses the Electronic
File either (a) to create substitute check(s), that Bank presents to the bank on
which the Paper Item is either (i) drawn or (ii) payable at or through (each,
"Paying Bank"); or (b) to generate one or more electronic files (from the original
Electronic File) for presentment directly or indirectly to Paying Bank.
3. Conditions to Provision of the Service. As conditions to Bank's provision of
the Service, Company shall (a) maintain Company's Account in good standing,
(b) subscribe to Bank's CEO service, and (c) comply with such restrictions on the
Electronic File as Bank may communicate to Company from time to time.
4. Creating Electronic Images and Transmitting Company's Electronic File to
Bank. Company shall use Bank provided or approved hardware and Bank's
CEO service to scan checks and other Paper Items that Company wishes to
deposit to Company's Account by means of the Service and to transmit
Company's Electronic File to Bank.
5. Processing Company's Electronic File. If Company transmits Company's
Electronic File to Bank before the cut-off time Bank separately discloses to
Company (the "Cut-Off Time") on any Business Day, Bank shall review and
process Company's Electronic File on that Business Day. If Company transmits
Company's Electronic File to Bank after the Cut-Off Time on any Business Day,
Bank shall review and process Company's Electronic File on the next Business
Day.
6. Exception Items. When Bank reviews and processes Company's Electronic
File, Bank shall reject any Electronic Image that Bank in its sole discretion
determines to be ineligible for the Service (each, an "Exception Item") including,
Desktop Deposit CEO Service Description TM-1863 Page 1
Revised 5/5/05
without limitation, Electronic Images of Items drawn on banks located outside the
United States, Electronic Images that are illegible, Electronic Images of Items
previously converted to substitute checks, and Electronic Images with
unreadable MICR information. Each Business Day on which Bank reviews and
processes Company's Electronic File, Bank will notify Company of all Exception
Items through Bank's CEO or other communication channels at Bank's
discretion. Company agrees that if it wishes to attempt to deposit any Exception
Item to Company's Account, it shall do so only by depositing the original Paper
Item on which the Exception Item is based. Company acknowledges and agrees
that even if Bank does not initially identify an Electronic Image as an Exception
Item, the substitute check created by Bank therefrom may nevertheless be
returned to Bank because, among other reasons, the Electronic Image is
deemed illegible by Paying Bank. Bank's failure to identify an Exception Item
shall not preclude or limit the obligation of Company to Bank under Paragraph 9.
7. Funds Availability. Bank shall make funds from accepted Electronic Files
available according to Bank's Electronic Deposit Collected Funds Schedule
("Collected Funds Schedule"). Bank's Collected Funds Schedule will be provided
to customer upon request and may be amended by Bank from time to time.
8. Company's Warranties. Company represents and warrants to Bank that:
8.1. Company shall use the Service only for Paper Items payable to or
endorsed or deposited by Company.
8.2. Company shall, in accordance with instructions from Bank, dispose of
original Paper Items from which Company has previously created and
submitted to Bank an Electronic Image. In that regard, Company shall
maintain control over and responsibility for retention and destruction of
original Paper Items, as instructed by Bank.
8.3. Company shall not submit any duplicate Electronic Images to Bank.
8.4. Company shall not deposit to Company's Account or otherwise negotiate
any original Paper Item from which Company has previously created and
submitted to Bank an Electronic File, unless Bank has notified Company
that the Electronic Image is an Exception Item.
8.5. Company shall transmit to Bank only Electronic Images that are suitable
for processing, including, but not limited to, Electronic Images that are
legible and contain readable MICR data.
9. Company's Agreement to Indemnify Bank. Company shall indemnify, defend,
and save harmless Bank, its parent company and its affiliates and each of their
respective directors, officers, employees, and agents (collectively in this
Paragraph 9, "Indemnitees") from and against all liabilities, damages, claims,
obligations, demands, charges, costs, or expenses (including reasonable fees
and disbursements of legal counsel and accountants) awarded against or
Desktop Deposit CEO Service Description TM-1863 Page 2
Revised 5/5/05
incurred or suffered (collectively, "Losses and Liabilities") by Indemnitees arising
directly or indirectly from or related to the following (except for Losses and
Liabilities arising directly or indirectly from or related to Bank's own gross
negligence or wilful misconduct):
9.1. Any negligent or intentional act or omission by Company in the
perFormance of its obligations under this Service Description and the
Service Documentation;
9.2. Any material breach in a representation, warranty, covenant, or obligation
of Company contained in this Service Description and the Service
Documentation;
9.3. The violation of any applicable law, statute, or regulation in the
perFormance of its obligations under this Service Description and the
Service Documentation;
9.4. Bank acting as a"reconverting bank" under the Check Clearing for the
21 st Century Act through the creation of "substitute checks" or purported
substitute checks using an Electronic Image or Electronic File or an
illegible Electronic Image;
9.5. Bank presenting to Paying Bank an Electronic File for payment; and
9.6. Company's failure to dispose of original Paper Items in accordance with
Paragraph 8.2, in which event such Losses and Liabilities shall include
without limitation consequential damages.
This Paragraph 9 shall survive the termination of the Service.
10. Termination. Bank may terminate the Service at any time upon prior notice to
Company.
Desktop Deposit CEO Service Description TM-1863 Page 3
Revised 5/5/05
ACH ORIGINATION SERVICE DESCRIPTION
1. Introduction. This Service Description together with the other Service Documentation as
defined in the Master Agreement for Treasury Management Services ("Master Agreement")
between Wells Fargo Bank, N. A. ("Bank"), and the company identified in the signature block of
this Service Description ("Company") govern Bank's ACH Origination Services ("Services") and
Company's ACH security procedure election(s).
2. Description of Services. The Service enables Company to originate automated clearing
house ("ACH") credit and debit entries in accordance with the National Automated Clearing
House Association Operating Rules and any applicable local ACH rules (collectively, the "ACH
Rules"). Company will maintain one or more deposit account(s) at Bank or Bank's affiliate
(each, an "Account"), that Bank may use to process such Entries. An "Entry" is an ACH debit or
credit entry issued in Company's name, and a"File" is the data file or batch release used to
transmit one or more Entries to Bank. This Service Description sets forth Company's elections
regarding (a) the communication channel(s) Company will use to will transmit Files to Bank and
(b) the means Bank will use to verify Company's authorization of a File or a communication
amending or canceling an Entry or File (each, a"Security Procedure"). When Bank acts with
respect to an Entry as both the originating depository financial institution ("ODFI") and receiving
depository financial institution ("RDFI"), as ODFI and RDFI are defined by the ACH Rules, the
Entry is an "on-us Entry."
3. Preparation of Entries and Files; Processing Schedules. Company will prepare each File in
accordance with the ACH Rules and the guidelines Bank separately makes available to
Company. Bank will process each File in accordance with Bank's then current processing
schedule and any instructions regarding the date an Entry is to be settled that Company
furnishes with the Entry provided (a) Bank receives the File by Bank's applicable cutoff time on
a Business Day (as defined in Bank's Commercial Account Agreement) and (b) the ACH is open
for business. Files will be deemed received by Bank when the transmission of the File to Bank
is completed and authenticated in compliance with the Security Procedure. If Bank receives a
File after Bank's applicable cutoff time or on a day when the ACH is not open for business, the
File will be treated as having been received prior to Bank's applicable cutoff time on the next
Business Day on which the ACH is open for business.
4. Inconsistency of Name and Number. If an Entry describes a"Receiver" (as defined in the
ACH Rules), both by name and identifying number, the RDFI may pay the Entry on the basis of
the identifying number, even if the number identifies a person different from the named
Receiver. If an Entry describes the RDFI both by name and identifying number, Bank, a
gateway operator or another financial institution handling the Entry may rely on the identifying
number to identify the RDFI, even if the identifying number refers to an institution other than the
named RDFI.
5. Company's Payment Obligations. As of the applicable settlement date, Company will
maintain available funds in each Account sufficient to cover the credit Entries originated against
it. Company's obligation to pay Bank for each credit Entry matures when Bank transmits the
credit Entry to the ACH or gateway operator or posts an on-us Entry. Bank is authorized to
debit the Account for the total amount of all credit Entries originated from it at any time. If
requested by Bank, Company will pay to Bank, in immediately available funds, an amount equal
to all credit Entries Company originates through Bank before the date Bank delivers the credit
TM-1423 ACH Origination Services Page 1 of 7
Revised 05-20-2010
Entries to the ACH or gateway operator or posts an on-us Entry. If Company fails to comply
with Bank's request, Bank may refuse to send the Entries to the ACH or gateway operator or
post an on-us Entry. Bank may take such other actions as it deems necessary or appropriate to
ensure that Bank receives payment for Company's credit Entries including without limitation (a)
upon notice to Company, placing a hold on funds in any account at Bank or any affiliate of Bank
that Company owns in whole or in part sufficient to cover Company's credit Entries and (b)
setting off against any amount Bank or an affiliate of Bank owes Company. In addition, Bank
may charge the Account or any other Company account at Bank or any affiliate of Bank for any
debit, correcting or reversing Entry which is later returned to Bank.
6. Provisional Credit. A credit to Company's Account for an Entry is provisional until Bank
receives final settlement for the Entry. If Bank does not receive final settlement, Bank is entitled
to debit Company's Account or any other accounts Company owns in whole or in part at Bank or
any affiliate of Bank for the amount of the Entry. Company will pay any shortfall remaining after
such debit to Bank immediately upon demand.
7. Rejected Entries. Bank may reject an Entry or File if Company fails to comply with the terms of
this Service Description. Bank will attempt to notify Company promptly so Company may cure
the defect but will have no liability to Company for rejecting an Entry or File or any loss resulting
from Bank's failure to provide notice. If Company requests Bank repair an Entry or File and
Bank attempts to do so, Bank will not be liable for not making the requested repair. Company
will pay all charges and expenses Bank incurs in connection with any repair or attempted repair.
8. Cancellation, Amendment, Reversal. Company has no right to cancel, amend or reverse an
Entry or File after its receipt by Bank. If Company requests Bank cancel, amend or reverse an
Entry or File, Bank may, at its sole discretion, attempt to honor such request but will have no
liability for its failure to do so. Company will reimburse Bank for any expenses, losses or
damages Bank incurs in effecting or attempting to effect Company's request.
9. Returned Entries. Bank will have no obligation to re-transmit a returned Entry or File to the
ACH or gateway operator, or to take any further action with respect to a returned on-us Entry, if
Bank complied with the terms of this Service Description with respect to the original Entry or
File. Company will reimburse Bank for any returned debit Entries on the same day Company
receives notice of such returned Entry.
10. Reconstruction of Entries and Files. Company will retain sufficient records to permit it to
reconstruct each Entry and File it delivers to Bank for a period of five (5) Business Days after
the applicable settlement date and will submit the reconstructed Entry or File to Bank upon
request.
11. Audit. Company grants Bank ongoing access to Company's Files and the right to audit
periodically such Files and Company's ACH processes and controls so Bank can verify
Company's compliance with this Service Description.
12. Bank's Internal Risk Parameters. Bank establishes internal risk parameters to identify out-of-
pattern or suspect Entries or Files and protect Company and Bank from potential losses. These
parameters may include without limitation limits on debit and credit settlements on a single
Business Day and/or over multiple consecutive Business Days. Bank may pend or delete an
Entry or File exceeding the applicable parameters. In addition, any transaction TYPE (debit or
credit) or SEC (standard entry class) as defined in the ACH Rules may, at Bank's option, be
conditioned upon Bank's prior approval. Upon notice to Company, Bank may discontinue
processing a TYPE and/or SEC of transactions Bank has previously processed for Company.
TM-1423 ACH Origination Services Page 2 of 7
Revised 05-20-2010
13. International Entries.
13.1. General. This section contains additional terms applicable when the financial institution
holding the account designated to receive an Entry is in a jurisdiction ("Receiving
Country") other than the United States (each, an "International Entry"). Bank will
process each International Entry in accordance with (a) the laws and payment system
rules of the Receiving Country (b) any agreement governing International Entries
between Bank and the gateway operator through which Bank processes the
International Entry, the terms of which Bank communicates to Company prior to
Company's use of the Service or from time to time thereafter, and (c) the ACH Rules. If
there is a conflict among these three clauses, they will will govern in the order set forth in
this subsection.
13.2. Credit Entries. With respect to credit Entries Bank agrees to originate in the currency of
a designated foreign government or intergovernmental organization ("Foreign
Currency"), Bank will convert the amount to be transferred from U.S. dollars ("USD") to
the Foreign Currency at Bank's sell rate for exchange in effect on the Business Day the
Entry is transmitted by Bank to the ACH or gateway operator. If the financial institution
designated to receive the funds does not pay the Receiver specified in the Entry, or if the
Entry is subsequently determined to be erroneous, Bank will not be liable for a sum in
excess of the amount of the original Entry after it has been converted from the Foreign
Currency to USD at Bank's buy rate for exchange at the time the Entry is returned to
Bank.
13.3. Debit Entries. With respect to debit Entries Bank agrees to originate in a Foreign
Currency, Bank will convert the amount of each Entry from the Foreign Currency to U.S.
Dollars at Bank's buy rate for exchange in effect on the settlement date of the Entry. If
the financial institution designated to receive the Entry subsequently returns it, Bank may
charge the applicable Account (or any other accounts Company owns in whole or in part
at Bank or any affiliate of Bank) for the amount equal to the value of the returned Entry,
after Bank has converted the Foreign Currency to USD at Bank's sell rate for exchange
at the time the Entry is returned to Bank. Bank will not be liable for a sum in excess of
the original amount of the Entry after conversion.
13.4. Acts or Omissions of Third Parties. Bank will not be liable for any failure or delay by a
gateway operator, any intermediary financial institution, or the financial institution
designated to receive the Entry in the Receiving Country in processing or failing to
process any Entry Bank transmits to the Receiving Country, or for acts or omissions by a
third party including without limitation the delay or failure of any third party to process,
credit or debit any Entry.
14. Third-Party Sender Activities. This section contains additional terms applicable when
Company is a Third-Party Sender, as defined by the ACH Rules.
14.1.General. Prior to originating any Entry on behalf of a customer of Company, Company
will (a) notify Bank in writing of any other financial institution Company is using to originate
transactions as a Third-Party Sender and thereafter notify Bank before Company adds
any new financial institution for this purpose; (b) provide Bank with the information Bank
requires to enable it to understand the nature of Company's customer's business
including without limitation the name, Taxpayer ldentification Number, business activity
and geographic location of Company's customer; (c) if specifically required by Bank,
obtain Bank's written approval to initiate or continue to initiate Entries for that customer,
TM-1423 ACH Origination Services Page 3 of 7
Revised 05-20-2010
which approval Bank may rescind upon written notice to Company; and (d) enter into a
written agreement with that customer whereby that customer agrees:
14.1.1. to assume the responsibilities of an originator under the ACH Rules and to be
bound by the ACH Rules as in effect from time to time;
14.1.2. ACH entries may not be initiated in violation of the laws or regulations of the
United States including without limitation the regulations issued by the Office of
Foreign Assets Control;
14.1.3. to grant Bank ongoing access to audit it and any ACH entry that it has
transmitted to Company for transmission to Bank; and
14.1.4. Bank may at any time refuse to process an ACH entry for that customer.
14.2. Representations and Warranties. Company represents and warrants to Bank
Company (a) has conducted due diligence with respect to each customer of Company
for which Company is originating transactions through Bank and determined that each
such customer is engaged in a legitimate business and that the type, size and frequency
of transactions that each such customer is originating is normal and expected for the
customer's type of business; and (b) will, in accordance with reasonable commercial
standards, monitor each customer's business and transactions on an ongoing basis and
notify Bank immediately if Company identifies any unusual activity by Company's
customer.
15. Perfect NOC Service. This section contains additional terms applicable to Bank's Perfect NOC
Service. Bank maintains a database of Notifications of Change (each, a"NOC") that Bank
receives and uses this database to update Company's Entries in accordance with the Service
options Company selects from time to time. Bank will notify Company of each NOC Bank
receives in connection with Company's Entries.
16. Smart Decision Service. This section contains additional terms applicable to Bank's Smart
Decision Service. Bank will process for credit to the Account specified by Company checks and
other instruments payable to Company (each, an "Item") that Company delivers to Bank.
Company will use the depository channels through which Bank offers the Service including
electronic channels and other channels specified by Bank through which Bank accepts Items for
processing. When Company uses electronic depository channels, Company transmits an
"Electronic File" to Bank that includes electronic images of Items (each, an "Electronic Image")
and other information regarding Items in the Electronic File. Each Business Day, Bank
processes Company's Electronic File and other Items according to the processing criteria Bank
has on file for Company, the issuer of an Electronic Image or Item, and Bank (each,
respectively, a"Company Preference," "Issuer Preference," or "Bank Preference.") Based on
these Preferences, Bank will (a) convert each eligible Electronic Image and Item to an ACH
debit Entry on the deposit account on which it was drawn; (b) process remaining Electronic
Images in accordance with Bank's separate Service Documentation governing the electronic
depository channel Company used to deliver the Electronic Image to Bank; or (c) process
remaining Items in accordance with Banks Commercial Account Agreement. If a Company
Preference or an Issuer Preference conflicts with a Bank Preference, Bank will follow the Bank
Preference.
TM-1423 ACH Origination Services Page 4 of 7
Revised 05-20-2010
17. Warranties.
17.1. General. Company acknowledges Bank makes certain warranties under the ACH Rules
with respect to each Entry. Company will reimburse Bank for any loss Bank incurs,
including Bank's reasonable attorneys' fees and legal expenses, as the result of a
breach of a warranty made by Bank in connection with any Entry Bank originates upon
the instructions received from Company, except to the extent that the loss resulted from
Bank's own gross negligence or intentional misconduct.
17.2. Smart Decision Service. If Company subscribes to Bank's Smart Decision Service,
Company warrants Company (a) will transmit to Bank only Electronic Images are
suitable for processing, including, but not limited to, Electronic Images that are legible
and contain machine-readable MICR data; (b) will not deposit to the Account or
otherwise negotiate any original Paper Item from which Company has previously created
and submitted to Bank an Electronic Image, unless Bank has notified Company the
Electronic Image is not legible or contains MICR data that is not machine readable; and
(c) has received copies of the then-current ACH Rules and Reg E and will comply
therewith at all times Bank provides the Service.
18. Indemnification. Company acknowledges Bank indemnifies certain persons under the ACH
Rules. Company agrees to reimburse Bank for any loss Bank incurs, including its reasonable
attorneys' fees and legal expenses, as the result of the enforcement of any such indemnity,
except to the extent the loss resulted solely from Bank's own gross negligence or intentional
misconduct. In addition, Company will indemnify Bank from and against all liabilities, losses,
damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees
and disbursements of legal counsel and accountants) awarded against or incurred or
suffered by Bank arising directly or indirectly from or related to any material breach in a
representation, warranty, covenant, or obligation of Company contained in this Service
Description.
19. Termination. In addition to the termination provisions contained in the Master Agreement,
Bank may terminate the Services immediately upon notice to Company if Bank determines in its
sole discretion: (a) the number of returned debit Entries originated under this Service
Description is excessive; or (b) Company has breached a warranty provided under the ACH
Rules or this Service Description or otherwise failed to comply with the ACH Rules.
20. Survival. Sections 3, 4, and 5- 18 will survive termination of the Services.
21. Election of Security Procedure(s).
The Security Procedure(s) Company has elected for ACH origination is/are:
❑ Commercial Electronic Office`R' (CEO")
CEO is Bank's electronic banking portal that is accessed via the Internet. Authorized users
may access Bank's CEO ACH Payments through the portal. CEO security procedures include
log-on credentials specified by Bank (that may include a Company ID, user ID and password)
and any other authentication or authorization process Bank requires from time to time. Bank
will use the CEO security procedures to authenticate each File received through CEO in
Company's name.
TM-1423 ACH Origination Services Page 5 of 7
Revised 05-20-2010
❑ Direct Origination.
❑ Secure Application File Exchange Transmission ("SAFE-T"). This transmission
protocol offers a variety of transmission protocols including hypertext transfer protocol
secured (https), FTP over SSL (FTP/S), secure FTP (S-FTP), and Applicability Statement 2
(AS2) that Bank uses to authenticate each Payment File transmitted to Bank in Company's
name.
❑ Connect:Direct with Secure This transmission protocol is used to connect Company's
mainframe environment to Bank's mainframe environment. Secure+ is an add-on to
Connect Direct to enhance security by means of Secure Socket Layer ("SSL") or Transport
Layer Security ("TLS"). Bank uses an agreed upon ID password combination and a token
card to authenticate each File transmitted to Bank in Company's name. Connect Direct
and Secure + are trademarks of Sterling Commerce.
❑ Payment Manager"
❑ Secure Application File Exchange Transmission ("SAFE-T"). This transmission
protocol offers a variety of transmission protocols including hypertext transfer protocol
secured (https), FTP over SSL (FTP/S), secure FTP (S-FTP), and Applicability Statement 2
(AS2) that Bank uses to authenticate each Payment File transmitted to Bank in Company's
name.
❑ Machine-to-Machine ("M2M"). This transmission protocol uses an XML message
interface that is based on the Interactive Financial eXchange (IFX) message standard
using SOAP structured messages. Data is communicated via the Internet using 128-bit
encryption and Secure Socket Layers (SSL). Bank uses digital certificates to authenticate
each File transmitted to Bank in Company's name.
❑ Connect:Direct with Secure This transmission protocol is used to connect Company's
mainframe environment to Bank's mainframe environment. Secure+ is an add-on to
Connect Direct to enhance security by means of Secure Socket Layer ("SSL") or Transport
Layer Security ("TLS"). Bank uses an agreed upon ID password combination and a token
card to authenticate each File transmitted to Bank in Company's name. Connect Direct
and Secure + are trademarks of Sterling Commerce.
❑ Value-Added Network ("VAN"). With this transmission protocol, a third party serves as
an intermediary for transmitting data between Company and Bank. Procedures for
transmitting files may vary by VAN. Bank follows the procedures of the VAN selected by
Company to authenticate each File transmitted to Bank through the VAN in Company's
name.
❑ SWIFT"
SWIFT has established procedures for controlling access to SWIFT messaging services (each,
an "Access Control") that may include without limitation access codes, message authentication
codes, secure card readers, digital signatures, and Hardware Security Modules. In addition,
SWIFT authenticates certain messages including without limitation Files based on SWIFT
message type prior to accepting them for routing as SWIFT messages (each, an
"Authenticated Message"). This authentication may include confirming that the sender and
TM-1423 ACH Origination Services Page 6 of 7
Revised 05-20-2010
recipient of the message have exchanged bilateral keys ("BKE"), entered into a relationship
management application ("RMA") agreement, or taken other steps to secure the transmission
of SWIFT messages between them as SWIFT requires from time to time (each, an
"Authentication Procedure").
❑ Security Procedure Elected by Company's Third Party Service Provider
Company is utilizing a Third Party Service Provider ("TPSP") as defined in the ACH Rules to
originate Entries and Files on Company's behalf. Bank will authenticate each File transmitted
to Bank in Company's name in accordance with the security procedure the Company's TPSP
has elected. Company will notify Bank of any change to Company's TPSP in a manner
affording Bank a reasonable opportunity to act on the information. Company's TPSP is:
Third Party Service Provider:
Contact Person:
Telephone: Fax:
❑ Non-Standard Security Procedure
Company has refused to utilize any of the security procedures described above and has
elected to use the Security Procedure set forth in Attachment A.
IN WITNESS WHEREOF, Company and Bank agree to and accept this ACH Origination Services
Service Description.
("Company") Wells Fargo Bank, N.A. ("Bank")
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1423 ACH Origination Services
Revised 05-20-2010
Page 7 of 7
TARGET BALANCE ACCOUNT SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Payment Authorization Service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. If Company maintains multiple accounts at Bank, Company
may designate in writing one such account as its "Principal Account" and one or more
additional accounts as "Target Balance Accounts". For each Target Balance Account,
Company will separately specify to Bank in writing the Ledger Balance or Collected
Balance which Company wishes to maintain in such account (the "Target Balance"). At
the end of each Business Day, Bank will determine the applicable balance on deposit in
each Target Balance Account. If the applicable balance in a Target Balance Account
exceeds its Target Balance, Bank will transfer from the Target Balance Account to the
Principal Account such funds as are necessary to bring the applicable balance to the
Target Balance. If the applicable balance is less than the Target Balance, Bank will
transfer from the Principal Account to the Target Balance Account such funds as are
necessary to bring the applicable balance to the Target Balance. Bank may, but will not
be required to, transfer funds if the transfer would create an overdraft or exceed the
Collected Balance then on deposit in the Principal Account.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1414- Target Ba/ance Account Service Description Page 1 of 1
Revised 0113112010
WIRE TRANSFER SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") wire transfer service ("Service") and Company's wire transfer
security procedure election(s). "Service Documentation" is defined in Bank's Master Agreement
for Treasury Management Services ("Master Agreement"). The Service Documentation
includes the Acceptance of Services ("Acceptance"), and "Company" is the company identified
in the Acceptance.
2. Description of the Service. The Service enables Company to instruct Bank to transfer funds
in accordance with Article 4A of the Uniform Commercial Code as amended from time to time
("UCC 4A") and the rules and regulations of any funds transfer system Bank uses to effect the
transfer. In this Service Description, an instruction to Bank (including any communication
cancelling or amending an instruction) in Company's name to transfer funds from Company's
account at Bank or Bank's affiliate (each, an "Account") is a"Payment Order" (as defined in
UCC4A). The Acceptance sets forth Company's elections regarding (a) the communication
channel(s) Company will use to send Payment Orders to Bank and (b) the means Bank will use
to verify Company's authorization of a Payment Order (each, a"Security Procedure").
3. Preparation of Payment Orders; Processing Schedules. Company will prepare each
Payment Order in accordance with guidelines Bank separately makes available from time to
time. Bank will execute each Payment Order in accordance with Bank's then current processing
schedule and any instructions Company furnishes with the Payment Order regarding the date a
Payment Order is to be executed. A Payment Order will be deemed received by Bank when
Bank has verified it in compliance with the Security Procedure. If Bank receives a Payment
Order after Bank's applicable cutoff time on any Business Day, Bank will treat the Payment
Order as having been received prior to Bank's applicable cutoff time on Bank's next Business
Day. A"Business Day" is every day except Saturdays, Sundays, federal holidays.
4. Inconsistency of Name and Number. If a Payment Order describes the person to receive the
funds that are the subject of the Payment Orders both by name and identifying number, Bank
may execute the Payment Order on the basis of the identifying number, even if the number
identifies a person different from the named person. If a Payment Order describes a financial
institution both by name and identification number, the identification number may be relied upon
to identify the financial institution, even if the identification number refers to a financial institution
other than the named financial institution.
5. Initiation Methods and Security Procedures. This section lists the initiation methods the
Bank offers for wire transfers and describes the security procedures provided for each initiation
method. The security procedure(s) elected by Company (each, a"Security Procedure") is/are
set forth in the Acceptance.
5.1. Voice.
Bank's voice initiation security procedure consists of confirming the personal
identification number ("PIN") accompanying a Payment Order corresponds with a valid
PIN assigned to Company for voice-initiated Payment Orders.
5.1.1. Telephone Verification Service. If Bank receives a voice-initiated, non-
repetitive Payment Order that exceeds your pre-designated limit, Bank will
TM-1440 Wire Transfer Services Service Description Page 1 of 4
Revised 0113112010
make one attempt to telephone person(s) designated by Company on the most
current setup form for Company in Bank's records to verify the Payment Order.
If Bank is unable to complete the call, Bank will not process the Payment
Order.
5.2. Commercial Electronic Office° (CEO°).
CEO is Bank's electronic banking portal accessed via the Internet. Authorized users
may access Bank's CEO Wire Transfer Service through the portal. The CEO security
procedures include log-on credentials specified by Bank that may include a Company
I D, user I D and password and any other authentication or authorization process Bank
requires from time to time. Bank will use the CEO security procedures to verify each
Payment Order received through the CEO in Company's name.
5.3. Payment Manager° or Direct Origination.
5.3.1. Secure Application File Exchange Transmission ("SAFE-T"). This
transmission protocol offers a variety of transmission protocols including hyper
text transfer protocol secured (https), FTP over SSL (FTP/S), secure FTP (S-
FTP), and Applicability Statement 2(AS2) that Bank uses to authenticate each
Payment Order transmitted to Bank in Company's name.
5.3.2. Machine-to-Machine ("M2M"1. This transmission protocol uses an XML
message interface that is based on the Interactive Financial eXchange (IFX)
message standard using SOAP structured messages. Data is communicated
via the Internet using 128-bit encryption and Secure Socket Layers (SSL).
Bank uses digital certificates to verify each Payment Order transmitted to Bank
in Company's name.
5.3.3. Connect: Direct with Secure This transmission protocol is used to connect
Company's mainframe environment to Bank's mainframe environment.
Secure+ is an add-on to Connect:Direct to enhance security by means of
Secure Socket Layer ("SSL") or Transport Layer Security ("TLS"). Bank uses
an agreed upon ID password combination and a token card to verify each
Payment Order transmitted to Bank in Company's name. Connect:Direct and
Secure + are trademarks of Sterling Commerce.
5.3.4. Value-Added Network ("VAN"). With this transmission protocol, a third party
serves as an intermediary for transmitting data between Company and Bank.
Procedures for transmitting files may vary by VAN. Bank follows the
procedures of the VAN selected by Company to verify each Payment Order
transmitted to Bank through the VAN in Company's name.
5.4. SWIFT°.
SWIFT has established procedures for controlling access to SWIFT messaging
services (each, an "Access ControP") that may include without limitation access codes,
message authentication codes, secure card readers, digital signatures, and Hardware
Security Modules. In addition, SWIFT authenticates certain messages based on
SWIFT message type prior to accepting them for routing as SWIFT messages. This
authentication may include confirming the sender and recipient of the message have
exchanged bilateral keys ("BKE"), entered into a relationship management application
("RMA") agreement, or taken other steps to secure the transmission of SWIFT
messages between them as SWIFT requires from time to time.
TM-1440 Wire Transfer Services Service Description Page 2 of 4
Revised 0113112010
5.5. Non-Standard Security Procedure.
Company has refused to utilize any of the security procedures described above and
has elected to use the Security Procedure set forth in a separate document provided
to Bank previously.
6. Authorization to Pay. Company authorizes Bank to (a) execute any Payment Order Bank
verifies in accordance with the Security Procedure and (b) Payment Order to debit the account
specified in the Payment Order (and if no account is specified, the Account or any other account
of Company at Bank or an affiliate) even if a debit results in an overdraft on the execution date
(as defined in UCC4A). Company will maintain sufficient available funds in the account
specified in the Payment Order at the time of each debit.
7. Company's Duty to Report Erroneous or Unauthorized Tranfer Instructions. Company will
exercise ordinary care to determine whether a Payment Order accepted by Bank was either
erroneous or not authorized and to notify Bank of the relevant facts within a reasonable time not
exceeding fourteen (14) days after Company receives notification from Bank that the Payment
Order was accepted or that the Account was debited with respect to the Payment Order,
whichever is earlier. Company will be liable to Bank for the loss Bank incurs as a result of
Company's failure to act in accordance with this section.
8. Rejected Payment Orders. If a Payment Order is rejected for any reason Bank will attempt to
notify Company promptly so Company may cure the defect but will have no liability to Company
for a rejected Payment Order or any loss resulting from Bank's failure to provide notice.
9. Cancellation, Amendment, Reversal. A Payment Order will be final and will not be subject to
cancellation, amendment or reversal by Company, except Bank may, at Company's request,
make an effort to effect such cancellation, amendment or reversal without incuring any liability
for its failure or inability to do so.
10. International Wire Transfers. A Payment Order expressed in U.S. Dollars will be sent in U.S.
Dollars. Company may request that prior to executing a Payment Order, Bank convert the
amount to be transferred from U.S. Dollars to the currency of a designated foreign government
or intergovernmental organization ("Foreign Currency") at Bank's sell rate for exchange in effect
on the date Bank executes the Payment Order. If the financial institution designated to receive
the funds does not pay the beneficiary specified in a Payment Order payable in Foreign
Currency and the funds are returned to Bank, Bank will not be liable for a sum in excess of the
value of the funds after they have been converted from Foreign Currency to U.S. Dollars at
Bank's buy rate for exchange at the time the cancellation of the Payment Order is confirmed by
Bank. Bank will not be liable for any failure or delay by any financial institution or other third
party in the designated foreign country in executing or failing to execute any Payment Order
Bank transmits to a foreign country.
11. Drawdown Requests. A"drawdown request" is an instruction from Company to another
depository institution to debit (a) an account at that institution and transfer the funds to Bank
(each, an "outgoing drawdown request") or (b) the Account and transfer the funds to that
institution (each, an "incoming drawdown request"). In this Service Description, "Payment
Order" includes drawdown requests. Bank may execute an incoming drawdown request that
conforms with instructions it receives through Fed Wire, SWIFT, CHIPs or any other funds
transfer system, provided such instructions are not inconsistent with instructions Company
separately provides in writing. The authority to execute the incoming drawdown request will
TM-1440 Wire Transfer Services Service Description Page 3 of 4
Revised 0113112010
continue until Bank receives express written notice from Company that such authority is
revoked.
12. Limitation of Bank's Liability. If Bank executes Company's Payment Order by sending
instructions to another financial institution, Bank may send the payment order by any
transmission method and by any route Bank in its sole discretion considers reasonable. Bank
will not be liable for any third party's failure to or delay or error in processing a Payment Order.
If the beneficiary bank does not pay the beneficiary specified in the Payment Order, a refund will
be made only after Bank has received confirmation of the effective cancellation of the Payment
Order and Bank is in free possession of the funds debited or earmarked in connection with the
Payment Order. If Bank is notified it did not transfer the full amount stated in a Payment Order,
Bank's sole obligation will be to promptly execute a second Payment Order in the amount of the
stated deficiency. If Bank executes a Payment Order in excess of the amount stated in the
Payment Order, to the extent Company does not receive the benefit of the Payment Order,
Bank will only be liable for any loss of the principal amount transferred in excess of the amount
stated in the Payment Order. Additionally, Bank will be liable for the amount of interest
Company has lost due to the transfer of the excess amount, computed at the then current
Federal Funds rate. However, Bank's liability for loss of interest will be limited to twenty (20)
calendar day's interest. This section sets forth Bank's complete liability for a Payment Order
issued or received under this Service Description.
13. Survival. Sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 will survive the termination of Services.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1440 Wire Transfer Services Service Description Page 4 of 4
Revised 0113112010
Wire Transfer Services Customer Setup
Complete this form to setup a Customer for voice wire initiation. This form requires both Customer and Banker signatures Forms received without signatures will be returned to the
Banker unprocessed. To setup SWIFT wire initiation, use the SWIFT Wire Initiation Setup form available online at Teamworks' Forms Online site
1. Setup Type 2. Initiation Type
❑ New setup (check this box for new customer). A completed and signed ❑ Voice
Wire Transfer Security Procedure Agreement must accompany the setup ❑ ECS Payment Manager (Contact your implementation associate Additional forms
❑ Update existing (update existing customer information) are required for this computer entry setup )
❑ Replace existing (delete ALL current customer information & replace with ❑ CEO Wire Transfer (Contact your implementation associate Additional forms are
information below ) required for this computer entry setup )
❑ Delete existing information on the database
3. ACCOUnt numbers used (list accounts that wires will debit.) For addi[ional accoun[s attach a signed listing with notation of customer's name and the additional
account numbers Check the appropriate box for each account number to identifv the account tvpe
❑ DDA ❑ DDA ❑ DDA ❑ DDA
1) ❑ G/L 2) ❑ G/L 3) ❑ G/L 4) ❑ G/L
4. Alternate Account to be charqed for wire fees 5. Account Relationship Link
List account only if wire fees are to be assessed to this account for the accounts listed To link accounts to the Master Account number (for Book Transfer pricing) enter the
above in section 3 Master Account number
I ❑ DDA ❑ G/L I I
6. Advice Information - Additional fees apply for these services. For Fax or Email Notification on intraday wire activity use the InfoFax setup form
Mail Advice for (if no choice is made will default as No Advice) Mail Advice to (if different than address noted below in section 8)
I❑ Debit Wires ❑ Credit Wires ❑ No Mail Advice I
7. Authorized callers List the people authorized to initiate and verify that a voice-initiated, non-repetitive Order is authorized. Special notes and instructions for the
following columns:
Individual's Dollar Limit= Use'TJ" if unlimited. The limit applies to all functions unless noted otherwise
Wire Initiation = If no choice is noted for Wire Initiation or Verify Callback we will set the individual up for both Repetitive and Non-Repetitive wire initiation. Complete by checking
appropriate box: R= Repetitive / B= Both Repetitive & Non-Repetitive
Verify Callback= Telephone approval of an outgoing non-repetitive wire initiated by another authorized caller This service must also be selected on the Wire Transfer Security
Procedure Agreement, form #WTR 1506 Fees may apply for the Verify Callback service Checkmark the appropriate box.
Authorized Individual's $ Limit Phone Number Caller ~f Initiation Type Verify Callback
first & last name including area code Add Delete R B Yes No
~ I $ ❑ ❑ ~ ❑ ❑ I ❑ ❑
~ I $ ❑ ❑ ~ ❑ ❑ I ❑ ❑
~ I $ ~ I ❑ ❑ I ❑ ❑ I ❑ ❑
~ I $ ~ I ❑ ❑ I ❑ ❑ I ❑ ❑
~ I $ ~ I ❑ ❑ I ❑ ❑ I ❑ ❑
8. CustOmer ApprOVal - Siqnatures as required by Certificate of Authority or Siqnature Card.
Legal Name as it appears on your account Customer's Primary Phone No
Mailing address for PINs and mail advice induding City, State, and zip code (If blank, items will be mailed to address on primary statement mailing address )
Printed Name of Authorized Signer Printed Name of Authorized Signer
Signature Date Signature Date
X I IX I
9. Bank ApprOVal - Forms submitted without customer and banker siqnatures or older than 90 days will be returned to the banker unprocessed.
Customer's 111 ID type, number, issued by State/Country & Expiration Date Customer's 2°d ID type, issued by State/Country & Expiration Date
Banker/Officer's Printed Name Bank MAC Document Prepared by & phone #(in case of questions about this setup)
Banker/Offcer's Signature - Required Date Banker/Officer's Phone # Banker/Officer's Fax #
X I I I
Banker's Wells Fargo email address for notifcation. A reasonable attempt will be made to contact the banker at the Wells Fargo email provided upon completion Notification will NOT
be sent to any email address outside the Wells Fargo system
After Customer & Banker have signed the form, Banker to fax to 866-922-6202, Wire Implementations OR email to Wire.lmplementationcilwellsfarqo.com
Banker is to retain the original document in the customer's file.
WTR4777 (4-10 128440F0)
IMAGE FILE IMPORT SERVICE DESCRIPTION
Introduction. This Service Description and the other Service Documentation as defined in the
Master Agreement for Treasury Management Services ("Master Agreement") between Wells
Fargo Bank, N.A. ("Bank"), and the company identified in the signature block of the Acceptance
of Services ("Company") between Bank and Company govern Bank's Image File Import Service
(the "Service").
2. Description of the Service. The Service enables Company to receive files containing images
of and data regarding (each, a"File") specified transactions on each account at Bank that
Company enrolls in the Service (each, an "Account"). The transactions include checks or other
instruments (each, an "Item") (a) posted to Company's Account; (b) cashed or collected by Bank
or accepted for deposit to Company's Account (each, a"Deposited Item"); and (c) returned
unpaid to Company's Account (each, a"Returned Deposited Item"). The data Bank provides
will include an index and images of each Item, Deposited Item and Returned Deposited Item
together with, in the case of Deposited Items, images of coupons and other information that are
received and processed by Bank along with the Deposited Item. Company may retrieve Files
through the delivery channels Bank makes available.
3. Conditions to Provision of the Service. As conditions to Bank's provision of the Service,
Company will (a) at all times maintain the Account(s) in good standing; (b) subscribe to the
applicable Treasury Management Services for which images and data are provided through the
Service; and (c) agree to the terms of the software sublicense (see Section 6) if Company has
elected to use the Wellslmage° Viewer Software (the "Software") to view certain Items or
Deposited Items.
4. Rules Applicable to the Service. Bank will provide the Service to Company in accordance
with (a) the Service Documentation; and (b) state and federal laws and regulations, including
the National Automated Clearing House Association Rules ("NACHA Rules") applicable to
Paper Item conversion.
5. Paper Item Conversion. NACHA Rules allow for the conversion of certain Items into ACH
items. Images of posted Items that have been converted pursuant to the NACHA Rules may
not be available through the Service.
6. Software Sublicense. Company will use the Software in accordance with the terms of a non-
exclusive, non-assignable sublicense ("Software Sublicense") from Bank. The Software
Sublicense will be presented to Company during installation, and Company will be required to
accept it before being allowed to use the Software. This Section will survive termination of this
Service.
7. Termination. In addition to the termination provisions of the Master Agreement, the Service
may also be terminated by Bank immediately on written notice to Company, if Company fails to
comply with its obligations under the Software Sublicense.
O 2009 Wells Fargo Bank, N.A. All rights reserved.
TM-1945 /mage File /mport Service Description Page 1 of 1
Revised 0712112009
INFORMATION REPORTING SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Information Reporting services (each, a"Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Services. The Services enable Company to view and or receive files containing
data and/or images (each, a"File") regarding specified transactions on each deposit account at
Bank that Company enrolls in the Service (each, an "Account"). The means used to transmit
Files to Company include without limitation BAI File Transfer, Bank's Commercial Electronic
Office° ("CEO"O), and CD-ROM. Depending on the Service Company elects, the transactions
may include checks or other instruments (each, an "Item") (a) posted to Company's Account; (b)
cashed or collected by Bank or accepted for deposit to Company's Account; and (c) returned
unpaid to Company's Account. "Item" is defined in Bank's Commercial Account Agreement.
3. Information From Company's Accounts at Other Financial Institutions. If the Service
Company elects permits Company to have information from deposit accounts Company
maintains at other financial institutions imported to Bank and included in a report Bank provides
to Company in connection with the Service, Bank will not verify the accuracy or completeness
of the information.
4. Software Sublicense. If a software sublicense is required for Company to access the Service
("Software Sublicense"), Bank will make the terms of the Software Sublicense available to
Company as part of the set up process for the Service. Company will be required to accept the
Software Sublicense before being allowed to access the Service. Bank may terminate any
Service requiring use of a Software Sublicense immediately on written notice to Company, if
Company fails to comply with the Software Sublicense. Company's obligations under this
section 4 will survive the termination of Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1431- Information Reporting Service Description Page 1 of 1
Revised 0113112010
STOPS-IMAGES-SEARCH (66SIS99) SERVICE DESCRIPTION
This Service Description contains provisions which, in addition to the provisions
contained in the Master Agreement for Treasury Management Services between
Bank and Company (the "Agreement"), will govern the Stops-Images--Search
{"SIS"} Service (the "Service").
1. The Service. Company may, using a computer or a computer and browser
acceptable to Bank, request stop payment orders on checks drawn on
Company's deposit account(s) or Company's account(s) with another financial
institution maintained in connection with the Controlled Disbursement Service (a
"Controlled Disbursement Account") and, where applicable, request photocopies
of checks that have cleared Company's deposit account(s) or Controlled
Disbursement Account(s).
2. Stop Payments.
2.1 Reauirements. Bank may pay a check against Company's deposit
account(s) whenever it is presented and without regard to its date. If Company
does not want Bank to pay a check, it must place a stop payment order which is
valid for the period specified when Company opened its deposit account and must
be received within sufficient time for Bank to act.
2.2 Limitations. A stop payment order will be ineffective with respect to (a) a
check deposited to an account at a Wells Fargo Bank if it cannot be charged back
without creating an overdraft in that account, and (b) a check that was cashed by
any Wells Fargo Bank. Company authorizes Bank to accept telephone stop
payment orders from any person who Bank in good faith believes is acting on
Company's behalf. In Texas, Company must confirm an oral stop payment order in
writing.
3. Survival. The provisions of this Service Description designated as Sections 2 and
3 will survive termination of the Service.
TM-1434 Stops-Images-Search (SIS) Service Description-Revised4/20/06 page 1 of 1
WELLSIMAGE°CD SERVICE DESCRIPTION
1. Introduction. This Service Description and the other Service Documentation as defined in the
Master Agreement for Treasury Management Services ("Master AgreemenY') between Wells
Fargo Bank, N.A. ("Bank"), and the company identified in the signature block of the Acceptance of
Services ("Company") between Bank and Company govern Bank's Wellslmage CD Service (the
"Service").
2. Description of the Service. The Service enables Company to receive a Wellslmage CD-ROM
("CD-ROM") containing (a) an index of each Paper Item that has been paid against each
Company checking account at Bank that is enrolled in the Service (each, an "AccounY") for the
specified CD-ROM cycle; and (b) images of the front and back of each paid Paper Item. After the
end of each CD-ROM cycle, CD-ROMs will be sent to Company at the address(es) designated by
Company. CD-ROMs may be viewed using the Wellslmage ViewerT"' Software (the "Software")
which will be provided pursuant to Section 7 below. "Paper Item" is defined in Bank's
Commercial Account Agreement.
3. Condition to Provision of the Service. As conditions to Bank's provision of the Service,
Company will (a) at all times maintain the Account(s) in good standing, and, (b) agree to the
terms of the Software Sublicense (see Section 7).
4. Rules Applicable to the Service. Bank will provide the Service to Company in accordance with
(a) the Service Documentation including, without limitation, the Wellslmage Viewer User Guide(s)
that Bank makes available to Company; and (b) state and federal laws and regulations, including
the National Automated Clearing House Association Rules ("NACHA Rules") applying to Paper
Item conversion.
5. Paper Item Conversion. The NACHA Rules allow for the conversion of certain Paper Items into
ACH items. Images of Paper Items converted pursuant to the NACHA Rules may not be available
through the Service.
6. Images and Replacement CD-ROMs. If a Paper Item on a CD-ROM index is not imaged on the
CD-ROM (and the image is available), Bank will, upon request and without charge, send an
image copy of the front and back of the Paper Item. However, each Paper Item will be indexed
and the data contained on the Paper Item will be provided on the CD-ROM whether or not an
image of the Paper Item is available. In addition, Bank will, at Company's request, recreate a CD-
ROM, but only for a period of sixty (60) days after the CD-ROM is first created.
7. Software Sublicense. Company must use the Software in accordance with the terms of a non-
exclusive, non-assignable sublicense ("Software Sublicense") from Bank. The Software
Sublicense will be presented to Company during installation and Company will be required to
accept it before being allowed to use the Software. This Section will survive termination of this
Service.
8. Termination. In addition to the termination provisions of the Master Agreement, the Service
may also be terminated by Bank immediately on written notice to Company if Company fails to
comply with its obligations under the Software Sublicense.
Wellslmage CD Service Description (TM - 1437) page 1 of 1
Revised 04-20-2007
ACCOUNT RECONCILIATION PLAN SERVICE
SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Account Reconciliation Plan service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Services. Bank's ARP Services enable Company to use Bank to (a) store
information about Items Company issues on demand deposit accounts that Company enrolls in
the Services (each, an "Account"); and (b) process the information in accordance with the
Service option(s) that Company elects during the set up process for the Services and from time
to time thereafter. Bank's User Guide for the Services details the Service options. "Item" is
defined in Bank's Commercial Account Agreement.
3. Issued Check Information. If Company elects Bank's full ARP Service, each Business Day
prior to the cutoff time Bank seperately discloses,Company will provide Bank with the issue
date, serial number and dollar amount of each Item Company issues on the Account ("Issued
Check Information") using the communication channel(s) Company elects. If Company elects
Bank's Deposit Location Reporting Service, Company will provide Bank with a list of Company's
location numbers and names and may amend the list from time to time by notifying Bank in
writing.
4. Stop Payment Orders. If Company uses the Service to place a stop payment order on any
Item, Company understands that (a) Bank's Commercial Account Agreement governs the stop
payment order; (b) each stop payment order is subject to Bank's verification that the Item
described in the stop payment order has not been paid; and (c) this verification may occur a
minimum of ninety (90) minutes after the time Company transmits the stop payment order to
Bank.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1408 Account Reconciliation Plan Service Description Page 1 of 1
Revised 0113112010
CHEXSTOR° SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") CheXstor service ("Service"). "Service Documentation" is
defined in Bank's Master Agreement for Treasury Management Services ("Master Agreement").
The Service Documentation includes the Acceptance of Services ("Acceptance"), and
"Company" is the company identified in the Acceptance.
2. Description of Service. The Service enables Company to have Bank maintain microfilm
records of all Items paid on each deposit account of Company at Bank that Company enrolls in
the Service (each an "Account"). Bank will maintain microfilm records for a period of seven
years or any longer period required by applicable law ("Record Period"). Each Item Bank
microfilms will be shredded and recycled. As part of the Service, Bank will provide a photocopy
of any Item posted against the Account which Company requests during the Record Period.
Company may request a photocopy electronically via Bank's Commercia/ E/ectronic Office° or
by contacting Bank at the telephone number on Company's account statement.
3. Liability. If Bank fails to provide in a timely manner a copy of an Item Company requests
during the Record Period, Bank will reimburse Company for (and Bank's liability will be limited
to) any direct monetary loss Company incurs as a result of the Item's unavailability (not to
exceed the amount of the Item). Bank will require Company to substantiate any claimed loss.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1410 CheXstor Service Description Page 1 of 1
Revised 0113112010
CHECK CASHING SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Check Cashing service ("Service"). "Service Documentation"
is defined in Bank's Master Agreement for Treasury Management Services ("Master
Agreement"). The Service Documentation includes the Acceptance of Services ("Acceptance"),
and "Company" is identified in the Acceptance.
2. Description of Bank's Service. Bank's Service enables Company to have Bank and Bank's
affiliates (each an "Affiliate" and unless otherwise specified, along with Bank, collectively "Bank")
cash checks drawn on Company's accounts held at other banks.
2.1. Company's Request to Cash Checks. Company requests Bank cash checks each of
which: (a) has a face amount equal to or less than the amount separately agreed to by
Company and Bank in the Setup Form for the Service ("Setup Form"); (b) purports to be
drawn by Company on an account identified on the Setup Form for the Service (each an
"Account" and collectively "Accounts") at a drawee bank identified on the Setup Form
("Drawee") (each such check a"Check") whether actually issued by Company or not;
and (c) is presented in person by the payee at an office of Bank.
2.2. Check Cashing Procedures. Company authorizes Bank to cash any Check that it does
not have actual knowledge bears an unauthorized signature, contains a material
alteration, or is otherwise not properly payable so long as Bank has followed its then
current check cashing procedures in connection with the cashing of the Check. Bank
reserves the right to require Company to consult with Bank with respect to any
information concerning Bank that is printed on Company's check stock. COMPANY
UNDERSTANDS THIS SERVICE IS NOT AVAILABLE AT CERTAIN AFFILIATES OR
BANK BRANCHES LOCATED IN CERTAIN STATES AS SEPARATELY DISCLOSED
TO COMPANY.
3. Fees. Company agrees to pay Bank a periodic fee for the Service, which fee will be charged
whether any Check is cashed during a period and may be changed by Bank from time to time
upon prior written notification to Company, in accordance with the Service Documentation. In
addition, a per-check check cashing fee may apply.
4. Termination of Service. In addition to the termination provisions contained in the Master
Agreement, Bank may immediately and without prior notice terminate the Service whenever it
has any basis to believe that there will not be sufficient available funds in the Account to pay a
Check when presented. The provisions of this Service Description and the other Service
Documentation will continue in effect with respect to all Checks cashed by Bank prior to
termination of the Service.
5. Company's Guarantee of Payment and Obligation of Reimbursement.
5.1. Guarantee of Check Payment. Company unconditionally guarantees payment of all
Checks even though at the time any particular Check is presented for payment (a) the
endorsement of the named payee is unauthorized; (b) the Check was not drawn, issued
or authorized by Company; (c) the Drawee has received a valid stop payment order
TM-2250 Check Cashing Service Description Page 1 of 2
Revised 0113112010
regarding the Check; (d) Company does not have sufficient funds in the Account to
cover the Check; (e) the Account has been closed or the Drawee is prohibited from
paying Checks drawn against the Account; or (f) the Drawee has knowledge that the
Check bears an unauthorized signature, contains a material alteration, or is otherwise
not properly payable.
5.2. Obligation of Reimbursement. If a Check is dishonored or if Bank is obligated to
reimburse the Drawee or a collecting bank with respect to a Check, upon written
demand accompanied by evidence of such dishonor or reimbursement, Company
agrees to promptly reimburse Bank for all resulting loss. Company waives presentment
and other notice of dishonor. In addition, Bank has the right to debit or chargeback any
account of Company at Bank for any such loss.
6. Bank's Limitation of Liability and Company's Agreement to Indemnify Bank. Bank will
have no liability including liability for any consequential, special, punitive or indirect loss or
damage which Company, a payee, the Drawee, a collecting bank or any other person may incur
or suffer in connection with a Check. Company will indemnify, defend, and save harmless
Bank, and each of its directors, officers, employees, and agents (collectively in this section,
"Indemnified Persons") from and against all liabilities, losses, damages, claims, obligations,
demands, charges, costs, or expenses (including reasonable fees and disbursements of legal
counsel and accountants) (collectively, "Losses and Liabilities") awarded against or incurred or
suffered by Indemnified Persons arising directly or indirectly from or related to the cashing of
any Check by Bank in accordance with this Service Description.
7. Survival. Sections 4, 5 and 6 of this Service Description survive termination of the Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-2250 Check Cashing Service Description Page 2 of 2
Revised 0113112010
CONTROLLED DISBURSEMENT SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") controlled disbursement services (each, a"Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Required Account(s) and Services. Company, as defined in the Acceptance, will establish
and maintain:
(a) one or more demand deposit accounts with Bank or Bank's affiliate (each, a"Funding
Account");
(b) one or more checking accounts (each, a"Disbursement Account") at Bank, Bank's
affiliate(s) and/or Wachovia Bank, N. A. ("Wachovia") (each, a"Disbursing Bank");
(c) the information reporting service specified by Bank ("Information Reporting Service"),
and
(d) in those instances in which Wachovia is the Disbursing Bank, a demand deposit account
(the "Shadow Disbursement Account").
Each Funding Account and Disbursement Account and the Information Reporting Service will be
identified in the Service Documentation. Each Funding Account will be linked to one or more
Disbursement Accounts maintained by Company. Company will use each Disbursement
Account solely to issue checks (or payable-through drafts) and electronic debits (each, a
"Debit") in accordance with this Service Description. Company will not issue any Debits on any
Disbursement Accounts until Bank notifies Company that such Disbursement Account is
operational. Company irrevocably authorizes Disbursing Bank to release to Bank all information
requested by Bank with respect to each Disbursement Account.
Each Disbursement Account (including a Disbursement Account at Wachovia) and Funding
Account will be governed by Wells Fargo Bank, N. A.'s Commercial Account Agreement
("Account Agreement"), except that if Company's Funding or Disbursement Account is Bank's
Choice III account, "Account Agreement" will mean Wells Fargo Bank, N. A.'s Business Account
Agreement. The term "Bank" as used in the Account Agreement will mean the bank at which
such Disbursement Account or Funding Account is maintained.
3. Determination of CD Summary Amount. Each Business Day, by the reporting times Bank
separately discloses to Company from time to time, Bank will make available to Company by
means of the Information Reporting Service the CD Summary Amount for each Disbursement
Account. The CD Summary Amount consists of the total dollar amount of:
(a) Debits that have posted in the first and, if applicable, second presentment on that
Business Day;
TM-1429 Controlled Disbursement Service Description Page 1 of 5
Revised 0113112010
(b) Debits that posted after the last presentment on the prior Business Day ("Prior Day
Holdovers"); and
(c) Adjustments.
If Bank does not make the CD Summary Amount available by the applicable reporting time
Bank will have no liability, and Company will estimate the CD Summary Amount based on
historical information about Company's Debits, Prior Day Holdovers and Adjustments (the
"Estimated CD Summary Amount").
4. Company's Obligation to Deposit Funds in Funding Account. Each Business Day, by the
applicable cutoff time Bank separately discloses to Company from time to time, Company will
deposit good and collected funds in Funding Account so that the balance in Funding Account,
determined in accordance with the applicable Account Agreement, is sufficient to cover either
the CD Summary Amount or, if the CD Summary Amount was not made available to Company,
the Estimated CD Summary Amount. If Company fails to transfer funds in accordance with its
obligation under the preceding sentence or if such transfer was based on the Estimated CD
Summary Amount and such estimated amount was less than the actual CD Summary Amount,
Bank may, at its sole option,
(a) advance to Funding Account(s) sufficient funds to pay the Debits presented for payment
and transfer such funds to Disbursement Account; or
(b) return, or cause Disbursing Bank (including Wachovia) to return, any Debits, in any
order, unpaid (even though Bank or Wachovia may have previously established a
pattern of paying such Debits). If Bank returns or causes Disbursing Bank to return the
Debits, Bank is authorized to instruct the Disbursing Bank to return any funds transferred
to Disbursing Bank pursuant to Section 5 of this Service Description.
5. Transfer of Funds to Disbursement Account.
(a) If the Disbursing Bank is Bank or Bank's affiliate, at the end of each Business Day, Bank
will transfer from Funding Account to Disbursement Account the amount necessary to
cover Debits and Adjustments that have actually posted to Disbursement Account on
that Business Day and Prior Day Holdovers ("Total Net Presentment"). In addition, Bank
will advance funds to Disbursement Account in the amount, if any, sufficient to cover
Debits that posted to Disbursement Account after the last presentment on that Business
Day (the "Prior Day Holdover Funding Credit").
(b) If the Disbursing Bank is Wachovia, at the end of each Business Day, Wachovia will
debit Bank's master account at Wachovia and transfer the amount debited to
Disbursement Account to cover Company's Total Net Presentment on that Business Day
(and for any prior business day of Wachovia which was not a Business Day of Bank).
Bank will debit Funding Account and credit Shadow Disbursement Account with Bank for
Company's Total Net Presentment on that Business day and settle to Bank's Master
Account at Wachovia.
Regardless of whether Disbursement Account is located at Bank, Bank's affiliate or Wachovia,
funds credited to Disbursement Account will not be a transfer to or for Company's benefit unless
such funds are used to make final payment on Debits that are presented for payment on
Disbursement Account.
TM-1429 Controlled Disbursement Service Description Page 2 of 5
Revised 0113112010
6. Disbursing Bank's Obligation to Pay Debits. No Disbursing Bank will have any obligation
whatsoever to pay any Debit if sufficient good and collected funds to cover the Debit are not in
the Disbursement Account on which the Debit is drawn at the time the Disbursing Bank makes
its payment decision.
7. Company's Agreement to Repay Bank's Advances to Disbursement Account(s).
Company will unconditionally pay Bank on demand without setoff or counterclaim in good and
collected funds the full amount of any advance Bank makes pursuant to Section 4(a) and
Section 5(a) of this Service Description, above, plus Bank's fees and costs incurred in
connection with such advance.
8. Security Interest. As security for the Obligations (as defined in this Section 8), Company
pledges to Bank, and grants a lien to Bank on, and a security interest in, the following and the
proceeds thereof (collectively, the "Collateral") as security for the prompt satisfaction of the
Obligations: (a) all amounts from time to time on deposit in, or withdrawable from, Funding
Account, all of Company's other accounts with Bank and Bank's affiliates and each
Disbursement Accounts, and (b) any of Company's property, or property in which Company has
an interest, now or at any time delivered, conveyed, transferred, assigned, pledged or paid to
Bank in any manner whatsoever. "Obligations" includes any and all advances, debts, loans,
obligations and liabilities that Company owes Bank and Bank's affiliates pursuant to the terms of
this Service Description, including without limitation any advances Bank makes to Funding
Account(s) pursuant to Section 4(a) of this Service Description and any advances Bank makes
to Disbursement Account(s) pursuant to Section 5(a) of this Service Description. Bank's receipt
at any time of any kind of security, including without limitation cash, will not be deemed a waiver
of any of Bank's rights or powers under any agreement Company has signed in Bank's favor.
Company will sign and deliver to Bank, on demand, all such security, control or other
agreements, financing statements and other documents as Bank may at any time request which
are necessary or desirable (in Bank's sole opinion) to grant to Bank a perfected security interest
in and to any or all of the Collateral. At the time any Obligation becomes due and payable,
Bank may sell or otherwise apply or dispose of any and all Collateral, received or to be
received, in such parcel or parcels, at such time or times, at such place or places, for such price
or prices and upon such terms and conditions as Bank may deem proper, and Bank may apply
the net proceeds of the sale or sales, application or other disposition, together with any sums
credited by or due from Bank to Company, to the payment of any and all of the Obligations, all
without prejudice to Bank's rights against Company with respect to any and all of the
Obligations which may be or remain outstanding or unpaid. Company expressly waives any
right to require Bank to make any presentment or demand, or give any notices of any kind,
including, but not limited to, any notice of nonpayment or nonperformance, protest, notice of
protest, notice of dishonor, notice of intent to accelerate or notice of acceleration. Any
requirement of reasonable notice to Company with respect to the sale or other disposition of
Collateral will be met if the notice is given at least five calendar days before the date any sale,
application or other disposition will be made. Bank's rights and remedies under any agreements
or instruments signed by Company in Bank's favor are in addition to, and not exclusive of, any
rights or remedies otherwise available to Bank under applicable law.
9. Fees. Fees for this Service may, in whole or in part, be based on the applicable fees charged
by each Disbursing Bank and will be separately disclosed to Company. Fees will not be
prorated if the Service terminates before the end of a calendar month.
10. Protection Against Fraudulent Checks. Company and Bank acknowledge that there is a
growing risk of loss resulting from the increasing use of counterfeit and certain other types of
fraudulent checks. Company recognizes that controlled disbursement service customers are
especially susceptible to losses from these checks. Company is aware that Bank offers
services known as "Positive Pay" and "Reverse Verify" which are effective means of controlling
TM-1429 Controlled Disbursement Service Description Page 3 of 5
Revised 0113112010
risk from counterfeit checks and certain other types of fraudulent checks. Bank has advised
Company that if it does not use either of these Services, Bank will be unable to prevent losses
from counterfeit and certain other types of fraudulent checks and Company will be treated as
having assumed the risk of those losses.
11. Company's Enquiries and Instructions Regarding Disbursement Account. Company will
direct all enquiries and instructions (including by way of example and not by way of limitation
stop payment orders) to Bank. In no event will any such enquiries or instructions be directed to
Disbursing Bank.
12. Liability and Indemnification. In addition to the liability and indemnification provisions in the
Master Agreement, neither Bank nor any Disbursing Bank will be liable for any claim, demands,
judgments or expenses ("Losses") paid, suffered or incurred by Company, and Company will
indemnify Bank and each Disbursing Bank from and hold each of them harmless against any
Losses paid, suffered or incurred by them, arising directly or indirectly as a result of or in
connection with:
(a) Company's performance or failure to perform its obligations in accordance with this
Service Description;
(b) Bank's or any Disbursing Bank's acting on any information furnished by or on behalf of
Company in any Service Documentation or otherwise;
(c) Bank's or any Disbursing Bank's return of any Check unpaid because Company has not
deposited good and collected funds in the Funding Account related to the Disbursement
Account on which a Debit is drawn sufficient to cover the CD Summary Amount;
(d) Bank's or Disbursing Bank's dishonor and return of any Debit unpaid if Company issues
the Debit before Bank notifies Company the Disbursement Account on which it was
drawn is operational;
(e) Bank's or any Disbursing Bank's nonpayment of a Debit, unless such nonpayment
results directly and proximately from, respectively, Bank's or Disbursing Bank's gross
negligence or willful misconduct;
(f) Bank or Disbursing Bank's late return of any Debit as a result of, and any presentment-
related problem resulting from, the failure of any Debit which has not been tested and
approved by Bank or Disbursing Bank to conform in any respect to Bank's or Disbursing
Bank's check specifications including without limitation failure to include Bank's or
Disbursing Bank's full name and address and Bank's full name on any check or payable
through draft,
(g) If Disbursing Bank is Wachovia, Disbursing Bank's refusal to accept a stop payment
order because Company sent it directly to Disbursing Bank,
(h) Except as otherwise provided under Bank's Account Reconciliation, Positive Pay,
Reverse Verify, Payable-Through Draft, Share Draft or Payable-If-Desired Service
Descriptions, if Bank provides Company with one or more of those services, Bank's
payment of any check or payable-through draft which is unauthorized or contains a
forged, unauthorized, incorrect or illegible endorsement, a forged or unauthorized
signature, an alteration of amount or payee, or any other error, discrepancy or
deficiency;
TM-1429 Controlled Disbursement Service Description Page 4 of 5
Revised 0113112010
(i) Bank's exercise of its rights, or Bank's performance of its obligations, in accordance with
this Service Description or Bank's Account Reconciliation, Positive Pay, Reverse Verify,
Payable-Through, Share Draft, or Payable-If-Desired Service Descriptions, if Bank
provides Company with one or more of those Services.
13. Termination. Bank may terminate this Service, close Funding Account, and instruct the
Disbursing Bank(s) to close Disbursement Account(s), immediately upon Bank's sending
Company written or oral notice (confirmed in writing) of such action if
(a) Company fails at any time to fund the Funding Account as required in this Service
Description,
(b) any lawsuit or other action or proceeding is filed or instituted by any federal or state
agency alleging, or any Disbursing Bank receives an opinion of counsel, that this Service
or any material term or condition of this Service violates any law or regulation,
(c) Bank's agreement with any Disbursing Bank concerning this Service is suspended or
terminated for any reason with respect to all Bank's customers receiving the Service or
with respect only to Company,
(d) the occurrence of any default by Company under the other Service Documentation or
under any other agreement or instrument signed by Company in Bank's or the
Disbursing Bank's favor including without limitation any loan agreement or promissory
note,
(e) Bank determines that one or more conditions exist or events have occurred which might
indicate, or result in, a material adverse change in Company's operations, business,
property or assets or its condition (financial or otherwise).
Upon termination of this Service, Company will, in accordance with such instructions as Bank or
the Disbursing Bank may give, cease to issue Debits on the Disbursement Account(s), and the
Disbursing Bank will close the Disbursement Account(s) and stop processing Debits. Company
will continue to be liable for all Debits issued on the Disbursement Account(s) prior to
termination and for all Debits the Disbursing Bank is obligated to pay. The provisions of
Sections 4, 8, 10 and 12 of this Service Description will survive termination of the Service.
14. Governing Law. Except to the extent governed by federal law and regulations, the law and
regulations of the state in which the Disbursing Bank is located will govern its performance of
the Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1429 Controlled Disbursement Service Description Page 5 of 5
Revised 0113112010
PAYMENT AUTHORIZATION SERVICE DESCRIPTION
1. Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Payment Authorization Service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. Company may, by executing and delivering to Bank a Payment
Authorization Service Set-up Form, elect to utilize the Service for deposit accounts which
Company maintains at Bank (each an "account"). Under the terms of the Service, Bank will
without Company's specific approval as to any particular Item, (a) automatically return unpaid
(marked "REFER TO MAKER") Items drawn against the account which are presented to Bank,
and which exceed the "Maximum Dollar Authorized Payment Amount" specified on the Setup
Form, (b) refuse encashment of Items drawn against the account which are presented to Bank
through its branch/store network, and which exceed the "Maximum Check Cashing Amount"
specified on the Setup Form, (c) refuse withdrawal requests against the account which are
presented to Bank through its branch/store network, and which exceed the "Maximum over the
Counter Withdrawal Amount" specified on the Setup Form, and/or (d) refuse encashment of
Items drawn against the account which are presented to Bank through its branch/store network,
and which are made payable to an individual.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-1420 PaymentAuthorization Service Description Page 1 of 1
Revised 0113112010
IMAGE POSITIVE PAY SERVICE DESCRIPTION
Introduction. This Service Description is part of the Service Documentation governing the
Wells Fargo Bank, N.A. ("Bank") Image Positive Pay service ("Service"). "Service
Documentation" is defined in Bank's Master Agreement for Treasury Management Services
("Master Agreement"). The Service Documentation includes the Acceptance of Services
("Acceptance"), and "Company" is the company identified in the Acceptance.
2. Description of Service. The Service enables Company to instruct Bank to pay or return
counterfeit Checks, Checks otherwise not validly issued and certain altered Checks presented
to Bank for payment on the deposit account(s) at Bank that Company enrolls in the Service
(each, an "Account"). Each Business Day, Bank electronically compares the serial number and
numeric amount of Checks presented to Bank for payment before Bank's separately-disclosed
cutoff time on the prior Business Day to Company's Check Issue Data (see section 5). In
accordance with section 7, Bank will notify Company of each Check that does not match
Company's Check Issue Data (each, an "Exception Item") and will pay or return each Exception
Item in accordance with this Service Description. "Check" refers to each check presented for
payment on Company's Account, whether it is counterfeit, not validly issued, altered or validly
issued by Company. A"Business Day" is every day except Saturdays, Sundays, and federal
holidays. Except as otherwise provided in this Service Description, enrollment in Bank's
Account Reconcilement Plan ("ARP") Service is required.
3. Service Options. Company may enroll an Account in one of three options of the Service. The
Service options differ based on (a) when Bank electronically compares a Check to Company's
Check Issue Data (before or after posting the Check to Company's Account); (b) Bank's
handling of errors on Checks; (c) the content of Bank's report to Company of discrepancies
between a Check and Company's Check Issue Data ("Exceptions Report"); and (d) the time by
which Company must notify Bank of Company's pay or return decision ("Decision Deadline"), as
specified in the Exceptions Report. Each discrepancy is an "Exception," and each Check with a
discrepancy is an "Exception Item."
3.1. Perfect Presentment° Positive Pay. Bank electronically compares a Check to
Company's Check Issue Data prior to posting the Check to Company's Account. Each
Check with error(s) that Bank can correct, such as an encoding error, will be corrected,
so that the Exceptions Report includes only unresolved Exception Items. This option is
offered only on an Account enrolled in Bank's Controlled Disbursement Service.
3.2. Positive Pay and Positive Pay Only. Bank electronically compares a Check to
Company's Check Issue Data after posting the Check to Company's Account. Bank
then reviews each Exception Item, and reverses and reposts each Exception Item with
error(s) that Bank can correct, such as encoding errors, so that the Exception Report
includes only unresolved Exception Items. Enrollment in Bank's ARP Service is not
required for Positive Pay Only.
3.3. Basic Positive Pay. Bank electronically compares a Check to Company's Check Issue
Data after posting the Check to Company's Account and provides Company with an
Exceptions Report that contains all Exception Items including Checks with encoding
errors.
TM-1418/mage Positive Pay Service Description Page 1 of 4
Revised 04-08-2010
4. Payee Validation. Bank offers Payee Validation with Perfect Presentment Positive Pay,
Positive Pay and Positive Pay Only. In addition to performing the electronic comparison
described in section 2, Bank electronically compares the payee's name on each Check to the
payee's name in Company's Check Issue Data. If there is a discrepancy between the two
names that is not within parameters Bank establishes from time to time in its sole discretion,
Bank will, in its sole discretion, (a) include the Check as an Exception Item in Company's
Exceptions Report (and the discrepancy will constitute an Exception), or (b) manually review the
Check. There are two Payee Validation Options:
4.1. Standard Payee Validation Option. Bank validates the payee's name on each Check
exceeding the dollar threshold determined by Bank from time to time without notice to
Company. Bank will indemnify Company against actual direct money losses incurred by
Company as a result of an unauthorized alteration of the payee's name on each Check
paid by Bank (excluding hand-written Checks).
4.2. Customized Payee Validation Option. Bank validates the payee's name on each
Check exceeding the dollar threshold that Company elects. Company will indemnify
Bank against actual direct money losses Bank incurs as a result of an unauthorized
alteration of the payee's name on a Check below Company's defined dollar threshold,
and Bank will indemnify Company against actual losses Company directly incurs as a
result of an unauthorized alteration of the payee's name on a Check equal to or greater
than Company's defined dollar threshold (excluding hand-written Checks).
Bank will not perform Payee Validation with respect to a Check if (i) Company fails to include
the payee's name on the Check in Company's Check Issue Data; (ii) Bank does not receive
Company's Check Issue Data for the Check before the cutoff time Bank separately discloses; or
(iii) Company requests Bank to add the payee's name manually to Check Issue Data Company
has previously provided to Bank. If Company's Account is enrolled in Bank's Greenville Perfect
Presentment Positive Pay Service, Payee Validation will be limited to those Checks presented
at a Bank branch for encashment.
5. Check Issue Data. The "Check Issue Data" for any Check is the Check's complete serial
number and numeric amount, and if Company has selected Payee Validation, the payee's name
(or truncated name). Each Business day not later than the cutoff time Bank separately
discloses, Company will provide the Check Issue Data for all Checks issued through that
Business Day to Bank in the format, through the medium, and at the place(s) Bank specifies. In
performing the Service, Bank will use only the Check Issue Data Company provides to Bank.
Bank will not electronically or manually compare a Check with an issue date after the current
Business Day against the Checks presented for payment on the Account until the issue date
contained on the future-dated Check register matches the current Business Day's calendar
date. Bank will not accept Check Issue Data that contains an issue date more than forty-five
(45) calendar days in the future.
6. Payment of Matching Checks. If a Check presented to Bank matches the Check Issue Data
Company has provided to Bank (a "Matching Check"), Bank will make final payment on the
Check and charge the Check to Company's Account (subject to section 12).
7. Notification of Exception Item; Image of Exception Item.
7.1. Electronic Comparison. When Bank identifies an Exception Item through its electronic
comparison process, Bank notifies Company of the Exception Item through the
Exceptions Report Bank makes available to Company through CEO.
TM-1418/mage Positive Pay Service Description Page 2 of 4
Revised 04-08-2010
7.2. Manual Review. When Bank manually reviews a Check in accordance with section 4
and identifies a payee name discrepancy, Bank will use its best efforts but in no event
make more than one attempt to notify Company of the discrepancy by telephoning
Company at the number Bank has on file for Company.
7.3. Holdover Exception Items. This subsection applies when Company has enrolled its
Controlled Disbursement Account in Bank's Perfect Presentment Positive Pay Service.
A"Holdover Exception Item" is an Exception Item Bank identifies after Bank prepares
and transmits the Exceptions Report to Company. Bank will use its best efforts but in no
event make more than one attempt to notify Company of each Holdover Exception Item
by telephoning Company at the number Bank has on file for Company.
7.4. Image of Exception Item. Bank will use reasonable efforts to provide an image of any
Exception Item (including a Holdover Exception Item) to Company, but Bank will have no
liability if Bank is unable to do so prior to Company's Decision Deadline.
8. Default Options for Checks Listed in Exception Report. Bank offers two options for
processing Checks listed in the Exceptions Report for which Company fails to instruct Bank to
pay or return before the Decision Deadline (each, "Company's Default Option"). Company may
elect to have Bank pay each such Check or to return each such Check.
9. Company's Instructions to Bank; Failure to Instruct By Decision Deadline.
9.1. Company's Pay or Return Decision. Company will make its pay or return decision
based on the information about the serial number and amount of the Exception Item in
the Exceptions Report, and if Company has elected Payee Validation, on any payee
information Bank provides to Company.
9.2. Instructions Prior to Decision Deadline. If, prior to Company's Decision Deadline,
Company instructs Bank to pay or return an Exception Item, Bank will follow Company's
instructions (subject to section 12). For each Exception Item, Company will use the
same communications channel to instruct Bank that Bank used to notify Company of the
Exception Item. If Bank included the Exception Item on the Exception Report Bank
makes available to Company through CEO, Company will use CEO to communicate its
instruction regarding the Exception Item to Bank. If Bank attempted to contact Company
by telephone, Company will telephone Bank to communicate its instruction.
9.3. No Instructions Prior to Decision Deadline. If Company does not instruct Bank prior
to Company's Decision Deadline with respect to an Exception Item described in
subsection 7.1, Bank will process the Check in accordance with Company's Default
Option. If Bank is unable to obtain Company's instructions prior to the Decision
Deadline regarding an Exception Item described in subsection 7.2, Bank will return the
Exception Item unpaid (regardless of Company's Default Option). If Bank is unable to
obtain Company's instructions prior to the Decision Deadline regarding a Holdover
Exception Item described in subsection 7.3, Bank will process the Holdover Exception
Item in accordance with Company's Default Option.
10. Limitation of Liability and Indemnification. Each Check Company has authorized or is
deemed to have authorized Bank to pay in accordance with this Service Description will be paid
without Bank performing Bank's customary (or any other) Check verification procedures. Bank
will have no liability for paying a Check if (a) there is an alteration in its serial number or amount;
(b) Company has elected Payee Validation and Bank fails to identify an alteration or other
exception in the payee's name because Company has truncated the name in Company's Check
Issue Data; (c) it is counterfeit, bears a forged or unauthorized signature; or (d) it was otherwise
TM-1418/mage Positive Pay Service Description Page 3 of 4
Revised 04-08-2010
not validly issued. Each Check that Bank pays in accordance with this Service Description will
be deemed to be properly payable, and each Check that Bank returns in accordance with this
Service Description will be deemed not to be properly payable. Without limiting the
indemnification provisions contained in the other Service Documentation, Company (a)
indemnifies and holds Bank harmless from any and all liabilities, losses, damages, claims,
obligations, demands, charges, costs, or expenses (including reasonable fees and
disbursements of legal counsel and accountants) that Bank may suffer or incur as a result of
Bank's payment or return of a Check at Company's instruction or otherwise in accordance with
section 9, and (b) releases and forever discharges Bank from all claims and damages, whether
known or unknown, liquidated or unliquidated, contingent, direct or indirect, which Company
has, or claims to have against Bank relating to the payment or return of any Check in
accordance with this Service Description. This Section 10 will survive termination of the
Service.
11. Stop Payment; Cancel and Void Instructions; Stale-Dated Checks. Company will not use
the Service as a substitute for Bank's stop payment service. Company will follow Bank's
standard stop payment procedures if it desires to stop payment on a Check that was validly
issued. Company agrees to use (a) a cancel instruction only to delete an outstanding Check
included in its Check Issue Data and (b) a void instruction only to notify Bank that a Check
included in Company's Check Issue Data has been destroyed and will not be re-issued. If
Company elects to use Bank's "stale-dated" feature, Bank will return each Matching Check that
is stale-dated unless Company instructs Bank to pay the Check. A Check is "stale-dated" when
it is a Matching Check with an issue date that exceeds the number of months that Company
elects as its stale date.
12. Bank's Right to Return Checks. Nothing in this Service Description will limit Bank's right to
return any Check that Company has authorized Bank to pay in accordance with this Service
Description if Bank determines in Bank's sole discretion that (a) the Check is not properly
payable for any reason (without Bank's agreeing to, or being required to, make such
determination in any circumstance), or (b) there are insufficient collected and available funds in
the Account to pay the Check. As between Company and Bank, any determination by Bank not
to pay a Check will not constitute wrongful dishonor of such Check.
13. Survival. Sections 4, 5, 7, 9, 10 and 12 will survive termination of the Service.
O 2010 Wells Fargo Bank, N.A. All rights reserved.
TM-14181mage Positive Pay Service Description Page 4 of 4
Revised 04-08-2010
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, ?O11 Questions conceriung tlus
acquisition may be directed
DEPARTMENT: Materials Manageinent to Vance ILeinler at 349-8044
ACM: Jon Fortune ~
SUBJECT
Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his
designee to execute a purchase order through the Buy Board Cooperative Purchasing Networlc
for the purchase of a Two Declc Vibratory Shalcer and Eight Station Mobile Process Conveyor
System to provide mechaiucal processing to separate and recycle constniction and demolition
waste at the City of Denton Municipal Solid Waste Facility by way of an Interlocal Agreement
with the City of Denton; and providing an effective date (File 4677-Purchase of Two Declc
Vibratory Shalcer and Eight Station Mobile Process Conveyor System awarded to McCourt and
Sons Equipment, liic. in the amount of $484,700). (The Public Utilities Board approved tlus item
by a vote of 5-0).
FILE INFORMATION
This purchase is for a McCloskey R155 two deck vibratory shaker and a McCloskey eight bay
inobile process conveyor systein (piclcing station) to be used to separate and recycle constniction
and demolition waste received at the City of Denton Muiucipal Solid Waste Facility (MSW).
Tlus is an eYtension of a pilot recycling program that was implemented at the MSW in ?008. The
Solid Waste Department obtained quotes from two different manufacturers-McCloskey and
Powerscreen. Staff reviewed the product specifications and determined that the McCloskey
motors and components were heavier duty, and that McCloslcey has an 18% greater hopper
capacity. The City is utilizing an interlocal agreement through the Buy Board Cooperative
Purchasing Networlc Contract 4345-10 for this purchase. A$95,000 grant froin the North
Central Texas Council of Governinents (NCTCOG) Solid Waste Grant prograin will help offset
the cost of the vibratory shalcer.
A detailed description of the program and equipment is included in the attached Public Utilities
Board agenda inforination sheet (Exhibit 1).
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
At its March 14, 2011 meetin~, the Public Utilities Board recommended approval to forward this
item to the City Council for consideration.
Agenda liiformation Sheet
April 5, 20 11
Page 2
RECOMMENDATION
Approve the purchase of a vibratory shalcer in the ainount of $312,750 and an eight station
mobile process conveyor system in the amount of $171,950 from McCourt and Sons Equipment,
liic. for a total award amount of $484,700.
PRINCIPAL PLACE OF BUSINESS
McCourt and Sons Equipment, liic.
La Grange, TX
ESTIMATED SCHEDULE OF PROJECT
liistallation of the equipment is estimated to be completed by June 2011.
FISCAL INFORMATION
The vibratory shalcer will be funded from 660542591.135030100 in the amount of 17,750.00
and $95,000.00 from North Central Texas Council of Governments Solid Waste Grant Program.
Base price
Options
Total
$305,000.00
$ 7.750.00
$312,750.00
The Eight Station Mobile Process Conveyor Systein will be funded from 66007059?.135030100
in the amount of $171,950.00. Selected options included in the $20,150.00 amount include the
Magnetic Cross Conveyor ($12,900), the Chevron belt ($1,750), and the Diesel Power option
($5,500).
Base price
Options
Total
$151,800.00
$ 20.150.00
$171,950.00
Requisition# 102370 has been entered in the Purchasing software system.
EXHIBITS
EYlubit 1: Public Utilities Board Agenda liiformation Sheet Without EYlubits
Exhibit 2: Vibratory Shaker Quote
Exhibit 3: Eight Station Conveyor System Quote
EYlubit 4: Public Utilities Board Draft Minutes
Agenda liiformation Sheet
April 5, 2011
Page 3
Respectfully submitted:
~
Antonio Puente, Jr., 349-7283
Assistant Director of Finance
1 AIS-File U77
Exhibit 1
PUBLIC UTILITIES BOARD AGENDA ITEM #2
AGENDA INFORMATION SHEET
AGENDA DATE: March 14, ?O11
DEPARTMENT: Solid Waste
ACM: Howard Martin, Utilities 349-8232 ihifl-
SUBJECT
Consider approval of a McCloslcey R155 two declc vibratory shalcer and an eight station mobile
process conveyor systein by McCourt & Sons Equipinent, Inc to provide inechanical processing
to separate and recycle Constniction and Deinolition (C&D) waste received at the City of Denton
MSW Facility for a total sum amount of $484,700.
BACKGROUND
The City Council has set a goal of aclueving a 40% landfill diversion rate. Our residential
curbside recycling program has produced a 16.9% rate of residential waste diversion, wluch is
3.1% of the entire waste stream. The composting operation (9.4%) in conjunction with our clean
yard and wood waste diversion prograin (9.5%), together with our expanded coininercial
recycling program (7.5%) have produced a?6% overall diversion rate in FY?010. lii order to
reach the 40% diversion goal, additional recycling efforts need to be aimed at diverting waste
from the commercial waste sector. The C&D waste stream offers the greatest opportunity, with
several recyclable components present in this waste stream. We conducted a waste
characterization study of tlus waste stream in 2008 and found that slightly more than 50% of the
roll-off waste was recyclable. With the addition of a C&D processing operation, we estimate a
C&D diversion in FY2012 to talce our overall waste diversion to 32.5%. This is alinost half way
to our 40% goal.
A pilot prograi-n to recycle C& D waste was conducted in 2008 and 2009. The pilot program
used manual labor to extract recoverable materials. This inefficient method limited our recover
to just 10% of the recyclables. Materials that were recovered included cardboard, pallets, inetals
and wood. Even at that low recovery level, the program covered its costs. We ended the pilot
program in May, 2009 when the general economy slipped into a recession.
The pilot pro~ram confirmed that we could divert a lar~e amount of waste from the landfill with
the inclusion of specialized processing equipment into our system. We are proposing the
purchase of an eight station mobile process conveyor system and the two declc vibratory shalcer
to be used for sorting of the C&D inaterials to recover dirt, roclc, concrete, inetals, cardboard,
pallets, and wood. The screener will also be used in our concrete recycling operation. The
funding for tlus equipment is included in our FY?Oll CIP. lii addition, we have a solid waste
AIS - PUB Agenda Item
March 14, 2011
Page 2 of 3
grant from the North Central TeYas Council of Goveriunents in the amount of $95,000 to be used
toward the purchase of tlus equipment.
Attached is the C&D financial pro forma for FY2012. The business plan assumes the plant start
up to occur in the last quarter of this fiscal year, being at full production by October, 2011. The
FY?012 budget is based on current waste streams with a projected growth of 3% per year in the
short term. The FY?012 operation is conservatively projected to net approYimately $85,000.
OPTIONS
1. Approve staff's recommendation to purchase the C&D processing equipment.
2. Reject staff's recommendation to purchase the C&D processing equipment.
RECOMMENDATION
Staff recommends the approval of the purchase of the processing equipment in the amount of
$484,700.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
Approval of the FY 2011 CIl' and O&M budget included C&D equipment acquisition and
employees to operate the facility.
DATE SCHEDULED FOR COUNCIL APPROVAL
April 5, 20 11
FISCAL INFORMATION
The vibratory shalcer will be funded from 66007059?.135030100 in the amount of 17,750 and
$95,000 from NCTCOG Solid Waste Gratit Program.
Base price $305,000
Options $ 7750
Total $312,750
The eight station mobile process conveyor systein will be funded from 66007059?.1350.30100 in
the amount of $171,950.
Base price $151,800
Options $ 210.150
Total $171,950
AIS - PUB Agenda Item
March 14, 2011
Page 3 of 3
EYHIBITS
L McCourt & Sons proposal
2. C&D Financial pro forina
Respectfully submitted:
A. Vance ILemler
General Manager, Solid Waste
THIS PAGE INTENTIONALLY LEFT BLANK
Exhibit 2
McCourk & Sons Equiprnefifi, Inc,
P. 0. BoX 247 / 5141 W F,wy 71
La Gt°arige, Texas 78945
- - - -
C11y C7f DeI1tQ11
215 E. MCKItl[le)'
Qeiito►ti, Texas 76201
Attii: David G►ciggcM-
Dear Mr. Dugger,
www.por4ablescreemcain
Febi•Uary 2, 2011
Office 979-242-5298
rax 979-242a5292
Tori Free 888-838a9252
NicCourt & So1is Fquipftiertt, [nc. svill provide tl7e follpwieig eqLiipmertt as proposec1 below.
Equipiiietat Puo•c1lase Pi•➢ce
McCloske}1 R155 $305,0(}0
[IiclLtcliilg:
5ci•een Media
Hardax Stee[ Aprr,n
t)ptians
At3cier Pi°icing
1-leavy I)tity Fingei• Deck $7,754
McCourt & Sans Eqt6ipiitetit appi'eciates the Oppartunity to supply ya«r pi•oject with the best equiptneiit alid
service in the itldtistf•y tocjay. C)ue- gaal is to c'eciuce yopir aperatirjg costs, iftaintaitl campetitiwe rates artd
c011tilItial@y pe•ovide the ljigk'iest qt»lity, of sei-wice, eqiliplllerit aiid perso»nel, to itiake youo- pr•ojeet aii
accomplisl7meaat af yOLir ktigitest expectaEions.
irVe Iook forwm~d to woa-king Wvith yoti o~~ this ar7d any futtit•e prajects. lf yOLt laave an)t questioiis or thoughts,
please clo not hesitate tg call,
Sincerely,
Coiirtor IvlcCqeaE•t
McGOL11°t & Sons Equipment Inc.
972-877-0481
" e dt 4e ' ! f,
Heavy dut}r mobile screener with fo9lowing features.
- 16x5 heavy ciuly high energy 2 bearing screenbox.
- 127Hp Cat diesel englete.
- Tracfc mabEle.
- Direct feed Hardox Iined hopper.
- Travel oLit fixed waJkways,
- IntegratQd hydraul'ic fofding stockpifing Gonveyors.
- Fast on sife seiup tirne - 25 aninutes,
- Screen raises ai Iower end far easy bottQm deck access.
- Servica standing room inside Powerpac4€.
A + ~
-
Lengfh - wovking .
15.21 rn (49' - 1 Ci")
Vvidfh - working
13.45m (44' _ 1")
Length - transport
15.30m (5(7` - 2°)
Width - transport
2.90m (9'_ 6")
FCeight -lransport
3.44m (11' - 2")
Vt+eight - track
34,000 Kgs (74,960 Ibs) -estimaRed
DieseP tank capacity 399 L(1t15 US ga1)
Hydraulic tank capaciiy 630 L(166 U5 gal)
Capacily - hopper (level) 8.00 m' (10.48 Yd')
, s r •
Bsik widCh
1400rnm (55")
Beft spec
Heavy Dirty Plain 500i4 8+2
Drive drum dia.
335mm (13.1°)
Tail drum dia,
320mm (125")
Geartaox
Bonfig 805 W2 x 2 off
Gearbax raEio
24.2 : 1
Gearbox korque
14,00{1Nm conk, 25,(}0ONrTy max
Motor
Danfass JMSS125 x 2 off
Flow rate
101.2 Lpm (26.7 US gprri)
Adjustable speed
YES
Maximurn speed
16.7 rpm
. r : + •
Belt tividill
1200mm (48")
Beat spec
Plain 40013 4+2
C3rive drum dia.
285mm (11.2")
Tail drum dia,
270mm {10.6"}
Motor
[}anfoss t]MV800
Flaw rate
101,2 Lpm (26.7 US gpm)
Adjustabfe speed
Np
Maxiinum speed
126.5 rpm
Ali speclficatians are current as of fhis printing, bui are subject ta change
._J. i
Xk9'U- e......~
StockpiPe height
2,77rn (9' -1°') - 3.75m (1 2' _ 3„)
Angle
12 io 24 tiegrees atljustable
6eik width
1400mm (55°')
Belt spec
Heauy Duty Chevran -50013 5+1.5
Drive drurn dia.
285ntm (11,2")
Tail drurn dia.
270rnin (10.6")
Moior
Eafon QMV800
Ffow rate
72.6 Lpm (19.2 U5 9Pm)
Adjustable speed
YES
Maximurn speed
90.8 rpm
Stoekpile height
3.47m (1V - 5") - 3.96m (13')
Angle
20 to 25 degrees adjustable
Bell widlh
9Cldirm (36")
Bell spec
Flain - 40013 4+2
Dr°sve ctrum d@a.
285mm (11.2")
Tail drum dia.
270mm (10,6")
Motor
[3anfoss OMT400
Flaw rate
50.6 Lpm (13.4 US 9pm)
Adjusiable speed
YES
Maximum speed
126.5 rpm
y . . UM
Stockpile height
2.51 m (8' 3°) - 3.60m (11' -1[}°)
,4ngle
14 ta 25 degrees adjustable
BeCt width
900mm (36")
Belt spec
Plain - 40013 4+2
Lrive drum dia,
270mrn (10.6")
Tail drum dfa.
200rnm (8")
Moior
Danfass ON1T400
Fltsw rate
50.6 Lpm (13.4 US gPrn)
AdJustabte speed
YES
Maximum speed
126.5 rpm
Alt speciftcaiions are curreni as af this printing, bul are sutaject to ehange
m ~
J. ,a It{ l ry~ J
~'l~ L~..1., LJ f} '.7;i1,:J 1. ,r
. .
IBM
Dimensions - dop deck
4.880m x 4,525m (16` x 5')
Dimensions - boiiam efeck
4,575m x 1.526m (9 5' x 5')
Bearing type
NSK 11 Orrrm bore -22322 EVBC4
Screens - top deck
5' x 4' sida tension - 4 off
Screens - boltom deck
5' x 5' end tensian - 3 off
Tensianing -1flp deck
Quick release pin and wedge
Tensioning - bottom deck
Cunred tertsion bar and adjuster
Screen angle
16 ta 20 degrees adjustable
Screen motor
Dauid Brown Hyd. MCC2213 (85.7celrev)
Drive system
Clirect drive with HRC180 cntipEing
Hydraulic flowrate
101.2 Lpm (22.26gi
Speed adjustable
MES Pressure cpmpensa#ed FCV
Screen strake adjustable
6 - iOmm maxirnurn
Screen shaff speed
1130 -95Q rpm
5creen 'g' force
4.29 w 5.05 g
, , , • .
Engine
CA7 4.4 TEer III
Engine power
127 HP
Engine speed
2200 rpm
Flywheel Pump 1
David Brown Hytl. 6046,5046,5033
LH PTC3 PumA 2
[7avid Brawn Fiyd. 5023,5023
Total system flow
37$ Lpm (99,3 US Gpm)
Hydratilic lank capaciiy
630 L(166 US Gal)
Hydraulic tank ratio
1.68 . 1
Hydraulic Qil cooler
YES
Air Cleaner
Dflnaldson Cyclone Cleaner
Emergency slops 4 aff, 2 powerunit RH&LH, 2 chassis.
fresnt sEdes RH&LH.
Chassis cabling Armared cabfe
S#art Siren YES - ia sec detay
Engine sliutdawns:
Errgine roam figh#
Radio control kracks
Pendant track control
L.ow oil pressure
High water temp
Air fil6er blockage (selectable)
Fuel contaminatian
Low hydraulic tank fevel
YES
optianaf - F#eironic system
YES - plugged in at feeder end
4
AIl specificakions are current as af this prinCing, buk are subjecf to change
jI _ _ `
~ ~
1
i
55
I
k..
t
' I (
tA.l sd ~ kA
GJ
iI V~tJ 1 Lv
. e..n.=~+ 6 • r
Width
60 t7mm (19.7")
Leiiyili
3300mrn ('cQ' --1i1") crs.
HeigFit
739mm (29'°)
~`ieafbf?k
BOnflglIpll 709
Rafio
142:1
Moftar
Rexrokh A2FE 90
Speed iiaax
1.14 Kph (0.71 Mph)
Flow rale
101.2 Lpm (26.7 US Gprn)
Aliachment la ctiassis
Bofk pn for qulck change
• r , ~ , .
Apron widkh 1400mrn (55")
Apron spec 10mm Hardox upper surface
Gearbox Brevini 209(}F#'
Gearbax ratio 16:1
Gearbox iorque 90,00QNm cont, 15,00CSNrn max
Moior Danfoss OMTS400
Flow rate 101.2 Lpm (26.7 US gpm)
Adjustabfe speed YE5
Maximum speed 15.8 rpm
External belt aligninent pcaints.
External grease points.
Errgine safeiy shutdown systems.
Full safety guardirrg far nip pcsints,
CE compliance.
All speeiflcations are current as of #his primiing, but are subject to cliange
k-A
,
: ...~s . ~ . , . ,
. . - . . . . ...........k_._,
. ._.6.. .
x .-"'-A
r ~
[
.t:~~ll~ ~ i
, ~ fr
~
'-t
• v ~ ~ 0 y
z
/ r-
/a~
~
~i
~ ~ .
E
-
i31hSl H 8~11 eo?'S7'Ja4a Q
T.V11RE1 SfIX
6
A41 specifications are current as of tt7is princing, bu6 are subject to change
a
e
;
•1~I ~ ~
~.~i ~
~
!
10 ,i,P L
c.
Lo~~ ~
f
~
.
I ~
._...f._.i ~ ,
~
~
I'
.
?
~
~ .
~
I
;
4t•,;;! R.4Y
7
AIP specificaiians are current as ofi this prinking, but are subjeet to change
Exhibit 3
McCourt & Sons Eguipnierifi, Inc.
P. 0, Box 247 1 5141 W FIwy 71
La Gi-ange, Texas 78945
City of Deritoti
215 E. Mclf itiney
Denton, 'I"exas 76201
Atti7; Daviti DUggei•
Dear Mr. Dtigger,
www.pAr°tabfescreen.coirr
Februat•y 2, 2(} 11
Offiico 979-242-5298
F'ax 979-242- a2~2
Toll Free 888m838-9262
NIGCourt & Sons Equiplalerlt, Inc. avill prcavide lhe $olloNving eq«ipn7eltt as pi°oposed below.
EqidipiiieiLk Pui•chase Pe=ice
N9cCloskey 8 Bay Picl:ing Statian $151,800
Options Aclclei, Pricing
Niaglietie Cl-oss CQnve}ror $12,900
Chewr'on Be[t $1,750
Iv[agiletiG Head I'ulley $4,100
Diesel Powcr'ed $5,500
Covered Carivass Catirrpy aitd SuppoE•ks $4,800
Dlist 5uppressian System $4,200
ivYcCotart & Sorjs Equipmer}t appreeiates tkie appOrtUnity to supp4~, your pi•aject with tfle best equil»rient atid
sai-vice in the dndustry taday. OLat- goaE is to i-ecEuce your operating casts, r»aiiitaiii ccrrrtpetitive t'ates and
catitiiiually }3p'pvicfe the lligiiest quality of secvice, equipinent atlcl personijel, ta malce yotir project an
accomplishment of yotar itigliesk expectatia►is.
We look forward ta Nvaa-k'sng witl7 yoti o» thas and ally fUtUre prajects. lf you liave any questio»s oa' t1toughts,
p1ease cka iiot hesitate to call.
Siticerely,
Coljrfor° McCcaul-t
McCotirt & Sa»s Fquipment lrie.
972-877-048 I
F/ We ' A.. . 69.57 Fr4lv,/ a °4BA;•'V•
~
Xr"Tr
t iV T E F-I f'V A T!C> N A L
icking Statim
GENE, ,Trtr1L iVA CHINE SPEC'TI'lCA TIONS
RLLEASE: Jrrly 2008
;
HEAD PULLfY TAKL-UP
/
'
--HEr1DPULLEY
i
.
CC?NVEYQR HYDRAULIC
f F'
MtjTOR
-
C;0hJiH0l PAfJl:t /VAtVi_
fi f'fC;KiNG C:I°IUILS /
'
f'
,f . .
tifARlNC, C}kF,hSE FITIIIlCaS
fsf)41 @ 51D[ S
l.IVf- R{)I.LER
I IYDRAU14C TANK RSSfNtBlY
a~
~
~
j
KiNG PIN
~
~
5 PO51TIC7N VALVE
FRflNT LIFT RAMS
LEvERS FC1FZ 4 LIFT
SFf. STRCaKE
15 ANI~ FOLL~
~RAMS At
PIhJ IN LC7C.ATIC7N
v
~
REAR L4FT RArvlS
~
r
3F7.5TRPKE ~
PiFJ IN PQ$ITIQN
~
~
AXLE HSSEMBI.Y FOR
TRAhlSPORT
FOLD RRMS
4Fi STRC)KF
MQTC7R/PUMP
H(JI'F,L-h
7AIL I'ULtEY TAKE-UPJ' ;
TAIL PIILLE'Y ~
ILLUSTRltTiQN A
PICKING STATIC)N 4VORKlNG SETUP
Machlne Dimensions
........y
PLATfORM LENGTH II CNUTES
/
~__..._..._.,_J I4...~ ~ ~ /L
~ ~ cn 1........
~
~ 74'-0 112" - TAIi. SECiIQt~!
OVERALL f FOLDS FUR MUVlNG
/
I4 • A.' 71~1
-
_ 8 FT Cf.fARANCE ~ '~--FOR MOVI G
FOR 61NS
RECYCLE aIN$ LEGS RETRACT
FOR MOVING
SRECIFICATIq{VS:
Superstructure
• Robust structural steeE mainframe.
• Ffeavy duty serrated bar grating walkway and stair treads for safety.
• S working station chutes 9`-6" apart made from 10 gauge steel, dimensions, per application.
• Platform and stairs supplied wikh full rai(ings and kick plates.
~ 4 independent platforrn jacks for easy on sike setup.
• Lower section nf inclined conveyor has a manually operated fold3ng mechanism for highway transport.
~ S' of clearance under picking station when 41ift jacks are fully extended.
• Ai[ components primecE and painted machine grade enamel, guards and railings painted yellaw.
MechanicaEs
• 48" wide 3-pfy 1/4 tnp friction backed conveyor beft.
• AIl required hydraulic components (Conveyor motar, Tank, Pump, Filter, fitkings,..,)
• 25 HP Electric
• Torque arrn on Head pullay shaft assembiy.
• Emergency staps at alf work stations, with lockout at main control panel.
•Easily accessible Stop/Start watertight control panel.
•Lower incline conveyor fitted with catch hopper and impact bed.
* Conveyor beit take-ups aE both ends for belt tensionfng.
• 12" lagged head pulley w'tth 2 15/16" diameter shaft.
•12" Taii pulley with 2 7J16° diameter shaft.
• Grease po€nts at easily accessible locations.
Undercarrlage
~ Within North American travel height restrictions.
• 53" kingpin for highway travel.
~ A 20,000 Ib singfe axel fitted with 4-11 x 22.5 tires on Budd rims.
• Removabfe light bar for highway travel.
Optionai
~ Magnetic cross conveyar,
• Chevron belt.
~ Magnetic head pulley,
• Diesel pawered.
• Covered canvas canopy and supports,
• Dust Suppressian System,
A!l specificatlons listed ate current as of this printing but are subject to change.
-.:.,..:,<.,...,~..~.~,..t~~,... ..n,,.,.-~
~
`
b"YLt'~r
fUlrf:,oi,irt & ;c7n;; p:qtIlprne rit, liac,. Off Eco 979M242-5298
P. 0, Dc>x 2471' 5141 W [Iwy 71 F~x 979-242.. 5?92
I_.a Gr•iitigtt, "i`c:xas 7£3945 'roll I`~~~o 8813-838~9252
www,portabloscr•eori.cooxll
McCIoslcey, P!!1a.ri_PicitinU Statiari
McCloslcev Tr•carniliel Pickinca Stations ai1d T'f°ori7riie1 S,ystems
Th7nk yo4i fol- your interest. If yoLr have any questioris pIease call 979-242-529£3.
S~~,z61- ellc 0,557 wr~ jewwee, elrc"rvvr,
'.fii~~~~~ (1,+' ~ ~ ~ .p ~J ~ A~~~J.; J r,f ~ i"~~a.,~ ~
EYlubit 4
~
3
4
5
6
7
8
9
10
DRAFT MINUTE S
PUBLIC UTILITIES BOARD
March 14, 2011
After deterinining that a quoniin of the Public Utilities Board of the City of Denton, Texas is
present, the Chair of the Public Utilities Board will thereafter convene into an open meeting on
Monday, March 14, 21011 at 9:03 a.m. in the Service Center Traiiung Rooin, City of Denton
Service Center, 901-A Texas Street, Denton.
Present
11
1?
13
14
15
16
17 Absent:
18
Chair Dick Smith, Phil Gallivan, Barbara Russell John Baines, Randy Robinson
(arrived at 9:06 departed at approYimately 10:210)
Ex Officio Meinber:
George Cainpbell, City Manager
Howard Martin, ACM Utilities
Bill Gnibbs (eYCUSed), Vice Chair Bill Cheek (uneYCUSed)
19 OPEN MEETING:
20
21 ITEMS FOR INDIVIDUAL CONSIDERATION:
22
23 2) Consider a recoininendation of an approval of a McCloslcey R155 two declc vibratory shalcer
24 and an eight station mobile process conveyor system by McCourt & Sons Equipment, liic to
25 provide mechaiucal processing to separate and recycle Constniction and Demolition (C&D)
26 waste received at the City of Denton MSW Facility for a total sum amount of $484,700.
27
?8 Vance ILemler, General Manager Solid Waste, presented tlus itein with a PowerPoint
2 9 presentation. ILemler started the presentation by stating that solid waste is worlcing toward the
30 goal of 40% recycling for Denton. Demands are being placed on business and civic leaders for
31 better land use, environmental stewardship, and sustainable development. Municipalities
3? consider varied integrated waste management solutions to reduce their landfilling needs.
34 C&D Waste is Municipal Solid Waste produced during the constniction, renovation, or
35 demolition of buildings, roads, bridges, and other manmade stnictures. The question is why we
36 should salvage and recycle C&D and other roll-off customer wastes. It will assist customers
37 aclueve LEED (Green Building) Certification, reuse atid recycle materials, reduce natural
38 resource consumption and save landfill disposal space.
39
40 Denton's roll off waste stream. lii ?008 we were loolcing at C&D recycling and eYpanding on
41 our entire roll off waste customers. We conducted a waste characterization study on roll off
42 boxes that caine into the facility. The ainount of recyclables that caine in those boxes was
43 actually greater than 50%. It would be a great asset available if we want to remove some of
44 those recyclable materials. Tlus also represents the most economical recycling method. Of those
45 materials that we can remove from the waste stream are concrete, brick, block, asphalt pavement,
46 shingles, cardboard, gypsum, wood, pallets, soils, rock, and metals both ferrous and non-ferrous.
47 In May 2008 through May 2009, we actually operated a very njdiinentary pilot prograin for
Draft Minutes of the Public Utilities Board Meeting
March 14, 2011
Page 2 of 6
1 C&D processing. We didn't have any equipment-we just used men to pick up the material and
? put it into roll off containers.
4 Member Baines asked if the employees were segregating the materials.
5
6 ILemler stated they were segregating into the different roll offs, one with cardboard, another for
7 metals and another for commodities. We had a trailer provided by a pallet company out of the
8 Dallas area that handled the good pallets; they paid us and reinoved thein. All of the inaterials
9 were handled by hand.
10
ll Member Baines stated that this particular facility had cardboard that was not segregated
121 which was different from the recycled units that handle the cardboard.
13
14 ILemler agreed.
15
16 ILemler resumed his presentation with manual processint', and stated that it is not exactly agood
17 choice on how to handle tlus operation. The pilot prograin was able to divert a little more than
18 10% of the waste stream. That isn't good since about 50% of that material was recyclable.
19 When there are people piclcint', up the material, you can only spend so much time on it.
20
21 Gallivan stated that his perception was that if you have manual labor, that would be more
definitive on where things go. ILemler stated that it could be. That is the item to tallc about a
23 semi automated combinint', the use of inechanical equipment to make the manual side much
24 easier. Manual only is very time consuming.
?5
?6 ILemler stated that witlun the constraints of the pilot prograin, staff oiily diverted 10%, plus
27 commodities revenue it totally supported staff operations. Solid Waste discontinued this
28 program in May 2009 because staff knew they didn't want to continue as a fully manual
219 operation. Secondly that was after the commodities prices for materials cratered. It was time to
30 loolc to alternatives to malce tlus economically feasible.
31
32 This equipment is semi-automated processint', and is really the state of the industry in the US.
33 Tlus is pretty well developed industry, equipment is well developed. lii the Dallas Metro area
34 they have not chosen to relieve landfilling of C&D and moving to processing. The reason is if
35 you have a C&D landfill that is paid for- why waste inanageinent would want to recycle. As
36 C&D landfills betlyin to fill up you will see a~reater movement to C&D processing. In several
37 larger marlcets it is normal. The equipment utilizes equipment to do some of the separation and
38 some will be manual labor. ILemler had several pictiLires of a C&D processing site. A lot of
39 facilities use fixed facilities like a transfer station with a processing station on it similar to Pratt.
40 There are disadvantages to that and the capital cost is extreinely high. In the last several years
41 there has been an effort to move toward mobile processing. You can have that operation setting
42 neYt to your active landfill area so when the velucles come in, you can set the roll off waste to
43 the side and process it right next to the worlcing space for the landfill. That reduces the
44 transportation and handling cost by having it next to the landfill. Since these units are mobile,
45 they are easily relocated.
46
Draft Minutes of the Public Utilities Board Meeting
March 14, 2011
Page 3 of 6
1 Last year in collecting concrete, dirt and rock and talcing that material in at the landfill, we call
? that revenue generating waste. Waste that is not put in to the landfill itself but it is inert and
3 because it is inert it is not considered municipal solid waste that has to "'o into a lined area. It
4 can be stored and further processed when there is enough inateriaL In the last fiscal year, staff
5 brought in a contractor out of Dallas who had about ?5,000 tons of concrete nibble. A moderate
6 amount of soil was also in the materiaL Last year in 22010 we processed 225,000 tons into two
7 products and we are selling those two products. One product is rocks that are about 3" in
8 diameter and the other is product that is less than 3" all the way down to real fine material. That
9 material does not meet a TYDOT spec for use as a road base in a state project but it worlcs well
10 for non-TYDOT proj ects where a road base is rolled in. The material performed better than
11 expected. ILemler further stated that Solid Waste is hard on roads because their equipment is
12 very heavy. Staff is currently sellint', that stoclcpile of materials, since October 1 we are C"ivin(y
13 the customers a better rate if the material is clean and doesn't have much dirt. To reduce the
14 amount of dirt that is received, staff re-established the roll-off rates so that the waste generator
15 has soine responsibility for inanaging the waste and is rewarded with lower rates. Staff has
16 changed the fees to a lower haul rate for waste that is clean.
17
18 Member Russell asked if the material is sold to any other entities like the Coimty. Kemler
19 stated that they do and will sell it to anybody.
20
? 1 ILemler then added that in the wall that is along Maylull Road by the landfill, staff is using the
roclc material from the C&D operations instead of purchasing roclc. That saves the budget for the
23 department.
24
?5 ILemler then stated that in the first four months of tlus year solid waste has already accumulated
?6 more than 20,000 tons of clean material. We will bring in a contractor to grind up that material.
27 We believe in that product we will be able to ineet one of the top two grades of TxDOT inaterial.
28
2 9 Member Russell asked how that material is marketed. ILemler stated that marlceting that
30 material is different. Tlus is not normally for residential customers it is more for the contractors.
31 We have contacts in the industry that we market our product to.
32
33 ILemler stated that once we get tlus neYt product grind completed, 80% of that material will have
34 a value of about $5-$6 per ton as a marketable material. At $6 per ton that is $120,000 in
;5 revenue. There was also revenue that caine in because it was a waste product. This is certainly a
36 good way to reach our recycling goals.
37
38 The proposed operation is in the baclciip paperwork for tlus is item. We believe we can increase
39 recycling from 26% to 32%.
40
41 Member Russell stated that she was told recently that cardboard that came in contact with
4_2 food (i.e. pizza box) wasn't recyclable. ILemler responded that it is. Now if the cardboard boY
43 was dipped in French fry oil it is a problem.
44
45 To get to the 321% of recycling the solid waste department would need to purchase two major
46 pieces of equipment, wluch includes an 8 station sorting line, and a two declc vibratory shalcer for
Draft Minutes of the Public Utilities Board Meeting
March 14, 2011
Page 4 of 6
1 2 sizes of products. When we decided to get into this business, there aren't too many business in
? the Dallas area, staff applied for a solid waste grant for $95,000 and received that grant from
3 NCTCOG. Even though the requested amount was for $484,700, $95,000 will be grant funds.
4 This will offer a new revenue streain and add additional jobs. These jobs are teinporary jobs so
5 we can get the number of people we need for any given day with the amount of waste that we
6 have on hand. We also get two equipment operators from the contractor, wluch are more
7 specialized.
8
9 Kemler stated that the equipment that staff would purchase would produce two sizes of
10 materials.
11
121 Member Gallivan stated that the stock for this shaker equipment would be rock, no
13 lumber. Kemler agreed.
14
15 Member Gallivan further asked Kemler if he had seen one of these operations. Kemler
16 answer that he has nin this type of operation in the private sector. There were two different
17 operations in the Miami, Florida area with two generations of equipment. Member Gallivan
18 further added that this type of equipment has been around for a good while. Kemler stated
19 that the biggest improvement has been with the equipment being mobile.
20
? 1 Chair Smith asked if there was a reason that there is only one vendor bid. Kemler stated
yes. Staff looked at two vendors and one that is not presented is Power Stream, wluch Kemler
23 stated he has had an entire Power Stream plant that was built from scratch. He was pleased with
24 the equipment. When staff started looking at equipment, staff utilized the Buy Board
25 procurement method. This equipment is specialized and the equipment just can't be bid out and
?6 loolc at the dollar amount, the individual components have to be loolced at to get the best value.
27 Staff reviewed Power Streain and McCloslcey, both vendors are in Texas. In loolcing at the
28 McCloslcey froin an engineering analysis standpoint, the inotors and coinponents in this systein
22 9 are more heavy duty and it appears to be a more productive piece of equipment.
30
31 Kemler stated that if staff inoves forward with the C&D processing facility, the recycling
32 tonnage in 2012 will greatly increase froin 50,241 tons in 2010 to 83,124 tons.
3.)
34 Chair Smith asked if Kemler can break out the amount to get to the $484,000. Kemler
35 stated that the base price for the vibratory shalcer is $305,000 and the option of the finger declc
36 $7,750 that totals $312,750. The total of the shaker and the total of the processing conveyor
37 system should add up to $484,700. Chair Smith asked which options would be added to the
38 processing conveyor system to add up to $171,950. Kemler stated that he was unsure of wluch
39 options would add up to the total but would find out.
40
41 Chair Smith then asked about the diesel tractor pulling the equipment in one of the
42 pictures and asked if solid waste has a tractor. Kemler stated they have two.
43
44 Kemler stated as a side note that this would generate revenue of about $1.38 million, operating
45 eYpenses at $1.1 million, transfers of $192,058 with a new income for the solid waste fund to be
46 $85,939.
Draft Minutes of the Public Utilities Board Meeting
March 14, 2011
Page 5 of 6
? Meinber Gallivan stated that in years to come it loolcs lilce we will more than brealc even. The
3 solid waste department will make money at today's prices. Kemler stated that today's prices for
4 commodities markets are stront', and are continuing to escalate. We have looked at commodities
5 prices; we have loolced at current marlcet and loolced at a couple of years ago to get a ratige.
6 Staff is trying to make sure that if we don't get the waste that we did have that we will still be
7 good.
8
9 Member Baines stated that he has a client that has a sizeable sand and gravel pit and one of
10 the revenue generations that they have is people bring broken cement there and they would
11 reprocess and sell to the commercial clientele. However the downturn in the construction
1? market has seriously reduced the amount of revenue. Baines stated that he is unsure of the
13 customer base. Kemler stated that some of the private sectors have lost their stoclc to the solid
14 waste facility. Member Baines went on to say they were feeding the home building
15 industry. Kemler stated that most of our customers are commercial not home buildint". Kemler
16 gave the exainple of the Hoine Depot that was out on I-35. Solid waste received all of that
17 material and was glad; there is a lot of material. The material was originally slated to go to
18 Dallas and staff started tallcing to them when the proj ect started.
19
?0 Member Baines then asked when you take that kind of rubbish what kind of dollar signs is
? 1 staff looking at, potentiaL Kemler stated that the revenue stream of selling the material will be
$5-$6 per ton. If staff is processing 225,000 in two more years it could easily be $50,000, wluch
23 would be extra revenue streain above and beyond what was received when it caine in as waste.
24
?5 Kemler stated that some material that comes in as a waste charged at $35-$36 per ton. That
?6 material doesn't go into the landfill it is revenue generated waste, so that is additional waste that
27 there is no expense in the landfill for.
28
29 Member Baines stated that as long as you have continuing revenue stream then the
30 operating cost is offset by the revenue stream. If we do not have an incoming stream then
31 you have how much operating cost that is uncovered. Baines asked if staff is able to project
32 that there is enough processing. Kemler stated yes and at the worst of tiines when the roll off
33 business was going down staff estimated numbers off of that roll off business and with a great
34 reduction the debt payments could still be made.
35
36 Member Baines asked where the laborers are that work at this facility. Kemler stated there
37 are labor pools in the commuiuty that are utilized.
38
39 Member Gallivan moved to approve this item with a second from Member Baines. The
40 vote was 5-0 approved.
41
42 Chair Smith suggested to Kemler that if this goes forward to Council to make comment
43 about why there is only one quote and detail the cost out better.
44
Draft Minutes of the Public Utilities Board Meeting
March 14, 2011
Page 6 of 6
1 Member Gallivan stated that since this is a separate business line it would be good after a
? year or two to see how the business is doing. ILemler stated that since it is separate, it will be
3 easy to get that inforination.
4
5 Adjouriunent was at 11:04 a.m
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER OR
HIS DESIGNEE TO EXECUTE A PURCHASE ORDER THROUGH THE BUY BOARD
COOPERATIVE PURCHASING NETWORIL FOR THE PURCHASE OF A TWO DECIL
VIBRATORY SHAILER AND EIGHT STATION MOBILE PROCESS CONVEYOR SYSTEM
TO PROVIDE MECHANICAL PROCESSING TO SEPARATE AND RECYCLE
CONSTRUCTION AND DEMOLITION WASTE AT THE CITY OF DENTON MUNICIPAL
SOLID WASTE FACILITY BY WAY OF AN INTERLOCAL AGREEMENT WITH THE
CITY OF DENTON; AND PROVIDING AN EFFECTIVE DATE (FILE 4677-PURCHASE OF
TWO DECIL VIBRATORY SHAILER AND EIGHT STATION MOBILE PROCESS
CONVEYOR SYSTEM AWARDED TO MCCOURT AND SONS EQUIPMENT, 1NC 1N
THE AMOLTNT OF $484,700).
WHEREAS, pursuant to Ordinance 2005-034, the Buy Board Cooperative Purchasing
Network has solicited, received, and tabulated competitive bids for the purchase of necessary
materials, equipment, supplies, or services in accordance with the procedures of state law on
behalf of the City of Denton; and
WHEREAS, the City Manager or a designated einployee has reviewed and recoininended
that the herein described materials, equipment, supplies, or services can be purchased by the City
through the Buy Board Cooperative Purchasing Networlc programs at less cost than the City
would expend if bidding these iteins individually; and
WHEREAS, the City Council has provided in the City Budget for the appropriation of
funds to be used for the purchase of the materials, equipment, supplies, or services approved and
accepted herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The items shown in the "File Number" referenced herein and on file in
office of the Purchasing Agent, are hereby accepted and approved as being the lowest
responsible bids for such items:
FILE
NLJIVIBER VENDOR AMOUNT
4677 McCourt and Sons Equipment, liic. $484,700
SECTION 2. By the acceptance and approval of the iteins set forth in the referenced file
nuinber, the City accepts the offer of the persons submitting the bids to the Buy Board
Cooperative Purchasing Network for such items and agrees to purchase the materials, equipment,
supplies, or services in accordance with the terms, conditions, specifications, standards,
quantities and for the specified sums contained in the bid documents and related documents filed
with the Buy Board Cooperative Purchasing Networlc and the purchase orders issued by the
City.
SECTION 3. Should the City and persons submitting approved and accepted items set
forth in the referenced file number wish to enter into a formal written agreement as a result of the
City's ratification of bids awarded by the Buy Board Cooperative Purchasing Network, the City
Manager or his designated representative is hereby authorized to execute the written contract
wluch shall be attached hereto; provided that the written contract is in accordance with the terms,
conditions, specifications and standards contained in the Proposal submitted to the Buy Board
Cooperative Purchasing Networlc, and related docuinents herein approved and accepted.
SECTION 4. By the acceptance and approval of the items set forth in the referenced file
number, the City Council hereby authorizes the eYpenditure of funds therefor in the amount and
in accordance with the approval purchase orders or pursuant to a written contract made pursuant
thereto as authorized herein
SECTION 5. Tlus ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED tlus day of
MARIL A. BLJRROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
~
BY:
6-c_)FtI)-Fi1e 4677
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM: Jon Fortune ~
SUBJECT
Consider approval of a resolution approvint', the City of Denton's Strategic Plan; and providing
for an effective date.
BACKGROUND
The City of Denton embarked on the development of a Strategic Plan to serve as a roadmap for
aclueving long-term goals and objectives that captiLire the City's Vision, Mission, and Value
stateinents. The Strategic Plan is a product of the input generated froin the 2008/2009 Citizen
Survey, two City Council Planning Sessions, two Leadership Retreats, and a special appointed
Strategic Plaiuung Steering Committee. Most recently, City staff presented the draft Strategic
Plan on Febniary 8, 2011 to the City Council during the aiuiual retreat.
Durin,, the annual retreat, staff discussed the Strategic Plan in detail with the City Council. The
discussion was wide-ranging and plulosoplucal in nature, and a few minor changes to the
Strategic Plan were suggested. Staff has now incorporated the Council's feedback into the Plan
and requests that the Strategic Plan be adopted as part of the resolution. If adopted, this Plan will
be used to ~uide resource allocation decisions as we plan for the FY 2011-12 Bud~et.
RECOMMENDATION
Staff requests City Council adoption of the City of Denton Strategic Plan, which is described in
the resolution.
EXHIBITS
Resolution and Strategic Plan
Respectfully submitted:
~r
Bryan Langley
Cluef Financial Officer
Prepared by:
~
Lindsey Balcer
Assistant to the City Manager
Z:1pur DawmentslResa3Wiona5l11suaregic plan.doe
RESOLUTION NO.
A RESOLUTiON APPROVING THE CiTY OF DENTON'S STR.ATEGIC PLAN; AND
PROVIDING F4R AN EFFECTIVE DATE.
WHEREAS a strategic plan is necessary fia define wha we are as an orgariizatian, what
we envision for the future of the City in accordance with citizen expectations, and how we plan
to achieve the long-term vision; and
WHEREAS a strategic plan is the result of thorough analyses of the internal and external
environment in which an organization operates; and
WHEREAS a strategic plan allows elected officials and admizxistrators to better respond
to and plan far the pressures and dynamics that may impact policy and administrative decisions;
and
WIIEREAS the City of Denton embarked on the development of a Strategic Plan to serve as
a roadmap for achieving long-term gaals and objectaves; and
WHERE,AS the Strategic Plan captures the City's vision, mission, and value statements;
and
WHEREAS key stakeholders were engaged thraughout the development of the Strategic
Plan, including the citizens, City Council, City management, and the Leadership Team; arid
WHEREAS a Strategic Planning Steering Committee was appointed to review the input
generated from the stakeholdexs and create a document ta recommend to the City Council; and
WHEREAS the City Council discussed the Strategic Plan in detail at its annual retreat on
February 8, 2011; and
WHEREAS the strategic plan wilt be iinked to the budget process so that resource
allocation decisions can be prioritized in the fixhue; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTTON 1. The Strategic Pian attached as Exhibit "A" is hereby approved by the Cfty
Council.
SECTION 2. The City Manager ar his designee will bring forth the Strategic Plan for
annual review by the City Cauncil.
Z:lOur DunimentalReeplutioas11l5shstegic pimt.doc
SECTION 3. This resolution shali become effective izzmediately upon its passage and
approval.
PASSED AND APPROVED this the day of
, 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CiTY SECRETARY
BY:
APPROVED AS T4 LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
B Y :
/
EXHIBIT A
The following vision, mission, and value staterrtents provide the foundation far the strategic plan.
Vision "Destxnation Denton" Denton is an identifiable and memorable de'stination and a
comnunity of opportunities. We achieve this by providing high quality of Iife through
excelience ian education, entertairunent, and employment; neighborhood vrtality and
su.stainabiii€y; environmezital and financial stewardship; and superior public facilities and
services.
Mission "Dedicated to Quality Service" The City of Denton will foster an environment that
will deliver extraordinary quality services and products through stakeholder, peer group, and
citizen collaboration; leadership and innavatian; and sustaznable and efficienit use of resources.
Values "We Care" We care about our peopie, our commwnity, and our work. We do this with
integrity, respect, and fairness.
On the follawang pages, the Cfty of Denton Strcttegic Plan is outlined in terms of Key Focus
Areas (KFAs), Goals, and Qbjectaves. Below is a brief definition of each of these terms.
Key Focus Areas (KFAs) are Iong-term axid foundational in nature, and are based on Vision,
Missian, and Values statements.
Goals provide the methad of achieving success within the KFAs. These are long-term, on-going,
and actionable.
Objeetives provide mare specificity on achieving the goals. By natizre of the relationship to the
goals, objectives are shorter-term and may change over time to mee# the chazaging environment.
EXHIBIT A
City of Denton Strategic Plan
KFA 1: ORGANIZATIQNAL EXCEf.LENCE
Goal 1.1. Manage financial resources in a responsible manner.
Objective 1.1.1.
Utilize benchrnarking, performance measurernent, and pragress evaluation .to
irnprove operations.
Objective 1.1.2.
Develop and implement long-range strategic pians.
Objective 1.1.3.
Provide timely, accurate, and relevant financial information.
Objective 1.1.4.
ERSUre adequate internal controls are in place to prevent was#e, fraud, and abuse.
Objective 1.1.5.
Manage enterprise funds to achieve financial self-suffciency.
Objective 1.1.6.
Minirnize fees and rates that are charged to our citizens and custamers.
Goal 1.2. De►+elap a high perFarmance woric #orce.
Objective 1.2.1.
Create successian ancE workforce management strategy to ensure organizationaf
sustainability and continuity.
Objective 1.21.
Attract, retain, and motivate qualified and diverse staff to ensure consistent
implementation of estabEished vision.
Objective 1.2.3.
Establish a culture where ernployees feel valued and respected.
Objettive 1.2.4.
Facifitate open inter- and intra-departmental cammunication and collaborationa
Objective 1.2.5.
Establish a cuEture of accountability at all levels of gavernance.
Goa! 1.3. Promote effec#ive internaf and external communication
Objective 1.3.1. Maintain an-going staff communication with Ci#y Counc[1, Boards, and Cornmissions.
Objective 1.3.2. Utifize both traditianal and non-traditional forms o# communication to disseminate
accurate information.
Objective 1.3.3. Actively seek feedback from citizens and emplayees, in order to identify and
implernent programmatic changes, as appropriate.
Goal 1.4. Provide exemplary custorr3er service.
Objective 1.4.1. Ensure alf customer interactions are conducted irt a professional and courteous
manner.
Objective 1.4.2. Respand to customer inquiries in a timely fashion.
Objective 1.4.3. Provide convenient methods of conducting business wi#h the City.
Goal I.S. Utilize technology to enhance efficiency and productivity.
Objective 1.5.1. Develop information technology systems ta automate routine processes.
Objective 1.5.2. tltilize data anafysis to rrtake informed management and aperationaE decisions.
Objective 1.5.3. Reduce reliance on paper-based systems.
KFA 2: FUBL3C INFRASTRUCTURE
Goal 2.1. Optimize resources to improve quatity of City roadways
s
Objective 2.1.1. Manage City street funding faased on Qverall Condition Index (OCf) methodology.
Objective 2.1.2. Develop a long-range strategy to Cransition sfreet funding to achieve the OCI criteria.
Objective 2.1.3. Improve the design criteria for all dedicated roadways.
Object'rve 2.1.4. Maintain an acceptable levei of senrice on aEl City roadways.
Objective 2.1.5. Design and construct all capital street projects on a 40-year design fife.
Objec#ive 2.1.6. Update the Mobility Plan every five years.
Gaa! 2.2. Seek solutions to mabitity demands and enhance connectivity
Objective 2.2.1.
Coordinate with [3CTA ta provEde effective multi-modal connectivity.
Objective 2.2.2o
Caordinate with TxDOT ta rnaintain and enhance the state road network.
Objective 2.2.3.
Improve walkabifity/pedestrian access.
Objective 2.2.4.
Encourage and improve bieycle mobility.
Objective 2.2.5.
Enhance aviation infrastructure at the Denton Airport.
Goal 2.3. Promote superior utility services and facilities.
Objective 2.3.1.
Plan for iong-term resource acquisition and development.
Objective 2.3.2.
Assure reguEatory compliance and legislative oversight.
Objective 2.3.3.
Protect pubtic health and provide reliable service.
Objective 2.3.4.
Ensure operational and environmentaE sustainabili#y.
Objective 2.3.5.
Effettively maintain and operate municipal facilities.
Objective 2.3.6.
Develop and support rates to provide funding for strategic obJectives.
Goal 2.4. Manage drainage infrastructure.
Objective 2.4.1. Require new drainage infrastructure to design 100-year flood protection, based on
fufly developed canditians.
Objective 2.4.2. Rehabilitate existing drainage system in compEiance with 100-year flood protection
criteria.
Objective 2.4.3. Develap funding mechanism to rehabilitate inadequate drainage system components
over a 20-year period.
Objective 2.4.4.
Require finished flaar elevation certification on studied and unstudied drainage
basins.
Objective 2.4.5_
Maintain street sweeping in compliance with the municipal good housekeeping
management practices associated with storm water regulations.
Goal 2.5. Der►elop Capitaf 1mprovement Program (CIP) based on comrnunity needs.
Objective 25.1.
Manage existfng and future infrastructure needs to meet projeeted growth trehds.
Objective 2.5.2.
Develop and implement financing plans far identified infrastructure needs.
KFA 3: SUSTAINASLE ECONOMIC DEVELOPMENT & ENVIRONMENTAL 57"EWARDSHIR
Goal 3.1. Manage growth, deveiopment, and redevelopment opportuni#ies.
Objective 3.1.1. Update Comprehensive Plan.
Objective 3.1.2. Execute Downtown lmpiementation Plan (DTfP).
Objective 3.1.3. Promote Smart Growth/Infill initiatives in assessing cfevelopment projeets.
Objective 3.1.4. Preserve and maintain historic structures and culture af Denton.
Objective 3.1.5. Encourage environmentafiy-sustainabfe development, business, and constructiQn
practices.
Goa13.2. Encourage econarnic development
Objective 3.2.1. Create comprehensive Economie Development incentive policy to maxirnize Return
on Investrnent to community.
Objective 3.2.2. Develap marketing effort to build on existing assets.
Oiajective 3.2.3. Create Industrial Park Master Plan, identifying challenges and opportunities for
sound growth.
Objective 3.2.4. Focus an economic clevefopment efforts that enhance the development of the
University of North Texas Discovery Park.
Objective 3.2.5. Increase growth of visitor industry in Den"ton.
Goai 3.3. Promote environmental sustainability.
Objective 3.3.1.
Establish sustainability goais and actions.
Objective 3.3.2.
lmprove lacal and regional air quality.
Objective 303.3.
Manage natural resources responsibly.
Objective 3.3.4.
Provide public education and involvement opportunities.
Objeetive 33.5.
Ensure financial integrity of sustainability effarts.
KFA 4: SAFE, LIVABLE, and FAMILY FRIENDLY COMMUNITY
Goal 4.1. Enhance public safety in the cornmunity. Objective 4.2.1. Expand tfepartmental colfaboration and community partnerships by increasing
invofvement, communicatian, educatian, and utilfzing technology.
Objective 4.1.2. Secure and deploy public safety resources in the most effective and efficient rnanner
possible.
Objective 4.1.3. Evaluate existing and future puhlic safety faciEity needs in order to provide the most
effective delivery of emergency response services.
4bjective 4.1.4. Focus on prevention programs ta heighten awareness, minimize loss, and support a
safer community.
Objective 4.1.5. Maintain a high level of preparedness through planning, training, and the utilization
of resources.
Goa14.2. Seek clean and healthy neighborhaods in the City of Denton.
Objective 4.2.1. Provide effective code enforcement services that rneet community expectationsa
Objective 4.2.2. Promote positive environmental behaviors and practices far the City of Rentan ancE
its residents.
Objective 4.2.3.
Enhance the quality, livability, and sustainahility of the neighbarhaads Rn Denton.
Objettive 4.2.4.
Support revitalization efforts of existing low-maderate income neighborhoods.
Goal 4.3. Provide
quality, diverse, and accessible neighborhood services #or the community.
Objective 4.3.1.
Meet customer needs thraugh quality and diverse prograrns.
Objective 4.3.2.
Provide quality parks, libraries, and recreation services to promate leisure, cultural,
and educational oppartunities in the cammunity.
Objective 4.3.3.
Promote a family friendly environment.
Objective 4.3.4.
Co-sponsor annual community events ancf festivaEs.
KFA 5: PARTNEiiSHIPS AND REGtONAL LFAdERSHiP
Goai 5.1. Actively participate in regional, state, and federal initiatives.
Objective 5.11. Maintain dialogue with state and federal delegation and agencies.
Objective 5.1.2. Promate bi-annual legislative agenda and congressianal priorities.
Objective 5.1.3. Pursue effective representation at the state and federal Eevels.
Goa15.2. Maintain visibte and effettive relationships with governmental and non-governmental
arganizations.
Objective 5.2.1. Maintain dynamie presence at the local Chambers af Commerce.
Objective 5.2.2. Participate in regionai, state, natianal, and international caalitions (RTC, EVCTCOG,
TML, NLC, ICMA, etc).
Objective 5.23. Support staff participatian in regional, state, national, and international professionaf
organiza#ions.
ObjeEtEve 5.2.4. Build re[ationships with key organizations to enhance community and sociaf services.
Objective 5.2.5. Cuftivate mutually beneficial relationships with local etlueational and governmental
institutians.
AGENDA INFORMATION SHEET
AGENDA DATE: April 6, 2010
DEPARTMENT: Parks atid Recreation
ACM: Fred Greene ~
SUBJECT
Consider adoption of an ordinance of the City of Denton, Texas, authorizing the City Manager to
eYecute a contract with the Denton liidependent School District for the 20 11 Summer Food
Service Program; authorizing the eYpenditure of funds to admiiuster the program; and providing
an effective date.
BACKGROUND
This free lunch pro~run is desi~ned to serve children in areas of low-income populations durin~
the summer months, when traditional school lunch prograi-ns are not in effect. Tlus program is
sponsored and funded by the Uiuted States Department of Agriculnire, Food and Nutrition Service
and is a continuation of the free lunch prograin that is offered during the school year. The Texas
Department of Agricult~~re has made an effort through outreach to increase the number of cities
participating in the prograrn.
Cold saclc lunches will be prepared by the Denton Independent School District and served at the
following locations: 1) MLIL Recreation Center, 2) Denia Park, 3) Quakertown Park, 4) Owsley
Parlc, 5) Fairways at Uiuversity Apartments, 6) Village East Apartments, 7) Fred Moore Parlc, 8)
McMath Middle School, 9) Maclc Parlc, 10) Denton Mobile Parlc, 11) Civic Center 121) North
Lalces Recreation Center; other DISD suininer school sites and additional City sites inay be
iinpleinented based on need. The total estiinated cost for this prograin is approxiinately $129,900,
wluch is reimbursed by the TeYas Department of Agriculture.
The Parks and Recreation Department first offered the Summer Food Service Program in 1992 at
Denia Parlc, Phoenix Parlc, Fred Moore Parlc, Civic Center Parlc, and two suininer school locations.
At these siY locations, a total of 10,7761unches were served to cluldren 1 through 18 years of age.
The 2010 Summer Food Service Protlyram served 40,261 lunches at 19 locations at a cost of
$1?8,633.90.
OPTIONS
Council may approve the contracts with the TeYas Department of Agriculture and Special Nutrition
Prograins and Denton Independent School District in its entirety, deny the request, or aslc staff to
inalce modifications.
RECOMMENDATION
Staff recommends approval of the proposed ordinance.
Agenda liiformation Sheet
April 5, 20 11
Page 2
ESTIMATED SCHEDULE OF PROJECT
Summer lunches will be served from June 6, 20 11 through Augnist 12, 2011. No lunches will be
served on Monday, July 4, 2011, in observatice of the liidependence Day Holiday.
PRIOR ACTION/REVIEW
The Denton Independent School District recommended approval to contract the preparation of
cold saclc lunches for this prograin when the issue was presented to their board on Febnjary 15,
2011. The program is scheduled for implementation on June 6, 2011.
FISCAL INFORMATION
Texas Department of Agriculture, which administers this grant, will reimburse all costs
associated with the program.
EYHIBITS
1. Ordinance
2. DISD Agreeinent
Respectfully submitted:
tk .0 w.4 .
Emerson Vorel, Director
Parlcs and Recreation Departinent
Prepared by:
~
ILathy Schaeffer, Special Projects/Fiscal Operation Manager
Parks atid Recreation Department
1lcodadldepartmentsl1ega1lour documentslordinancesll llsutntner food service 201 l.doc
oRDnvaNcE rro.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY
MANAGER TO EXECUTE A CONTRACT WITH THE DENTON INDEPENDENT SCHOOL
DISTRICT FOR THE 2011 SLTMMER FOOD SERVICE PROGRAM; AUTHORIZING THE
EXPENDITURE OF FUNDS TO ADMINISTER THE FROGRAM; AND PROVIDING AN
Ek'FECTNE DATE.
WHEREAS, the City of Denton and the I3enton Independent School District znutually agree
to provide meals for eligible individuals; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager is hereby authorized to execute a contract with the Denton
Independent School District, substantially in the fornn of the contract whi.ch is attached to and rnade
a part of this ordinance for all purposes, to provide meals for eligible individuals at the varfous sites,
and such other documents and certifications as are necessary to carry aut the 2011 Sumrner Food
Service Program and to handle all fiscal and administrative matters relating to the pragram.
SECTION 2. The expenditure of funds necessary to administer the 2011 Summer Food
Service Program is hereby authorized.
SECTION 3. This nrdinance shall become effective unmediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
~
BY:
~ ~ ~
Y
i
State of Texas
County of Denton
AGREEMENT TO FURNISH F40D SERVICE
CITY OF DENTQN
and
DENTON INDEPENDENT SCHUOL DISTRICT FOOD
SERVICES
THIS AGREEMENT is made and entered into by and between the Denton Indenendent Schoal
District and the Citv of Dentvn both af whom are local governmental entities authorized to enter
into interlocal agreements under Chapter 791 of the Texas Government Code. (Vernon 1994)
Whereas, the interlocal agreement contemplates the performance of function or services that
each party to this contract is authorized to perform individually.
Whereas, that the City of Denton is making payment under this agreement which it is funding
from payments from current revenue; wherea.s, the payments provided by the City of Denton are
in an amount that fairly compensates the Denton Independent School District for the sezvices that
ft is performing.
Witnesseth:
1. Provision of Mea1s
Denton Indenendent School District agrees to supply unitized meals inclusive of milk and juice
to the Citv of Denton Parks and Recreation Devartment. The Citv of Denton Parks and
Recreation Denartment will pick up meals at designated food preparation site and package
coolers with meals and deliver to approved SFSP sites.
Breakfast...... $ 0.00 each Lunches....... $ 2.00 each
Snacks $ 0.00 each Supper......... $ 0.00 each
II. Menu Records
It is further agreed that the Denton Indetiendent School District pursuant to the provisions of the
Summer Food Service Program Regulations, will assure that said meals meet the minimum
requirements as to nutritive value and content as outlined in the U.S.D.A.'s sponsor Meal
Preparation Handbook, and will maintain full and accurate recordings of such, including the
following:
1. Menu Records, including amount o£ food prepazed.
2. Meals, including daily number of ineals delivered by type.
III. Retention of Records
These records must be reported to the institution promp#ly at the end of each week. Denton
Indenendent School District agrees also to retain records required under the preceding elause for
a period of three years and 90 days after the end of the contract period. If audits, claims or
litigation have not been resolved, a11 records must be retained beyond the required time period
until all issues are resolved in accordazace with the Summer Food Service Program Agreement
between The Citv of Denton and Texas Devartment of Agriculture-Food & Nutrition Division.
IV. Comnliance With Immisration Laws
The Denton Indeuendent School District agrees to comply with the requirements of the
Immigration Reform Control Act of 1986 regarding employrnent verificatiQn and retention of
verification forms for any individuals hired after November 6, 1986 who will perform labor or
services under #his contract.
V. Audit
The Denton Indenendent School District agrees to allow for purposes of audit, examina.tion,
excerpt, and transcription: the USDA, the Comptroller of the United States, D.S. and any of
their authorized representatives to ha.ve access to any of the contractor's books, documents,
papers, and records that are pertinent to the contraet.
VI. EnerQV Efficiencv
The Denton Indenendent School Distriet agrees to comply with the required rnandatory
standards and policies concerning energy efficiency contained in the Texas Energy Conservation
Plan issued in compliance with the Energy Policy and Conservation Act (P.L. 94-163).
VII. Remedies For Breach af Contract
The Denton Indenendent Schaol Distriet agrees that except for sma11 purchase contracts, zt will
comply with and enforce provisions that a11ow for administrative, contractual, or iegal remedies
if contractors violate or breach contract terms, and any appropriate sanctions and penalties.
VIII. Comnliance With Labor Reaulatians
The Denton Indenendent School District agrees to be in compliance with Section 103 of the
contract Work Hours and Safety Standards Act (40 USC 327-330) as supplemented by the
Department of Labor regulations (29 CFR, Part 5). Under this Act, contractors must cornpute the
wages of inechanics and laborers on the basis of standard workday of eight houas and a standard
workweek of 40 hours. Work that exceeds the standards must be compensated at least 1%2 times
the basic pay rate for overtime hours warked. These requirements do not apply to the purchase
of supplies or materials ardinarily available on tlxe open market or contracts for transportation.
IX. Equal Emplovment Opportunitv
The Denton Indevendent School District agrees to comply with Executive Order 11246 entitled
"Equal Employment Opportunity" as amended by Executive Order 11375 and as supplemented
in Department of Labor regulations (41 CFR, Part 60).
X. Comnliance With Laws
The Denton Indevenden# School District agrees to comply with a11 other applicable laws;
including without limitation, any additional applicable Federal Laws ar regulations contained in
the Suimmer Faod Proaram Ap-reement between the Citv of Denton and the Texas Denartment of
Atiriculture-Food & Nutrition Division.
XI. Remedv For Breach
If the Denton Indenendent School District fails ta provide services in accordance with the
provisions of this contract, the Citv of Denton may, upon wxitten notice of default to the
contractor, immediateiy terminate the whole or part of this contract.
XII. Consideration
The Citv of Denton agrees ta pay Denton Indenendent School District for all rneals ordered on
daily basis at the rate agreed upon in this contract.
XIII. Term
The agreement shall be effective as of June 6. 2011 and shail have the same term as the Summer
Food Program Agreement between the City of Denton and the Texas Detiartment of A2riculture-
Foad & Nutrition Division. It may be terminated by notice in writing given by any party hereto
to the other parties at least 30 days prior to the date of termination.
XIV. Venue
This agreernent shall be interpreted in accordance with the iaws of the State of Texas. Any
litigation filed with regard to tlus contract shall be tried in a court of competent jurisdiction
setting in Denton County, Texas.
IN WITNESS WHEREOF, the parties hereto have executed ttis agreement as of the dates
indicted below:
Agreed to this date
Sponsar Official
Agreed to this date
~
Sponsor
t
Title: Citv Manatzer Title School Board President
The location of the food preparation site will be:
Denton High School
1007 Fulton
Dentan, Texas 76201
APPROVED A5 TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
~
CITY OF DENTON CITY COUNCIL MINUTES
Febniary 15, ?O11
After deterinining that a quoniin was present, the City Council convened in a Worlc Session on
Tuesday, Febniary 15, 2011 at 3:00 p.in. in the Council Worlc Session Rooin at City Hall.
PRESENT: Council Member ILing, Council Member Watts, Council Member Gregory, Council
Meinber Engelbrecht, Mayor Pro Tem ILamp, and Mayor Burroughs.
ABSENT: Council Meinber Heggins.
L Citizen Coininents on Consent Agenda Iteins
Bob Pugh, 2714 Broolcfield Lane, Denton, 76?09 - spoke regarding Consent Agenda Items J and
K.
Jeremy Fykes, 3924 Clumney Rock, Denton, 762 10 - spoke regarding Consent Agenda Items J
and K.
2. Requests for clarification of agenda iteins listed on the agenda for Febniary 15, 2011.
Council Member Gregory asked aboLrt Consent Agenda Item G. There was no iiiformation in the
baclaip materials relative to the decibel level requested.
Einerson Vorel, Director of Parlcs and Recreation, stated that the decibel level was 70 which was
recommended and in lceeping with other events at the Fairgrounds.
Council Meinber Watts aslced about Consent Agenda Itein E which was the water reclaination
project that when approved would use wastewater for recirculation. He questioned what benefits
the proj ect would have for the landfill.
Vance ILeinler, General Manager for Solid Waste Services, stated that this was the second phase
of the project for the bioreactor. Rather than purchase water for the project, water froin the tniclc
wash operation would be used.
Council Member Watts stated that would then cause the decomposition to accelerate at the
landfill. He asked how many gallons of water the tnick wash was producing.
ILemler replied that would not be laiown until the facility started operating.
Council Meinber Watts aslced for an inforinal staff report on the cost brealcdown of the project
including how much gas was being harvested and an analysis of the operation.
Council Member Watts asked about Consent Agenda Item 4F and how the cost was factored in
with the DISD.
Vorel stated that the City would absorb the cost as it was funded out of parlcs gas well revenues.
Council Member Watts indicated that he would be pullin~ Consent A~enda Items J and IL for
separate consideration.
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?
Mayor Burroughs aslced about Consent Agenda Itein F and aslced if the existing systein was
being replaced. If not, he questioned what had been done before.
Vorel stated that this was an unfunded inandate that all public pools that spray water on the faces
of patrons were required to either super chlorinate or install the ultraviolet systein. The
ultraviolet systein was less costly.
3. Receive a report, hold a discussion, and give staff direction regarding the governance of the
Airport as recommended in the Denton Airport 2010 Business Plan.
Bryan Langley, Cluef Financial Officer, presented the governance recommendation.
Background - The Airport Master Plan was approved by Council in 2003 with the Airport
Business Plan approved on November 16, 2010. The Business Plan stated that Denton should
consider modifying the airport governance stnicture to assist with vetting financial proposals for
the Airport as well as provide policy input related to targeted marlceting iiutiatives and
development. During Business Plan discussions, the Council requested staff provide a
recommendation on airport governance options. On December 6, 2010 management discussed
potential governance options with the Airport Advisory Board (AAB). The Board eYpressed
some concerns regarding the options presented but did not provide a formal recommendation.
On December 7, 2010 management discussed potential governance options with the Economic
Developinent Partnership Board (EDPB) The EDPB was very supportive of the staff
recommendation and had recommended that the Council approve the proposed revisions to the
memberslup and role of the EDPB. On December 13, 2010, the AAB held a special called
ineeting to discuss the governance options that were presented by staff. The AAB developed a
letter that recommended the Council either table the item until more discussion could talce place
or increase the size of the AAB from 7 to 9 members with one additional member coming from
the EDPB and one member from the Chamber of Commerce. December 14, 2010, staff
presented airport governance options to Council which was tabled due to only 4 council
ineinbers present. January 5, 2011 the AAB held a ineeting to discuss the governance options
that were presented by staff. Another meeting of the AAB was held on January 19, 20 11 to
discuss the options and receive input and to consider the views of the Airport tenants and
stakeholders. January 24, 2011 a three member committee of the AAB met to consider drafting
options to CounciL Council Member Engelbrecht had suggested that staff consider formalizing
the eYisting Airport Safety Committee. The current Committee was admiiustered by staff but
memberslup was not formally defined and the meetings occurred on an irregular basis. Council
Member Engelbrecht proposed that the committee membership, charge and meeting schedule be
forinalized if the proposed governance stnicture was changed. Staff was in agreeinent with this
recommendation and would draft a proposal for Council to consider if directed to do so.
Staff recommendation - The staff recommendation as presented on December 14, 2010 included
(1) expand the role of the EDPB to review, consider and malce recommendations to Council
regarding branding, marketing and development incentive policies, (2) increase memberslup by
two meinbers, (3) transition from the AAB as it currently eYisted to a City Council Airport
Coininittee, (4) hold regularly scheduled ineetings with interested stalceholders to share
information and ideas relative to airport operations or development and (5) continue to have the
Airport Manager admiiuster day-to-day operations of the Denton Airport.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 3
Council Meinber Watts aslced about the Safety Coininittee and Tenant/stalceholder line of
commuiucation. He questioned if there would be a liaison to the Council Committee or staff.
Langley stated that the proposed governance stnicture would be directly back to Council. The
Safety and Tenant Committees would have staff liaisons to handle those functions.
Mayor Pro Tem ILamp asked if the Safety Committee and the Tenant Committee iiiformation
would go to the Council Airport Coininittee.
Langley stated that the Tenant/Stalceholder group would not be a formal committee. It would
meet on a regular basis but would not be a formal group. The Safety Committee would be more
forinalized with a charge, how often the ineetings would be, etc. and would have posted
meetings.
Mayor Pro Tem ILamp aslced about the iiiformation flow.
Langley stated that it would go back to the Council Airport Committee and then back to Council.
City Manger Campbell stated that staff would have regular and consistent dialog with the Safety
Committee. The function of the Committee would be to advise and assist staff to manage
functions of the Airport but directly related to safety issues.
Mayor Pro Tem ILamp felt that more discussion was needed on the tenant/stalceholder issue.
Mayor Burroughs noted that the safety and tenant relations issues were not on agenda for this
evening.
Don Sinith, Chair-Airport Advisory Board, presented baclcground inforination on the history of
the Airport. Since 1985, the Airport had experienced expanded taxiways and rainp space; the
installation of perimeter security fencing; increased aiuiual fuel sales; had attracted substantial
businesses; gained financial independence from the City's General Fund; was in the process of
adding a second ninway; and was Reliever Airport of the Year in 2010.
All of tlus toolc place with an active parriierslup between Council, City staff and the AAB. The
AAB was directly involved in developing and presenting economic incentives that developed the
Airport into the worlcin~ airport it was today. That was accomplished by utilizin~ the
knowledge, expertise and contacts of the AAB members to locate vital resources within the
industry to bring aviation businesses to the Airport.
Facing the future - Current questions/issues dealt with the inaxiinizing of the inanageinent of and
benefits from a city-owned Denton Municipal Airport and how best to implement the 2003
Airport Master Plan and the 20 10 Business Plan.
The staff proposal for the restnicturing included inanageinent by the EDPB, a new three ineinber
Council Committee and staff interaction with stakeholders. The AAB proposal suggested
assessing the needs of the Airport from a strategic plaiuung level and determiiung important
governance factors by public meetings of stalceholders and the aviation commuiuty.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 4
The AAB's proposed governance stnicture would form a Denton Airport Enterprise Board
(DAEB ) that would emulate the Public Utility Board and maintain an advisory role with a
similar stnicture, responsibility and terms as the Public Utility Board. The DAEB would have a
7 or 9 member board each nominated by a council member. Up to two members could be
appointed from outside the city limits. Two additional members could be added, one each from
the Chamber of Commerce and the EDPB wluch would be confirmed by Council. The members
would have staggered iiutial term lengths, past or current AAB meinbers would be eligible and
the terin liinits would begin at the initial appointinent on the DAEB.
Advantage of tlus type of stnicture included (1) stability in the form of continuity during the
changes with staff and Council; (21) aviation eYperience with contacts witlun the aviation industry
and (3) livint-1, archives with information on historical actions and outcomes. The mission of the
DAEB would be to continue to worlc with the EDPB on inarlceting the airport and inaintain and
increase the cash flow of the Airport. The end result would be four uiuts worlcing together as a
partnerslup to provide an eYCellent opportuiuty to build on the great lustory of the Denton
Airport while inaxiinizing the eleinents of citizen involveinent.
Council Member Gregory stated that he did not see any suggestion on the memberslup of the
Board. He questioned if the proposal had any restrictions on board meinbers in terms of those
who own hangers or businesses at the Airport.
Smith stated that there would be the same vetting of candidates as was currently done. The City
Attorney provided iiiformation on conflicts of interest. It would be up to Council on the final
say. He did not feel ownership of a hanger should not disqualify soineone froin the Board as the
person owning a business or home in Denton was not disqualified from other boards. The issues
loolced after the best interest of the City and if there was a conflict, a Board meinber must abstain
from the issue. The current AAB had relatively little problems with that happeiung.
Council Member Gre~ory aslced about term limits. Council had recently completed a handboolc
for all boards and commission and one recommendation was that all boards and commissions
have three ? year terms. He questioned if Smith was suggesting that the AAB not have term
limits.
Smith replied that the AAB would have term limits similar to the EDPB wluch he thought was
three four year terms. However, he would be comfortable with limits similar to the Council's.
Council Member ILin~ asked if anyone currently servin~ would be subject to term limits.
Smith stated that he was termed out. If the Council chose to lceep the AAB as it was now, the
regular term limits would apply. If the Council re-established a new board, the new board would
start with a clean slate.
Mayor Burroughs aslced Smith if he had a problein with a Council subcommittee worlcing with
the ne~otiation of leases and miscellaneous other items.
Smith saw no problein with that.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 5
Mayor Burrou~hs stated that the difference would be that the Council committee would have
more direct role in lease options, etc.
Smith felt that a three member committee would improve the process rather than the opposite.
Mayor Burroughs stated that the EDPB concept was limited to a couple of topics such as
marketing and incentives.
Smith felt that was also a good idea.
Mayor Burroughs stated that the marlceting direction was a part of the enterprise fund. Those
were the two items being discussed at this meeting. The other area was the operations and safety
issues and input for those two iteins which was a lot of what the AAB did at this tiine. Staff
recommended terming it a stalceholder operation with a possible different stnicture. The
functionality was safety and operations and malcing recommendations and hearing suggestions.
He felt there was no problem from Council for a safety and operations stakeholders group. The
issue was the stnicture to (-,yet there to allow as much input as possible with less political
influence and more input from more people. If the stnicture allowed individuals to participate
without conflict of interest, more iiiformation could be provided.
Smith stated that those functions were taking place right now. There currently was a Safety
Committee that reviewed problems and solved them right away. The stalceholders
commuiucated with individual AAB meinbers and attended their meetings. The lines of
communication were there ri~ht now as well as the functions.
Council Member Watts stated that Council was considering the governance stnicture of the
Airport. A consideration was where the proposal from the AAB fit into that stnicture. The
recommendations from the AAB would fit more in the governance issue than safety and
operations issue.
Mayor Burroughs suggested considering a hybrid of the proposal later in the operations and
safety stnicture but he was not sure that was what the AAB wanted.
Smith felt that the direction of the discussion was going towards the safety issue. Safety was
already being addressed and the staff proposal would just make the process more cumbersome.
Safety issues did not come to the full Board that often because they were solved before they got
to the Board. The safety meetings that were held took care of the issues before they got to the
full Board.
Council Member Watts questioned if Council approved the items on this agenda, would the
recoininendations froin the AAB be foreclosed.
Council Meinber Gregory felt if the council committee were approved and designated the taslc to
vet contracts for businesses and leases, then in some way it would affect the proposal from the
AAB as that function would be taken away from the AAB. If the Council approved the proposal
conceriung the EDPB, then the economic development responsibility of the AAB would also be
removed. He aslced how the staff safety committee currently operated.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 6
Quentin Hix, Airport Manager, stated that the safety committee representatives met with no
formal agenda or schedule but did meet routinely every ?-3 months to discuss the operations at
the Airport. Meinbers included airport staff, the tower manager, representatives from the fiYed
based operators, and constniction people if constniction was going on. There was no
formalization in terms of inembership.
Council Member Gregory asked if representatives from the AAB attended or were AAB
ineinbers notified about the ineetings.
HiY stated that no meinbers of the AAB were routinely notified of the meetings; however, the
AAB had eYpressed an interest to attend the meetings. liidividual members of the AAB were in
attendance but not in an official capacity.
Council Member Gregory asked if the meetings were held after a particular incident or in
anticipation of an event that would affect safety.
Hix stated that the meetings were to tallc about general safety issues, not specific items. They
were to stimulate commuiucations among various entities at the Airport.
Council Meinber Gregory aslced who would inalce a call regarding safety if there were
differences in opinions on how a matter would be handled.
HiY replied that there was always staff at the safety meetings. If there were differences of
opinion, staff would coordinate the response. If it needed to go further than that, it would go to
the AAB and from there to the Executive staff.
City Attorney Burgess stated that the draft resolution conceriung the council committee dealt
with the duties and purpose of the coininittee and addressed inatters of airport operations. If
Council wanted to go in a different direction, the resolution would need to be amended.
Mayor Pro Tem ILamp felt that she would lilce to see direction given to staff to loolc into a safety
committee as proposed by Council Member Engelbrecht. The stakeholders committee included
more involvement but did not include day to day operations. Day to day operations were not a
function of the Council or of the AAB. She suggested more formalization of the stalceholders
group so that it was not so loose and would include more involvement with people at the Airport
including the fixed based operators.
Council Meinber Gregory stated that the last discussion on these issues proposed establislung the
stalceholders group by resolution. He felt the safety committee could also be established with a
resolution indicatint', how stnictiLired it would be, how often it would meet, etc. The stalceholders
group would depend on the issues present and the nuinber of individuals involved. The chair of
the Council committee would attend those meeting to hear those discussions.
Mayor Burrou~hs stated that from a stnictural standpoint, he would like to vet out a discussion
whether there should be a separate stakeholders group versus a safety group, whether they be
subgroups of the same entity and function as that on an as needed basis. He questioned how
separate they needed to be and function as well as subgroups.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 7
City Manager Campbell stated that staff could think through the whole issue regarding the
concerns eYpressed and return to Council with more than one option for consideration.
Council Member Gregory stated that he would prefer making decisions on all of the issues at the
same time. He would like to do the issue of the EDPB and council committee at the same time
as the safety committee and stakeholders group. The individuals on the current AAB and current
members of Council were all interested in same tlung wluch was to have the Airport a successful
operation. He had tallced with inany tenants at the Airport who had indicated that they were
coinfortable with the EDPB suggestion. They had all indicated that they wanted a voice on how
tlungs would happen at the Airport. Council was not trying to talce away a voice at the Airport
but was trying to stnicture a way to malce that happen.
4. Receive a report, hold a discussion and give staff direction regarding the 35 Conferette
Concerts.
Mayor Pro Tem ILamp left the meeting with a conflict of interest.
Einerson Vorel, Director of Parlcs and Recreation, stated that this was the first tiine this event
was being hosted in the proposed fasluon. Many staff and different departments were involved
in the process and it was still a fluid event. The proposed ordinance allowed the Coiiferette to
close Hickory Street and associated side streets for 4 days. Hickory would be closed from 7:00
a.m. on Thursday, March lOth until midnight on Sunday, March 13th. There were many issues
involved in the proposed closing. There were new apartments on Oakland Street with Oakland
being a one way street northbound. The proposal would temporarily malce Oakland a two way
street to enter off Oakland and the north side of Hiclcory would be posted as no parlcing and a
tow away zone for the terin of event. Industrial Street would also be a no parlcing and tow away
zone. A second issue was the eYClusive use of the area for the four days. Fences would be
erected on Hickory from Locust down to Bell. A tlurd issue dealt with a noise eYCeption up to
95 decibels. Staff was recommending 75 decibels which was in keeping with other music
events.
Mayor Burroughs aslced what the decibels were at the Arts and Jazzfest.
Vorel stated it was at 75 decibels.
Council Meinber Gregory aslced what "eYClusive use" of the area involved.
Vorel stated that DCTA had rented parking lot space and that was where the buses were
eYChanged. DCTA felt that they were far enough long with the new site that they could move
the bus operations for that event and then lceep them at the new site after the event.
Council Member Gregory stated that if the area were fenced off and someone wanted to use any
of the businesses on Hiclcory, he/she would have to pay to go to the Coiiferette in order to get
into one of those businesses.
Vorel replied correct that anyone in the fenced off area would have to have a wrist band to get
into that area.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 8
Vorel stated that a fourth itein dealt with the sale and consuinption of alcohol on city property.
At tlus point, there was no contract for that. If it happened, the contract would have to be
approved by Council on the March lst agenda. lii order for that to happen, the orgaiuzers would
have to have all of their information completed by 3:00 p.m. on Friday so it could be posted in
the agenda. He indicated that a street closure request had been submitted with a number of
signatures of people in area who agreed with the closure of the street.
Council Meinber Watts aslced if Austin Street would be closed at Oalc or at Hiclcory.
Vorel indicated that he was not sure yet, that he had seen a couple of different maps. He felt that
some barricades would require staffing to allow some access for deliveries and band equipment
to get into the area.
Council Meinber Watts questioned why there had to be four days of street closure. With an
estimated crowd of 5,000 people at the headliner event, how would that matiy people fit into that
area as the only large open space was the parlcing lot. Another question was the fiscal
information. He asked Vorel if it was correct that if the event organizers paid the required police
officers directly, the cost would be $17,300. If the officers were paid by the city, the cost would
be $25,300. If the officers were paid by the City, the City would not be reiinbursed.
Vorel replied that was correct.
Council Meinber Watts aslced if the orgaiuzers had aslced that it be paid by the City.
Vorel stated that the Conferette would pay for the necessary police officers.
Council Member Watts asked how the total costs for the Fire Department were determined in
terins of charging for ainbulances.
Brad Lahart, Denton Fire Department, stated that the cost was broken out in terms of overtime
costs.
Council Meinber Watts aslced if the ainbulances would be on standby for the entire event.
Lahart indicated that it would oiily be for the time the bands were on stage. The outside festival
ended at 10:00 p.m. and that would be when the coverage would end.
Council Meinber Watts aslced if the orgaiuzers would have to pay in advance or if they would be
invoiced.
City Manager Cainpbell stated that it was norinal to pay in advance.
Assistant City Manager Greene stated that there had been no decision at tlus time whether to pay
in advance or be invoiced.
Council Meinber Watts aslced what department loolced at pedestrian control for the area and how
many people could safely fit in that area.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 9
Lahart stated that they had loolced at the total square footage of the fenced area in terins of the
total number per persons. A required fire lane would also have to be dedicated.
Council Member Watts questioned who would be responsible for cleanup after the event.
Vorel stated that the Coiiferette would be responsible and the agreement indicated that the area
would be cleaned.
Council Meinber Engelbrecht stated that the business signature sheet only said the property
owners needed to be told of street closure. It did not indicate that the businesses laiew that there
would be no business traffic uiiless someone paid to get in.
Vorel stated that he did not lcnow what inforination was shared. Early discussions had tallced
about compensating businesses that would lose business during the nin of the event.
Council Member En(Yelbrecht aslced if the barricades could be nin alon-, the curbs so the
sidewallcs would stay open.
Vorel assumed that would not happen as tlus was a wrist band event and having the barricades
on the sidewallcs would allow for potential openings for people to get into the event without
paying.
Council Meinber Gregory aslced if the residents in the area had been contacted about the level of
the music.
Jaiue McLeod, Special Events Coordinator, stated that the residents in the towiiliomes had been
contacted as well as the businesses on liidustrial. The businesses on Russell Street would be
using the baclc doors of the businesses and not the front doors for those people who were not
attending the event.
Council Meinber Watts questioned where people would parlc.
McLeod stated that they had such a discussion and comments were made that it would be similar
to Jazzfest where patrons had to find places to parlc.
Council Meinber Watts aslced about the storytelling festival.
McLeod stated that it would be inside tlus year.
5. Receive a report, hold a discussion, and give staff direction on the City of Denton's
P.L.U.S. One program.
Mayor Pro Tem ILamp returned to the meeting.
Ethan Cox, Customer Service Manager, presented background information on the program. Plus
One was a donation program that assisted customers stni ggling to pay their utility bill due to a
recent financial crisis. Customers could donate either by incorporating a recurring donation into
City of Denton City Council Minutes
Febniary 15, 20 11
Page 10
their utility bill or malcin~ a one-time donation with the utility payment. Once collected the
funds were admiiustered by liiterfaith Miiustries. To request assistance customers contacted
liiterfaith Miiustries and applied for funds. If eligible, liiterfaith Miiustries pledged a payment on
the customer's behalf. Qualifying customers could receive funds once per year. Funds from the
prograin were applied to past due balances. Customer eligibility was based on (1) documented
household income and eYpenses with proof of a financial crisis; (2) disabled, elderly or persons
on a fiYed income; and (3) priority was given to homes with young cluldren or family members
on life support.
The estimated demand for qualified customers included $56,834 among 362 families in 2009
with 260 requests deiued due to lack of funding; $81,900 among 455 families were estimated for
2010 with 360 requests declined due to funding. Donations to Plus One program averaged
$15,745 for the last 5 fiscal years with donations not exceeding $19,500 in any year. Staff had
worked on a marketing campaign to boost donations to program.
The staff recoininendation was to allocate a portion of the revenues received froin the $20 late
payinent fee to the Plus One prograin. Interfaith Ministries estiinated that $75,000 in additional
funding would be required to meet the 2011 demand. That amount would assist 450-500
families with average bills from $180-200. Future allocations may fluctuate based on demand.
There would also be an additional annual allocation of $10,000 for resources and capitaL If
Council agreed with the proposed strategy, it would be presented to the Public Utility Board on
Febniary ?gti' and for Council approval on March 1't.
Mayor Burroughs asked about the effect of the additional late fee.
CoY replied that in January there was a 10% reduction in late fees.
Mayor Burroughs questioned why staff was requested only $75,000 and not the amount needed
to meet the applicants.
CoY stated that the intent was to meet the demand and $75,000 was what was eYpected for 2011.
Staff would revisit the issue each year to determine if more allocation was needed or less if it had
not been totally used the prior year. Each year they would loolc at the trend and the allocation for
that year.
Council Meinber Engelbrecht aslced if there was anything that could be done to help iinprove the
Plus One prograin. He noticed that the inforination on the prograin was on the bottoin baclc side
of the utility statement and questioned why it couldn't be put on the front.
Cox stated that the invoice had been recently redesigned and the Plan One inforination had been
on the front prior to that. He felt that efforts this year had outpaced previous years.
Consensus of the Council was to proceed as proposed.
1. Closed Meeting:
City of Denton City Council Minutes
Febniary 15, 20 11
Page 11
A. Deliberations regarding Real Property - Under Texas Governinent Code Section
551.072 and Econoinic Developinent Negotiations - Under Texas Governinent Code
Section 551.087.
1. Receive a report and hold a discussion regarding an economic development
prospect for a hotel and conference center to include discussion of the
leasin~ of land and financin~ of such facility. The discussion shall include
financial iiiformation the City Council will review, including the offer of
financial or other incentives.
B. Consultation with Attorney - Under Texas Government Code Section 551.071;
Deliberations regarding Real Property - Under Texas Government Code Section
551.07?.
1. Receive a report and hold a discussion with the City's attorneys regarding
legal issues associated with real property interests located in the Hiram Sisco
Survey, Abstract No. 1184, City of Denton, Denton County, Texas (the
"Property" ) and actions of the City of Denton related to the value and sale of
the Property. The duty of the City's attorneys to the City of Denton under
the Texas Disciplinary Rules of Professional Conduct of the State Bar of
Texas clearly conflicts with the provisions of the Texas Open Meetings Act,
Chapter 551 of the TeYas Government Code in tlus matter. Also hold a
discussion to deliberate the purchase, exchange, lease or value of the
Property. A discussion of these inatters in an open ineeting would have a
detrimental effect on the position of the City of Denton in negotiations with
the tlurd party.
C. Consultation with Attorney - Under Texas Government Code Section 551.071;
Deliberations regarding Econoinic Developinent Negotiations - Under Texas
Goveriunent Code Section 551.087.
1. Receive a report and hold a discussion regarding legal issues related to
economic development incentives in which the duty of the attorney to the
City of Denton under the Texas Disciplinary Rules of Professional Conduct
of the State Bar of TeYas clearly conflicts with the provisions of the TeYas
Open Meetings Act, Chapter 551 of the TeYas Government Code. Also hold
a discussion re~-,ardin-, economic development incentives and the discussion
shall include commercial information the City Council has received from the
candidate wluch the City Council seelcs to have locate, stay, or eYpand in or
near the territory of the City, and with wluch the City Council is conducting
economic development negotiations and to deliberate the offer of a financial
or other incentive to such candidate.
D. Deliberations regarding Real Property - Under TeYas Goveriunent Code Section
551.0722; Consultation with Attorneys - Under TeYas Government Code Section
551.071.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 1?
1. Discuss, deliberate, and receive iiiformation from Staff and provide Staff
with direction pertainint', to the acquisition or the condemnation of fee
simple tracts, permanent drainage easement tracts and temporary
constniction easement tracts for the Maylull Road Wideiung and
linprovements project, the limits of wluch generally being between the
intersection of Mayhill Road and Interstate Highway 35 East and the
intersection of Mayhill Road and U.S. Highway 380, affecting real property
tracts in the M. Forrest Survey, Abstract No. 417, the D. Hough Survey,
Abstract No. 646, the M.E.P. & P.R.R. Surveys, Abstract Nos. 927, 950 and
1469, the D. Lambert Survey, Abstract No. 784, the G. Wallcer Survey,
Abstract 1330, and the J. Brandon Survey, Abstract No. 1515, in the City
and County of Denton, TeYas. Consultation with the City's attorneys
regarding legal issues associated with the acquisition or condemnation of the
tracts referenced above where a public discussion of these legal inatters
would conflict with the duty of the City's attorneys to the Denton City
Council under the TeYas Rules of Disciplinary Conduct of the State Bar of
TeYas, or would jeopardize the City's legal position in any admiiustrative
proceedin~s or potential liti~ation.
E. Deliberation regarding Personnel Matters - Under Texas Governinent Code Section
551.074.
L Consider and discuss an appointment to the Zoiung Board of Adjustment
and two alternate appointinents to the Denton County Transportation
Authority.
F. Consultation with Attorneys - Under TeYas Goveriunent Code Section 551.071.
L Consult with City's attorneys regarding the status and potential settlement of
pending litigation styled Delarosa, et al. v. City of Denton, Cause No. CV-
2009-02751, currently pending in the County Court at Law 42, Denton
C OLillty.
G. Certain Public Power Utilities: Competitive Matters - Under TeYas Goveriunent
Code, Sec. 551.086; and Consultation with Attorneys - Under Texas Governinent
Code Sec. 551.071.
1. Receive a presentation from Staff regarding present Denton Muiucipal
Electric utility competitive and financial issues; and receive a briefing from
and a consultation with the City's attorneys regarding proposed Texas
le,,islation dealint', with municipally-owned electric utilities; and discuss,
deliberate and provide the City's attorneys with direction and any
recommendations regarding such legal issues. A public discussion of tlus
legal matter would conflict with the duty of the City's Attorneys to the City
Council under the Texas Disciplinary Rules of Professional Conduct of the
State Bar of TeYas.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 13
Regular Meeting of the City of Denton City Council at 6:30 p.in. in the Council Chainbers at
City Hall, 2115 E. McILinney Street, Denton, TeYas.
1. PLEDGE OF ALLEGIANCE
The Council and ineinbers of the audience recited the Pledge of Allegiance to the U. S. and
TeYas flags.
2. PROCLAMATIONS/PRESENTATIONS
A. Proclainations/Awards
1. Denton Fainily Unity Weelc
Mayor Burroughs presented the proclamation to Jaiue McLeod.
2. Presentation by Carter Blood Care of Four Seasons Award
Linda Sarvis presented the award in recogiution of the City's participation in the Carter Blood
Care drives.
3. Presentation by Carter Blood Care of Top Perforiner Award
Linda Sarvis presented the Top Performer Award to ILari Zilca for her worlc on the blood drives.
4. Presentation of Einpowering Excellence Award
ILevin Gunn, Director of Technology Services, presented the award to the Mayor for the use of
electroiuc records tecluiology.
5. Severe Weather Awareness Weelc
Mayor Burroughs presented the proclamation to Michael Penaluna for Severe Weather
Awareness Weelc.
3. CITIZEN REPORTS
A. Review of procedures for addressing the City Council.
B. Receive citizen reports from the following:
1. Bob Clifton regarding City employees.
Mr. Clifton was not present at the ineeting.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 14
4. CONSENT AGENDA
Mayor Burroughs indicated that Item J and IL would be pulled for separate consideration.
Mayor Pro Tem ILamp asked that Item H also be pulled for separate consideration.
Council Meinber ILing motioned, Council Meinber Gregory seconded to approve the Consent
Agenda and accompanying ordinances and resolutions with the eYCeption of Items H, J, and K.
On roll call vote, Council Meinber ILing "aye", Council Meinber Watts "aye", Council Meinber
Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro Tem ILainp "aye", and Mayor
Burroughs "aye". Motion carried unanimously.
Ordinance No. 2011-020
A. Consider adoption of an ordinance ordering an election to be held in the City of Denton,
Texas, on May 14, 2011, and if a ninoff election is required, on June 18, 2011, for the
purpose of electing Council Members to District 1, 3, and 4 of the City Council of the
City of Denton, TeYas; prescribing the time and maiuier of the conduct of the election to be
in accordance with an agreement with the Elections Administrator of Denton County;
providing a severability clause; providing an open meetings clause; and providing for an
effective date.
Ordinance No. 2011-021
B. Consider the adoption of an ordinance of the City of Denton, Texas to declare the intent to
reimburse eYpenditures from the uiireserved fund balance of the General Fund with
Certificates of Obligation with an aggregate maYimum principal amount equal to
$1,500,000 for fundinc, facility HVAC and roof replacements for municipal facilities, and
providing an effective date.
Ordinance No. 2 011-0?2
C. Consider adoption of an ordinance accepting competitive bids and awarding an aiuiual
contract for the Purchase of Ready Mix Concrete, Cement and Bullc Lime products for
various City departments; providing for the expenditure of funds therefor; and providing an
effective date (Bid 4647-Aiuiual Contract for Ready MiY Concrete, Cement and Bullc Lime
awarded to the lowest responsible bidder for each item as shown on EYlubit A in the aiuiual
estiinated ainount of $250,000).
Ordinance No. 2011-023
D. Consider adoption of an ordinance authorizing the City Manager to eYecute Change Order
Nuinber One to the contract between the City of Denton and National Wholesale Supply;
providing for the expenditure of funds therefor; and providing an effective date (Bid 4592-
Miscellaneous Water Material For Masch Branch Road Change Order Nuinber Two in the
amount of $2,048 for a total contract award of $10?,047.66).
Ordinance No. 2011-024
E. Consider adoption of an ordinance acceptin(y competitive bids and awarding a public worlcs
contract for the Installation of a Drainage Basin including a Wash Water Recycling Tanlc
City of Denton City Council Minutes
Febniary 15, 20 11
Page 15
for the City of Denton Landfill Tnick Wash; providing for the expenditure of funds
therefor; and providing an effective date (Bid 4616-awarded to the lowest responsible
bidder meeting specification, Caliber Constniction, liic., in the amount of $445,724). The
Public Utilities Board recommends approval (5-0).
Ordinance No. 2011-025
F. Consider adoption of an ordinance acceptin(y competitive bids and awarding a public worlcs
contract for the liistallation of an Ultraviolet Light Disiiifection System at the City of
Denton Waterworlcs Parlc; providing for the eYpenditure of funds therefor; and providing an
effective date (Bid 4621-awarded to the lowest responsible bidder ineeting specification,
Sunbelt Pools, inc. in the amount of $102,550).
Aaaroved the noise eYCeation below.
G. Consider a request for an eYCeption to the Noise Ordinance for amplified sound for a
fundraiser, Ride for Reid, to be held at the North Texas Fairgrounds on March 19, 2011.
The exception is for an extension of hours for ainplified sound froin 10:00 p.in. to 12:00
a.m.
Ordinance No. 2011-026
L Consider adoption of an ordinance authorizing the City Manager or his designee to execute
an Agreeinent to Purchase Real Property ("Agreeinent" by and between the City of
Denton, TeYas and Denton County Transportation Authority ("DCTA"), a Coordinated
County Transportation Authority under Chapter 460 of the Texas Transportation Code, a
conteinplating (i) the sale and purchase of approxiinately 1.61 acres of real property in the
Hiram Sisco Survey, Abstract No. 1184, City of Denton, Denton County, TeYas ("Real
Property" for public purposes, being located adjacent to the Dallas Area Rapid Transit Rail
between Hickory Street and Prairie Street, and being a portion of the lands conveyed to the
City of Denton by Union Pacific Railroad Company, by Deed recorded in Volume 4962,
Page 02851, Real Property Records, Denton County, TeYas; (ii) the eYecution and delivery
of a Street Use License to Use Certain City Property for Rail Crossing Purposes related to
DCTA's use of Sycamore Street in the vicinity of the Real Property; and (iii) the execution
and delivery of an Assigninent and Assuinption Agreeinent, assigning that certain lease,
dated on or about Septeinber 25, 2001, by and between Uiuon Pacific Railroad Company
and Triiuty liidustries, liic.; authorizing the City Manager, or lus designee, to eYecute and
deliver any and all deeds, licenses, assigninents and any other docuinents necessary to
accomplish closing of the transactions contemplated by the Agreement; authorizing the
eYpenditure of funds therefore; and providing an effective date.
Item H was considered.
Resolution No. R2011-002
H. Consider approval of a resolution of the City Council of the City of Denton, TeYas,
appointing first and second alternates to the Board of Directors of the Denton County
Transportation Authority; providing a repealer; and providing an effective date.
Mayor Pro Tem ILainp presented the naines of Richard Moore as First Alternate and Riclc
Woolfollc as Second Alternate.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 16
Mayor Pro Tem ILamp motioned, Council Member Gregory seconded to approve the resolution
with the names of Richard Moore for First Alternate and Rick Woolfollc as Second Alternate.
On roll call vote, Council Meinber ILing "aye", Council Meinber Watts "aye", Council Meinber
Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro Tem ILainp "aye", and Mayor
Burroughs "aye". Motion carried unanimously.
Item J was considered.
J. Consider adoption of an ordinance ainending Ordinance No. 2003-258 relating to the
Economic Development Partnerslup Board ("The Board" ) to add to the memberslup of the
Board and to eYpand the duties of the Board to include branding and marlceting for the
Denton Municipal Airport in support of the Denton Airport 2010 Business Plan and to
further include duties related to Airport economic development incentives; repealin"; all
conflicting ordinances and portions thereof; and providing an effective date.
Mayor Burroughs indicated there were Spealcer Cards for Iteins J and K.
The following individuals spolce on Items J and IL:
Jim Clark, 1220 Tulane, Denton, 76201 - spoke in opposition to both proposals
Riclc Woolfollc, 115 W. College, Denton, 76201 - spolce in opposition to Iteins J and K.
Bill Schofield, ?224 Hollylull, Denton, 76?05 - spolce in opposition to Items J and K.
Mayor Burroughs felt that where staff and the citizens currently were stnicturally as far as
inanageinent of the Airport and goals for the Airport was not as far apart as had been indicated.
Basically the Council was the final authority for Airport issues on how best to vet items before
they came to the Council. The Enterprise Fund focused the Airport as an economically
standalone entity. Decisions regarding the Airport could be uncomfortable if a member of the
Board owned property at the Airport and might directly benefit at the Airport. The focus of the
Council was to have an identification of best economic decision malcing from an enterprise
standpoint. Tlus item dealt with incentives, the proposing of incentives, marlceting and branding
of the Airport. The Econoinic Developinent Partnership Board (EDPB) would be expanded to
add members who were airport related. Item IL dealt with a council subcommittee with the
Council the final authority under any circumstance. Lease disputes and contractual terms would
be vetted through the council subcommittee. A negotiation problem would go to that committee.
The real issue was the reinaining duties of operations and safety. A review and input of those
issues, inalcing recoininendations and visioning on those issues were in a taslc force/stalceholders
group wluch was not before Council at tlus time. That was the critical group and staff was still
worlcing on the stnicture of that group. He did not have a problem with the subcommittee
focusing on the areas inentioned or with the EDPB charged with the two priinary areas of that
focus. Those two areas were not talcing anything away froin citizen input. The last eleinent
needed to be stnicttired properly to encompass the Airport Advisory Board's (AAB) view points.
Council Member En~elbrecht indicated that Item J would do some of the AAB duties which
would be established by ordinance or resolution. He questioned if that would require dissolution
of the AAB.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 17
City Attorney Burgess indicated that the ordinance did have a repealer provision that would
eliminate the AAB. Approving the proposed ordinance would talce that action.
Council Meinber Watts felt that based on the Worlc Session discussion and based on the Mayor's
comments, the economic development function was a new function. If that was going to be
done, it should be comprehensive. If the safety and stakeholder components were critical
portions of the process, he was uncoinfortable voting on two coinponents and leaving the inost
critical component undone. He needed a clear picture of what all components would loolc lilce.
He felt that the item should be postponed to the March 1't agenda to complete the process on the
other committees.
Council Member Watts motioned, Council Member Gregory seconded to postpone the item to
the March 1, 20 11 agenda. On roll call vote, Council Meinber ILing "aye", Council Meinber
Watts "aye", Council Meinber Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro
Tem ILainp "aye", and Mayor Burroughs "aye". Motion carried unaniinously.
IL. Consider approval of a resolution amending Resolution No. R2009-015 to establish a
standing committee of the City Council of the City of Denton, TeYas to be laiown as the
City Council Airport Committee to advise and assist the City Council regarding City of
Denton Municipal Airport Matters; alternatively assigning such duties to an existing City
Council committee; and providin~ for an effective date.
Council Member Watts motioned, Mayor Pro Tem ILamp seconded to postpone the item to the
March 1, 2011 agenda. On roll call vote, Council Meinber ILing "aye", Council Meinber Watts
"aye", Council Meinber Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro Tein
ILamp "aye", and Mayor Burroughs "aye". Motion carried unaiumously.
5. ITEMS FOR INDIVIDUAL CONSIDERATION
Ordinance No. 2011-027
A. Consider adoption of an ordinance to allow eYClusive use of City property for an
event at Williams Trade Square and Hickory Street between Locust Street and Bell
Avenue for the sale and consumption of alcohol on City property contingent on a
fully executed contract with an approved vendor; for an exception to the Noise
Ordinance to have increase in decibel level to 75 decibels and for amplified sound
on Sunday; and for the street closures to traffic begiiuung at 7:00 a.m. on Thursday,
March 10, 2011, and concluding at 12:00 inidnight on Sunday, March 13, 2011; and
providing for an effective date. Staff recommends approval of the requests pending
completion of items by dates set by City ordinances as listed on EYlubit ?"Schedule
of Project" wluch was provided to event orgaiuzers on January 24, 2011.
Mayor Pro Tem ILamp left the meeting with a conflict of interest.
Emerson Vorel, Director of Parlcs and Recreation, stated that the proposed ordinance was for an
event scheduled for March 10-13, ?O11 and included four major items.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 18
The first item involved the closure of Hickory Street for the four days of the event for vehicular
traffic. The proposal was to fence off a large area in the downtown area wluch included all of
Hickory from Bell to Locust. That would encompass a portion of the Williams Trade Square
parlcing lot. Oakland Street was currently a one way street and it was proposed to teinporarily
change Oakland to a two way street. Parlcing would be suspended on the west side to inalce the
two way traffic pattern. The Police Department would post the north side of Hiclcory as no
parlcing and a tow zone. The west side of liidustrial would also be posted no parlcing and a tow
away zone.
The second item involved granting eYClusive use of the area for the four day event. The area
would be closed to velucular traffic for the total time of the event. When the bands were not
playing on the stages, those areas would be open to pedestrian traffic. The intent was to have
three stage areas fenced and during music and performances a wrist band would be required to be
inside the area.
The third item dealt with a noise exception to raise the decibel level to 95 and have amplified
sound on Sunday. The staff recommendation was to 75 decibels in keeping with other events
held in the City.
The fourth item was the sale and consumption of alcohol on city property. That would require a
license by TABC At this tiine, there was no vendor. If the organizers could identify one, the
paper work would need to be turned in at the end of tlus week for Council consideration on
March lst. Also, the DCTA transit area would move to the new transit station and would remain
there after the event.
Council Meinber Watts aslced about the south side of Hiclcory for a tow away zone.
Roger White, Denton Police Departinent, stated that a tow away zone was needed to help lceep
cars out of the area.
Council Meinber Watts questioned why there would not be towing on the south side.
Jaines Brett, Police Operations, stated that towing would be needed on both sides of the street.
Council Meinber Watts aslced if it would be the same for Oakland Street with a fenced in area
and towing.
Wlute replied correct.
Council Member Watts asked about a 95 decibel equivalent.
Vorel stated that it would be similar to a subway train at 200 feet. Ninety decibels would be
similar to a train wlustle at 95 feet. A sustained eYposure to 90-95 decibels would produce a
hearing loss.
Council Meinber Watts questioned why not bloclc off Austin Street at Hiclcory instead of malcing
Oakland a two way street.
City of Denton City Council Minutes
Febniary 15, 20 11
Page 19
Vorel stated that the established businesses in the area had deliveries to the rear of their stores
and leaving Austin Street open would provide access to the businesses during the event. A
concern had been eYpressed since the Worlc Session that the semi-tniclcs pulling in for deliveries
might not be able to get out after their deliveries.
Council Meinber Watts raised a question about insurance.
Vorel stated that insurance was required but he had not seen it yet.
Council Meinber Watts aslced if the stage on the Courthouse lawn was open to the public.
Vorel stated correct pending approval by Commissioners Court.
Council Member Watts stated that there were still outstanding items and questioned what would
happen if those items were not provided by the times indicated.
Vorel stated that would depend on which itein was outstanding. For exainple, if the insurance
was not provided, the orgaiuzers would not be allowed to close the street and could not hold the
event. If not all of the iiiformation were provided for the safety plans, there could not be any set
ups.
Council Meinber Gregory aslced about the fencing area at the Williams Trade Square parlcing lot
in terms of the Wells Fargo Banlc spaces.
Vorel stated that those parlcing spaces would have to be open Thursday and Friday for the banlc
customers.
Council Meinber Gregory aslced if the barricades would be inoved baclc so people could have
access to that area of the parlcing lot.
Vorel stated that was a part of a later concept. Another discussion was when the banlc closed, the
barricades would encompass all of the parlcin~ lot.
Council Meinber Gregory aslced about vendors and vendor booths in the enclosed area. He
questioned if there would be booths with vendors or booths for tobacco compaiues sponsoring
the event with free products.
Vorel stated that the plan submitted by the orgaiuzers showed vendor booths. Last year there was
one issue of setting up of a tobacco tent on city property.
Council Member Gregory asked about vendor fees for the booths.
Vorel stated that vendor permits were oiily required when on parlc property. Wlule tlus area was
city property, it was not on parlc property.
Mayor Burroughs indicated that Speaker Cards had been submitted for tlus item.
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?0
Chris Flemmons, 1322 Egan, Denton, 76201, stated that this festival in March would be more
hassle free and an alternate to the upcoming festival in Austin. The growth of the event had been
aggressive. Last year the event had been moved to the North TeYas State Fairgrounds but tlus
year they wanted to inove it baclc to the downtown area.
Council Meinber Gregory stated that he was aslcing lots of questions because he feared that if the
event was not done right, it would be the last time it was done. There were oiily 23 days left
before the event and he questioned if there was a Plan B ready if Council did not approve the
proposal.
Flemmons stated that they would have a Plan B if needed.
Council Meinber Gregory felt that a 95 decibel level was not going to happen. He aslced if that
would niin the program if it were down to 75 decibels.
Flemmons stated that last year there had been a conflict with 75 decibels at the Fairgrounds due
to a question on where the sound was being measured from. If the sound were measured from
the perimeter, 75 decibels would be olc.
Council Member Gregory asked about the vendors.
Flemmons stated that there were no specific locations determined at tlus point but that there
would probably be about 10 booths and no outside food sales. The barricades would be maiuied
24/7 for trash pickup and vendors.
Council Meinber Gregory aslced how a person would get to one of the businesses on Hiclcory
Street such as the small engine place if he did not want to park far away to get lus equipment to
the business.
ILen Leathers, event orgaiuzer, stated that there would be people at the barricades to help people
get into the businesses. They had also worlced out details with the homeowners association of
the condos in the area.
Council Meinber Watts indicated that there was a schedule in their agenda baclciip that indicated
outstanding issues and documentation. He questioned if the orgaiuzers were coiif'ident that they
would be able to meet the schedule.
Flemmons replied that they would be able to meet those requirements.
Council Member Watts asked about public safety measures.
Leathers indicated that they were worlcing with the Denton Police Department and had used that
iiiformation to bid for a private security company. That firin would be worlcing with the Denton
Police Department to coordinate what would be needed for public safety.
Council Member Watts questioned if there would be a strong Denton Police Department
presence even with the private security persoiuiel.
City of Denton City Council Minutes
Febniary 15, 20 11
Page ? 1
Leathers stated that the event would be inanned by security personnel 24/7 to worlc and
commuiucate with the Denton police.
Council Meinber Engelbrecht stated that the petition notifying the area property owners of the
street closure did not include the fact that there would also be no pedestrian traffic other than
people attending the event. He questioned if that had been eYplained to the property owners.
Wallace Cainpbell, Director of Operations, stated that it had been explained that the streets
would be closed but the barricades would be manned for deliveries.
Council Meinber Engelbrecht aslced if the property owners understood that there would be no
foot traffic during music sessions.
Campbell stated that they understood that.
Council Member Gregory asked if there would be video screens for presentations during the
perforinances.
Campbell stated that there would be one at the stage in the Williams Trade Square.
Council Member Gregory stated that he understood there had been a number of complaints with
the Coiiferette in Fairbanlcs conceriung what was shown on the screens.
Cainpbell stated that the screen would show the bands during their perforinances.
Council Member ILing motioned, Council Member Engelbrecht seconded to approve with the 75
decibel level.
Council Member Gregory asked for a friendly amendment to ensure that Austin Street would not
be barricaded.
Campbell showed the entrance to the festival with the entrance past Austin Street which would
be a problem for safety.
Leathers indicated that they had a discussion with the Police Department and there was a public
safety concern if Austin were not closed. If the entrance gate were moved, people would be
standing in traffic waiting to get into the event area.
Council Member Gregory stated that he would defer to the Police Department on how to move
traffic and withdrew his suggestion.
Council Member Watts asked if the motion was contingent upon the orgaiuzers meeting the
schedule and necessary requirements as presented in their baclaip materials.
Mayor Burroughs asked if the Council approved the proposal as presented and if one element
was not satisfied, would the City be able to shut down the event.
City of Denton City Council Minutes
Febniary 15, 20 11
Page
City Attorney Burgess stated that if Council was concerned about that possibility, a motion could
include a contingency to meet those requirements so that the lughest level had acted to approve
the proposal with the discretion to staff to take some action.
Mayor Burroughs aslced about the direction for staff to terininate the event if the health and
safety measures were not accomplished.
Council discussed possible terminolo~y to deal with the possibility of the or~anizers not
completin~ all of the requirements in the allotted time frame.
City Attorney Burgess stated that her preference would be to make a motion contingent at
meeting all health and safety issues.
Council Meinber ILing motioned to adopt the ordinance with the latitude of staff to ensure that
the safety and health issues are addressed by the Coiiferette. Council Member Engelbrecht was
in a,,reement of the wordint', with his second. On roll call vote, Council Member ILincl, "aye",
Council Member Gregory "aye", Council Member Engelbrecht "aye", and Mayor Burroughs
"aye". Council Meinber Watts "nay". Motion carried with a 5-1 vote.
Mayor Pro Tem ILainp returned to the ineeting.
B. Continue consideration of adoption of an ordinance of the City of Denton, Texas,
providing for a zoiung change from a Neighborhood Residential 3(NR-3 ) zoiung
district classification and use desi~nation to a Nei~hborhood Residential Mixed Use
12 (NRMCJ-12) zonin~ district classification and use desi~nation, with an overlay
district, on 6.836 acres of land located at the northeast corner of Glenwood Lane and
East Uiuversity Drive (U.S. 380), situated witlun the J.Q. Lilly Survey, Abstract No.
762, within the City of Denton, Denton County, Texas; providing for a penalty in the
maximum amount of $2,000.00 for violations thereof, severability and an effective
date. (Z10-0007, 1411 E. Uiuversity Drive) The Plaiuung and Zoiung Commission
recommends approval with an overlay district (3-2). DLTE TO MORE THAN 20%
OPPOSITION FROM THE LAND AREA WITHIN 200 FEET OF THE REQUEST,
A SUPERMAJORITY VOTE BY COUNCIL IS REQUIRED FOR APPROVAL.
City Manger Campbell indicated that the applicant had asked to have tlus item continued to the
March 1, 20 11 meeting.
Council Member ILing motioned, Council Member Engelbrecht seconded to continue the item to
the March 1, 2011 meeting. On roll call vote, Council Meinber ILing "aye", Council Meinber
Watts "aye", Council Meinber Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro
Tem ILainp "aye", and Mayor Burroughs "aye". Motion carried unaniinously.
C Consider nominations/appointments to the following boards and commissions:
L Commuiuty Development Advisory Board
2. Human Services Advisory Committee
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?3
3. Public Art Coininittee
4. Traffic Safety Commission
5. Zoiung Board of Adjustment
6. Downtown Denton Tax Increinent Financing Reinvestinent Zone Board
Mayor Pro Tem ILamp nominated the following to the Downtown Denton TaY liicrement
Financing Reinvestment Zone Board: Bob Moses and Virgil Strange in the property owner
category; Marty Rivers and Hanlc Diclcinson in the Chainber of Coininerce category; and Harold
Strong in the at-large category.
Mayor Burroughs stated that there were two positions on the board for council members.
Council Meinber Watts aslced about a policy of serving on inore than one advisory board or
commission.
City Attorney Burgess stated that this would be an advisory board and there was nothing in law
or ordinance that would prohibit an individual froin serving on two advisory boards
Mayor Burroughs asked for interested persons from Council to serve on the board.
Mayor Pro Tem ILainp and Council Meinber ILing expressed an interest in serving.
Mayor Pro Tem ILamp motioned, Council Member Gregory seconded to approve the
nominations as listed above. On roll call vote, Council Member ILin~ "aye", Council Member
Watts "aye", Council Meinber Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro
Tem ILamp "aye", and Mayor Burroughs "aye". Motion carried unaiumously.
6. PUBLIC HEARINGS
A. Hold a second public hearint', to consider the involuntary annexation and service
plan for approYimately 1,595 acres of land contained in three (3) areas located
witlun the City of Denton's Eztraterritorial (ETJ) Jurisdiction, in accordance with
Texas Local Government Code. The proposed annexation consists of three (3)
distinct areas under inultiple ownerships and of an approxiinate total of 1,595 acres.
The 3 areas are identified and generally located as follows:
1. DH-7: 143 acres, located east and north of Teasley Lane, south of Teasley
Harbor Subdivision and west of Southlalce Drive;
2. DH-9: 298 acres, located north of Pocknis Page Road, north, south and
northeast of Edwards Road; and
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?4
3. DH-12: 1,154 acres, located south of E. University Drive, east of N. Mayhill
Road, north and south of Blagg Road, north and south of Mills Road, east
and west of S. Triiuty Road.
Marlc Cunninghain, Director of Planning and Developinent, presented the details of the proposal,
indicating that this was the second public hearing on the proposal.
Overview/Baclcground - lii 21009, 18 potential aiuieYation areas were identified. Of the 18 areas,
all but three were exeinpted froin the 3-year annexation plan requireinents. The 15 areas that
were exeinpted froin the requireinent of the 3-year annexation plan were annexed on May 4,
2010 eYCept for properties that qualified for non-aiuieYation agreements. The areas to be
included in the proposed aiuieYation in terms of acres and parcels were reviewed.
Annexation plan process included (1) the adoption of a 3 year annexation plan, (2) providing
written notice of intent to aiuieY, (3) conducting an inventory of services and facilities, (4)
preparing a service plan for eYtension of full muiucipal services, (5) holding two public hearings,
(6) negotiating for the provision of services and (7) holding two readings of the annexation
ordinance. A Service Plan must be prepared that provided for full municipal services to the
aiuieYed areas. The City may provide the services by any of the methods by wluch it eYtended
services to other areas of the City. The City was not required to eztend services to a newly
annexed area prior to the extension of services to existing siinilar areas. The City was not
required to provide a uniforin level of full inunicipal services to each area annexed if different
characteristics of topography, land use and population density constituted a sufficient basis for
providing different levels of service. Staff was recommending the same Service Plan for the
three-year annexation areas that was prepared and adopted for the other 15 recently annexed
exeinpted areas.
Elements of the Service Plan -(1) Fire - would be provided at a level consistent with current
inethods and procedures consistent with those services provided to other areas of the city
includint', fire suppression, pre-hospital medical services, hazardous materials response,
emergency prevention, tecluucal rescue response and constniction plan review. (2) EMS -
included emergency medical dispatch, pre-hospital emergency advanced life support and medical
rescue services. (3) Solid Waste - solid waste and recyclint" services would be made available
immediately upon the effective date of annexation with private collection services continuing up
to two years after the aiuieYation. (4) Parlcs and Recreation - the aiuieYed areas would be able to
utilize all eYisting parlc and recreation facilities on the effective date of the aiuieYation. (5)
Streets - emergency street maintenance would be provided on the effective date of the
annexation, routine maintenance would be provided consistent with current policies of the City,
and roadway signage would be provided in priority of importance starting with emergencies. (6)
Water - coiuiection to eYisting city water in accordance with eYisting city policies would be
available at the established rates. As new developinent occurred in the annexed areas, the
extension of water would be consistent with city policies. Water service capacity would be
provided consistent with the same fasluon in the current city limits. EYisting developments,
businesses or homes on individual water systems would be allowed to remain as such until a
request was inade for service. (7) Wastewater - sanitary sewer inains would be extended in
accordance with the provisions of the City's codes, ordinances and regLilations. (8) Operation
and Maintenance - the City would assume the operation and maintenance of wastewater
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?5
facilities; roads and streets; and any other publicly owned facility, buildint', or service followint',
the effective date of the aiuieYation. After holding the public hearings, the City and property
owners must negotiate with area representatives for the provision of services to the area after
annexation. The Denton County Commissioners Court would select the representatives to
negotiate with the City for the provision of services. The City would not be able to annex those
areas appraised for agriculture, wildlife management or timberland uses uiiless offered a non-
aiuieYation agreement and the property owner declined to make the agreement.
Council Meinber Gregory stated that soine neighborhoods were on well systeins owned by a
neighborhood association wluch distributed water to the area. He questioned if the city would
talce responsibility of that water system once the area was aiuieYed.
Cunningham stated that in that case, the system would be a private system and the city would
oiily be responsible for a public system.
The Mayor opened the public hearing.
The following individuals spolce during the public hearing:
Carold Nunez, 3057 Swisher Road, Denton 76208 - opposed
Leo Miller, 3091 Swisher Road, Denton, 76208 - opposed
ILeiuieth Stout, 4608 Mills Road, Denton, 76?08 - opposed
Wade Willis, 5367 Edwards Road, Denton, 76?08 - opposed
Judith Grimes, 4268 Swisher Road, Denton, 76208 - opposed
Comment cards in opposition were submitted by:
C.T. Pat Powell, 1170 N. Mayhill, Denton, 76208
Bryan and Stephanie Hughes, 1080 N. Mayhill, Denton, 76208
Ginger McCormaclc, 1035 S. Triiuty, Denton, 76?08
Terry Broclcett, 7923 E. McILiiuiey, Denton, 762 10
The Mayor closed the public hearing.
No action was required by Council on tlus item at tlus time.
Ordinance No. 2011-028
B. Hold a public hearing and consider adoption of an ordinance of the City of Denton,
TeYas, providing for a zoiung change from a Downtown Residential 1(DR-1)
zonin(, district classification and use designation to a Downtown Residential 2(DR-
2) zonint', district classification and use designation with an overlay, on
approYimately 0.51 acres of land located on the south side of Faiuun Street and west
of Avenue A; providing for a penalty in the maYimum amount of $2,000 for
violations thereof, severability and an effective date. (Z 10-0013, Fannin Street
Apartinents) The Planning and Zoning Coininission recoininends approval with an
overlay district (6-0).
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?6
Council Member Watts left the meetin~ with a conflict of interest.
Marlc Cuiuunghain, Director of Plaiuung and Development, stated the proposal was to rezone
half an acre of property to the Downtown Residential-2 zoning district to facilitate constniction
of multifamily development. He reviewed the current zoning and the zoning around the
property. The Plaiuung and Zoiung Commission recommended approval as did staff with oiily
residential uses permitted.
The Mayor opened the public hearing.
No one spolce during the public hearing.
The Mayor closed the public hearing.
Mayor Pro Tem ILamp motioned, Council Member ILing seconded to adopt the ordinance with
the condition noted by the Plannin~ and Zonin~ Commission. On roll call vote, Council Member
ILing "aye", Council Meinber Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro
Tem ILamp "aye", and Mayor Burroughs "aye". Motion carried unaiumously.
Council Meinber Watts returned to the ineeting
Ordinance No. 2 011-0219
C. Hold a public hearing and consider adoption of an ordinance of the City of Denton,
Texas, ainending Ordinance 2005-081 to ainend the signage plan and sign finishing
requireinents of the special sign district for Denton Towne Crossing on a site
located at 1715 South Loop 2288, legally described as Denton Towne Crossing
Addition, Bloclc A, Lot 6, in the city of Denton, Denton County, TeYas; providing
for a penalty in the maximum amount of $2,000.00 for violations thereof; providing
a severability clause and an effective date. (SD10-0001, Del Taco) The Planning
and Zoiung Commission recommends approval (6-0).
Marlc Cuiuunghain, Director of Plaiuung and Development, stated that approval of the proposed
ordinance would allow for relocation of a monument si(,n and chan(,e the facade materials from
briclc to stucco to match the Del Taco stnicture. The si~n would be relocated to the other side of
the building and the material of the sign would match other signs in the area. The request was
consistent with the criteria for approval. The Plaiuung and Zoiung Commission and staff
recommended approval of request.
The Mayor opened the public hearing.
No one spoke during the public hearing.
The Mayor closed the public hearing.
Council Member Gregory motioned, Council Member ILing seconded to adopt the ordinance.
On roll call vote, Council Meinber ILing "aye", Council Meinber Watts "aye", Council Meinber
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?7
Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro Tem ILainp "aye", and Mayor
Burroughs "aye". Motion carried unanimously.
Ordinance No. 2011-030
D. Continue a public hearing and consider adoption of an ordinance of the City of
Denton, Texas, providing for a zoning change from a Neighborhood Residential 3
(NR-3 ) zoiung district classification and use designation to a Neighborhood
Residential MiYed Use 12 (NRMU-12) zoiung district classification and use
designation, on approxiinately 0.26 acres of land located on the east side of Bonnie
Brae Street and approximately 200 feet south of Emery Street; providing for a
penalty in the maYimum amount of $2,000.00 for violations thereof, severability
and an effective date. (Z 10-001?, Janlce Addition) The Plaiuung and Zoiung
Commission recommends approval (4-0).
Marlc Cuiuunghain, Director of Plaiuung and Development, stated that the purpose of the
proposal was to facilitate the constniction of a single-story office building. The site currently
was developed with a sin~le-family dwellin~ and the applicant also included vacant property to
the south of the site to inalce one large lot. The Planning and Zoning Coininission and staff
recommended approval.
The Mayor opened the public hearing.
Larry Reicliliart, representing the applicant, was available for questions.
The Mayor closed the public hearing.
Council Member Gregory motioned, Council Member ILing seconded to adopt the ordinance.
On roll call vote, Council Meinber ILing "aye", Council Meinber Watts "aye", Council Meinber
Gregory "aye", Council Meinber Engelbrecht "aye", Mayor Pro Tem ILainp "aye", and Mayor
Burroughs "aye". Motion carried unaniinously.
7. CONCLUDING ITEMS
A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from
the City Council or the public with specific factual information or recitation of
policy, or accept a proposal to place the matter on the agenda for an upcoming
meeting AND Under Section 551.0415 of the TeYas Open Meetings Act, provide
reports about items of community interest regarding which no action will be talcen,
to include: expressions of thanks, con(yratulations, or condolence; information
regarding holiday schedules; an honorary or salutary recogiution of a public official,
public employee, or other citizen; a reminder about an upcoming event orgaiuzed or
sponsored by the governing body; inforination regarding a social, cereinonial, or
community event organized or sponsored by an entity other than the governing body
that was attended or is scheduled to be attended by a meinber of the goveriung body
or an official or employee of the muiucipality; or an aiuiouncement involving an
iinininent threat to the public health and safety of people in the inunicipality that has
arisen after the posting of the agenda.
City of Denton City Council Minutes
Febniary 15, 20 11
Page ?8
Council did not have any items.
B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the
TeYas Open Meetings Act.
There was no continuation of the Close Meeting.
C Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the
TeYas Open Meetings Act.
There was no official action on Close Meeting Iteins.
With no further business, the meeting was adjourned at 9:15 p.m.
MARIL A. BLJRROUGHS
MAYOR
CITY OF DENTON, TEXAS
JENNIFER WALTERS
CITY SECRETARY
CITY OF DENTON, TEXAS
CITY OF DENTON CITY COUNCIL MINUTES
Febniary 17, ?O11
After determinin~ that a quoniin was present, the City Council convened in a Special Called
Session on Thursday, Febniary 17, 2011 at 6:30 p.in. in the Council Worlc Session Rooin at City
Hall.
PRESENT: Council Member ILing, Council Member Engelbrecht, Mayor Burroughs, Council
Meinber Watts, and Mayor Pro Tem ILainp.
ABSENT: Council Meinber Heggins and Council Meinber Gregory.
1. PUBLIC HEARING
A. Hold a tlurd public hearing to consider the involuntary aiuieYation and service plati
for approxiinately 1,595 acres of land contained in three (3) areas located within the
City of Denton's Extraterritorial (ETJ) Jurisdiction, in accordance with Texas Local
Goveriunent Code. The proposed aiuieYation consists of three (3) distinct areas
under multiple ownerslups and of an approYimate total of 1,595 acres. The 3 areas
are identified and ~enerally located as follows:
1. DH-7: 143 acres, located east and north of Teasley Lane, south of Teasley
Harbor Subdivision and west of Soutlilalce Drive;
DH-9: 298 acres, located north of Poclcnis Page Road, north, south and
northeast of Edwards Road; and
3. DH-1?: 1,154 acres, located south of E. Uiuversity Drive, east of N. Maylull
Road, north and south of Blagg Road, north and south of Mills Road, east
and west of S. Trinity Road.
Marlc Cunninghain, Director of Planning and Developinent, presented the details of the proposed
aiuieYation, indicating that tlus was the tlurd public hearing on the proposal due to the inclement
weather for the first public hearing.
Overview/Baclcground - In 2009, 18 potential annexation areas were identified. Of the 18 areas,
all but three were eYempted from the 3-year aiuieYation plan requirements. The 15 areas that
were eYempted from the requirement of the 3-year aiuieYation plan were aiuieYed on May 4,
2010 except for properties that qualified for non-annexation agreeinents. The areas to be
included in the proposed annexation in terins of acres and parcels were reviewed.
AiuieYation plan process included (1) the adoption of a 3 year aiuieYation plan, (2) providing
written notice of intent to annex, (3) conducting an inventory of services and facilities, (4)
preparing a service plan for extension of full municipal services, (5) holding two public hearings,
(6) negotiating for the provision of services and (7) holding two readings of the aiuieYation
ordinance. A Service Plan must be prepared that provided for full muiucipal services to the
annexed areas. The City inay provide the services by any of the inethods by which it extended
services to other areas of the City. The City was not required to extend services to a newly
aiuieYed area prior to the eYtension of services to eYisting similar areas. The City was not
required to provide a uiuform level of full muiucipal services to each area aiuieYed if different
City of Denton City Council Minutes
Febniary 17, 20 11
Page ?
characteristics of topography, land use and population density constituted a sufficient basis for
providing different levels of service. Staff was recommending the same Service Plan for the
three-year aiuieYation areas that was prepared and adopted for the other 15 recently aiuieYed
exeinpted areas.
Elements of the Service Plan -(1) Fire - would be provided at a level consistent with current
methods and procedures consistent with those services provided to other areas of the city
includint', fire suppression, pre-hospital medical services, hazardous materials response,
einergency prevention, technical rescue response and constniction plan review. (2) EMS -
included emergency medical dispatch, pre-hospital emergency advanced life support and medical
rescue services. (3) Solid Waste - solid waste and recycling services would be made available
immediately upon the effective date of annexation with private collection services continuing up
to two years after the annexation. (4) Parks and Recreation - the annexed areas would be able to
utilize all eYisting parlc and recreation facilities on the effective date of the aiuieYation. (5)
Streets - emergency street maintenance would be provided on the effective date of the
annexation, routine maintenance would be provided consistent with current policies of the City,
and roadway signage would be provided in priority of importance starting with emergencies. (6)
Water - coiuiection to eYisting city water in accordance with eYisting city policies would be
available at the established rates. As new development occurred in the aiuieYed areas, the
extension of water would be consistent with city policies. Water service capacity would be
provided consistent with the same fashion in the current city limits. Existing developments,
businesses or homes on individual water systems would be allowed to remain as such until a
request was made for service. (7) Wastewater - saiutary sewer mains would be eYtended in
accordance with the provisions of the City's codes, ordinances and regulations. (8)
Operation and Maintenance - the City would assume the operation and maintenance of
wastewater facilities; roads and streets; and any other publicly owned facility, building or service
following the effective date of the annexation. After holding the public hearings, the City and
property owners must negotiate with area representatives for the provision of services to the area
after aiuieYation. The Denton County Commissioners Court would select the representatives to
negotiate with the City for the provision of services. The City would not be able to aiuieY those
areas appraised for agriculture, wildlife management or timberland uses unless offered a non-
annexation agreeinent and the property owner declined to inalce the agreeinent.
AiuieYation schedule - the neYt step would be negotiation for services, the first reading of the
ordinance would be 1/10/12 and the second reading would be determined but no later than
5/20/13.
The Mayor opened the public hearing.
The following individuals spoke during the public hearing:
ILen Stout, 4608 Mills Road, Denton, 76208 - opposed
ILevin McCormack, 3031 Swisher Road, Denton, 76208 - opposed
Georgina Nunez, 3325 Swisher Road, Denton, 76208 - opposed
Lisa Polster, 415 Bronco Circle, Shady Shores, 76208 - opposed
Hunter Plullips, 3409 Swisher Road, Denton, 76208 - opposed
City of Denton City Council Minutes
Febniary 17, 20 11
Page 3
The Mayor closed the public hearing.
No action was required by Council on tlus item at tlus time.
2. CONCLUDING ITEMS
A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from
the City Council or the public with specific factual iiiformation or recitation of
policy, or accept a proposal to place the matter on the agenda for an upcoming
ineeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide
reports about items of community interest regarding which no action will be talcen,
to include: eYpressions of thanlcs, congratulations, or condolence; iiiformation
regarding holiday schedules; an honorary or salutary recogiution of a public official,
public einployee, or other citizen; a reininder about an upcoining event organized or
sponsored by the governing body; inforination regarding a social, cereinonial, or
commuiuty event orgaiuzed or sponsored by an entity other than the goveriung body
that was attended or is scheduled to be attended by a meinber of the goveriung body
or an official or employee of the municipality; or an announcement involving an
iinininent threat to the public health and safety of people in the inunicipality that has
arisen after the posting of the agenda.
There were no items suggested by Council.
B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the
TeYas Open Meetings Act.
A Closed Meeting was not held.
C Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the
TeYas Open Meetings Act.
There was no official action on Closed Meeting iteins.
With no further business, the meeting was adjourned at 7:02 p.m.
MARIL A. BLJRROUGHS
MAYOR
CITY OF DENTON, TEXAS
JENNIFER WALTERS
CITY SECRETARY
CITY OF DENTON, TEXAS
CITY OF DENTON CITY COUNCIL MINUTES
March 1, 2 0 11
After deterinining that a quoniin was present, the City Council convened in a Worlc Session on
Tuesday, March 1, 2011 at 3:00 p.in. in the Council Worlc Session Rooin at City Hall.
PRESENT: Council Member ILing, Council Member Watts, Council Member Heggins, Council
Meinber Gregory, and Mayor Burroughs.
ABSENT: Council Meinber Engelbrecht, and Mayor Pro Tem ILainp.
L Citizen Coininents on Consent Agenda Iteins
There were no citizen comments on Consent Agenda items.
2. Requests for clarification of agenda iteins listed on the agenda for March 1, 2011.
Council Meinber Gregory aslced about the Public Utility Board recommendation for Consent
Agenda Items H and I.
City Manger Cainpbell stated that the Public Utility Board had considered those iteins yesterday
and had voted 6-0 for approval.
Mayor Burroughs noted that Consent Agenda Itein D had been reviewed very carefully by staff
in deterinining the inost responsible bidder and the low bidder had not been recoininended.
City Attorney Burgess stated that the low bidder did not meet miiumum qualifications.
3. Receive a report, hold a discussion, and give staff direction regarding the FY 2009-10
Comprehensive Aiuiual Financial Report (CAFR) and aiuiual audit.
Bryan Langley, Cluef Financial Officer, stated that there were three documents included in the
backup materials; the Comprehensive Annual Financial Report, the single Audit Report and the
Auditor's communication to the Audit Committee. These reports had been discussed in detail
with the Audit/Finance Committee.
Overview and Purpose - discuss the CAFR report section, provide a review of the accounting
basis and financial statement presentation, discuss key financial information, discuss audit
process and comments, and provide an opportuiuty for auditor to discuss the financial
statements.
Report overview - the CAFR was comprised of three sections; the introductory section, financial
section and statistical section. The report was designed to comply with GAAP/GASB guidelines
with an emphasis on transparency and disclosure.
Financial presentation -~overnmental funds used a modified accnjal and current financial
resources management focus. Proprietary funds used full accnial accounting and economic
resources focus. An Entity-Wide Presentation (statement of net assets and activates) provided a
consolidated view of the or~anization usin~ one basis of accountin~. Individual fund level
presentations were dictated based on whether the funds were governmental or proprietary in
nature.
City of Denton City Council Minutes
March 1, 2 0 11
Page ?
ILey Financial Information - net assets for the City increased by $25.5 million in FY 2010 due
primarily to lugher net revenue from goveriunental and business type activities. Coinbined
goveriunental fund balances increased by $6.7 million. The General Fund uiireserved/
undesi~nated fund balance was $21.5 million, a decrease of $1.3 million from the prior year.
Audit Comments - the City received an unqualified or "clean" opiiuon from the audit firm. Tlus
was the best possible opiiuon that could be received. A Single Audit was also conducted for
state and federal grant awards with no findings noted for the Stl' year in a row. There were no
Manageinent Coininents.
4. Receive a report, hold a discussion and give staff direction regarding drafting a new
Plaiuied Development (PD) ordinance for inclusion witlun the Denton Development Code,
with associated developinent standards. The discussion will include a general overview of
PD's, a brief history of PD's in Denton, effect of 2002 city-wide rezoning, and rescinding of
previous PD districts. (DCA10-0007)
Marlc Cunninghain, Director of Planning and Developinent, reviewed a general overview of
planned developinents in Denton and the proposed new ordinance.
Overview - the presentation would include a brief lustory of plaiuied developments, plaiuied
developinent regulations, the planned developinent review process and staff recoininendations.
Plaiuied Development History - the first plaiuied development regulations were adopted between
1966 and 1969. lii 1969 there were 5 plaiuied developments in the city. Plaiuied developments
were eliininated in 2002 with the city-wide rezoning. Reasoning for the eliinination of planned
developments included (1) below par guidelines; (2) disparity in guidelines; (3) no timelines for
development and over time the uses were no longer compatible with adjacent districts, the
iiifrastnicture serving the proposed uses and future land uses at the actual time of the
development were below par but vested; (4) the original purpose of planned developments was to
achieve higher standards of developinent but that was not necessarily achieved; (5) planned
developments became a means to circumvent conventional development code requirements; (6)
many plaiuied developments were not consistent with the Comprehensive Plan and the Denton
Plan; and (7) the planned developments were hard to administer. In 2002 there were
approxiinately 200 planned developinents in the City but only 15 were retained and vested in the
Denton Development Code.
In 2007 the Master Planned Community (MPC) process was adopted. In all practicable purposes,
the MPC was a planned development. There was, however, no ability to do small type MPCs as
the miiumum area for one was 300 contiguous acres or 125 contiguous acres held under single
ownerslup at the time of application. There currently were four approved MPC s in Denton -
Hills of Denton, Hills of Denton North, Inspiration and Cole Ranch.
A plaiuied development was a development that had been approved via a process that required
the comprehensive review of project design. Plaiuied developments could be used in a variety of
situations. The purpose and intent of planned developments were to (1) conform with and
enhance the goals and policies in the Denton Plan; (2) achieve a much higher quality of
development; (3) provide an alternative zoiung district and development process; (4) allow
City of Denton City Council Minutes
March 1, 2 0 11
Page 3
flexibility under controlled conditions; and (5) achieve a desired development form such as New
Urbaiusin, transit-oriented development, residential clusters, and Smart Growth.
To avoid the short comings of the City's former planned development regulations, staff
recommended the following regulations (1) appropriateness that would designate minimum size,
and the development should be plaiuied and maintained as an integrated uiut; (21) physical
characteristics of the site should be suitable and free from probability of erosion, flood hazard or
other dainages; (3) should be located in relation to available transportation systeins, sanitary
sewers, einergency services, schools, public safety, water, storin and surface drainage systeins;
(4) should be compatible with surrounding areas to miiumize the negative effects of eYternal
impacts such as traffic, noise or lights; (5) should be responsive to the character of the area; (6)
should include adequate screening, buffering, and transitional uses with surround property; (7)
vehicular access should be desi(yned to encoura(ye smooth traffic flow and pedestrian access
should be separated from velucular access point to reduce congestion, friction and hazards; (8)
streets, drives, parlcing and service areas should provide safe and conveiuent access to all
buildings and general facilities; (9) pedestrian systein should have internal or external wallcways;
(10) density/intensity should not exceed inaxiinuins projected in the Coinprehensive Plan; (11)
should preserve the natural land features and lustoric resources; (12) height in the plaiuied
development should not create any eYternal impacts that would adversely affect surround
development; (13) buffer and screening should be provided at periphery of the district to protect
occupants from undesirable views, lights, noise or other off-site influence; (14) yards and
setbacks should be adequate to promote general health, safety, welfare, design eYCellence and
neighborhood compatibility; (15) solid waste and utility screens should be screened from sight;
(16) signs should be in accordance with the DDC or a special sign district should be created; (17)
landscaping should be equal to or exceed the standards stipulated in the DDC; (18) entranceways
should be identified and additional scnrtiny should be given to the potential visual impacts of the
proposed projects; (19) utility standards should adhere to the requirements of the city's Criteria
Manual; (20) storinwater inanageinent should adhere to requireinents of the zoning code; and
(21) minimum open space requirements should not be less than the requirement of the local
zoning code.
PD requireinents should be specific, ineasurable, realistic, and when possible, have an applied
time factor. A planned development usually contained a zonin~/land use map, a concept plan,
development phasing plan, detail plan, site plan, and PD proj ect-specific ordinance.
There were different forins that could be used with a planned developinent. A short forin
provided a general directive. The long forin provided design standards that were highly detailed
and prescriptive. A hybrid forin went beyond generalized regulations but did not enact a detailed
development format. It would specify the nuinber of access points the project might have but did
not specify how they should be provided. A hybrid would be required to have internal capture of
traffic, establish a jobs/housing ratio but not how that ratio should be achieved. Adoption of a
single set of regulations and/or review process for all types of PDs might not be possible.
EYamples of different types of PDs might included (1) small scale or in-fill
developinent/redevelopinent as on a vacant site or redevelopinent in the downtown area to
include 5-15 acres; (2) inid-scale developinents on a greenfield or redevelopinent of existing land
in suburban or non-urban area to included 15-100 acres; and (3) large-scale development/master
plaiuied commuiuty wluch would usually be on a substantial acreage with the potential of having
a regional impact to include 100 acres and above.
City of Denton City Council Minutes
March 1, 2 0 11
Page 4
Staff's recommendation was to give staff direction to draft new planned development regulations
for inclusion in the Denton Development Code. Staff also recommended an intermediate
approach with emphasis on project outcome, development form, project design and character.
Different types of planned developinent options that were tailored to the size of the developinent
should be explored.
Mayor Burroughs stated that the general concepts associated with the removal of plaiuied
developments were when the planned developments had been approved and the status of the
developinent. Soine of the planned developinents were very old and soine had a laclc of interest
to develop.
Council discussed infill developinent and the ease of developinent in those areas.
Council Member Heggins questioned if a plaiuied development might not be possible in a certain
enviroiunent and asked how much input commuiuty was allowed regarding development.
Cunninghain stated that a planned developinent could be placed wherever it was allowed to go
and included a lot of commuiuty interaction.
Mayor Burrou~hs stated that a small scale, such as 5 acres, would be hard to accumulate in the
downtown area and questioned if that would that eliininate redevelopinent in the downtown
using plaiuied developments.
Cunninghain stated that an allowance could allow for other types of developinent tools. If an
area was too sinall, the whole City inight be a planned developinent.
Mayor Burroughs aslced if it could be possible for the City to have provision for downtown
redevelopinent or brownfield areas and set a sinaller standard if the area qualified for those
conditions.
Cuiuungham stated that would be possible.
Consensus of the Council was to move forward as suggested.
Mayor Burroughs noted that there was a Closed Session item associated with Worlc Session 45
and suggested Council consider Item 46, then go into Closed Session followed by consideration
of Itein #5.
6. Receive a report, hold a discussion, and give staff direction regarding the governance of the
Airport as recommended in the Denton Airport 2010 Business Plan.
Bryan Langley, Chief Financial Officer, reviewed baclcground inforination on this itein. The
Airport Business Plan was approved by Council on November 16, 2010. During the business
plan discussion, the Council requested staff provide a recommendation on governance options
which staff provided at the Council's December 14th meeting. The staff recommendation would
(1) increase ineinbership on the Econoinic Developinent Partnership Board (EDPB ) by two
meinbers, create a City Council Airport Committee to oversee airport operation and repeal the
City of Denton City Council Minutes
March 1, 2 0 11
Page 5
ordinance that established the Airport Advisory Board (AAB). Another staff recommendation
was to hold regularly scheduled meetings with interested stakeholders to share iiiformation and
ideas relative to Airport operations and continue to have the Airport Manager admiiuster the day-
to-day operations of the Airport. Subsequent to the December 14th staff recommendation,
Council Meinber Engelbrecht suggested forinalizing the existing Airport Safety Coininittee and
proposed that the Safety Committee memberslup, charge and meeting schedules be formalized if
the proposed governance stnicture was changed. Staff agreed with tlus recommendation and
incorporated it into the Febniary 15th proposal.
On Febniary 15ti' Council requested the proposal be tabled until a specific recommendation
regarding the safety, tenant and stakeholder groups could be presented. lii considering tlus issue,
staff examined the concerns and comments of both the Council and the AAB over the past
several weelcs.
The AAB and Council agreed and emphasized that tenants and other stalceholders at the Airport
should have ample input on airport related issues, historical and ~eneral aviation lcnowled~e at
the Airport should be preserved, econoinic developinent at the Airport should be enhanced,
citizens should have increased access to the Council on Airport matters and various aspects of
the proposed governance stnicture should be more completely defined.
The staff recoininendation for safety, tenant and stalceholder relations now included (1) forinally
establislung an Airport Manager Safety and Stakeholder Committee. The intent of the
committee would be to eYplore a wide range of safety and operational issues including Flight and
Ground Operations. (3) The Airport Manager would conduct the ineetings. (4) The coininittee
may meet monthly but not less than 4 times per year. (5) Meetings would be conducted by
management and would include an opportuiuty to discuss any issue. (6) At a miiumum, invitees
to the meetings would include FiYed Base Operator representatives, Air Traffic Control
management and Airport Operations Coordinator. (7) FAA representatives and contractors
might be involved to discuss a wide range of issues. (8) The chairmen of Council Airport
Committee would be formally invited to attend each meeting. (9) A summary of discussions
would be forwarded to Council and the Airport Committee
Other ILey Aspects - The Econoinic Developinent Partnership Board would be expanded by two
members; the Board would review, consider and make recommendations to the Council
regarding Airport branding and marketing efforts; the Board would outline development
incentive policies for the Airport; and would leverage coininon goals and create synergy between
development of the Airport and the development of the community. The City Council Airport
Committee would be a three meinber committee with the City Manager or lus designee on the
Committee; the Committee would review and make recommendations regarding leases at the
Airport, would review grant funding opportunities; would monitor budget and assist with the
developinent of long terin financial plans for the Airport; and would provide a foniin for tenants
and other interested parties to interface directly with the Council on Airport related matters.
Iteins Under Consideration - there were three iteins under consideration at this ineeting - the
ordinance that expanded the EDPB role and ineinbership by two ineinbers; the ordinance that
established the City Council Airport Committee; and the resolution that established the charge,
meinberslup and meeting requirements of the Airport Manager Safety and Stalceholder
Coininittee.
City of Denton City Council Minutes
March 1, 2 0 11
Page 6
Council Meinber Gregory stated that the resolution establishing the Safety and Stalceholder
Committee referred to invitees rather than committee members.
Langley stated that Section 3 in the resolution referred to invitees who would be invited to the
committee meeting but there would be no formal members.
Council Member Gregory stated that there would be no miiumum or maYimum number of
members.
Langley stated that invitations would be eYtended to as many people as possible and that any
meinber of the public could attend.
Council Member Gregory asked how the public would know when to attend.
Langley stated that notices would be sent to everyone at the Airport and it would be on the City's
website.
City Manager Campbell stated that some issues might need a short notice meeting and if
stnictured properly there would be no conflict with the Open Meetings Act.
Council Member Gregory stated that he was not comfortable with not having regular members as
that might be too iiiformal with issues such as meeting times. He did not have a problein with
the Council Committee and the eYpansion of the EDPB but was uncomfortable with repealing
the AAB until he was comfortable with the resolution.
City Manager Campbell stated that Council Meinber Engelbrecht's suggestion was to have
another set of eyes loolcing at specific safety related issues. The intent was not to malce it a
formal process but more informal to worlc with current issues. The other two elements were very
stnictured.
Mayor Burroughs stated that he was in favor of the EDPB and the role it would fill. He also felt
it was appropriate to have the Council subcommittee. However, he was still havint', a problem
with the stnicture of the stakeholders group. He felt it needed more stnicture so that over time it
would continue to process situations. He had a difficulty with the eYisting stnicture of the AAB
as many of the duties of the eYisting AAB were dependent on the stakeholders group. Council
appointed committees tended to be political in nature and politics was not the nature of the
proposed stakeholders group. He was not comfortable with stnjcture as proposed or with the
eYisting stnicture. His priority was not the stnicture of the stalceholders group. He cared about
the input received to and from the group and felt that a gathering of the stalceholders group to
come up with their proposed stnichire was appropriate to get to the objectives needed. He would
like to see the other two elements processed but not dissolve the AAB at this moment until Item
G on the agenda was clarified.
Langley stated that the duties of the AAB would be limited to safety and stakeholder outreach
issues.
Mayor Burroughs suggested including operations but not marketing and not incentive issues.
City of Denton City Council Minutes
March 1, 2 0 11
Page 7
Council Member ILing stated that he like the option of the EDPB taking on the marketing issues.
He was not sure about the operations, safety and stalceholders wluch were important. There was
overlap in those areas and he did not see how one part could be done and not other parts. He was
also not sure about the proposed Council committee. Exhibit Three in the a"'enda backup put
those functions back to the newly stnicture Airport Board.
Council Meinber Watts aslced for a clarification of that EYlubit.
Council Meinber ILing stated that the revised Airport Board option would establish a new Denton
Airport Enterprise Board.
Council Member Watts questioned where such a board would fall in the reporting chain.
Council Meinber ILing stated that the reporting chain would begin with the Airport Manager.
The Council Committee would not be related in that chain and it might become coiifusing.
Council Member Watts stated that the current AAB had a similar chain of reporting.
Council Member ILing indicated that economic development and incentives would be dealt with
by the EDPB.
Council Meinber Watts aslced about leases.
Council Member ILing stated that if there was a conflict, a member could not be on that board.
There was a different charge to that board which was an enterprise board. He felt that Council
did not have time to deal with Airport issues.
Mayor Burrou~hs asked about the Council subcommittee duties.
City Manager Campbell stated that staff was trying to be more specific on who had what
responsibilities. Placing issues at two different places would create a conflict.
Mayor Burroughs aslced where operations would be located.
Langley stated that the Council committee would deal with leases, grant funding, moiutoring the
budget, long term financial plans and would be a fonim for interested individuals to interact with
the Council.
Langley stated that the safety and stalceholders group would be just be for safety issues and was
not meant to be a fonim to discuss leases or economic development.
Mayor Burroughs felt that operations might overlap with stakeholders. The Council
subcommittee should not discuss operations. The stalceholders should tallc with staff about
operations.
Langley stated that the City Manager and lus designee were charged with operations. Council
and the Council committee focused on policy. Day-to-day operations were the responsibility of
the Airport Manager.
City of Denton City Council Minutes
March 1, 2 0 11
Page 8
Council Meinber Gregory stated that Section 3 of the proposed ordinance for Itein 4E was the
repealer of the AAB. He suggested removing that section from the ordinance and not repeal the
AAB until the issues were completed on the stalceholders group.
City Manager Cainpbell stated that the concern seeined to be that the intent was to talce the
current responsibility of the AAB and divide it with the EDPB and the Council Committee. If
that were done and Section 3 was removed from the ordinance, the question was what would be
the function of the AAB.
Council Member Gregory stated that functions of economic development and leases would no
longer be a function of the AAB.
Mayor Burroughs also suggested doing the repealer of the AAB when the stakeholders group
was finalized.
Council Member Watts felt that the resolution for Item 4G was conflicting. The Council
committee was a more formalized group. He was comfortable with the stakeholders group
having a montlily meeting on a specific day but as the members were not appointed by Council,
the meeting would not be subject to public notices. If the meeting were going to be plaiuied and
scheduled, there needed to be stnicture with specific ineinbers. If that were the case, then the
current AAB could become the initial stakeholder committee with monthly meetint"s to receive
input and interface with the Airport Manager. lii lus opiiuon, there needed to be a committee but
the function would be different. The current AAB could transition into that position with
delineated functions with clear duties.
City Manager Campbell suggested that if the old ordinance were repealed, the stalceholders could
come together and elect a chair and create criteria for whoever wanted to be members of the
committee. They could create their own stnicture for chair and vice-chair with the current AAB
ineinbers possibly elected.
Council Meinber Watts suggested that instead of repealing the ordinance and then having a
meetin~, somethin~ be put in place first. The committee could determine when to meet and
invite everyone to attend the ineetings.
City Attorney Burgess stated that Item 4E transferred the economic development arm of the
AAB to the EDPB. She suggested loolcing at the stalceholder aspect and coine baclc with an
alternative stnicture than what was proposed.
Council Member Gregory stated that Section 3 referred to the ordinance wluch created the EDPB
and that needed to stay in the ordinance. The portion to amend would be to not repeal 97-299.
City Attorney Burgess stated that was correct.
Council Member ILin~ stated that the council committee would deal with leases and contracts.
Langley stated that the fonim for tenants would not be a component of the committee.
City of Denton City Council Minutes
March 1, 2 0 11
Page 9
Council Member Watts stated that the resolution for Item 4F indicated the duties and purpose of
the council committee. He was concerned that if the bullet point dealing with operations were
removed, the committee would not hear operational issues. The council committee might not be
involved with operational issues but it should be a place where concerns could be discussed. He
did not want to limit the fonim people could speak to the committee.
Langley stated that staff tried to elevate the opportuiuty for citizens to access Council with the
proposal.
Council Meinber Campbell stated that many other committees had staff coming before thein with
issues and that did not preclude the council committee discussing operations. There was an
Airport Manager and staff to do the operations at the Airport.
Mayor Burroughs suggested changing the wording in Item 4F to say "on matters of policy
affecting airport operations". He also suggested waiting on the final passage of the stalceholders
resolution for the repealing of the AAB.
Council went into Closed Meeting at 5:07 p.m. to discuss the following:
L Closed Meeting:
A. Deliberations regarding Real Property - Under Texas Government Code §551.072;
Consultation with Attorneys - Under TeYas Goveriunent Code Sec. 551.071.
1. Discuss, deliberate, and receive iiiformation from Staff and provide Staff
with direction pertainint', to the acquisition or the condemnation of
permanent utility easement and temporary constniction easement tracts the
location of wluch being generally north and west of the Denton Muiucipal
Airport in the City of Denton, Denton County, TeYas. Consultation with the
City's attorneys regarding legal issues associated with the acquisition or
condemnation of the tracts referenced above where a public discussion of
these legal matters would conflict with the duty of the City's attorneys to the
Denton City Council under the TeYas Rules of Disciplinary Conduct of the
State Bar of Texas, or would jeopardize the City's legal position in any
administrative proceedings or potential litigation.
Discuss, deliberate, and receive iiiformation from Staff and provide Staff
with direction pertaiiung to the acquisition or the condemnation of a
perinanent easeinent tract for utilities, at the northeast corner of Loop 288
and Stuart Road, the location of which being S. McCracken Survey, Abstract
Nuinber 871, City of Denton, Denton County, TeYas. Consultation with the
City's attorneys regarding legal issues associated with the acquisition or
condemnation of the tract referenced above where a public discussion of
these legal inatters would conflict with the duty of the City's attorneys to the
Denton City Council under the TeYas Rules of Disciplinary Conduct of the
State Bar of TeYas, or would jeopardize the City's legal position in any
administrative proceedings or potential litigation.
City of Denton City Council Minutes
March 1, 2 0 11
Page 10
B. Deliberations regarding Certain Public Power Utilities: Competitive Matters - Under
Texas Governinent Code Section 551.086; and Consultation with Attorneys - Under
Texas Governinent Code, Sec. 551.071.
1. Receive a presentation and hold a discussion regarding a public power
competitive and financial matter regarding offers from power suppliers and
other entities for firm energy and services (RFP 4601- Request for Proposals
for Firm Energy Supply and Service); and provide Staff with direction.
Council Member Gregory motioned, Council Member Watts seconded that the item was
appropriate to discuss under the Public Power eYCeption. On roll call vote, Council Meinber
ILing "aye", Council Meinber Watts "aye", Council Meinber Heggins "aye", Council Meinber
Gregory "aye", and Mayor Burroughs "aye". Motion carried unaniinously.
C Consultation with Attorneys - Under TeYas Goveriunent Code Sec. 551.071.
1. Receive a briefing froin the City's attorneys and provide thein with direction
pertaining to a vulnerable road users ordinance in the City of Denton where
public discussion of these legal matters would conflict with the duty of the
City's attorneys to the Denton City Council under the TeYas Rules of
Disciplinary Conduct of the State Bar of Texas or would jeopardize the
City's le~al position in any administrative proceedin~s or potential liti~ation.
Receive a briefing from and a consultation with the City's attorneys
regarding legal issues conceriung the possible constniction and installation
of a coinbined heat and power (CHP) tri-generation station for the City in
the industrial district in the City of Denton, Texas; and discuss, deliberate
and provide the City's attorneys with direction and any recommendations
regarding such legal matter. A public discussion of tlus legal matter would
conflict with the duty of the City's Attorneys to the City Council under the
Texas Disciplinary Rules of Professional Conduct of the State Bar or Texas.
Following the completion of the Closed Session, the Council returned to the Worlc Session to
discuss Item 45.
5. Receive a report, hold a discussion, and give staff direction regarding general terms and
provisions of a Vulnerable Road User ordinance.
Marlc Nelson, Director of Transportation, stated that lus presentation would be an introduction to
the concept of a vulnerable road user ordinance. Areas in this concept included comprehensive
plans, routes with destinations, routes that connected, routes as part of the road system, routes in
parlcs and greenbelts, and facilities that accommodate bicycles.
Council Member Watts questioned what such an ordinance would be tryin~ to accomplish.
City of Denton City Council Minutes
March 1, 2 0 11
Page 11
Council Meinber Gregory stated that it would try to inalce Denton inore bicycle friendly. For a
long time there had been efforts to do more for pedestrians and bicycle riders. lii the past, the
answer had been wide outer lanes and he felt that it would be a long time before there were
separate bicycle facilities as long as the wide outer lanes were relied on. There was a need to
encourage motorists to be more careful around bicyclists. There should be more specific
direction regarding bicycle routes.
Council Meinber Gregory reviewed safe passing states and cities and the types of signs that
could be used with such a program. If the wide outer lanes were going to be used, there needed
to be more specific defiiutions such as three feet passing distance for cars and siY feet passing
distance for commercial velucles. If those specific distances were not included, an ordinance
should not be considered.
Council Meinber Watts clarified that Council Meinber Gregory felt that if the distance
requirements were not included in an ordinance, it should not be considered.
Council Member Gre~ory replied correct because it would not be worth doin~.
Council Meinber Watts stated that if there were a collision between a car and a bicycle, it did not
necessarily mean that the auto was at fault.
Council Meinber Gregory replied correct that the bicycle could have violated the distance.
Council Meinber Watts stated that there were other types of users on the roadways besides
bicycles. There were also general distance requirements for bicycles as opposed to auto
distances. There was a need to give more instnictions for vulnerable road users.
Mayor Burroughs stated that a principle component would be to get the word out rather than
issue tickets. If such an ordinance were to pass, there was a need to be more specific in the
ordinance.
Council Member Gregory stated that there was also a need to improve the bicycle and wallc trail
along the A-train line. There would be inany bicycles out there when the train was coinpleted
and the City needed to be prepared for that. If the City was going to encourage more bicycle
riding, then steps needed to be talcen. Approving a safe passing ordinance was one of those
steps.
Council Member Watts stated that there was no mention of other options such as the use of
sidewallcs. Some vulnerable road users needed to use sidewallcs instead of the roads. If
alternatives were available, those should be used.
Consensus of the Council was to bring the proposal back for further discussion.
Regular Meeting of the City of Denton City Council at 6:30 p.in. in the Council Chainbers at
City Hall.
City of Denton City Council Minutes
March 1, 2 0 11
Page 1?
1. PLEDGE OF ALLEGIANCE
The Council and meinbers of the audience recited the Pledge of Allegiance to the U.S. and TeYas
flags.
2. PROCLAMATIONS/PRESENTATIONS
A. Proclainations/Awards
1. Social Worlc Month
Mayor Burroughs presented a proclaination for Social Worlc Month.
2. Presentation of the Certificate of Achievement for Excellence in Financial
Reporting from the Goveriunent Finance Officers Association
Bryan Langley, Chief Financial Officer, presented the award to the Council.
3. National Surveyor's Weelc
Mayor Burroughs presented the proclamation for National Surveyor's Weelc.
3. CONSENT AGENDA
Council Meinber ILing motioned, Council Meinber Heggins seconded to adopt the Consent
Agenda and accompanying ordinances and resolutions. On roll call vote, Council Meinber ILing
"aye", Council Meinber Watts "aye", Council Meinber Heggins "aye", Council Meinber Gregory
"aye", and Mayor Burroughs "aye". Motion carried unaniinously.
Ordinance No. 2 011-031
A. Consider adoption of an ordinance of the City of Denton, Texas, ainending the Fiscal Year
2010-11 Budget and Annual Prograin of Services of the City of Denton to allow for an
adjustment to the Materials Management Fund of three million iune hundred thousand
dollars ($3,900,000) to provide for additional funding capacity for costs of goods sold in the
Warehouse; declaring a municipal purpose; providing a severability clause; providing an
open ineetings clause; and providing an effective date. The Audit/Finance Coininittee
recommends approval (3-0).
Ordinance No. 2 011-03?
B. Consider adoption of an ordinance acceptin(y competitive bids and awarding an annual
contract for the purchase of Water Treatinent Cheinicals for the City of Denton Water
Treatment Plants; providing for the eYpenditure of funds therefor; and providing an
effective date (Bid 4643-Aiuiual Contract for Water Treatment Chemicals awarded to the
lowest responsible bidder for each item in the annual estimated amount of $850,000). The
Public Utilities Board recommends approval (6-0).
City of Denton City Council Minutes
March 1, 2 0 11
Page 13
Ordinance No. 2011-033
C. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or
lus designee to eYecute a purchase order through the Buy Board Cooperative Purchasing
Network for the partial replacement of the roof at City Hall East by way of an interlocal
agreeinent with the City of Denton; and providing an effective date (File 4671-Partial
Replaceinent of the Roof at City Hall East awarded to Castro Roofing of Texas in the
amount of $778,500).
Ordinance No. 2011-034
D. Consider adoption of an ordinance acceptin(y competitive bids and awarding a public worlcs
contract for Eagle Drive Drainage Improvements; providing for the expenditure of funds
therefor; and providing an effective date (Bid 46?3-awarded to the lowest responsible
bidder meeting specification, Humphrey and Morton Constniction Company, liic., in the
amount of $1,478,12830). The Public Utilities Board recommends approval (5-0).
Resolution No. R2011-003
E. Consider approval of a resolution allowing Tejas Storytelling Association to be the sole
participant allowed to distribute/not sell alcoholic beverages at the TeYas Storytelling
Festival on March 12, 2011, upon certain conditions; authorizintly the City Manager or his
designee to execute an agreement in conformity with this resolution; and providing for an
effective date. The Parlcs, Recreation and Beautification Board recommends approval (7-
0). Staff recommends approval of the TeYas Storytelling Festival request.
Ordinance No. 2011-035
F. Consider adoption of an ordinance authorizing the City Manager to approve a second
amendment to an Airport Lease Agreement approved by Resolution R87-054 dated
Septeinber 15, 1987, between the City of Denton, Texas, and First Financial Resources, Inc.
at Denton Municipal Airport which will extend the lease terin an additional ninety (90)
days; and providing an effective date. The Airport Advisory Board recommends approval
(4-0).
Aaaroved the ininutes listed below.
G. Consider approval of the ininutes of: Febnjary 1, 2011 Febnjary 7, 2011 Febnjary 8, 2011
Ordinance No. 2 011-036
H. Consider adoption of an ordinance finding that a public purpose and necessity eYists and
finding that public welfare and convenience requires the acquisition through agreement or
eminent domain of an approximate 1.989 acre utility easement, and a 3306 acre temporary
constniction easement for the relocation and installation of muiucipal utilities relating to
Denton Muiucipal Electric proj ects located generally north and west of the Denton
Municipal Airport and situated in the F.P. Johnson, C.R. Green, J.F. Myers, and H.F.
Bniininett Surveys, Abstract Nuinber 1699, City of Denton, Denton County, Texas;
authorizing the eYpenditure of funds therefor; and providing an effective date.
City of Denton City Council Minutes
March 1, 2 0 11
Page 14
Ordinance No. 2011-037
L Consider adoption of an ordinance finding that a public purpose and necessity exists and
finding that public welfare and conveiuence requires the acquisition through agreement or
eminent domain of an approYimate 0.041 acre utility easement for utilities at the north east
corner of Loop 288 and Stuart Road, the location of which being S. McCracken Survey,
Abstract Number 871, City of Denton, Denton County, Texas; authorizing the expenditure
of funds therefor; and providing an effective date.
Ordinance No. 2011-038
J. Consider adoption of an ordinance repealing Ordinance No. 2009-174 and Ordinance No.
20 10-3 12 and ainending Section 2-29 of the City of Denton Code of Ordinances relating to
Rules of Procedure for the City Council of the City of Denton; and declaring an effective
date.
Resolution No. R2011-004
K. Consider approval of a resolution allowing Metzler's Food and Beverage to be the sole
participant allowed to sell alcoholic beverages at the 35 Coiiferette March 10-March 13,
2011, upon certain conditions; authorizing the City Manager or lus designee to eYecute an
agreement in conformity with this resolution; and providing for an effective date. Staff
recommends approval of Metzler's Food and Beverage request.
Ordinance No. 2 011-039
L. Consider adoption of an ordinance approving a full property dainage release of all claiins by
the City of Denton, Texas against Lindsay Paliner and Bobby Paliner, in settleinent of a
claim arising on or aboLrt May 1, 2009; authorizing the City Manager and City Attorney to
take actions necessary to finalize settlement of tlus claim; and declaring an effective date.
4. ITEMS FOR INDIVIDUAL CONSIDERATION
Ordinance No. 2011-040
A. Consider adoption of an ordinance directing the publication of Notice of liitention to
issue $11,500,000 in principal amount of Certificates of Obligation of the City of
Denton for General Government and Solid Waste projects; and providing for an
effective date. The Audit/Finance Coininittee recoininends approval (3- 0).
Bryan Langley, Cluef Financial Officer, presented iiiformation for both Items A and B. He
indicated that state law required a notice of sale must be published prior to the actual sale.
These bonds would provide funding for $3.4 million for General Government projects and $7.8
million for Solid Waste projects. The Audit/Finance Committee recommended approval.
Mayor Burroughs aslced if there might be the possibility of not issuing the bonds if the savings
were not realized.
Langley stated that tlus was the notice of intent to issue the bonds and staff would rettirn at a
future date with the eYact amount to be issued. Item B dealt with a notice of intent to issue 1
million in Certificates of Obli~ation for wastewater and electric projects.
City of Denton City Council Minutes
March 1, 2 0 11
Page 15
Council Meinber Watts inotioned, Council Meinber ILing seconded to adopt the ordinances for
both Items A and B. On roll call vote, Council Meinber ILing "aye", Council Meinber Watts
"aye", Council Meinber Heggins "aye", Council Meinber Gregory "aye", and Mayor Burroughs
"aye". Motion carried unanimously.
Ordinance No. 2 011-041
B. Consider adoption of an ordinance directing the publication of Notice of liitention to
issue 1,000,000 in principal amount of Certificates of Obligation of the City of
Denton for Wastewater and Electric System projects; and providing for an effective
date. The Audit/Finance Committee recommends approval (3 - 0).
C. Consider a request for a variance to the Noise Ordinance by the North TeYas Rail
Group for the purpose of constniction activities of the DCTA A-train passenger
rail. The exception is requested for constniction worlc to begin at 9:00 a.in. instead
of 1:00 p.m. on Sundays, from March 2 through June 30, 2011.
Mayor Burroughs noted that tlus item had been pulled from consideration.
D. Continue consideration of adoption of an ordinance of the City of Denton, Texas,
providing for a zoning change from a Neighborhood Residential 3(NR-3 ) zoning
district classification and use designation to a Neighborhood Residential MiYed Use
12 (NRMCJ-12) zoiung district classification and use designation, with an overlay
district, on 6.836 acres of land located at the northeast corner of Glenwood Lane
and East Uiuversity Drive (U.S. 380), situated witlun the J.Q. Lilly Survey, Abstract
No. 762, witlun the City of Denton, Denton County, TeYas; providing for a penalty
in the maximum amount of $2,000.00 for violations thereof, severability and an
effective date. (Z 10-0007, 1411 E. University Drive) The Planning and Zoning
Commission recommends approval with an overlay district (3-2). DLTE TO MORE
THAN 20% OPPOSITION FROM THE LAND AREA WITHIN 200 FEET OF
THE REQUEST, A SUPERMAJORITY VOTE BY COUNCIL IS REQUIRED
FOR APPROVAL.
Mayor Burroughs noted that the applicant had asked for a continuance of tlus item as a
supermajority vote of the Council was needed and there were two meinbers absent.
Council Member ILin~ motioned, Council Member Watts seconded to continue the item to the
neYt Council meeting. On roll call vote, Council Meinber ILing "aye", Council Meinber Watts
"aye", Council Meinber Heggins "aye", Council Meinber Gregory "aye", and Mayor Burroughs
"aye". Motion carried unanimously.
Ordinance No. 2 011-0421
E. Consider adoption of an ordinance amending Ordinance No. 22003-2258 relating to
the Economic Development Partnership Board ("The Board" ) to add to the
membership of the Board and to expand the duties of the Board to include branding
and marlceting for the Denton Muiucipal Airport in support of the Denton Airport
?010 Business Plan and to further include duties related to Airport economic
development incentives; repealing all conflicting ordinances and portions thereof;
City of Denton City Council Minutes
March 1, 2 0 11
Page 16
and providing an effective date.
Bryan Langley, Cluef Financial Officer, presented an update on Items E, F. and G. Itein E would
eYpand the Economic Development Partnerslup Board by two members and eYpand the duties of
the Board to include branding and marketing for the Denton Municipal Airport. Item F would
establish a City Council Airport Coininittee to handle leases and budget issues. Itein G was a
resolution to create an Airport Manager Safety and Stakeholder Committee to eYplore a wide
range of safety and operational issues with appropriate stalceholders at the Airport. All of these
items had been discussed extensively durin~ the earlier Council Work Session.
Spealcer Cards were submitted by the following:
Jeremy Fykes, 3924 Chimney Rock, Denton, 76201. Mr. Fykes presented an updated
Airport Advisory Board (AAB) proposal for governance. The current AAB would be
restnictured and renamed the Denton Airport Enterprise Board and would replace the eYisting
Airport Advisory Board. The new Board would be comprised of seven members each nominated
by a city council member, with up to two members eligible to live outside the city limits. There
would be staggered initial term lengths with the term limits to be the same as the Denton Public
Utilities Board. Conflict of interest guidelines would be consistent with City of Denton
guidelines for other boards. Advantages of the stnicture would be to capitalize on the eYpertise
of the Econoinic Developinent Departinent and the EDPB to increase inarlceting and branding
efforts and attract new businesses to the Airport.
Don Smith, 21107 Emerson, Denton, 762209 - in favor of AAB proposal
Rick Woolfollc, 115 West College, Denton, 76201 - opposed to staff proposal
Bob Clifton, 1800 Morse, Denton, 76201 - opposed to staff proposal
Council Meinber ILing stated that he lilced the AAB proposal. He felt that the Safety and
Stakeholders Committee and the Council Committee had overlapping duties. He was
uncomfortable with a council committee havin~ that authority and lilced citizen input. The
enterprise suggested was a different charge to that Board.
Mayor Burroughs stated that Itein E dealt with a inodification to the EDPB. The enterprise
aspect was a primary element of the modification and would be more aggressive for economic
development. He did not have a problein with that element. He did have a problein with the
proposed ordinance repealed the eYisting AAB wluch he disagreed with. Discussion in the Worlc
Session centered on how to worlc around that problein. The nature of Itein G was not finalized at
this time so he was not in favor of eliminatintly the AAB until that section was completed. Item F
dealt with the Council Airport Committee. He agreed that the Council was responsible for many
major decisions and relied on outreach for input from citizens. The subcommittee had important
elements for leases, budget, contracts, etc. and he had no problem with it as it was Council's
responsibility. The operational aspect was not one that had a great role but after discussion
concluded to amend the ordinance to relegate what the committee might consider - matters of
policy that might affect operations. He was not satisfied that there was a conclusive alternative
with Item G. He suggested the charge the stalceholders, not just limited to the current AAB, to
have a meeting and come up with a best proposed stnicture for this group. Expand the input
from all citizens who might be interested. His preference would be to address Items E and F
City of Denton City Council Minutes
March 1, 2 0 11
Page 17
with inodifications as noted in Worlc Session and hold off on Itein G by not deleting the AAB.
The stakeholders could have a meeting with staff and develop a best stnicture to accomplish the
objectives needed. A time frame would be given for a report back to the Council.
Council Meinber Gregory inotioned to adopt the ordinance in 4E, inodifying Section 3 to end
with a period after "herewith" so that the section would read "amends Ordinance ?003-?58 and
supersedes any provision and others in conflict herewith". There would be no repeal of the
ordinance that created the Airport Advisory Board.
Mayor Burroughs questioned if the motion would be sufficient so not have a conflict with 97-
299 and the proposed ordinance.
City Attorney Burgess replied correct because included in the language was to repeal any
ordinance in conflict with the 2003 ordinance.
Council Member Watts stated that then the economic duties of the AAB would be transferred to
the EDPB because it would be in conflict with the new ordinance.
City Attorney Burgess stated that the language proposed that if there were any language in 97-
299 relatin~ to economic development, the lan~ua~e in the new ordinance would supersede it.
The intent was to put the econoinic developinent duties with the EDPB at this tiine and not with
AAB.
Council Meinber Watts questioned if the econoinic developinent function had not been in the
direct language of Ordinance 97-299 but had been a duty that was implied or assumed with the
AAB, how would that be handled. He questioned what the EDPB was to do and what the AAB
was to do.
City Attorney Burgess stated that the ordinance made it clear that the EDPB would assume
economic development as it concerned the Airport
Council Member Gregory understood that adding that responsibility to the EDPB dealt with
brandin~, marlcetin~ and coordinatin~ activities in that whole section of town..
Council Member Gregory motioned, Council Member ILing seconded to adopt the ordinance
with the amended lan~ua~e. On roll call vote, Council Member ILin~ "aye", Council Member
Watts "aye", Council Meinber Gregory "aye", and Mayor Burroughs "aye". Council Meinber
Heggins "nay". Motion carried with a 5-1 vote.
F. Consider approval of a resolution amending Resolution No. R2009-015 to establish
a standing coininittee of the City Council of the City of Denton, Texas to be lcnown
as the City Council Airport Committee to advise and assist the City Council
regarding City of Denton Muiucipal Airport Matters; alternatively assigiung such
duties to an existin~ City Council committee; and providin~ for an effective date.
Mayor Burroughs noted that a suggestion during the Work Session was to include a wording
change in 1C to add "of policy" to the phrase "affecting airport operations".
City of Denton City Council Minutes
March 1, 2 0 11
Page 18
Council Meinber Gregory inotioned, Council Meinber ILing seconded to table the itein with no
date certain. On roll call vote, Council Member ILing "aye", Council Member Watts "aye",
Council Meinber Heggins "aye", and Council Meinber Gregory "aye". Mayor Burroughs "nay".
Motion carried with a 5-1 vote.
G. Consider approval of a resolution establishing an Airport Manager Safety and
Stalceholder Committee to advise and assist the Airport Manager regarding City of
Denton Muiucipal Airport matters; and providing for an effective date.
Council Meinber Gregory inotioned, Council Meinber ILing seconded to table the itein.
Mayor Burroughs noted that staff had been asked to provide a stnicture for the committee and a
inethod to do the structure and aslced the best way to get that accoinplished.
City Attorney Burgess stated Council could instnict the City Manager to do that.
Council Member ILing suggested that it could be part two of the Airport Advisory Committee
proposal.
Council Meinber Gregory motioned, Council Meinber ILing seconded the motion to table
without a date certain but have staff return with options for a future work session. On roll call
vote, Council Meinber ILing "aye", Council Meinber Watts "aye", Council Meinber Heggins
"aye", Council Meinber Gregory "aye", and Mayor Burroughs "aye". Motion carried
Li11a1ll1T10LiSly.
H. Consider noininations/appointinents to the following boards and coininissions:
L Commuiuty Development Advisory Board
Human Services Advisory Committee
3. Public Art Coininittee
4. Traffic Safety Coininission
5. Zoiung Board of Adjustment
6. Designate a chairman for the Downtown Denton TaY liicrement Financing
Reinvestment Zone Board
There were noininations inade for Iteins H1-5.
Mayor Burroughs suggested having the Board for Item 46 meet and determine their chairman.
Council would then ratify that noinination.
City of Denton City Council Minutes
March 1, 2 0 11
Page 19
5. PUBLIC HEARINGS
Ordinance No. 2 011-043
A. Hold a public hearing and consider adoption of an ordinance regarding a Specific Use
Permit (SUP) to allow a theater use in a Downtown Commercial General zoiung district.
The approxiinately 127 acre site is located on the south side of East Hiclcory Street,
approximately 200 feet west of the intersection of East Hickory Street and Bell Avenue.
(510-0007, Black BoY Theatre) The Plaiuung and Zoiung Commission recommends
approval (4-0). (Cuiuunghain)
Mark Cunningham, Director of Planning and Development, stated that the request was for a
specific use permit to allow a theater use in a Downtown Commercial district. The use was
located witlun the Denton Record-Chroiucle building on East Hiclcory Street. The proposed use
would fit perfectly in the Downtown Iinpleinentation Plan. Staff and the Planning and Zoning
Commission recommended approval.
The Mayor opened the public hearing.
Bob Clifton, 1800 Morse Street, spolce in opposition.
The Mayor closed the public hearing.
Council Meinber Gregory aslced if the zoning change was for the entire bloclc.
Cuiuungham stated that it was not a zoiung change request but rather a request for a specific use
perinit for the theatre. The proposal would not change the zoning for the area.
Council Member ILing motioned, Council Member Heggins seconded to adopt the ordinance.
On roll call vote, Council Meinber ILing "aye", Council Meinber Watts "aye", Council Meinber
Heggins "aye", Council Meinber Gregory "aye", and Mayor Burroughs "aye". Motion carried
unaniinously.
B. Hold a public hearing and consider adoption of an ordinance of the City of Denton, TeYas,
concernin~ a Specific Use Permit for a new self-supportin~ lattice telecommunications
tower on property located within an Employment Center Industrial (EC-I) zoning district
classification and use designation. The approYimately 14.9 acre property is generally
located east of Teasley Lane and south of the Denton County Transportation Authority
railroad right-of-way and is inore coininonly lcnown as lot 6A, Bloclc B of the Shady Oalcs
Industrial Park Addition; and providing for a penalty in the maximum amount of
$2,000.00 for violations thereof, severability and an effective date. The Plaiuung and
Zoiung Commission recommends approval of tlus request (6-1). (510-0010, DCTA A-
Train North Communication Tower)
Mark Cunningham, Director of Planning and Development, stated that this was a request for a
specific use permit to allow for a 180 foot telecommuiucations tower. A specific use permit was
required whenever a tower eYCeed 50 feet. The property would be developed in two phases. The
first phase was located in the southwest corner of the property and involved approxiinately 800
City of Denton City Council Minutes
March 1, 2 0 11
Page ?0
square feet. It would involve the tower and a prefabricated 80 square foot enclosure. The
enclosure would house all the radio and fiber optic equipment necessary for the train dispatcher
to operate the train system. Phase two would consist of a DCTA Bus Maintenance facility wluch
would encoinpass the reinaining property. The proposal inet all the criteria needed for the
issuance of a specific use permit. Staff and the Plannintly and Zonincl, Commission recommended
approval with the condition that the eYisting landscaping screeiung between the property and
neighborhood north of ILerley Street be maintained.
The Mayor opened the public hearing.
The following individuals spolce during the public hearing:
Tom LeBeau, DCTA - favor
Council Meinber Gregory aslced if the oiily option was for one tall tower and questioned if two
sinaller towers would worlc instead.
LeBeau stated that tlus was the best solution and that they had loolced at other alternatives that
were too costly.
Council Member Gregory asked about meetings with the neighborhood.
LeBeau replied that they had multiple meetings.
Council Member Gregory asked if a communications tower had been contemplated early on in
the process.
LeBeau replied that early in the process, they did not know how it would be designed. As the
design progressed into the northern section of the corridor, it was brought up to DCTA to put a
tower in Denton. Various sites had been loolced at but tlus site was most conducive to the need.
Council Member Gregory asked if the buses were radio equipped.
LeBeau stated that the tower was not for the buses but rather for the A train.
Council Member Gregory asked if the tower would also be used for the buses.
LeBeau replied that they had not tallced about that at tlus time.
Council Member Watts asked if the tower would be leased out to other entities.
LeBeau replied no.
Council Member Watts asked if there would be any interfere with TV or radio in the
neighborhood.
LeBeau stated that the tower would be a standard railroad design and should have no impact in
the neighborhood.
City of Denton City Council Minutes
March 1, 2 0 11
Page ? 1
Council Member Heggins asked if the Lewisville tower was close to a neighborhood.
LeBeau stated that it was in an industrial area.
Mayor Burroughs asked if this tower was a safety requirement and was it a federal mandate.
LeBeau stated yes that it was a safety requirement but not a federal mandate. The radio
communications could be nin off a single tower but then there would be no baclcup if something
happen to the south tower.
Council Meinber Watts aslced about the cost differences with the other options of lesser heights.
LeBeau stated that he did not have that inforination with hiin.
Lillie Clarlc, 1009 ILerley Street, Denton, 76?05 - opposed
William Clark, 1109 ILerley Street, Denton, 76205 opposed
Willie Sellers, 930 Scott Drive, Denton, 76201 - opposed
Samuel Marshal, 1319 ILerley Street, Denton, 76?05 - opposed
Bob Clifton, 1800 Morse, Denton, 76?05 - opposed.
The Mayor closed the public hearing.
Council Meinber Gregory questioned if there would be guide wires with the tower.
LeBeau stated that it would be a frame constniction with no wires which helped to consolidate
the area needed.
Mayor Burroughs questioned the design of the stnicture.
LeBeau stated that the tower would loolc eYactly lilce the picture shown.
Mayor Burroughs aslced about interference with electronics.
LeBeau stated that if it could be shown that there was a problein with the tower, they would do a
study on the band width.
Council Meinber Watts questioned the tiine fraine that was required to have the tower
operational.
LeBeau stated that the northern section was starting in May so tiine was of the essence to get it
installed and tested before have trains were on the systein.
Council Member Watts asked about the time needed for constniction.
LeBeau replied it would talce three to four weelcs. Ground worlc would be done after the tower
was completed.
City of Denton City Council Minutes
March 1, 2 0 11
Page
Council Member Watts stated that he was concerned about the timing element with the
neighborhood and that no other options were considered. Tlus was a residential area and he
would like to see the cost differences for other options.
LeBeau stated that they had loolced at an offsite tower to utilize one already built. The cost and
security for the railroad and the needed commuiucation systein was seen as too costly.
Maintenance would also be difficult on a leased space. DCTA had already funded fiber optics
for communications for all 21 miles of the corridor. They would lilce to use the fiber optic
systein for efficiency up and down the line.
Council Meinber Watts questioned if an alternative fit had been loolced at for the ILerley site.
LeBeau stated that they had loolced at that site and one on the corridor which would have been
closer. Currently the proposed site was 600 feet from residences.
Council Meinber Watts stated that the shorter the tower the closer it had to be to the rail line.
LeBeau replied correct.
Council Member ILing asked about the zoning between the tower and ILerley Street.
Cuiuungham stated that the entire site was EC-I and the residences were NR-4.
Council Member Watts asked about the ramifications if the request were denied.
Cuiuungham stated that a delay oiily applied to rezoiung.
Mayor Burroughs asked what would be the alternatives.
Cuiuungham stated that if the alternative included a specific use permit, DCTA would have to
start over again with the Plaiuung and Zoiung Commission but if it was done by right, there
would be no additional action needed by Council and the Planning and Zoning Coininission. In
order for the specific use perinit requireinent to be in effect, the tower would have to be over 50
feet ta1L If that were the case, it would have to go to the Plaiuung and Zoiung Commission and
the C ouncil.
Mayor Burroughs stated that everything regarding the train had an iinpact on the opening of the
service. If there were no alternatives it would be very difficult to vote against sometlung that
would have major financial implications to all residents. Tlus could be a very dangerous issue
with minimal information.
City Manager Campbell stated that the tower was to create redundancy for the commuiucation
system. The primary system would still be functional for a train as tlus was a baclciip system.
He didn't lcnow if not havin~ it would hinder service.
Cuiuungham stated that if the specific use permit was deiued, the applicant would have to wait
one year before applying again.
City of Denton City Council Minutes
March 1, 2 0 11
Page ?3
Council Member Gregory questioned that if the motion was to deny and it passed but the
applicant came up with an alternative plan, would it be possible for one of the Council Meinbers
who voted to deny the proposal bring it up as a vote to reconsider.
Mayor Burroughs stated that the inotion to reconsider had to be done by soineone in the inajority
as long as it was brought up at neYt meeting. He suggested continuing it to the neYt council
meeting to determine the impact of a deiual. He questioned what would happen if the proposal
were delayed until the April Sth meetin~ to ~et more information on alternatives.
LeBeau stated that he could not answer that and would have to tallc with the contractor. They
had loolced at right of way options, off site options and others and chose tlus route. A delay
might affect the testing date of May 1 st. The system would be able to operate without the
redundancy but he would be afraid that it would not be viewed favorable if they did not have a
baclaip system.
Council Meinber Heggins aslced if a new site could be found and this proposal were denied,
would the 12 month ~ile come into play
Cuiuungham stated that it would oiily apply to tlus location.
Council Meinber Watts stated that even if an alternative site were found, it inight talce 30-60
days to get back to Council.
Cunninghain stated that it would talce longer than that because DCTA probably would not own
the property.
Mayor Burroughs stated that then there would be the rezoiung issues.
Council Member Watts stated that a$300 million project was coming down to the location of a
tower.
Council Member Heggins motioned, Council Member Gregory seconded to deny the request.
Council Member Watts motioned, Council Member ILing seconded to postpone the issue to the
neYt council meeting. On roll call vote, Council Meinber ILing "aye", Council Meinber Watts
"aye", Council Member Heggins "aye", Council Member Gregory "aye", and Mayor Burroughs
"aye". Motion carried unanimously.
6. CONCLUDING ITEMS
A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from
the City Council or the public with specific factual information or recitation of
policy, or accept a proposal to place the matter on the agenda for an upcoming
meeting AND Under Section 551.0415 of the TeYas Open Meetings Act, provide
reports about items of community interest regarding which no action will be talcen,
to include: expressions of thanks, con(yratulations, or condolence; information
regarding holiday schedules; an honorary or salutary recogiution of a public official,
City of Denton City Council Minutes
March 1, 2 0 11
Page ?4
public einployee, or other citizen; a reininder about an upcoining event organized or
sponsored by the governing body; inforination regarding a social, cereinonial, or
commuiuty event orgaiuzed or sponsored by an entity other than the goveriung body
that was attended or is scheduled to be attended by a meinber of the goveriung body
or an official or employee of the municipality; or an announcement involvincl, an
iinininent threat to the public health and safety of people in the inunicipality that has
arisen after the posting of the agenda.
Mayor Burroughs requested information on the sound barrier along ILerley Street including the
original criteria and how that changed regarding the allocation for the grant funding.
Council Member Watts asked staff to eYplore the option of DCTA and UNT cooperating in a
partnership to help move people on game days and event days at the new stadium.
B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the
TeYas Open Meetings Act.
There was no continuation of the Closed Meeting.
C Official Action on Closed Meeting Itein(s) under Sections 551.071-551.086 of the
TeYas Open Meetings Act.
There was no official action on Closed Meeting iteins.
With no further business, the meeting was adjourned at 9:08 p.m.
MARIL A. BLJRROUGHS
MAYOR
CITY OF DENTON, TEXAS
JENNIFER WALTERS
CITY SECRETARY
CITY OF DENTON, TEXAS
CITY OF DENTON CITY COUNCIL MINUTES
March 8, 2 0 11
After determining that a quonim was present, the City Council convened in a 2ic1 Tuesday
Session on Tuesday, March 8, 2011 at 4:00 p.in. in the Council Worlc Session Rooin at City Hall.
PRESENT: Council Meinber ILing, Council Meinber Heggins, Council Meinber Gregory,
Mayor Burroughs, Council Member Watts, and Mayor Pro Tem ILamp.
ABSENT: Council Meinber Engelbrecht.
Mayor Burroughs aiuiounced that Council would be going into Closed Session before
considering the items on the Tuesday Session.
L Closed Meetin-:
A. Consultation with Attorneys - Texas Governinent Code Section 551.071.
L Consult with City's attorneys on legal issues associated with eYisting and
potential regulation of gas well drilling and eYploration witlun the Denton
city limits and extraterritorial jurisdiction, specifically includin~, but not
limited to, the followint', general categories, as they may relate to such
regulations:
a. Legal issues and strategies associated with the imposition,
calculation and assessment of various local permittin~, road
remediation and inspection fees, and local requirements for operators
to provide security and insurance, as such fees and requirements
relate to gas well drilling and production in the Denton city liinits
and extraterritorial jurisdiction;
b. Legal issues and strategies associated with possible preemption of
local regulatory standards relating to gas well drilling and
exploration within the Denton city liinits and extraterritorial
jurisdiction, by existing, proposed and potential Federal and State
legislation, and admiiustrative regulations; and
c. Legal issues and strategies associated with proposed and potential
modifications to existin~ local re~ulations, as they relate to ~as well
drilling and exploration within the Denton city liinits and
eYtraterritorial jurisdiction, as well as limitations imposed upon the
City's regnilatory authority, with regard to such issues and strategies.
B. Consultation with Attorneys - Under Texas Governinent Code, Section 551.071;
and Deliberations Regarding Real Property - Under Texas Governinent Code,
Section 551.0721.
L Consult with City's attorneys on legal issues associated with the proposed
annexation of 1,595 acres of land previously designated as areas DH-7, DH-
9 and DH-12 in the City's 2009 Annexation Study, specifically including,
City of Denton City Council Minutes
March 8, 20 11
Page ?
but not limited to, legal and strategic issues associated with the proposal,
modification, ne~otiation execution, and enforcement of service plans and
non-aiuieYation agreements, as well as more general legal and strategic
issues relating to the aiuieYation of each area.
2. Discuss, deliberate and receive information from Staff and provide Staff
with direction pertaining to the possible acquisition of certain real property
located in the downtown area of Denton, TeYas, Denton County, TeYas,
including real property located in the H. Cisco Survey, Abstract No. 1184
and in B.B.B. & CRR Company Survey, Abstract No. 185. Consultation
with the City's attorneys regarding legal issues associated with the potential
acquisition of the real property referenced hereinabove, where a public
discussion of these legal matters would conflict with the duty of the City's
attorneys to the Denton City Council under the Texas Rules of Disciplinary
Conduct of the State Bar of Texas, or would jeopardize the City's legal
position in any potential litigation. C E R T I F I C A T E
Following the completion of the Closed Session, the Council convened into the 2"d Tuesday
Session.
1. Receive a report, hold a discussion and give staff direction regarding the Fire Department's
2010-11 FY budget update and Strategic Plan review.
Ross Chadwiclc, Fire Chief, stated that Council had requested an update at the end of the first
quarter as it related to the budget reductions and staffing impacts that were part of the 2010-11
FY budget. He presented a five-year lustory of emergency responses. That lustory showed that
building fires were down about 1.4% with EMS and fire calls staying about the saine.
One of the budget issues dealt with the direction from Council to reduce overtime by one tlurd.
He reviewed the first quarter overtime comparison from the first quarter from the previous year.
There had been no impact on service and the figures showed that the reduction in daily minimum
staffin~ from 37 to 35 had accomplished its primary ~oal of reducin~ overtime.
Another budget strategy was to freeze several positions wluch included one fire captain and one
receptionist position. Those frozen positions would result in an annual savings of $201,704.
During budget discussion, the Council aslced about the options to increase staffing and/or
deployment. At that time, he had presented the preferred staffing/deployment option in the
strategic plan which was to provide an ainbulance coinpany at every fire station phased in over a
period of tiine deterinined by the econoiny, growth patterns, unit and fire station worlcloads, and
emergency call volume. That ultimately meant an additional three ambulance compaiues at the
fire stations that currently did not have a front line ainbulance company.
Options for this type of staffin~ included (1) add a front-line ambulance at Fire Station 41 on a
part-time basis, add a front-line ainbulance full time at Station 41, (3) add at least two
ambulances to provide a non-emergency transfer business, and (4) keep staffing and deployment
as it currently existed. At this time, staff was recommendin~ Option 44.
City of Denton City Council Minutes
March 8, 20 11
Page 3
Council Member Gre~ory asked about the cost of part-time to full-time.
Chadwick stated that $200,000 would be needed for full time and part time would be
approxiinately $150,000.
Council Meinber Gregory aslced for more iiiformation on what would happen for a non-
emergency transfer when an emergency happened.
Consensus of the Council was to lceep the status quo and follow the staff recoininendation.
The Council went into the Special Called Session to consider the following item.
1. Consider approval of a resolution confirming the appointment by the City Manager of Paul
Abbott as Interim Police Chief for the City of Denton Police Department; and declaring an
effective date.
Council Member Heggins motioned, Mayor Pro Tem ILamp seconded to approve the resolution.
On roll call vote, Council Meinber ILing "aye", Council Meinber Watts "aye", Council Meinber
Heggins "aye", Council Meinber Gregory "aye", Mayor Pro Tem ILamp "aye" and Mayor
Burroughs "aye". Motion carried unanimously.
Council returned to the 2"d Tuesday Session.
Receive a report, hold a discussion and give staff direction regarding the position vacancy
inanageinent prograin within the City of Denton.
Bryan Langley, Chief Financial Officer, stated that the overall goal of the prograin was to save
$1.45 million and the City was on track to save at least that amount.
He indicated that bud~et plannin~ for the FY 10-11 estimated an initial $8.5 million ~ap between
revenues and expenditiLires in the General Fund. Several operational cost saving measures were
considered. Since persoiuiel costs represented the largest portion of the General Fund
eYpenditures, options for reducing those costs had to be considered.
The Vacancy Management Plan resulted in no layoffs and savings were achieved by not filling
approYimately ?2 positions. As position turnover and attrition rates dictated, vacant positions
were filled according to need. Since the adoption of the budget, several positions had become
vacant. Timin~ and cost of each vacant position factored into the total savin~s for the fiscal year.
Staff traclced the savings on a weelcly basis and it appeared that the city was on traclc to achieve
at least the $1.45 million in cost savings.
Mayor Burroughs left the ineeting.
3. Receive a report, hold a discussion and give staff direction regarding the Council's
objective of developing commuiuty leaderslup through boards and commissions.
City of Denton City Council Minutes
March 8, 20 11
Page 4
City Manager Cainpbell stated that this itein included the action steps identified by the City
Council. He suggested that the discussion be postponed until there was a full Council and defer
the item to another meeting.
Consensus of the Council was to postpone the item to another meeting.
With no further business, the meeting was adjourned at 6:30 p.m.
MARIL A. BLJRROUGHS
MAYOR
CITY OF DENTON, TEXAS
JENNIFER WALTERS
CITY SECRETARY
CITY OF DENTON, TEXAS
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, ?O11
DEPARTMENT: Utility and CIP Engineering
ACM: Howard Martin, 349-8?3?
SUBJECT
Consider adoption of an ordinance of the City of Denton, TeYas, amending Chapter 30 of the
Denton Code of Ordinances to comply with National Flood Insurance Rate Program; providing
for severability; providing for a penalty not to exceed $2,000 for violations of this ordinance; and
providing for an effective date.
BACKGROUND
The Department of Homeland Security's Federal Emergency Management Agency (FEMA)
issues the Flood liisurance Rate Map (FIRM), or the map that identifies the areas that would be
inundated by a flood having a one percent (1%) chance of being equaled or exceeded in any
given year (the base flood) in the coininunity. These areas are terined the Special Flood Hazard
Areas, or SFHAs. FEMA recently re-evaluated the flood hazards in Denton and on June 29,
?007, FEMA provided the City with preliminary copies of the Flood liisurance Study (FIS)
report and FIRM that identified existing flood hazards, including the Base Flood Elevations
(BFEs), or the elevations of the 100-year flood event. City staff was afforded an opportunity to
review and comment on the map and study. On Septeinber 18, 21009, FEMA provided revised
preliminary copies of the FIS report and FIRM, and the proposed BFEs for Denton were
published in the Fecler•al Register• in December 2009 and in the Deratora Recor•c1 C'hr•oraicle twice
in January 2010.
There was a statutory 90-day appeal period for the proposed BFEs after their publication, which
has ended. According to FEMA, "all tecluucal data submitted in support of the appeal have been
evaluated, and the appeal has been resolved." The BFEs for Denton are now considered
finalized. The final nile for the BFEs will be published in the Federal Register, and the FIRM
for Denton will become effective on April 18, 2011, before which the City is required to adopt or
show evidence of adoption of floodplain management regulations that meet the standards of
Paragraph 603(d) of the National Flood liisurance Program (NFIP) as a condition of continued
eligibility for participation in this prograin.
The Flood Insurance and Mitigation Adininistration (FIMA), a coinponent of FEMA, inanages
the NFIP. The three components of the NFIP are flood insurance, floodplain management and
flood hazard mapping. According to FEMA, "nearly 210,000 commuiuties across the Uiuted
States and its territories participate in the NFIl' by adopting and eiiforcing floodplain
inanageinent ordinances to reduce future flood dainage. In exchange, the NFIP inalces Federally
baclced flood insurance available to hoineowners, renters, and business owners in these
commuiuties. Commuiuty participation in the NFIP is voluntary."
Flood insurance is intended as an alternative to disaster assistance in helping to reduce the rising
costs of repairing dainage to buildings and their contents caused by floods. FEMA states that
"flood dama~e is reduced by nearly $1 billion a year throu~h communities implementin~ sound
floodplain management requirements and property owners purchasing of flood insurance.
Additionally, buildings constnicted in compliance with NFIP building standards suffer
approYimately 80 percent less damage aiuiually than those not built in compliance. lii addition to
providing flood insurance and reducing flood damages through floodplain management
regulations, the NFIP identifies and inaps the Nation's floodplains. Mapping flood hazards
creates broad-based awareness of the flood hazards and provides the data needed for floodplain
management programs and to actuarially rate new constniction for flood insurance."
Chapter 30 "Flood Prevention and Protection" of the Denton Code of Ordinances serves as the
City's primary floodplain management regulation. There are some complimentary sections, and
some amount of overlap, found within Subchapters 35.17 "Environmentally Sensitive Areas"
and 35.19 "Drainage Standards" of the Denton Development Code (DDC). For instance, the
designations of undeveloped and developed floodplains on the Enviroiunentally Sensitive Areas
(ESAs) map are based on the elevations of the 100-year flood event identified on the FIRM, as
outlined in Sec. 35.17.4. Therefore, the undeveloped and developed floodplain on the ESA map
would readjust to correspond with the 2011 FIRM. In addition, staff is currently worlcing on an
update on and revisions to Subchapter 35.19 wluch, among other tlungs, will bring it and Chapter
30 of the Code into agreement. lii the meantime, in order to meet the FEMA requirements and
maintain the City's participation in the NFII' prograin, certain minor amendments are required to
Chapter 30 prior to the effective date of the FIRM.
Definitions
Section 30-3 -"Defiiutions" needs to be modified to include the following new defiiutions:
• Existirag nzaraiffaetirr•ecl honze l)ar•k or• sUbcliVisiOra means a manufactured home parlc or
subdivision, in wluch the constniction of facilities servicing the lots upon wluch the
manufactured homes are to be affiYed (including, at a miiumum, the installation of
utilities, the constniction of streets, and either final site grading or the pouring of
concrete pads), was completed prior to August 1, 1979, the effective date of the
floodplain management regulations adopted by the City of Denton.
• Regarlatoi-il, Flooca'wra~, means a river, chaiuiel or other watercourse and the adjacent
land areas that must be reserved in order to discharge the base flood without
cumulatively increasing the water surface elevation more than a designated height.
Normally, the floodway will include the stream chaiuiel and that portion of the
adjacent land areas required to pass the base flood (one-hundred-year flood)
dischar(,e without cumulatively increasing the water surface elevation at any point
more than one (1) foot above that of the prefloodway condition, including those areas
designated on the flood insurance rate map.
• Riverine means relating to, formed by, or resembling a river (including tributaries), stream,
broolc, etc."
The following defiiution for Floodway needs to be deleted (replaced by Regulatory Floodway as
defined above).
•"Flooclwczll means a river, chasinel or other N-,atercourse and the adjacent land areas that must
be reseitired iu order to discharge the base flood N-6thout cumulatively increasiug the vmter
suiface elevation more than a designated height. Normallv, the floodvmv N-611 iuclude the
stream channel and that portion of the adjacent land areas required to pass the base flood
(one-hundred-N-ear flood) discharge N-6thout cumulativelv increasiug the vmter suiface
elevation at any point more than one (1) foot above that of the prefloodi-my condition,
iucluding those designated on the flood iusurance rate map."
The following definitions need to be inodified as follows:
• 1llcznarfczetarr'ed honze shall be chaiiged from "nzeczns cz str'aretarr'e, tr'cznsj)or'tczble in one (1) or
more sections, tivhich is barilt on al)cPmanent chassis ancl is designedfbr arse tivith or tivithoart
(I l)«°manent foarnd(Ition laving comiectecl to the reqarired facilities. For floodlVain
111LdmdqC'111C'nt jnfly)OSC'S, tI'IC' tC'1711 "111Ldn2ffLdCt2fl'('.d I'10111C'" LdISO 7nCI2fdC'S jml'IZ tl'LdIIC'l'S, tl'LIL'C'I
0r4ail«°s ancI otheP sirnil(11° vehicles lVaced arl)on a site fbr great«° than one harndred eightv
(I[4O) COnSC'C2ftll'C' Ckdl'S. FOl' 7nS2fl4LdnCC' jJ2flyJOSC'S, tI'IC' tC'1711 "J11Ldn2ffLdCt2fl'C'd I'10J11C'" ClOC'S nOt
7nCI2fdC' 1)Ldl'Iz tl'LdIIC'l'S, tl'LIL'C'I tlYdllC'l'S Ldnd OtI'IC'l' S11117ILdl' l'C'I'17CIC'S. ' t0 111('LdnS Ld Stl'2fCt2fl'C',
tran,til)oPtable in one (1) or more sections, tivhich is barilt on (1 l)cr°manent chassis ancl is
designed,for arse with or withoart cz I)er'nzcznent foarnckztion Icz1°ing eonneeted to the r'ecjarir'ed
fLdClllt7C'S. TI'IC' tC'1711 "111Ldn2f fLdCt2fl'C'd I'10111C' " ClOC'S nOt 7nCI2fdC' Ld l'C'Cl'('LdtlOnLdI l'C'I'17CIC'.
• New eonstnretion shall be changed from "nzeczns stnretarr4es for whieh the stczrt of'
COnStl'2fCtl0n COI11111C'nC('d On Ol' LdfrC'l' tI'IC' C1)e Ctll'C' C~LdtC' Of Ld fI00C~lVLdIn 111LdmdqC'111C'nt l'C'g2flLdtlOn
czdovted bll cz eonznzunity cznd ineludes cznl° subsecjuent in7j)r'oven7ents to sueh str'arelzrr'es. " to
`;fol" tl?E' p1lIyJOSE' Of GlE'tE'1'1??ll?ll?g ll?S1l1'ql?CE' 1'qtE'S, "l?E'11' COI?St1'1lCt101?" 1??E?ql?S
St1'1lCt1l1'E?S f01' 11'l?1Ch tl?E' "Stq1't Of COI?St1'1lCt101?" COl??1??E'1?CE?d OI? 01' qftE'1' AllR7lSt 1,
1979, the effectiiv clate of the irlitial FIRA1 irachtclirag arai' siibseqiterlt inzl)r•oi,enzerats
to sitch str•itetitr•es. For.f7oocllVaira nzaraagellzeratlnIrPoses, „raeiv c0rastr•iletiora" nzearas
St1'1lCt1l1'E?S f01' 11'l?1Ch tl?E' "Stq1't Of COI?St1'1lCt101?" COl??1??E'1?CE?d OI? 01' qftE'1' AllR7lSt 1,
1979, tl?E' E'ffE?Ctll'E' Gd~qtE' Of tl?E' f~00Gd~lJJql1? 1??ql?qgE'1??E'1?t 1'E'R7lJqtl01i qGd~O~JtE?Gd~ ~~l' tl?E' ~~111'
ofDerltora, irachtcliiag arai'sitbseqnerat ilizl)r•oi,elizerats to siIch str•itctitr•es. "
Snecial Flood Hazard Areas
Section 30-5 -"Basis for establishing the areas of special flood hazard" is the section under
wluch the currently effective FIRM was adopted. The current language was adopted by
Ordinance No. 97-056 and states:
"The areas of special flood hazard identified by the Federal Emergency Management
Agency on the flood insurance rate inap (FIRM) and the flood boundary/floodway inap,
Community No. 480194, dated April 2, 1997, and any subsequent revisions thereto are
hereby adopted by reference and declared to be a part of tlus chapter."
liiasmuch as the current maps will be superseded by the new FIRM as of April 18, 20 11 and
inasmuch as subsequent updates to the FIS and FIRM are inevitable, the following language is
recommended to replace this existin~ section:
"The areas of special flood hazard identified by the Federal Einergency Manageinent
Agency in the current scientific and engineering report entitled, "The Flood liisurance
Study (FIS) for Denton County, TeYas and liicorporated Areas" dated April 18, 2011,
with Flood Insurance Rate Map (FIRM), dated Aprill8, 2011; and any revisions thereto
are hereby adopted by reference and declared to be a part of this chapter."
Citv Engineer
Section 30-32 -"Duties and responsibilities of the city engineer" needs to be amended to include
the following:
(x) "Review permit applications to determine whether the proposed buildin" site project,
including the placement of manufactured homes, will be reasonably safe from
flooding.
(9) In riverine situations, notify adjacent communities, the Texas Water Development
Board (TWDB) and the Texas Coininission on Environinental Quality (TCEQ), prior
to any alteration or relocation of a watercourse, and submit evidence of such
notification to the Federal Emergency Management Agency.
(10) The City Engineer must require that no new constniction, substantial improvements,
or other developinent (including fill) shall be perinitted within Zones A1-30 and AE
on the commuiuty's FIRM, uiiless it is demonstrated that the cumulative effect of the
proposed development, when combined with all other eYisting and anticipated
developinent, will not increase the water surface elevation of the base flood at any
point within the community, and that all provisions of Denton Development Code
Subchapters 35.17 and 35.19 are met."
Manufactured Homes
Section 30-53 -"Specific standards", subsection (c) "Manufactured homes", part currently
states:
"All manufactured homes to be placed or substantially improved witlun zones A1-30, AH
and AE shall be elevated on a perinanent foundation so that the lowest floor of the
manufactured home is at least eighteen (18) inches above the base flood elevation under
encroached stream conditions, and shall be securely anchored to an adequately anchored
foundation in accordance with provisions of section 32-94(b)(6) of this Code."
Inasmuch as the base flood elevation under encroached stream conditions is somewhat difficult
to define or establish and Code Chapter 32 was iinplicitly repealed by the DDC, the following
language is recommended to replace tlus eYisting section:
"All manufactured homes to be placed or substantially improved witlun zones A1-30, AH
and AE shall be elevated on a permanent foundation so that the lowest floor of the
manufactured home is at least thirty (30) inches above the base flood elevation found in
the current flood insurance study, or if no flood insurance shidy is available, eighteen
(18) inches above the base flood elevations, as determined using ultimate development
watershed conditions, and shall be securely anchored to an adequately anchored
foundation in accordance with all tie-down requirements imposed by State law or City
ordinance."
Section 30-53(c) shall also be ainended to include the following:
(3) "All manufactured homes not otherwise subject to the requirements of 30-53(c)(1) or
(c)(?) shall, if placed or substantially improved on sites witlun an eYisting
inanufactured hoine parlc or subdivision located within Zones A1-30, AH or AE of
the FIRM, be elevated so that either:
(i) the lowest floor of the inanufactured hoine is elevated thirty (30) inches above the
base flood elevation found in the current flood insurance study, or if no flood
insurance study is available, eighteen (18) inches above the base flood elevations,
as determined usin~ ultimate development watershed conditions; or
(ii.) the manufactured home chassis is supported by reinforced piers, or other
foundation elements of equal or greater strength, with the lowest floor of the
manufactured home elevated at least 36 inches above grade, and securely
anchored to a foundation systein sufficient to resist flotation, collapse, and lateral
movement in accordance with all tie-down requirements imposed by State law or
City ordinance."
lii addition, a new subsection for recreational velucles shall be added:
(d) "Recr•eatioraal i,ehicles. All recreational vehicles placed on sites within Zones A1-30,
AH, and AE on the commuiuty's FIRM shall either:
(1) be on the site for fewer than 180 consecutive days;
(2) be fully licensed and ready for highway use; or
(3) meet the permit requirements of Section 30-34(a), and the elevation and
anchoring requirements specified for "manufactured homes" in paragraph 30-
53(c).
A recreational vehicle is ready for highway use if it is on its wheels or jaclcing
systein, is attached to the site only by quiclc disconnect type utilities and security
devices, and has no permanently attached additions."
All other provisions of Chapter 30 shall remain unchanged until such time as staff can bring
forward the proposed updates to Subchapter 35.19 of the DDC for adoption along with any
additional changes to Chapter 30 as inay be necessary and applicable.
OPTIONS
1. Approve the recoininended ainendinents to Chapter 30.
Approve the amendments to Chapter 30 with modifications.
3. Deny approval of the recommended amendments.
RECOMMENDATION
Staff recommends approval of the amendments to Chapter 30 of the Denton Code of Ordinances.
It is staff's belief that these are the miiumum revisions necessary for the City to remain
compliant with the FEMA provisions for continued participation in the NFIP. These revisions
inust be adopted prior to the effective date of the new FIRM on April 18, 2011.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
Not applicable.
EXHIBITS
1. Ordinance
Respectfully submitted,
~
Franlc G. Payne, P.E.
City Engineer
s:\Iegal\our documents\ordinances\11\nf1p chapter 30 code amendment clean 032511.doc
ORDfNANCE 2011-
AN ORDfNANCE OF THE CITY OF DENTON, TEXAS, AMENDING CFIAPTER 30 OF
THE DENTON CODE OF ORDINANCES TO COMPLY WITH NATIONAL FLOOD
INSURANCE RATE PROGRAM; PROVIDING FOR SEVERABILITY; ; PROVIDING FOR
A PENALTY NOT TO EXCEED $2,000 FOR VIOLATIONS OF THIS ORDINANCE; AND
PROVIDING FOR AN EFFECTIVE DATE..
WHEREAS, the Federal Emergency Management Agency (FEMA) of the Department
of Homeland Security has recently revised the Flood Insurance Rate Map for the Denton Area,
and it is therefore necessary to revise Denton's ordinances to incorporate the new nzap, revise
definitions relating to its interpretation, and revise standards relating to certain structures; and
WHEREAS, the City Council of the City of Denton, Texas has considered the matter
and deems it appropriate and in the best interest of the public and the City to help facilitate the
instailation and operation of this Ordinance; NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. Section 30-3 of the Denton Code of Ordinances is hereby revised to add or
modify the following definitions, as shown and denoted by underscore, and delete the foliowing
definitions denoted by strikeout:
• Existine manufacturect home pnrk or subdivision means a manufactured home Darlc
or subdivision, in which the construction of facilities servicing the lots upon which
the manufactured homes are to be affixed (includinia, at a minimum, the installation
of utilities, the canstruction of streets, and either final site grading or the pourina of
concrete bads), was campleted briar to Ausaust 1, 1979, the effective date of the
floodblain mana2ement reiaulations adopted bv the Citv of Dentan.
• Re2ulatorv Flovdwav means a river, channel or other watercourse and the adiacent
land areas that must be reserved in order to discharge the base flood without
cumulativelv increasinii the water surface elevation more than a desiiznated heiizht.
Normallv, the floodwav will include the stream channel and that bortion af the
adiacent land areas reauired to bass the base flood (one-hundred-vear flood)
discharize without cumulativelv increasinu the water surface elevation at anv boint
more than one (1) foot above that of the brefloodwav candition, includina those areas
designated on the flood insurance rate man.
• Riverine means relatina to, formed bv, or resemblinQ a river (including tributaries),
stream, brook, etc.
• Manufacturecl home means a structure, transnortable in one (1) or more seetions,
which is built on a bermanent chassis and is desitined for use with or without a
bermanent foundation when connected to the reauired facilities. The term
"manufactured hame" does not include a"recreationai vehicle.
Page - 1
s:\legal\our documents\ordinances\11\nfip chapter 30 cnde amendment dean 032511.doc
• New construction. For the buraose of determininia insurance rates, "new
construction" means structures for which the "start of construction" commenced on or
after Auaust 1, 1979, the effective date of the initial FIRM, including anv subseauent
imnrovements to such structures. For floodblain manaiaement purposes. "new
construction" means structures for which the "start of construction" commenced on or
after August 1, 1979, the effective date of the floodblain manaizement resaulatian
adobted bv the Citv of Denton, includiniz anv subseauent improvements to such
structures.
SECTION 2. Section 30-5 of the Denton Code of Ordinances is hereby amended to read
as follows:
Sec. 30-5. Basis for establishing the areas of special flood hazard.
The areas of special flaod hazard identified by the Federal Emergency
Management Agency in the current scientiFic and engineering report entitled, "The Flood
Insurance Study (FIS) for Denton County, Texas and Incorporated Areas" dated April 18,
2011, with Flood Insurance Rate Map (FIRM), dated April 18, 2011; and any revisions
thereto are hereby adopted by reference and declared to be a part of this chapter.
SECTION 3. Section 30-32 of the Denton Code of Ordinances is hereby amended to
append subparagraphs (8) through (10), as set forth below, to the existing provisions:
Sec. 30-32. Duties and responsibilities of City Engineer.
[Existing provisions unchanged]
(8) Review permit applications to determine whether the proposed building
site project, including the placement of manufactured homes, will be
reasonably safe from floading.
(9) In riverine situations, notify adjacent communities, the Texas Water
Develapment Board (TWDB) and the Texas Commission on
Environmental Quality (TCEQ), prior to any alteration or relocation of a
watercourse, and submit evidence of such notification to the Federal
Emergency Management Agency.
(10) The City Engineer must require that no new construction, substantial
improvements, or other development (including fill) shall be permitted
Page - 2
s:\legal\nur documents\ordinances\11\nfip chapter 30 code amendment clean 032511.doc
within Zones A1-30 and AE on the community's FIRM, unless it is
demanstrated that the cumulative effect of the proposed development,
when combined with all other existing and anticipated development, will
not increase the water surface elevation of the base flaod at any point
within the community, and that all provisions of Denton Development
Code Subchapters 35.17 and 35.19 are met.
SECTION 4. Subsection 30-53 of the Denton Code of Ordinances is hereby amended to
append subparagraph (c)(3), as set forth below, to the existing provisions, and to append a new
subsection (d) as well:
Sec. 30-53. Specific standards.
[Existing subparagraphs 30-53 (a) and (b) remain unchanged]
(c) Manufactur^ed homes.
[Existing subparagraph 30-53(c)(1) shall remain unchanged. Existing
subparagraph 30-53(c)(2) is hereby amended as foilows and new
subparagraph 30-53(c)(3) is hereby added.]
(2) All manufactured hames to be placed or substantially improved
within zones A1-30, AH and AE shail be elevated on a permanent
foundation so that the lowest floor of the manufactured home is at
least thirty (30) inches above the base flood elevation found in the
current fload insurance study, or if no flood insurance study is
available, eighteen (18) inches above the base flaod elevations, as
determined using ultimate development watershed conditions, and
shall be securely anchored to an adequately anchored foundation
in accordance with all tie-down requirements imposed by State law
or City ordinance.
(3) All manufactured homes nat otherwise subject to the requirements
of 30-53(c)(1) or (c)(2) shall, if placed or substantially improved
on sites within an existing manufactured home park or subdivision
located within Zoncs A1-30, AH or AE of the FIRM, be elevated
so that either:
(i) the lowest floor of the manufactured home is elevated thirty
(30) inches above the base flood elevation found in the
current flood insurance study, or if no flood insurance study
is available, eighteen (18) inches above the base flood
elevations, as determined using ultimate development
watershed conditions; or
(ii) the manufactured home chassis is supported by reinforced
piers, or other foundation elements of equal or greater
Page - 3
s:\legal\our documents\ordinantes\11\nfip chapter 30 eode amendment clean 032511.doc
strength, with the lowest floor of the manufactured home
elevated at least 36 inches above grade, and securely
anchored to a foundation system sufficient to resist
flotation, collapsc, and lateral movement in accordance
with all tie-down requirements imposed by State law or
City ordinance.
(d) Recreativnal vehicles. All recreational vehicles placed on sites within
Zones A1-30, AH, and AE on the community's FIRM shall either:
(l) be on the site for fewer than 180 consecutive days;
(2) be fully licensed and ready for highway use; or
(3) meet the permit requirements of Section 30-34(a), and the
elevation and anchoring requirements specified for
"manufactured homes" in paragraph 30-53(c).
A recreationai vehicle is ready for highway use if it is on its wheels or
jacking system, is attached ta the site only by quick disconnect type
utilities and security devices, and has no permanently attached additions.
SECTION 5. If any provision of this ordinance or the application thereof to any person
or circumstance is held invalid by any court, such invalidity shall not affect the validity of other
provisions or applications, and to this end the provisions of this ordinance are severable.
SECTION 6. Any person found liable of violating the requirements adopted by Sections
l, 3, or 4 of this ordinance by a court of campetent jurisdiction shall be fined a sum not to exceed
two thousand dollars ($2,000) per offense per day. Each day that a provision of this ordinance is
violated shall constitute a separate offense
SECTION7. Section 2 of this ordinance shall become effective on April 18, 2011;
however, the remaining provisions shail become effective fourteen (14) days from the date af
passage and approval, and the City Secretary is hereby directed to cause the caption of this
ordinance to be published twice in the Denton Record-Chronicle, a daily newspaper pubiished in
the City of Denton, Texas, within ten (10) days of the date of its passage.
PASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
Page - 4
s:\Iegai\our dbcuments\ordinances\11\nfip chapter 30 code amendment clean 032511.doc
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
AY;
w_.
~
- 5
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Utilities
ACM: Howard Martin, 349-8232 1k,1,
SUBJECT
Consider adoption of an ordinance authorizing the City Manager of the City of Denton, Texas
("CITY" ) to eYecute for and on behalf of the City an Easement Abandonment Agreement to abandon
(i) that certain Public Drainage and Detention Easement, dated August ?3, 21000, from Campus Parlc
Denton, Ltd. to the City of Denton, Texas, recorded as County Clerk file number 00-R0088188,
Volume 4671, Page 42, Real Property Records of Denton County, Texas, (ii) that certain Limited
Easement for the liistallation of Water and Sewer Utilities, dated November 11, 1987, from George E.
liunan, George E. liunan, Jr., Glen Ray liunan and Jimmie D. liunan to the City of Denton, Texas,
recorded as Voluine 2356, Page 711, Real Property Records, Denton County, Texas, and (iii) a portion
of that certain Public Utility Easeinent, dated August 17, 2000, from Cainpus Parlc Denton, Ltd. to the
City of Denton, Texas, recorded as County Clerlc File No. 00-R0088189, and Volume 4671, Page 48,
Real Property Records of Denton County, Texas, insofar and oiily insofar as said Public Utility
Easeinent encuinbers a 544.46 square foot tract, as inore particularly described in the easeinent
abandonment agreement; and declaring an effective date.
BACKGROUND
On behalf of the affected property owners, the developer of the Retreat at Denton Addition located
near the intersection of Ininan Street and Center Place Drive has requested that the City of Denton
abandon a Public Drainage and Detention Easement, a Limited Easement for the liistallation of Water
and Sewer Utilities, and a portion of a Public Utility Easement. These eYisting easements were
originally dedicated to the City to serve as a temporary solution for the then proposed development
projects public iinproveinents, and the initial constniction of Ininan Street.
The property ownerslup has changed, and the newly proposed development proj ect includes the design
of a perinanent solution for the necessary public iinproveinents. New easeinents for the re-aligninent
of the required public drainage, water, and sewer facilities are being formalized by the pending platting
activity of the Retreat at Denton Addition. Abandoiunent of the three eYisting easements will oiily
proceed after all required alternative easements have been dedicated, the required public improvement
facilities have been constnicted, and they have been accepted by the City of Denton.
Staff performs an analysis on the request for easement abandoiunents as follows:
■ Is the easement tract requested for abandonment considered "excess easement"?
■ Does the easement tract requested for abandonment have a continued public use?
■ Is it in the best interest of the general public to abandon the goveriunent's rights in the subject
abandoiunent tract?
■ Would the granting of this request establish a precedent for easement abandonment for future
requests?
Staff findings on tlus analysis are as follows:
1
1. The requested easement abandoiunent tracts fit the criteria of "eYCess easement." EYCess easement
is defined as: Property acquired or used by the City for easement subsequently declared excess (not
needed for any public project, the continuation of operation and maintenance of public facilities,
and/or no foreseeable utility application in the funire).
The easement abandoiunent tract areas are not slated for utilization of any future public utilities.
3. The easement abandonments are in the public interest because the areas for the subject
abandonments are no longer needed by the public and/or have not been utilized for the public.
4. These abandoiunents will not set precedent because the above three standards have been met.
OPTIONS
1. Recommend approval of the Ordinance
Do not recommend approval
RECOMMENDATION
Staff endorses approval of the Ordinance.
ESTIMATED PROJECT SCHEDULE
April 2011
PRIOR ACTION/REVIEW
Development Review Committee
FISCAL INFORMATION
Not applicable
BID INFORMATION
Not applicable
Exhibits
1. Ordinance
2. Agreement
3. Location Map
4. Site Map
Respectfully submitted,
Jiminy D. Coulter
Director of Water/Wastewater
Water Administration
Prepared by:
Marlc A. Laird
Right-of-way Agent
~
s:llegallour documentslordinances1111retreat abandonment ordinance.doc
QRDINANCE NO.
AN ORDINANCE AUTHORIZING THE CITY MANAGER OF THE CITY OF DENTON,
TEXAS ("CITY") TO EXECUTE FOR AND ON BEHALF OF THE CITY AN EASEMENT
ABANDONMENT AGREEMENT TO ABANDON (1) THAT CERTAiN PUBLIC
DRAINAGE AND DETENTION EASEMENT, DATED AUGUST 23, 2000, FROM CAMPUS
PARK DENTON, LTD. TO THE CITY OF DENTON, TEXAS, RECORDED AT COUNTY
CLERK FILE NUMBER 00-R0088188, VOLUME 4671, PAGE 42, REAL PROPERTY
RECORDS OF DENTON COUNTY, TEXAS; (II) THAT CERTAIN LIMITED EASEMENT
FOR THE INSTALLATION OF WATER AND SEWER UTILITIES, DATED NOVEIvIBER
11, 1987, FROM GEORGE E. INMAN, GEORGE E. INMAN, JR., GLEN RAY IlVMAN AND
JIMMIE D. INMAN TO THE CITY OF DENTON, TEXAS, RECORDED AT VOLUME 2356,
PAGE 711, REAL PROPERTY RECORDS, DENTON COUNTY, TEXAS; AND (III) A
PORTION OF THAT CERTAIN PUBLIC UTILITY EASEMENT, DATED AUGLJST 17,
2000, FROM CAMPUS PARK DENTON, LTD. TO THE CITY OF DENTON, TEXAS,
RECORDED AT COUNTY CLERK FILE NO. 00-R0088189, AND VOLUME 4671, PAGE
48, REAL PROPERTY RECORDS OF DENTON COUNTY, TEXAS, INSOFAR AND ONLY
1NSOFAR AS SAID PUBLIC UTILITY EASEMENT ENCUMBERS A 544.46 SQUARE
FOOT TRACT, AS MORE PARTICULARLY DESCRIBED IN THE EASEMENT
ABANDONMENT AGREEMENT; AND DECLARING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The Easement Abandonment Agreement, between the Ciiy of Denton,
Texas azad Retreat at Dentan, LLC, a Georgia limited liability company, in the form as attached
hereto and made part of this ordinance for all purposes {the "Agreement"}, is hereby approved.
SECTION 2. The City Manager of the Ciiy or his designee, is hereby authorized to
execute the Agreement fox and on behalf of the City.
SECTION 3. This ordinance shal.l become effective immediately upon its passage and
approval.
PASSED AND APPROVED tlus the day of , 2011•
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
,APPROVED AS TO LEGAL FORM
ANITA BURGESS, CITY ATTORNEY
EY: '00/~ K,
Page 2
s.~Leayrar n-te,o~s IuL-hmt Abanaonm~c ordfiw,«.noc
EASEMENT ABANDONMENT AGREEMENT
THIS AGREEMENT is entered into effective as of the date set forth below by and
between the City of Denton, Texas, a home rule municipal corporation (the "City") and Retreat at
Denton, LLC, a Georgia 1'zmited liability company (the "Landowner").
WHEREAS, the Landownex has triade an application to the City requesting the (i)
aba.ndonment of that certain Public Drainage and Detention Easement (herein sa called), dated
August 23, 2000, from Campus 1'ark Denton, Ltd. to the City of Denton, Texas recorded at
County Clerk file number 00-ROO88188, VoIume 4671, Page 42, ReaI Properly Records of
Denton County, Texas; (ii) the abandonment of that certain Limited Easement for the Tnstallation
of Water and Sewer Utilities (herein so called), dated Novernber 11, 1987, from Gearge E.
Inman, George E. Inman, Jr., Glen Ray Inman and Jimmie D. Znman (collectively "Inman") to the
City of Denton, Texas, recordad at Volume 2356, Aage 711, Real Property Records, Denton
County, Texas; and (iii) the partial abandonment of that certain Public Utility Easement (herein
so called), dated August 17, 2000, from Campus Park Denton, Ltd, to the City of Denton, Texas,
recarded at County Clerk Fi1e No. 00-R0088189, and Volume 4671, Page 48, Real Property
Records of Denton County, Texas, INSOFAR AND ONLY INSOFAR as said Public Utility
Easement encumbers a 544.46 square foot tract, being more particularly described on Exhibit
"A", attached hereta and made a part hereof (the "Public Utility Easement Partial Abandonment
Area") (the (i) Iands cavered by (a) the PubIic Drainage and Detention Easement; and (b) Limited
Easement for the InstaIlatian of Water and Sewer Utilities; and (ii) the Public Utility Easement
Partial Abarzcio-nment Area, are collectively referred to herein as the "Abandonment Area"}; and
WHEREAS, the Public Drainage and Detention Easemezat, the Linaited Easement for the
Installation of Water and Sewer Utilities and the Public UtiIity Easerraent are colIectively referred
to herein as the "Existing Easements"; and
WHEREAS, staff has reviewed the abandonment application af Landowner and is
axnenable to abandoning the Existing Easements, INS4FAR AND 4NLY INSOFAR as the
existing Easements cover a.nd encumber the Abandonment Area, upon the terms and conditions
provided herein; and
WHEREAS, the Landowner is successor in interest in the Abandonment Area to Campus
Park Denton, Ltd. and Inman; and
WHEREAS, City and Landowner stipulate that no formal acceptance by the Ciry of the
Lizxaited Easement far the Installation of Water and Sewer Utilities has occwnred and that no
public facilities have been installed or constructed within the lands encumbered by such
easerrient;
WHEREAS, notwithstanding the lack bf formal acceptazace, the City is amenable #p
abandoning, in accardance with the terms hereof, said Limited Easement far the Installation of
Water and Sewer Utilities, for the sake of certainty of title;
WHEREAS, the Landowner has agreed to dedicate New Easetnents (herein so called) for
the public facilities and public drainage improvernents (the "New Facilities") as now shown on
Page 2
the Final Plat for The Retreat at Denton Addition (the "Addition"), Lot 1& 2, Block A,
illustrated in Exhibit "B", along wzth an overall map of the easement abandonment layout
illustrated in Exhibit "C" hoth Exhibit "B" and Exhibit "C" being attached hereta and rnade a
part hereof for all purposes; and
WHEREAS, along with the dedicatxon o#'the New Easements, the Landowner has agreed
to {i} remove all existing utilities and facili#ies related to same from the Existing Easements,
INSOFAR AND ONLY INSOFAR as the Existing Easements cover and encunnber the
Abandonment Area (the "Removed Facilities"), and relocate same ta the New Easements; and
(ii) realign and relocate the New Facilities to the New Easements, all activities to be conducted in
accordance with all Ci#y ardinances, ruIes, regulations, criteria manuals and any other docurnent
or material pertaining or relating to such improvements andlor the construction of same, all as
rnore particularly described below; and
WHEREAS, the City is amenable to the abandonment of the Existing Easements,
IlVSOFAR AND ONLY INSOFAA as the Existing Easements cover and encumber the
Abandonrnent Area, upon the realignment, relocation, and acceptance by the City of the New
Facilities within the New Easements and satisfaction of other conditions and obligations set forth
in this Agreement; and
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
contained herein, and other goad and valuable consideration, the receipt and sufficiency of which
Page 3
is hereby acknowledged by City and Lanaownex, the City and Landowner hereby agree as
folzoWS:
1. (a) The City shall abandon the Existing Easements, INSOFAR AND ONLY
INSOFAR as they cover and encumber the Abandanment Area, upon (i) acceptance of the final
plat of the Addition by the City of Denton, Texas; (ii) the removal by Landovsmer of all af the
Removed Facilities; (iii) the removal by Landawner of all utilities and infrastruchue not owried
by the City from the Existing Easements, INSOFAR AND ONLY INSOFAR as the Exfsting
Easements cover and encuznber the Abandonment Area (the "Franchised Utilities") and
relocatian of saine to the New Easements, in accardance with the terms of Section 2, below; and
(iv) relocation by Landowner of the New Facilities within the New Easements (the conditions
provided in Section 1.(a) (i) -(iv) are collectively referred to herein as the "Landowner
Conditions"}. All activities related ta the Landowner Conditions shali be conducted in
accordance with all City ord'rnances, ruIes, regulations, criteria manuals and any other document
or material pertaining or relating to such improvements andJor the construction of same and shall
have been inspected and accepted by the City, in its sole discretion, ali in accordance with the
terms hereaf.
(b) Nofwithstanding anything to the contrary herein, nothing contained herein shall
affect, and the City hereby retains and reserves, any and all rights it rriay have in all other
easements and/or rights of way, including without limitation, street rights of way and utilitty
easements, whether conveyed by other instruments or dedicated oz established by plat, in which
the Abandanment Area may cross andlor overlap (the "Non-Released Interests").
Page 4
(c) The New Facilities must be inspected and accepted by the Ci.ty prior to the City's
abandonznent of the Existing Easements, INSOFAR AND ONLY INSOFAR as they cover and
encumber the Abasadontnent Area. The City Manager, or his designee is hereby authorized to
execute and deliver to Landowner a Quit C1aim for the Abandonxzaent Area, less and except and
reserving the Non-Released Interests, upan and only upon the tirnely fulfillment of ail of the
conditions prescribed herein.
2. The Landowner shaIl submzt to the City, prior to the City's znspection and
acceptance of the New Facilities, written confirtnation from the owner(s) af any affected
Franchised UtiIities that a11 such Franchised Utilities have been relocated, in accordance with the
tenns of this Agreernent, within the New Easements ta the satzsfaction of such other owner(s).
3. Landowner, at its sole cost and expense, shall perform, or shall cause to be
perFormed within the times prescribed herein (i) the activities reIated to the removal of the
Renaoved Facilities; (ii) the activities related to the removal and relocation of any Franchised
Utilities; and (iii) the activities related to the relocation of the New Facilities within the New
Easements (collectively, the "Wark"), in a goad aztd workman like manner and in conformance
with saund and accepted engineering and construction activity practices. in per£orming the
Work, or causing the Wark to be performed, the Landowner shall at all tirnes perform such
activities in a safe manner and in full compliance with all applicable federaI, state, lacal,
munzcipal or other laws, staiutes, codes, restrictions, reguiations, ordinances, resolutions and
orders. Landowner agrees to perform the Work, or cause the Work to be performed, in a diligent
manner and restore the lands encumbered by the New Easements and the Existing Easements,
Page 5
INSOFAR AND ONLY INS4FAR as they cover and encuznber the Ahandonrnent Area, to as
near as reasonably practicable its condition prior to the commencezxaent of the Work.
4. Landowner represents and warrants to City that (i) Landowner has taken any and
aIl actions necessary to bind Landowner to all terms and provisions of this Agreement; (ii) the
party executing this Agreernent on behalf of the Landowner has the authority ta bind Landowner
to all terms and provisions of this Agteement; and (iii) this Agreement is enforceable against
Landoumer in accordance with the tertns and provisions herein.
5. THE LAWS OF THE STATE OF TEXAS SHALL APPLY TO THIS
AGREEMENT WITHOUT REGARD TO CONFLICT OF LAW RULES THAT MAY DIItECT
APPLICATION OF THE LAW OF ANOTHER JURISDICTION. THIS AGREEMENT IS
PERFORMABLE IN DENTON COIJNTY, TEXAS. VENUE FOR ANY ACTION ARISING
UNDER OR RELATED TO THIS AGREEMENT SHALL LIE EXCLUSNELY IlN COURTS
OF COMI'ETENT J[TRISDICTION IN DENTON COUNTY, TEXAS.
6. In the event Landowner shall default in the performance of any term or provision
of this Agreement, the CFty may, if said default shall be continuing after five (5) days notice of
the default is deemed received by Landowner, enforce any and all rights and remedies available
to it by law, contract, equzty or otherwise, including without limitation, the remedy of specific
performance.
Page 6
7. Any notice prescribed by this Agreement shall be deemed properly served if (i)
provided by telephonic facsimile; or (ii) deposited in the United States maii by certif ed lettex,
return receipt requested, addressed to the recipient at recipient's address shown belaw, subject to
the right to designate a different address by notice given zn the manzaer just described. Notice
shall be deemed received when delivered if provided by telephonic facsimile, ar if deposited in
the United States mail, three (3) days after depositing such natzce in the United States mail, as
described above.
Far Cifv:
Paul Williamson, Real Esta.te Manager
215 E. McKinney
Denton, TX 76201
Facsimile No. (940) 349-8951
Far Landowner:
11,55 &J-if- r 41--W-t/ Zol
,
.
Facsizanile No. ~1
8. This Agreement runs with the land. The terms and provisions hereto are binding
upan, and shall inure to the benefit of, the City and Landowner, and their successors and assigns.
9. This Agreeinent represents, including the exhibits hereto, the sole agreernent
between the City azad Landowner with respect to the subject matter herein and supersedes any
and all prior negotiations, understandings, representatians and other agreements, whether written
Page 7
or oral. This Agreement rnay not be modif ed or amended except in writing and duly authorized
and executed by each party hereto.
In Wittiess Whereof, this Agreement has been executed by the parties to be effective this
, day of )2011.
CITY OF DENT4N
By:
GEORGE C. CAMPBELL, CITY MANlAGER
ATTEST:
JENNIFER WALTEAS, CITY SECRETARY
BY:
AP'PROVED AS TO LEGAL FORM:
ANTTA BURGrESS, CITY ATTORNEY
Z,-(/,~ z
BY:
RETREAT AT DENTON, LLC, a Georgia limited
liability compa
BY: .
~
NA
TITLE: R4~,zeW S;':~rxk~~7
t.-I
Page 8
EXHIBIT A
~
A
~~~ITY EASEMENT
VOLUME 4671: PAGE 48:
S 89058W W 397.25'
A TRaCT OF LAND DEsCRMED JN A ~E-D
TO DENTON 8f'ATIOtV TEXAS LTE).
tNSf.# 2gD6-134401
.
~
~ j
E.
N W"
~ A-
~3 c
SWW26* W
1$.94'.
LOT S; MWo~ PARK 35 ADDrr'K)rt
CA&U,'Pc.418 . .
46' PU6tlC lt"tILliY EAsE11+EN{' ABANDONMENT
5"46 SQ. FEET
~t.D.r~~ tv aN ~t. ~ ~ct a~ ~d situated ~ t►~ :HIt.L ~W ~~3; E~x of ~r~> [~e~t+ T~, ~1 ~s
a p~u'i ~ a t6' F'ut~iC CJE~iEy ~Setrs~M to ~e City of Derton a,~de!d ~t V+pit~ae 4677, Pa" 48. #2eM Ptopwty ~'#ecvrds Eif DentDn G=y, 'fexas,
aM bekV mnre paffiatarly des~ as lbllarys:
BEGRtP11NG at a poWst W ihe hoMwest corner of herieiii ciestxtwd , ,tr+c~rs which tte ntvst Wes" s6d easeniont
bears Stiut9 89 Qegrees s8 MriuW 02 SgCOrds West: a dManGe of 99725.tot `
TI-EME North 89 Degrees 58 tuinrte.s 02 Seoonds East, a ci"tstance of 16.60 feet to a .pdFA &u ite Nmtieast aomer of tfie bwMn. d.ew*md
abandonvi*K and $n aCost *ee o# saici eawmerit;
TW:tGE SoM 17 Dograft 4y2 MirltftS 32 SBcondS WestwM a EW
ke - .a . of 33_87 *0 to a[okt foi' the txommo"
h"n dw"ibed obwWwrmvt arW &r the rxv)st Souftft Southeast ootrw t3E saiCI eamTmK
'iHENC)E SotAh Degrees 30 !b!htik8s 26 Secards 1N85t with a ScalAh *ne ftmd, a 4istwce of 46.34 fieef io a poitit k+r #hegotfthwest qmter of fF►e
Me(Vn dewibe~ WmWonrrmit an# W #e mcst gguftrfy SouSt~ed coaw o# ud emmriat
1'HWE Notit 77 DegFees 42 iMmufts Sooatsds East vait'i a West MRe#wea#. o dsWvbe ' at 3426 k-ei tn ft R.A0E £F BEGR*016 arn#
oorAWrdm W.#i sq. feet of Wnd, moFe or less.
P.L.S. :No. 63i2 Elete
~
~
fl 10 20
4'~~,Srg~~F-~-~ 1720 WES$MINSTER 401- ~Ni'°i, TX ~`~6
~~i ~ ~;~;~cg~ . . (~6~2=~ .
5312 ~~r %
T~j1p . JCO-NUMWR: tP.i~:E. .
~ ~ : ~1(:
DATE; - 3'MV
SJRVEY _ N ~ . ~t.P.~;~
~ .IF~ER .
TN A: ZC3~..IF~ER
Page T of 1 .
~ .
.
.estme:F
, ~
,
rc,
~n iu .,.a.. r
.a
'u- -I ' • , _ I 4 . .
E
~ _ } .
a ' m
~ a r
i0T 2
, ,m • ~ , ~
~
.
Pnin^=RP IIty_II ~ . . . .
. N
~ ~
lr
.
-A
~'S cP
. _ • , Y
0
1,1
o~'FR'^aev pwvwi.n. worznu~[ _t~ ~ II5 ,_~~s t6:ki.5 P~ EYRS al f w . .
+a I ~oE4~tp~cG`ar~'+~ I
s.s.i, n_ II _~JI ~ ° . ' .mrvt.~neomenr~m exrrtemm.enm~a ertxxarr.4+um.t~enwrrnl'vaxem~~-rna._~=~v
~
..p ;M1ESNNIJ.. ~NNC 5 I ~ ~ gY 'f •
~
~riOnrTi~n
~ ~ I ~ . ~x . . . .
. I -
h
~E
e ,
~e I `rl
~iv . +r1 na.5~ttrsi R~ rvrof n._ n_ v ti 1i .
nR e~Ern~r~ a.orH2,.~,utyr~,.,. ~ r j
.
,
~ ~ a I
K- n'~ „ p~rs ~ h!% T- ~ r r . I m ~ a~ortoeu.
uuw.;c.i I d
u.irta.~x~ -
s ~ a
~
wc
rc
. G~u no= 6 P irv u Nvtors. E P[.s[enMC n rthrpw..m' A ~ I f~ m vme~~crM_: nli rwu.aF.~.~.. i rrr.iwrs~ti,_~r.rur
.~r . . [ I!
• .uµv Y
-N ..rw+_rcwl'.t~. mm. ~I nnna.ms
I I ~ ~E.nvNre..nt. .
w~n «
FINAL FtEPL4T !
THE RE7REAT.AT DENTC?tU :
LC3T
1& 2, BLQCK A
1EING A REPLAT dr I.OF 2, 6LOCkX 41
GENtRP
~~t~ PLRCERHASEdNE.LOTeT.Z.cRh65810C3fA.OF
} ~ \ DERY4N PARKl5 ApL`I13pN, T6TkLING e;xI ACREg;
.IlI • Z GHCC EdbY Xk
nM1D AL5[5 EING&56ACRESOIJTflFFHE.
_ ' ~i _ k-~ EkECLT~oNC4Erscc ~~RVEYlNG R e14E1(AM6LRNILLSI.ftVE'[.A951FiFCANUM9ER623.
.rvsi. GfT1' OF' 6F^i70N, pENTahJ CqVhRY. iFX.55
EXHIBIT B
~ r -
C'.R.G.(,- i.
Z 1 ,._1 !1
fl HO'U LILF <
tw, ; r
t,,,rr.dC li_ CJCi=! tfiiPd Lt}ItEE Ci1{ti I-OLI91N;'e LF'-
S°I'/iTlCil`I
t.1a ~
C: 05
IzRI~°,r=ap I
i I§r
i °r
IRFICArs
H _i.17,,:
iM'
I S° F',U.E.
" VGL. 2356, PG 711
(7O BE A8ANDCENED
HY SEPAiA7E
IN'STRUMENT)
LLL UL
LLLLL t To SI
~ ~
~
~~LU
-L~ LLLLLI
~ LLLI!
rPHk:pj1
I ~'t~t~r:°( t~x;' L .fJ[) e 2~ s-
i;:{IE3L:GD 1h.1 ti'o 0 ~.F-r'(:)
ClEN"IC'i,l STAPIUSN G1 i! v~
TL.;A 6 d'D.
~ ]'.42o-0G 534wa1
4
(,.P.r: E3_C,T_
k {~k_
1 Z hr,-
f
L tp
Irli"K~t{P
} 3' ~h
-
I f~
Lrj 11'd f I 1Y ~S.
0 C~ ['?fi;1fJAfiP FA, f h:1¢'_:IV.f
CPH, 'i.l, 1'.'
14 89~5ji i"3Ga VV 149,"{~''
7
jF1 89°52.,~" 4'd 34"J~ 1 I 1
RFMJ:.lhlbe°R OF t?
IN h DLf:a `['C5
tI;:3±
{14 89"26'2tj" E)
112IRSICilP
N ~'8.9l°26'22" E 584.40° CJ?J?rf
.lE~f-t-I-if
f Lf , t k.~., 4` ^ y_ 57939
7, ' i~'I` I Ll L Q E
r~~
Gt ut#Tl LEF~9.'w FILF
t
V 71...
p~i.I~,f~ER0f~r951w
~.v°c~ .~,it~ ~.-s ~ _
. 3C1' J.E.
l.;c'i3(! I fLE'F`.k'S RLL`-
U
A
i`d.:~~dE~!EF~ U« 1{15961 ~
~v
~
+L
L
°
±
L
L
t4-
~
_LL
~
~
. r.
_
E3 } !t, LJiELIT..f ,4.
1
~
~
F1~ Ef~.~elJ~" ~
L
4
~
~
~i' FCF~ 3F#f~` F~l RT -
~~'i
B:;.
2. 4-
LL
L
(NFT
_LL
L
1 6,_ 6,~`f .
:
hiiv kuc tF L
EF EEAhEfVT
1, PG 42
:1:1 d'Y` S€f-'A~=..'ATE
L
[ITILtTr EA5EMEN7 ~
u.
"
'
~"-ch~fT)
L
Efi Ti-4S F
L.A d
F
L= ul
L~
~ .I-LL~~~,
L
„m
LLL,
L
~
„LL~~L
L~
~~,L
°
I
ry
~5~,~~ ~
L
LL!~ 2 L.a ~ '
L
LLL
~„P .LL~,~L
La
~ LL LJJ eSP lJ. E
-L~L~ LL
L
r~ F ct~~l j [ F [ LFr~f , I FILE
t
~
W
I II1M,31 P (0 T
4J15 r
.i:iiq1' z
__.LLLLLL
E
L.
~ru
__.E~~ ~~LLI E1t E~G C1403,V
' Cd£i, t tlz C y~~"
Icr 9 Ld.( ~ s+E.r:]` U c7 ~t'
OL} i b7c , PG'L 48 ~ V lo Li t G` U.$t 46 rC E r a hND,H~ 11
~ r,.rE i,]irfRt¢.,.~
Hs 4' E,_ ~ 2s, PUBUC Uri! irY & Dr;aiHAc:~- ,
- ~ ~
tn 00, cAB. U. PG. 418
° (TO Bi: A&ACvC20100 FIER 'rH~3 PLA i
; 01 Cr 24 U4'F5!t,iAGE u
25 61' 4J i II.1TY Lt},SEIVIL[,fT ~
Yd`:R. TH [SPLp\"i'
t ;7
12.51 AGP.ES
f P'U L
(GRqSS ACREAGE)
GOL}1,1TY CLERW ; rh F
N4JMBF;.0?7L~5t,
w.,
~
~
J~~ ~µr
LOT 5; C3F.IJ IU'PJ 8°'F'seYlti
~=r u-
15 llC3fi71T1Ot,f
Lr iL 4-' ~
f.AB, LI. PG, 418
p,Rl).C:."I.
ci
L
Lj
Z.
{IJ 4
U (P ~ il m {t`:
"
45
fFMf'.
(D Li
L
TL,RNAROUPJD
;
u a L '
C;kL1. Li, €(7. 4'6E
Lj J s-
I7O EF A~RANDOA.iELl
[!usz
D
PER TI 11 S PL };l"}
. m..
; ° r ?
c
, 4iV.f1G
ry
LOT 1
VWDRAIN.aGlE E;;sEMEr.rr
aLOCK A
1f?~i~f,H
L:ts,ES. lJ PC3.4 tE
-
°
I?_=~,~G6~~li
(lCl ~:E f.gAlVf'OPVEC3 P~i~~~ THI5 P
fj
Lr~
.
.
_
_
l~~Ftt
CRCREAGEJ
IFIE
EXH B ` C
NORTH
;
,
DOWNTOWN I
DENTON ~
.
i
` ~ i
- ~
~ I
~
~
~ j
i_
i
~
~
-
:
~
~f
~
\
~
I L
i
~ ~ i
SITE
~
/
_I
~
LOCATION MAP
~
I
~ l
NTS
NORTH
SITE MAP
NTS Abandonment Areas are Approximate in location.
Abandonment Description:
Abandonment Area #1 - Abandonment of Public Drainage & Detention Easement, CC# 00-R0088188.
Abandonment Area #2 - Abandonment of Water & Sewer Installation Easement, Vol. 2356, Pg. 711.
Abandonment Area #3 - Partial Abandonment of Public Utility Easement, CC# 00-R008819.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Economic Development
ACM: Jon Fortune ~
SUBJECT
Consider appointing a nominatint', committee to recommend appointees to serve on the
Economic Development Partnership Board.
BACKGROUND
Economic Development Partnership Board (EDPB) members serve two-year terms and may
serve as many as three terms. The ordinance establislung the EDPB requires that the City
Council appoint three persons to serve as a nominating committee, to include two City Council
ineinbers and one person who is a member of the Chainber of Coininerce. The noininating
coininittee ineinbers who appointed EDPB ineinbers in July 2010 were Mayor Pro-Tein Pete
ILamp, Council Meinber James ILing, and Chainber of Commerce member Hanlc Diclcenson.
Recently, City Council expanded the scope of the EDPB's duties to include economic
development marketing and recnjitment activities for the Denton Municipal Airport. The EDP
Board memberslup was increased by two members, one to have aviation eYperience and one to
be a Denton citizen. The committee is asked to confirm with each potential nominee lus/her
willin~ness to serve. The nominatin~ committee will then malce its final recommendation to the
City Council for appointment to the EDP Board.
The ordinance requires that EDPB meinbers must fall into specific categories when they are
originally appointed to the Board, i.e., City Council ineinber, Chainber of Coininerce Board of
Directors ineinber, Top Twenty Taxpayer and the President of the University of North Texas, or
lus designee. City Council members and Chamber of Commerce Board members may be
reappointed to two additional consecutive terms even if they no longer serve on the City Council
or Chainber Board.
Current EDPB members are:
EDP Board Member
Marty Rivers, Chair
Virgil Strange, Vice-Chair
Mark Burroughs
Dalton Gregory
Denny Aldridge
Caleb O'Rear
Lane Rawlins
Category
~ Term Expires
Chamber of Commerce
~ ?01?
Chamber of Commerce
~ ?O11
City Council
~ 2012
City Council
~ 2011
Top 220 TaYpayer
~ ?O11
Top 220 TaYpayer
~ ?01?
Uiuversity of North TeYas
~ ?01?
-1-
~ Vacant ~ Aviation
~ Vacant ~ At Large
Since EDPB ineinber terins are staggered, the two new ineinbers will draw lots at their first
meeting to determine if their first term will be a one-year or two-year term.
The City Manager, George Cainpbell, and President of the Chainber of Coininerce, Chuclc
Carpenter, serve as ex-officio ineinbers and have no defined terins of service.
ESTIMATED SCHEDULE OF PROJECT
The Nominatint', Committee is respectfully aslced to report on their recommendations at the April
19 or May 3, ?0 11 meeting.
Respectfully submitted:
c-ti dk-
~
Linda Ratliff, Director
Economic Development Department
-2-
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM:
SUBJECT
Jon Fortune ~
Consider adoption of an ordinance considering all matters incident and related to the issuance,
sale and delivery of up to $32,100,000 in principal amount of "City of Denton Certificates of
Obli~ation, Series 2011"; authorizing the issuance of the certificates; approvin~ and authorizin~
instniments and procedures relating to said certificates; and enacting other provisions relating to
the subject.
BACKGROUND
On March 1, 2011, the City Council adopted Ordinance No. 2011-040 and 2011-041 directing
the publication of a Notice of Intention to issue Certificates of Obligation (COs) of the City of
Denton totaling $32,500,000. Ordinance No. 2011-040 provided notice of the City's intention to
issue $11,500,000 in principal amount of COs for General Goveriunent and Solid Waste
Projects. Ordinance No. 2011-041 provided notice of the City's intention to issue $21,000,000
in principal ainount of COs for Wastewater and Electric Systein projects. The notices were
published on March 4, 2011 and March 11, 2011 in the Denton Record Chronicle, as required by
state law. The COs will be issued as a single series of bonds and will provide $31,965,000 to
fund General Goveriunent, Solid Waste, and Wastewater and Electric System projects. The
additional $135,000 is for the cost of issuance and to allow flexibility in marketing and pricint"
the sale. The lower proposed principal amount is due to market conditions, lower issuance costs,
and reflects a change in bond sale type from a negotiated bond sale to a competitive bond sale.
Staff recoininends the sale of $3,439,550 in COs for General Governinent, which is less than
originally intended in the FY 2010-11 Capital Improvements Program (CIP). The decrease is
due to: the elimination of the Airport Western Development project; the postponement of the
Public Safety Traiiung Facility; and lower than anticipated velucle replacements. Below is a
listing of recommended CO funded projects for General Government's FY 2010-11 CIP:
1. Velucle Replacements - $1,939,550*
Facility Maintenatice Program - $1,500.000*
Total - $3,439,550
*Previously authorized through a Reimbursement Ordinance.
Agenda Inforination Sheet
April 5, 20 11
Page 2
Staff recommends the sale of $7,850,330 in COs for Solid Waste projects. Below is a listing of
recommended CO funded projects for Solid Waste's FY 2010-11 CIP:
1.
Articulated Tniclc -
$
550,000*
Auto Side Load Tri-ick -
$
21621,865*
3.
Auto Side Load Tri-ick -
$
?6?,865*
4.
Auto Side Load Tri-ick -
$
262,865*
5.
Coininercial Container Equipinent/Maintenance -
$
250,000
6.
Container Tri-ick -
$
75,000*
7.
Flatbed Conversion -
$
225,000*
8.
Forlclift/Mofitt -
$
60,000*
9.
Front Load Tri-ick -
$
257,275*
10.
Front Load Tri-ick -
$
22 67,22 75*
11.
Home Chemical Building -
$
225,000
12.
Hybrid Box Tri-ick -
$
66,800*
13.
Integrated Waste Manageinent Systein -
$
50,000
14.
Landfill Software -
$
175,000
15.
Mechaiucal Processing Equipment -
$
300,000*
16.
Rear Load Tri-ick -
$
212,5310*
17.
Recycling Carts -
$
100,000
18.
Recycling Commercial Containers -
$
105,000
19.
Recycling Facility Upgrades -
$
16,000
20.
Residential Container Equipinent/Asseinbly -
$
150,000
21.
Roll-Off Tni clc -
$
182,050*
Side Load Tnick -
$
22 57,22 75*
?3.
Solid Waste Equipment -
$
100,000
24.
Solid Waste Manageinent Planning -
$
50,000
25.
Super Cab Tniclc -
$
50,000
26.
Waste to Energy Pilot -
$
100,000
?7.
Leachate Recirculation -
$
50,000
28.
Landfill Security Fence -
$
50,000
29.
Landfill Lnprovements -
$
100,000
30.
Ground Water Wells -
$
22 5,000
31.
Parlcing Lot EYpansion -
$
2250,000
32.
Parlcing Lot Expansion -
$
200,000
33.
Landfill Expansion -
$
200,000
34.
Landfill Property -
$2,000,000
35.
Landfill Capital Project Cost -
$
515,530
36.
ELR Scada -
$
300.000
Total -
$7,850,330
*Previously authorized through a Reimbursement Ordinance.
Agenda Inforination Sheet
April 5, 20 11
Page 3
Staff recommends the sale of $500,000 in COs for Wastewater projects. Below is a listing of
recommended CO funded projects for Wastewater's FY ?O10-ll CIP:
3. TROMMEL Power Screen -
Total -
$ 500.000*
$ 500,000
*Previously authorized throu~h a Reimbursement Ordinance.
Staff recommends the sale of $20,157,000 in COs for Electric projects. Below is a listing of
recommended CO funded projects for Electric's FY 2010-11 CIP:
37.
Autoinated Meter Reading -
$
156,000*
38.
Automated Meter Reading -
$
422 8,389*
39.
Building Constniction -
$
1,000,000
40.
Buildin~ Constniction -
$
3,689,361*
41.
Communication Equipment -
$
117,819*
42.
Distribution Transformers -
$
677,000
43.
Distribution Transformers -
$
2250,000*
44.
Feeder Extension & Improvements -
$
1,314,000
45.
Feeder Extension & Improvements -
$
3,233,719*
46.
New Res./Comm. Transmission Lines -
$
8?5,000
47.
New Res./Comm. Transmission Lines -
$
1,819,7022*
48.
Distribution Substation -
$
1,602,000
49.
Distribution Substation -
$
364,725
50.
Transmission Lines -
$
1,1722,000
51.
Transmission Lines -
$
689,511*
52.
Transmission Substations -
$
1,581,000
53.
Transmission Substations-
$
588,137*
54.
Meters -
$
148,222) 6*
55.
Office Furiuture & Equipment -
$
77,777*
56.
ERCOT/NERC Compliance -
$
84,768*
57.
Storm Outages -
$
44,811 *
58.
Street Lights -
$
78,000
59.
Street Lights -
$
22 15.055*
Total -
$20,157,000
*Previously authorized through a Reimbursement Ordinance.
Approxiinately $18.6 inillion in General Governinent, Solid Waste, Wastewater and Electric
System projects of the $32,100,000 CO issuance has been previously authorized through
Reimbursement Ordinances.
The City sells bonds in accordance with the useful life of the asset that is bein~ acquired. For
example, vehicles are typically sold with bonds that will be paid within five years. For the FY
2010-11 proposed debt issuance, $6,599,350 will be 5 year debt, $1,?44,000 will be 10 year debt,
and $24,103,530 will be 20 year debt. lii addition, the 20 year debt issues will also have a 10
year call feature.
Agenda Inforination Sheet
April 5, 20 11
Page 4
In the past, debt associated with the utility system has been sold as Utility System Revenue
Bonds. These bonds have a lower underlying credit rating (Aa?/AA-) than Certificates of
Obligation (COs), and as a result, cost more to issue. To counteract tlus issue, staff proposes to
sell COs at a substantial savings. This is due to the higher overall credit rating (Aa2/AA) of the
City and the eliinination of a bond reserve requireinent. If the debt is sold in this inanner, the
debt will be gLiaranteed by the full faith and credit of the City, not just the utility system
revenues. As a result of tlus approach, staff anticipates that the cost of the issuance will be
approximately $1.8 million less than if it had be sold as Utility System Revenue Bonds over the
life of the debt.
The bonds will be sold through a competitive bid process. The City's financial advisor, First
Southwest Company, will accept bids on April 5, 2011, with the closin~ and delivery of funds
planned for May 10, 2011. Interest rates, pricin~ and all other information from the successful
bidder will be included in the finalized Official Statement following the City Council's award of
the bid. For your review, staff has attached a copy of the ordinance and preliminary official
statement.
Concurrently with the sale of COs, the City anticipates the sale of approYimately $10,845,000 in
General Obligation Refunding and linprovement Bonds (GOs) to fund projects approved by
voters in 2005 and refund existing utility systein revenue bonds. Staff has discussed the CO and
GO issuances in detail with the bond rating agencies. Standard and Poor's has affirmed the
City's bond rating of AA, and Moody's has affirmed the City's bond rating of Aa2. These rating
reports have been included as EYlubits 6 and 7 for your review.
RECOMMENDATION
Staff recommends approval of the ordinance.
PRIOR ACTION/REVIEW (CouncilBoards/Commissions)
On Febniary 15, 2011, the Audit/Finance Committee unaiumously recommended approval to
forward the upcomin~ bond issuance to the City Council for consideration.
On March 1, 2011, the City Council adopted Ordinance No. 2011-040 and 2011-041 directing
the publication of Notice of liitention to issue Certificates of Obligation of the City of Denton
totaling $32,500,000.
EYHIBITS
1. Ordinance
2. Notice of Sale
3. Preliminary Official Statement
4. Preliminary Schedule - Certificates of Obligation, Series 2011
5. Paying Agent/Registrar Agreement
6. Moody's Investors Services Bond Rating Report
7. Standard and Poor's Bond Rating Report
Agenda Inforination Sheet
April 5, 20 11
Page 5
Respectfully submitted,
~t.
Bryan Langley
Chief Financial Officer
Prepared By:
~
~
~
Antoiuo Puente, Jr.
Assistant Director of Finance
ORDINANCE NO. 2011-
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND I2E;LATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $32,100,000 IN PRINCIPAL
AMdUNT OF "CITY OF DENTQN CERTIFICATES OF OBLIGATION, SERIES 2011
AUTHORIZING THE ISSUANCE OF THE CERTIFICATES; APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID
CERTIFICATES; AND ENACTING OTHER P'ROVISIONS I2LLATING TO TNE
SUBJECT
THE STA1'E OF TEXAS
COtJNTY OF DF.NTON
CITY OF DENTON
WHEREAS, the City Council of the City of Denton, Texas (the "Issuer"), deems it advisable to issue
Certificates of Obligation in the amount of $32,100,000 for the purposes hereinafter set forth; and
WHEREAS, the Certificates of Obligation liereinafter authorized and designated are to be issued and
delivered far cash pursuant to Subchapter C of Chapter 271, Texas Local Government Code and Subchapter
B, Chapter 1502, Texas Government Code; and
WHEREAS, the City Council has heretofore passed two resolutions each authorizing and directing
the City Secretary to give notice of intention to issue Certificates of Obligation, and said notices have been
duly published in a newspaper of general circulation in said Issuer, said newspaper being a°newspaper" as
defined in §2051.044, Texas Governtnent Code; and
WHEREAS, the Issuer received no petition fi•om the qualified electors of the Issuer protestiilg the
issuance of such Certificates of Obligation; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance
has been adopted was open ta the pub]ic and public notice of the time, place and subject matter of the public
business to be considered and acted upon at said meeting, includingthis Ordinance, was given, all as required
by the applicable provisions of Texas Government Code Chapter 551; Now, Therefore
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
Section l. RECITALS, AMOUNT AND PURPOSE OF THE CERTIFICATES. The recitals set
forth in the preamble hereof are incorporated 17erein and shall have the same force and effect as if set forth
in this Section. The Certificates of Obligation of the City of Denton, Texas (the "Issuer") are hereby
authorized to be issued and delivered in the aggregate principal amount of $32,100,000, for the purpose of
paying a11 or a portion of the Issuer's contractual obligations incurred pursuant to contracts for the purchase,
construction and acquisition of certain real and personal property, to wit: $11,350,000 for the purpose of the
(a) acquisition of vehicles and equipment for, and acquiring, construeting, installing and equipping additions,
extensions, renovations and improvements to, the Issuer's solid waste disposal system; (b) renovations to, and
equipping of, existing municipal buildings, including City Hall East; and (c) acquisition of vehicles and
equipment for the Issuer's motor pool; and also for the purpose of paying all or a portion of the lssuer's
contractual obligations for professional services, including engineers, architects, attorneys, map makers,
auditors, and financiai advisors, in connection therewith and said Certificates; and $20,750,000 for the
purpose of the (a) acquisition of equipment for, and acquiring, constructing, installing and equipping
additions, extensions, renovations and improvements to, the Issuer's waterworks and sewer system; (b)
acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensinns,
renovations and improvements to, the Issuer's electric light and power system; and also for the purpose of
paying all or a portion of the Issuer's contractual obligations for professional services, including engineers,
architects, attorneys, map makers, auditors, and financial advisors, in connection therewith and said
Certificates(collectively, the "Projects").
Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND MATURITIES AND
INTEREST RATES OF CERTIFICATES. Each certificate issued pursuant to this Ordinance shall be
designated: °CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 2011," and initially there
shall be issued, sold, and delivered hereunder one fully registered certificate, without interest coupons, dated
April 1, 2011, in the principal amount stated above and in the denominatians hereinafter stated, numbered
T-1 (the °Initial Certificate"), with certificates issued in replacement thereof being in the denominations and
principal amounts hereinafter stated and numbered consecutively from R-1 upward, payable to the respective
Registered Owners thereaf (with the Initial Certificate being made payabie to the Purchaser as described in
Section 10 hereoo, or to the registered assignee or assignees of said Certificates or any portion or portions
thereof (in each case, the "Registered Owner"), and said Certificates sha11 mature and be payable serially on
February 15 in each of the years and in the principal amounts, respectively, and shall bear interest from the
dates set forth in the FORM OF CERTIFICATE set forth in Section 4 of this Ordinanee to their respective
dates of maturity or redemption priar to maturity at the rates per annum, as set forth in the followiilg schedule:
Principal Interest
Years
Amount Rates
2412
$1,525,000 %
2013
2,195,000
2014
2,285,000
2015
2,400,000
2016
2,515,000
2017
1,090,000
2018
1,140,000
2019
1,190,000
2020
1,255,000
2021
1,320,000
Principal Interest
Years
Amount Rates
2022
$1,215,000 %
2023
1,275,000
2024
1,335,000
2025
1,400,000
2026
1,470,000
2027
1,540,000
2028
1,615,000
2029
1,695,000
2030
1,775,000
2031
1,865,000
The term °Certificates" as used in this brdinance shall mean and include collectively the certificates of
obligation initially issued and delivered pursuant to this Ordinance and ail substitute certificates of obligatian
exchanged therefor, as well as all other substitute certificates of obligation and replacement certificates of
obligation issued pursuant hereto, and the term "Certificate" shall mean any of the Certificates.
Section 3. CHARACTERI57'ICS OF THE CERTIFICA"1'ES.
(a) Reizistration. Transfer. Conversion and Exchanae: Authentication. The Issuer shall keep or cause
to be kept at the principal corporate trust office of The Bank of New York Mellon Trust Company, National
Association, Dallas, Texas, (the "Paying Agent/Registrar"), books or records for the registration of the
transfer, conversion and exchange of the Certificates (the "Registration Books"), and the Issuer hereby
appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make
such registrations oftransfers, conversions and exchanges under such reasonable regulations as the Issuer and
Paying Agent/Registrar rnay prescribe; and the Paying Agent/Registrar shall make such registrations,
transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar sha11 obtain and record
in the Registration Books the address of the Registered Owner of each Certificate to which payments with
respect to the Certificates shall be mailed, as herein provided; but it shall be the duty of each Registered
Owner tn notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and
2
such interest payments shall not be mailed unless such notice has been given. The Issuer shall have the right
to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise
the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any other eiltity. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for making such registration, transfer, conversion, exchange and
deiivery of a substitute Certificate or Certificates. Registration of assignments, transfers, conversions and
exchanges of Certificates shall be made in the ma»ner provided and with the effect stated in the FORM OF
CERTIFICATE set f'orth in this Ordinance. Eac11 substitute Certificate shall bear a letter and/or number to
distinguish it from each other Certificate.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying
Agent/Registrar shall, before the delivery ofany such Certificate, date and manually sign said Certificate, and
no such Certificate shall be deemed to be issued or outstanding unless such Certificate is so executed. The
Paying Agent/Registrar promptly shall cancel all paid Certificates and Certificates surrendered for conversion
and exchange. No additional ordinances, nrders, or resolutions need be passed or adopted by the governing
body of the Issuer or any other body or person so as to accomplish the foregoing coriversion and exchange
of any Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution,
and delivery of the substitute Certificates in the manner prescribed herein, and said Certificates shall be
printed or typed on paper of customary weight and strength. Pursuant to Chapter 1201, Government Code,
as amended, the duty of conversion and exchange of Certificates as aforesaid is hereby imposed upon the
Paying Agent/Registrar, and, upon the execution of said Certificate, the converted and exchanged Certificate
shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Certificates
that initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General of the
State of Texas (the "Attorney General") and registered by the Coinptroller of Public Accounts of the State
of Texas (the "Comptroller").
(b) Pavment of Certificates and Interest. The Issuer hereby furtlier appoints the Paying
Agent/Registrar to act as the paying agent for paying the prii7cipal of and ipterest on the Certificates, all as
provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by
the lssuer and the Paying Agent/Registrar with respect to the Certificates, and of all conversions and
exchanges of Certificates, and all replacements of Certificates, as provided in this Ordinnnce. 1-Iowever, in
the event of a nonpayment of interest nn a scheduled payment date, and for thirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer.
Notice of the past due interest shall be sent at least five (5) business days prior to the Special Record Date
by United States mail, first-class postage prepaid, to the address of each Registered Owner appearing on the
Registration Books at the close of business on the last business day next preceding the date of mailing of such
notice.
(c) In General. The Certificates (i) shall be issued in fully registered fonn, without interest coupons,
with the principal of and interest an such Certificates to be payable only to the Registered Owners thereof,
(ii) may or shall be redeemed prior to their scheduled maturities (natice of which shall be given to the Paying
Agent/Registrar by the Issuer at least 45 days prior to any such redemption date), (iii) may be converted and
exchanged for other Certificates, (iv) may be transferred and assigned, (v) shall have the characteristics, (vi)
shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Certificates s11a11
be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain
duties and responsibilities with respect to the Certificates, all as provided, and in the manner and to the effect
as required or indicated, in the FORM OF CERTIFICATE set forth in this Ordinance. The Initial Certificate
is not required to be, and shall not be, authenticated by the Paying AgentJRegistrar, but on each substitute
Certificate issued in conversion of and exchange for any Certificate or Certificates issued under this
Ordinance the Paying AgentlRegistrar shall execute the Paying Agent/registrar's Authetltication Certificate,
in the form set forth in the FORM OF CERTIFICATE.
(d) Pavinp Aizent/Re2istrar for the Certificates. The Issuer covenants with the Registered Owners
af the Certificates that at all times while the Certificates are outstanding the Issuer will provide a competent
and legally qualified bank, trust company, financial institution, or other entity to act as and perform the
services of Paying Agent/Registrar for the Certificates under this Ordinance, and that the Paying
Agent/Registrar will be a single entity. The Issuer reserves the right to, and may, at its option, change tlte
Paying Agent/Registrar upan not less than 120 days written notice to the Paying Agent/Registrar, to be
effective not later than 60 days prior to the next principal or interest payment date after such notice. In the
event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or
other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will
appoint a competent and legally qualified bank, trust company, fiilancial iilstitution, or other agency to act
as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the
previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy
thereo fl, along with all other pertinent books and records relating to the Certificates, to the new Paying
Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying Agent/Registrar,
the Issuer promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each
Registered Owner of the Certificates, by United States mail, first-class postage prepaid, whicll notice also
shall give the address of the new Paying Agent/Registrar. By accepting the position and performing as such,
each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a
certified copy of this Ordinance sha11 be delivered to each Paying Agent/Registrar.
(e) Authentication. Except as provided below, no Certificate shall be valid or obligatory far any
purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Paying Agent/Registrar's Authentication Certificate substantially in the form provided in this Ordinance, duly
authenticated by manual execution of the Paying Agent/Registrar. It shall not be required that the same
authorized representative of the Paying Agent/Registrar sign the Paying Agent/Registrar's Authentication
Certificate on all of the Certificates. In lieu of the exeeuted Paying AgentlRegistrar's Authenticatioti
Certificate described above, the Initial Certiiicate delivered on the closing date shall have attached thereto
the Comptroller's Registration Certificate substantially in the form provided in this Ordinance, ma»ually
executed by the Comptroller or by her duly authorized agent, which certificate sha11 be evidence that the
Initial Certificate has been duly approved by the Attorney General and that it is a valid and binding obligation
of the Issuer, and has been registered by the Comptroller.
(f) Book-Entrv-Onlv Svstem. The Certificates issued in exchange for the lnitial Certificate shall be
initially issued in the form of a separate single fully registered Certificate for each of the maturities thereof.
Upon initial issuance, the ownership of each such Certificate shall be registered in the nalne of Cede & Co.,
as nominee of The Depository Trust Company, New York, New York ("DTC"), and except as provided in
subsection (g) hereof, all of the outstanding Certificates shall be registered in the name of Cede & Co., as
nominee of DTC.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the Issuer and
the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations on whose bel7alf DTC was
created ("DTC Participant") to hold securities to facilitate the clearance and settlement of securities
transactions among DTC Participants or to any person on behalf of whom such a DTC Participant holds an
interest in the Certificates. Without limiting the immediately preceding sentence, the Issaer and the Paying
Agent/Registrar shall have no responsibility or obligatinn with respect to (i) the accuracy of the records of
DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Certificates, (ii) the
delivery to any DTC Participant or any other person, otller than a Registered Owner of Certificates, as shown
on the Registration Books, of any notice with respect to the Certificates, or (iii) the payment to any DTC
Participant or any other person, other than a Register-ed Owner of Certificates, as shown in the Registration
Books of any arnount with respect to principal of or interest on the Certificates. Notwithstanding any other
provision ofthis Ordinance to tlie contrary, the Issuer and the Paying Agent/Registrar shall be entitled to treat
and consider the person in whose name each Certificate is registered in the Registration Books as the absolute
owner of such Certificate for the purpose of payment of principal and interest with respect to such Certificate,
for the purpose of registering transfers with respect to such Certificate, and for all other purposes whatsoever.
The Paying Agent/Registrar shall pay all principal of and interest on the Certificates only to or upon the order
of tlYe Registered Owners, as shown in the Registration Books as provided in this Ordinance, or their
respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully
satisfy and discharge the tssuer's obligations with respect ta payment of principal of and interest on the
Certificates to the extent of the sum or sums so paid. No person other than a Registered Owner, as shown
in the Registration Books, shall receive a Certificate evidencing the obligation ofthe Issuer to make payments
of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar
of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co.,
and subject to the provisions in this Ordinance with respect to interest checks being mailed to the Registered
Owner at the close of business on the Record Date, the words °Cede & Co." in this Ordinance shall refer to
such new nominee of DTC.
Tlle previous execution and delivery of the Blanket Issuer Letter of Representations with respect to
obligations ofthe Issuer is hereby ratified and confirmed; and the provisions thereof shall be fully applicable
to the Certificates.
(g) Successor Securities Debositorv: Transfers Outside Book-Entrv-0nlv Svstem. In the event that
the Issuer determines that DTC is incapable of discharging its responsibilities described herein and in the
Blanket Issuer Letter of Representations to D'TC or that it is in the best interest of the beneficial owners of
the Certificates that they be able to obtain certificated Certificates, the Issuer shall (i) appoint a successor
securities depository, qualified to act as such umder Section 17A of the Securities and Exchange Act of 1934,
as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and
transfer one or more separate Certificates to such successor securities depository or (ii) notify DTC and DTC
Participants of the availability through DTC of Certificates and transfer one or more separate eertificated
Certificates to DTC Participants liaving Certifcates credited to their DTC accounts. In such event, the
Certificates shall no longer be restricted to being registered in the Registration Books in the name of Cede
& Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its
nominee, or in whatever name or names Registered Owners transferring or exchanging Certificates sha11
designate, in accordance with the provisions of this Ordinance.
(h) Pavments to Cede & Co. Notwithstanding any other provision of this Ordinance to the cantrary,
so long as any Certificate is registered in the name of Cede & Co., as nominee of DTC, ail payments with
respect to prulcipal of and interest on such Certificate and all notices with respect to such Certificate sl7all be
made and given, respectively, in the manner provided in the Blanket Issuer Letter of Representations to DTC.
(i) Cancellatioi7 of Initiai Certificate. On the closing date, the Initial Certificate, representing the
entire principal amount of the Certificates, payable in stated installments to the purchaser designated in
Section 10 or its designee, executed by manual ar facsimile signature of the Mayor and City Secretary of the
Issuer, approved by the Attorney General, and registered and manually signed by the Comptroller, will be
delivered to sLich purchaser or its designee. Upon payment for the initial Certificate, the Paying
Agent/Registrar shall cancel the Initial Certificate and deliver to DTC on behalf of such purchaser otte
registered definitive Certificate for each year ofmaturity ofthe Certificates, in the aggregate principal amount
of all of the Certificates for such maturity. To the extent that the Paying Agent/Registrar is eligible to
participate in DTC's FAST System, pursuant to an agreement between the Paying Agent/Registrar and DTC,
the Paying Agent/Registrar shall 11o1d the definitive Certificates in safekeeping for DTC.
(j) Conditional Notice of Redemation. With respect to any optional redemption of the Certificates,
unless tlze prerequisites to such redemption required by this Ordinance have been met and moneys sufficient
to pay the principal of and premium, if any, and interest on the Certificates to be redeemed shall have been
received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall
state that said redemption may, at the option of the Issuer, be coriditional upon the satisfaction of such
prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such
redemptian, or upon any prerequisite set forth in such notice of redemption. If a conditional notice of
redemption is given and such prerequisites to t11e redemption and sufficient moneys are not received, such
notice shall be of no force and effect, the Issuer shall not redeem such Certificates and the Paying
Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to the effect
that the Certificates have not been redeemed.
Section 4. FORM OF CERTIFICATES. The form of the Certificates, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignmeilt and the form of Comptroller's
Registration Certificate to be attached to the Certificates initially issued and delivered pursuant to this
Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions or
insertions as are permitted or required by this Ordinance.
(a) [Form of Certificate]
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
CITY OF DENTON $
CERTIFICATE OF OBLIGATION
SERIES 2011
Interest Rate Dated Date Maturity Date CUSIP No.
April l, 2011 February 15,
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, the City of Denton, in Denton County, Texas (the
"Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to
pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner"), on the Maturity Date specified above, the Principal Amount specified above. The lssuer promises
to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-day year of twelve 30-
day months) from April 1, 2011 at the Interest Rate per annum specified above. Interest is payable on
February 15, 2012 and semiannually on each August 15 and February 15 thereafter to the Maturity Date
specified above, or the date of redemption prinr to maturity; except, if this Certificate is required to be
authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such
Principal Amount shall bear interest from the interest payment date next preceding the date of authentication,
unless such date of authentication is after any Record Date but on or before the next following interest
6
payment date, ii7 which case such principa] amount shall bear interest from such next following interest
payment date; provided, however, that if on the date of autheptication hereof the interest on the Certificate
or Certificates, if any, for which this Certificate is being exchanged is due but has not been paid, then this
Certificate shall bear interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the
United States of America, witholit excl7ange or collection charges. T]Ze principal of this Certificate shall be
paid ta the Registered Owner hereof upon presentation and surrender of this Certificate at maturity, or upon
the date fixed for its redemption priar to maturity, at the principal corporate trust office of The Bank of New
York Mellon Trust Company, National Association, Dallas, Texas, which is the "Paying Agent/Registrar"
fbr this Certificate. The payment of interest on this Certificate shall be made by the Paying Agent/Registrar
to the Registered Owner hereof on each interest payment date by check or draft, dated as of such interest
payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds ofthe Issuer required
by the ordinance authorizing the issuance of this Certificate (the "Certificate Ordinance") to be on deposit
with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be
sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared an the Iast business day of the
month preceding each such date (the "Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described. In addition, interest may be paid by such other method, acceptable
to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered Owner. In the
event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date
for such interest payment (a "Special Recard Date") will be established by the Paying Agent/Registrar, if and
when funds for the payment of such interest have been received from the Issuer. Notice of the Special Record
Date and of the scheduled payment date of the past due interest (which shall be ] 5 days after the Special
Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail,
first-class postage prepaid, to the address of each Registered Owner of a Certificate appearing on the
Registration Books at the close of business on the last business day next preceding t11e date of mailing of such
notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate prior to
maturity as provided herein sha]1 be paid to the Registered Owner upon presentation and surrender of this
Certificate for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar.
The Issuer covenants with the Registered Owner of this Certificate that on or before each principal payi-netit
date, interest payment date, and accrued interest payment date for this Certificate it will make available to the
Payillg Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the
amounts required to provide for the payment, in immediately available fimds, of all principa] of and interest
on the Certificates, when due.
IF THE DATE for the paymeilt of the principal of or interest nn this Certificate shall be a Saturday,
Sunday, a legal holiday or a day on which banking institutions in the city where the principal corporate trust
office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date
for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day
on which banking institutions are autliorized to close; and payment on such date sha11 have the same force
and effect as if made on the original date payment was due.
THIS CERTIFICATE is one of a series of Certificates dated Apri1 1, 2011, authorized in accordance
with the Constitution and laws of the State of Texas in the principal amount of $32,100,000 for the purpose
of paying all or a portion of the Issuer's contractual obligations incurred pursuant to contracts for the
purchase, construction and acquisition of certain real and personal property, to wit: $11,350,000 for the
purpose of the (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and
equipping additions, extensions, renovations and improvements to, the Issuer's solid waste disposal system;
(b) renovations to, and equipping of, existing municipal buildings, including City Hall East; and (c)
acquisition of vehicles and equipment for the Issuer's motor pool; and also for the purpose of paying all or
a portion of the Issuer's contractual obligations for professional services, including engineers, architects,
attorneys, map makers, auditors, and financial advisors, in connection therewith and said Certificates; and
$20,750,000 for the purpose of the (a) acquisition of equipment for, and acquiring, constructing, installing
and equipping additions, extensions, renovations and improvements to, the Issuer's waterworks and sewer
system; (b) acquisition of equipment for, and acquiring, constructing, installing and equipping additions,
extensions, renovations and improvements to, the Issuer's electric light and power system; and also for the
purpose of paying al] or a portion of the Issuer's contractual obligations for professional services, including
engineers, architects, attorneys, map makers, auditors, and financial advisors, in comlection therewith and
said Certificates.
ON FE$RUARY 15, 2021, or on any date thereafter, the Certificates of this series may be redeeined
prior to their scheduled maturities, at the option of the Issuer, with funds derived from any available and
lawful source, as a whoie, or in part, and, if in part, the particular Certificates, or portions thereof, to be
redeemed shall be selected and designated by the Issuer (provided that a portion of a Certificate may be
redeemed only in an integral multiple of $5,000), at a redemption price equal to the principal amount to be
redeemed plus accrued interest to the date fixed for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Certificates or portions thereof prior
to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States
mail, first-class postage prepaid, to the Registered Owner of each Certificate to be redeemed at its address
as it appeared on the 45th day prior to such redemption date; provided, however, that the failure of the
Registered Owner to receive such notice, or any defect therein or in the sending or mailing thereof, shall not
affect the validity or effectiveness of the proceedings for the redemption of any Certificate. By the date fixed
for any such redemption due provision shall be made with the Paying Agent/Registrar for the payment of the
required redemption price for the Certificates or portions thereof that are to be so redeemed. If such writtett
notice of redemption is sent and if due provision for such payment is made, all as provided above, the
Certificates or portions thereof that are to be so redeemed thereby automatically shall be treated as redeelned
prior to their scheduled maturities, and they shall not bear interest after the date fixed for redemption, and
they shall not be regarded as being outstanding except for the right of the Registered Owner to receive the
redemption price from the Paying Agent/Registrar out of the funds provided for such payment. If a partion
of any Certificate shall be redeemed, a substitute Certificate or Certificates having the same maturity date,
beari»g interest at the same rate, in any denomination or denominations in any integral i7iultiple of $5,000,
at the written request of the Registered Owner, and in aggregate principal amount equal ta the unredeemed
portion thereof, will be issued to the Registered Owner upon the surrender thereof for cancellation, at the
expense of the Issuer, all as provided in the Certificate Ordinance.
IF A"I' THE T1ME OF MAILING of notice of optional redemption there shall not have either bee11
deposited with the Paying Agent/Registrar or legally autharized escrow agent immediately available funds
sufficientto redeem all the Certificates called for redemption, such notice inay state that it is corrditional, and
is subject to the deposit of the redemption moneys with the Paying Agerrt/Registrar or legally authorized
escrow agent at or prior to the redemption date. If such redemption is not effectuated, the Paying
Agent/Registrar shall, within five days thereafter, give notice in the manner in which the notice of redemption
was given that such moneys were not so received and shall rescind the redemption.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Certificate
Ordinance, this Certificate may, at the request of the Registered Owner or the assignee or assignees hereof,
be assigned, transferred, converted into and exchanged for a like aggregate principal amount of fu11y
registered Certificates, without interest couporls, payable to the appropriate Registered Owner, assignee or
assignees, as the case may be, having the same denomination or denominations in a»y integral multiple of
$5,000 as requested in writing by the appropriate Registered Owner, assignee or assignees, as the case may
be, upon surrender of this Certificate tn the Paying Agent/Registrar for cancellation, all in accordance with
the form and procedures set forth in the Certificate Ordinanee. Among other requirements for such
assignment and transfer, this Certificate must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the
Paying Agent/Registrar, evidencing assignment of this Certificate or any portion or portions hereof in any
integral multiple of $5,000 to the assignee ar assignees in whose name ar names this Certificate or any such
portion or portions hereof is or are to be registered. The Form of Assignment printed or endorsed on this
Certificate may be executed by the Registered Owner to evidence the assignment hereof, but such method
is not exc]usive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used
to evidence the assignment of this Certificate or any portion or portions hereof from time to time by the
Registered Owner. 1'he Paying Agent/Registrar's reasonable standard nr customary fees and charges fnr
assigning, transferring, converting and exchanging any Certificate or portion thereof will be paid by the
Issuer. ln any circumstance, any taxes or governmental charges required to be paid with respect tllereto shall
be paid by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent
to the exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such transfer,
conversion, or exchange (i) during the period commencing with the close ofbusiness on any Record Date and
ending with the opening of business on the next following principal or interest payment date, or (ii) with
respect to any Certificate or any portion thereof called far redemption prior to maturity, within 45 days prior
to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and cause written notice tllereof to be mailed
to the Registered Owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper ta be performed, exist
and be done precedent to or in the authorization, issuance and delivery of this Certificate have been
performed, existed and been done in accordance with Iaw; and that annual ad valorem taxes sufflcient to
provide for the payment of the interest on and principal of this Certificate, as such interest comes due and
such principal matures, have been levied and ordered to be levied against all taxable property in said Issuer,
and have been pledged for such payment, within the limit prescribed by law; and that this Certificate is
additionally secured by and payable from a limited pledge (not to exceed $1,000) of the surplus revenues
derived by the Issuer from the ownership and operation of the Issuer's Utility System (consisting of the
Issuer's combined waterworks system, sanitary sewer system, and electric light and power system), all as
provided in the Certificate Ordinance.
THE ISSUER HAS RESERVED THE R1GHT to issue, in accordance with law, and in accordance
with the Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from ad
valorem taxes and/or revenues ofthe Issuer's Utility System, on a parity witll, or with respect to said revenues,
superior in lien to, this Certificate.
THE ISSUER HAS RESERVED THE RIGHT to amend the Certificate Orclinattce as provided
therein, and under some (but not all) circLimstances amendments thereto must be approved by the Registered
Owners of a majority in aggregate principal amount of the outstanding Certificates.
BY BECOMING the Registered Owner of this Certificate, the Registered Owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be baund by such terms
and provisions, acknowledges that t11e Certificate Ordinance is duly recorded and available for inspection in
the official minutes and records of the governing body of the Issuer, and agrees that the terlns and provisions
of this Certificate and the Certificate Ordinance constitute a contract between each Registered Owner hereof
and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be sigiled with the manual or
facsimi]e signature of the Mayor of the Issuer (or in the Mayor's absence, of the Major Pro-Tem) and
countersigned with the manual or facsimile signature of the City Secretary o£said Issuer, and has caused the
official seal of the Issuer to be duly impressed, or placed in facsimile, oiz this Certificate.
(siiznature)
City Secretary
(SEAL)
(b) [Form of Paying Agent/Registrar's Authentication Certificate]
fsianaturel
Mayor
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate is not accompanied by an executed Comptroller's Registration
Certificate)
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described in the text of this Certificate; and that this Certificate has been issued in conversion or
replacement of, or in exchange for, a certificate, certificates, or a portion of a certificate nr certificates of a
series that originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated:
The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas
Paying Agent/Registrar
By:
Authorized Representative
10
(c) [Form of Assignment]
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer ldentification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee.)
the within Certificate and all rights thereunder, and hereby irrevocably coiistitutes and appoints
, attorney, to register the transfer of the within
Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Sigllature(s) must be guaranteed by an
eligible guarantor institution participating in a
securities transfer association recognized
signature guarantee program.
NOTICE: The signahire above must correspond
with the name of the Registered Owner as it
appears upon the front of this certificate in every
particular, without alteration or enlargement or any
change whatsoever.
(d) [Form of Comptroller's Registration Certificate]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate of Obligatian has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been
registered by the Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) [Initial Certificate Insertions]
(i) The Initial Certificate shall be in the form set forth in paragraph (a) of this Sectioiz, except
that:
A. irnmediately under the name of the Certificate, the headi»gs °Interest Rate" and
"Maturity Date" shall both be completed with the words "As shown below" aizd "CUSIP No.
" shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF DENTON, TEXAS, in Denton County, T'exas (the "Issuer"), being a political subdivision
and municipal corporation of the State of Texas, hereby promises to pay ta the Registered Owner specified
above, or registered assigns (hereinafter called the "Registered Owner"), on February 15 in each of the years,
in the principal installments and bearing interest at the per annum rates set forth in the following schedllle:
Years Principal Installments Interest Rates
(Information from Section 2 to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (caiculated on the basis of a 360-
day year of twelve 30-day months) from April 1, 2011 at the respective Interest Rate per annum specified
above. Interest is payable on February 15, 2012, and semiannually on each August 15 and February 15
thereafter to the date of payment of the principal installment specified above, or the date of redemption prior
to maturity; except, that if this Certificate is required to be authenticated and the date of its autheiltication is
later than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from the
interest payment date next preceding the date of authentication, unless such date of authentication is after any
Record Date but on or before the next following interest payment date, in which case such principal amount
shall bear interest from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Certificate or Certificates, if any, for which this Certificate is beillg
exchanged is due but has not been paid, then tllis Certificate shall bear interest from the date to which such
interest has beert paid in full."
C. The Initial Certificate shall be numbered "T-1."
Section 5. INTEREST AND SINKING FUND; SURPLUS REVENUES.
(a) A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for
the benefit of the Certificates, and the Interest and Sinking Fund shall be established and maintained by the
Issuer at an officia] depository bank of the Issuer. The Interest and Sinking Fund shall be kept separate and
apart from all other funds and accounts of the Issuer, and shall be used only for paying the interest on and
principal ofthe Certificates. All ad valorem taxes levied and coliected for and on account ofthe Certificates,
together with any acerued interest received Lipon sale of the Certificates, shall be deposited, as collected, to
the credit of the Interest and Sinking Fund. During each year while any of the CertiFcates or interest thereon
are outstanding and unpaid, the governing body of the Issuer shall compute and ascertain a rate and amount
of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the
Certificates as such interest becomes due, and to provide and maintain a sinking fund adequate to pay the
principal of its Certificates as such principal matures or is scheduled for redemption (but never less than 2%
of the origina] principal amount of the Certificates as a sinking fund each year). Said tax shall be based on
12
the latest approval tax rolls of the Issuer, with full allowance being made for tax delillquencies and the cost
of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied,
against all taxable property in the Issuer for each year while any of the Certificates or interest thereon are
outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit
of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of
the interest on and principal of the Certificates, as such interest comes due and such principal matures or is
scheduled for redemption, are hereby pledged for such payment, within the limit prescribed by law.
(b) The Certificates are additionally secured by revenues derived by the Issuer from the ownership and
operation ofthe Issuer's Utility System (consisting of its combined waterworks system, sanitary sewer system,
and electric light and power system) that remain after the payment of all maintenance and operation expettses
thereof, and a11 debt service, reserve and other requirements in connection with all of the Issuer's revenue
obligatians (now or hereafter outstanding) or contractual obligations (now or hereafter existing) which are
payable frorn all or any part of the net revenues of the Issuer's Utility System, constitutil7g "Surplus
Revenues", not to exceed $1,000. The Issuer shall deposit such Surplus Revenues to the credit of the Interest
and Sinking Fund created pursuant to tllis Section, to the extent necessary to pay the principal and interest
on the Certificates. Notwithstanding the requirements of this Section, if Surplus Revenues or other lawfully
available moneys of the Issuer are actually on deposit or budgeted and appropriated to be deposited in the
Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any
year, then t11e amount of taxes that otherwise would have been required to be levied pursuant to subsection
(a) ofthis Section may be reduced to the extent and by the amount ofthe Surplus Revenues or other lawfully
available funds then on deposit or budgeted and appropriated to be deposited in the Interest and Sinking Fund.
If Surplus Revenues are budgeted and appropriated for deposit into the lnterest and 5inking Fund, the Issuer:
(i) sha11 transfer and deposit in the Interest and Sinking FLuid each montll an amount of not less than
1/12th ofthe annual debt service on the Certificates to be paid from Surplus Revenues until the amount
on deposit in the Interest and Sinkittg Fund equals the amount cequired for annual debt service on the
Ceilificates;
(ii) shall establish, adopt and maintain aii annual budget that provides for either the monthly deposit
of suffcient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally available
funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the
Interest and Sinking Fund for the repayment of the Certificates; and
(iii) shall at all times maintain and collect sufficient Utility System rates and charges in conjunctioii
with any other legally available funds that, after payment of the costs of operating and maintaining the
Lltility System, produce revenues in an amount not less than the debt service requirements of all
outstanding Utility System revenue bonds of the Issuer and other obligations of the Issuer which are
secured in whole or in part by a pledge of revenues of the Utility System and for which the Issuer is
budgeting the repayment of such obligations from the revenues of the Utility System, or the Issuer shall
provide documentation whieh evidences the levy of an ad valorem tax rate dedicated to the Irlterest and
Sinking FLmd, in conjunction with any other legally available funds except Utility System rates and
charges, sufficient for the repayment of Utility System debt service requirements.
(c) Chapter 1208, Texas Govermnent Code, applies to the issuance of the Certificates and the pledge
of the taxes and Surplus Revenues granted by the Issuer under this Section and Section 9, respectively, and
is therefore valid, effective, and perfected. Should Texas law be amended at any time while the Certificates
are outstanding and unpaid, the result of such amendment being that the pledge of the taxes and Surplus
Revenues granted by the Issuer under this Section is to be subject to the filing requirements of Chapter 9,
Texas Business & Commerce Code, in order to preserve to the Registered Owners of the Certificates a
13
security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and
necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business &
Commerce Code and enable a filing of a security interest in said pledge to occur.
Section 6. DEFEASANCE OF CERTIFICATES.
(a) Any Certificate and the interest thereon shall be deemed to be paid, retired and no longer
outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except to the extent provided
in subsectiott (d) of this Section, when payment of the principal of such Certificate, plus interest thereon to
the due date (whether such due date be by reason of maturity or otherwise) either (i) sha11 have been made
or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before
such due date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance
with an escrow agreement or other instruinent (the "Future Escrow Agreement") for such payment (1) lawful
money of the United States of America sufficient to make such payment or (2) Government Obligations that
mature as to principal and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to provide for such payment, and when proper arrangeinents have been
made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased
Certificates shall have become due and payable. At such time as a Certificate shall be deemed to be a
Defeased Certificate hereunder, as aforesaid, such Certificate and the interest thereon shall no longer be
secured by, payable from, or entitied to the benefits of, the ad valorem taxes herein levied and pledged as
provided in this Ordinance, and such principal and interest shall be payable solely from such money or
Government Obligations. Notwithstanding any other provision ofthis Ordinance to the contrary, it is hereby
provided that any detern7ination not to redeein Defeased Certificates that is made in conjunction with the
payment arrarlgements specified in Subsection (a)(i) or (ii) ofthis Sectinn sltall not be irrevocable, provided
that: (1) in the proceedings providing for such payment arrangements, the Issuer expressly reserves the right
to call the Defeased Certificates for redemption; (2) gives notice of the reservation of that right to the
Registered Owners of the Defeased Certificates immediately following the making of the payment
arrangements; and (3) directs that notice of the reservation be iilcluded in any redemption notices that it
authorizes.
(b) Any moneys sQ deposited with the Paying Agent/Registrar may at the written direction of the Issuer
be invested in Government Obiigations, maturing in the amounts and times as hereinbefore set forth, and all
income from such Government Obligations received by the Paying Agent/Registrar that is not required for
the payment of the Certificates and interest thereon, with respect to which such money has been so deposited,
shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow
Agreement pursuant to which the money and/or Government Obligations are held for the payment of
Defeased Certificates may contain provisions permitting the investment or reinvestment of such moneys in
Government Obligations or the substitution of other Government Obligations upon the satisfaction of the
requirements specified in Subsection (a)(i) or (ii) of tllis Section. All income from such Government
Obligations received by the Paying Agent/Registrar which is not required for the payment of the Defeased
Certificates, with respect to which such money has been so deposited, shall be remitted to the lssuer or
deposited as directed in writing by the lssuer.
(c) The term "Government Obligations° means (i) direct, noncallable obligations of tlie United 5tates
of America, including obligations that are unconditianally guaranteed by the United States of America., (ii)
noncallable obligations of an agency or instrumentality ofthe United States ofAmerica, including obligations
that are unconditionally guaranteed or insured by the agency or instrwnentality and that, an the date the
governing body of the Issuer adopts ar approves the praceedings authorizing the financial arrangements, are
rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its
equivalent, and (iii) noneallable obligations of a state or an agency or a county, municipality, or other political
14
subdivision of a state that have been refunded and that, on the date the governing body of the Issuer adopts
or approves the proceedings autharizing the financial arrangements, are rated as to investment quality by a
nationally recognized investment ratirlg firin not less than AAA or its equivalent.
(d) Until all I)efeased Certificates shall have become due and payable, the Paying Agent/Registrar shall
perform the services of Paying Agent/Registrar for such Defeased Certificates the same as if they had not
been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required
by this Ordinance.
(e) In the event that the Issuer elects to defease less than a1l of the principal amount of Certificates of
a maturity, the Paying Agent/Registrar shal] select, or eause to be selected, such amount of Certificates by
such random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICXI'ES.
(a) Replacement Certificates. In the event any outstanding Certificate is damaged, rnutilated, lost,
stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a new
Certificate of the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen
or destroyed Certificate, in replacement for such Certificate in the manner hereinafter provided.
(b) ApDl ication for Reolacement Certificates. Application far replacement of damaged, mutilated, ldst,
stolen or destroyed Certificates shall be made by the Registered Owner thereof to the Paying Agent/Registrar.
In every case of loss, theft or destruction of a Certificate, the Registered Owner applying for a replacement
Certificate shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may
be required by them to save each of them harmless from any loss or damage with respect thereto. Alsa, in
every case of loss, theft or destruction of a Certificate, the Registered Owner shall furnish to the lssuer and
to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Certificate,
as the case may be. ln every case of damage or mutilation of a Certificate, the Registered Owner shall
surrender to the Paying Agent/Registrar for cance]lation tlie Certificate so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this drdinance, in the event
any such Certificate shall have matured, and no default has occurred that is then continuing in the payment
of the principal of, redemption premium, if any, or interest on the Certificate, the Issuer may authorize the
payment of the same (without surrender thereof except in the case of a damaged or mutilated Certificate)
instead of issuing a replacement Certificate, provided security or indemnity is furnished as above provided
in this Section.
(d) Charae for Issuing Reolacement Certificates. Prior to the issuance of any replacement Certificate,
the Paying Agent/Registrar shall charge the Registered Owner of such Certificate with all legal, printing, and
other expenses in connection therewith. Every replacement Certificate issued pursuant to the provisions of
this Section by virtue of the fact that any Certificate is lost, stolen or destroyed shall constitute a contractual
obligation of the Issuer whether or not the lost, stolen or destroyed Certificate shall be found at any time, or
be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and
proportionately with any and all other Certificates duly issued under this Ordinance.
(e) Authoritv for Issuiniz Reblacement Certificates. In accordance with Sec. 1206.022, Governrnent
Code, this Section 7 of this Ordinance shall constitute authority for the issuance of any such replaceme»t
Certificate without necessity of further action by the governing body of the Issuer or any other body or
person, and the duty of the replacement of such Certificates is hereby authorized and imposed upon the
Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Certificates in
15
the form and manner and with the effect, as provided in Section 3(a) of this Ordinance for Certificates issued
in conversion and exchange for other Certificates.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES; BOND
COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF
OBTAINED; ENGAGEMENT OF BOND COUNSEL.
(a) The Mayor of the Issuer is hereby authorized to have control of the Initial CertificaYe and all
necessary recards and proceedings pertaining to the Certificates pending its delivery and its investigation,
examination, and approval by the Attorney General, and its registration by the Comptroller. Upon registration
of the Initial Certificate said Comptroller (or a deputy designated in writing to act for said Comptroller) sliall
manually sign the Comptroller's Registration Certificate attached to such Certificate, and the seal of said
Comptroller shall be impressed, or placed in facsimile, on such Certificate. The approving legal opinion of
the Issuer's Bond Counsel and the assigned CUS1P numbers may, at the option of the Issuer, be printed on
the Certificates issued and delivered under this Ordinance, but neither shall have any lega] effect, and shall
be solely for the convenience and information of the Registered Owners of the Certificates. In addition, if
bond insurance is obtained, the Certificates may bear an appropriate legend as provided by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Certificates is subject to the initial
purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond
counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the
Certificates to the initial purchaser. The engagement of such firm as bond counsel to the Issuer in connection
with the issuance, sale and delivery of the Certificates is hereby approved and confirmed. The execution and
delivery of an engagement letter between the Issuer and such firm, with respect to such services as bond
counsel, is hereby authorized in such form as may be approved by the Mayor, and the Mayor is hereby
authorized to execute such engagement letter.
Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES.
(a) Covenants. The Issuer covenants to take any action necessary ta assure, or refrain from any action
that would adversely affect, the treatment of the Certificates as obligations described in section 103 of the
Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in the "gross
income" of the holder for purposes of federal ineome taxation. In furtherance thereof, the Issuer covenants
as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the Certificates
(less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined
in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects financed
therewith are so used, such amounts, whether or not received by t11e Issuer, with respect to such private
business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service on the
Certificates, in contraventiQn of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use" described in
subsection (1) hereof exceeds 5 percent of the proceeds of the Certificates or the projects financed
therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent
is used for a"private business use" that is "related" and not "disproportionate," within the meaning of
section 141(b)(3) of the Code, to the govermnental use;
16
(3) to take any action to assure that no amount that is greater than the lesser of $5,000,000, or
5 percent of the proceeds of the Certificates (less amounts deposited into a reserve fund, if any) is
directly or indirectly used to finance loans to persons, other than state or local govermnental units, in
contravention of section 141 (c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Certificates being treated
as "private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Certificates being "federally
guaranteed" withiii the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Certificates, directly or indirectly,
to acquire or to replace funds that were used, directly or i»directly, to acquire investment property (as
defined in section 14$(b)(2) of the Code) that produces a materially higher yield over the term of the
Certificates, other than investment property acquired with -
(A) proceeds of the Certificates invested for a reasonable temporary period of 3 years or
less or, in the case of a refunding bond, for a period of 30 days or less until sucll proceeds are
needed for the purpose for which the bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning of section
1.148-1(b) of the rules and regulations of the United States Department of the Treasury
("Treasury Regulations"), and
(C) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amou»ts do not exceed 10 percent af the proceeds of the Certificates;
(7) to otherwise restrict the use of the proceeds of the Certificates or amounts treated as proceeds
of the Certificates, as may be necessary, so that the Certificates do not otherwise contravene the
requirements of section ] 48 of the Code (relating to arbitrage) and, to the extent applicable, section
149(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five-year period (beginning
on the clate of delivery of the Certificates) an amount that is at least equal to 90 percent of the "Excess
Earnings," within the meaning of section 148( fl of the Code and to pay to the Ui7ited States ofAmerica,
not later than 60 days after the Certificates have been paid in full, 100 percent of the amount then
required to be paid as a result of Excess Earnings under section 148(f) of the Code.
(b) Rebate Fund. ln order to facilitate coinpliance with the above covenant (a)(8), a"Rebate Fund"
is hereby established by the Issuer for the sole beneflt of the United States of America, and such Rebate Fund
shall not be subject to the claim of any other person, iiicluding without limitation the Certificateholders. The
Rebate Fund is established for the additional purpose of compliance with section 148 of the Code.
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer understands
that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the
case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to
the date of issuance of the Certificates. It is the understanding of the Issuer that the covenants contained
herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the
United States Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated that modify or expand provisions of t11e Code, as applicable to the Certificates, the
17
Issuer will not be required to comply with any covenant contained herein to the extent that such failure to
cornply, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from
federal income taxation of interest orr the Certificates under sectiop 103 of the Code. In the event that
regulations or rulings are hereafter promulgated that impose additional requirements applicable to the
Certificates, the Issuer agrees to comply with the additional requirements to the extent necessary, in the
opinion of nationally recognized bond counsel, to preserve the exemption from federal income taxation of
interest on the Certificates under section 103 of the Code. ln furthecance af such intention, the Issuer hereby
authorizes and directs the Mayor to execute any documents, certificates or reports required by the Code and
to make such elections, on behalf of the Issuer, that may be perrnitted by the Code as are consistent with the
purpose for the isstiiance of the Certificates.
(d) Allocation of, and Limitation on, Expenditures for the Proiects. T'he Issuer covenants to account
for the expenditure of sale proceeds and investment earnings to be used for the construction and acquisition
of the Projects on its books and records by allocating proceeds to expenditures within 18 months of the later
of the date that (1) the expenditure is made, or (2) the Projects are completed. The foregoing notwithstanding,
the Issuer shall not expend proceeds of the sale of the Certificates or investment earnings thereon more than
60 days after the earlier of (1) the fiftih anniversary of the delivery of the Certificates, or (2) the date the
Certificates are retired, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such
expenditure will not adversely affect the status, for federal income tax purposes, of the Certificates or the
interest thereon. For purposes hereof, the Issuer sha11 nnt be obligated to comply with this covenant if it
obtains an opinion that such failure to comply will not adversely affect the excludability for federal income
tax purposes from gross income of the interest.
(e) Disoosition of Proiects. The Issuer covenants that the Projects will not be sold or otherwise
disposed in a transaction resulting in the receipt by the Issuer ofcash or other compensation, unless the Issuer
obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will not adversely
affect the tax-exempt status of the Certificates. For purposes of the foregoing, the portion of the property
comprising personal property and disposed in the ordiliary course shall not be treated as a tra»saction
resultirlg in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not be obligated
to comply with this covenant if it obtains a legal opinion that such failure to comply will not adversely affect
the excludability for federal income tax proposes from gross income of the interest.
(f) Reimbursement This Ordinance is intended to satisfy the official intent requirements set forth in
section 1.150-2 of the Treasury Regulations.
Section 10. SALE OF CERTIFICATES AND APPROVAL C7F OFFICIAL STATEMENT; FURTHER
PROCEDURES.
(a) The Certificates are hereby sold and shali be delivered to ,
(the"Purchaser") for cash for the par value thereof atzd accrued interest thereon to date of delivery, plus a cash
premium of $ . The Certificates shall initially be registered in the name of the Purchaser or its
designee. It is officially found, determined, and declared that the Certificates have been sold at public sale
to the bidder offering the lowest interest cost, after receiving sealed bids pursuant to an Notice of Sale and
Bidding Instructions and Preliminary Official Statement prepared and distributecl in connection with the sale
ofthe Certificates. Said Notice of Sale and Bidding Instructions and Preliminary Official Statement, and any
addenda, supplement, or amendment thereto have been and are hereby approved by the governing body of
the lssuer, and their use in the offer arid sale of the Certificates is hereby approved. The Initial Certificate
shall be registered in the name of the Purchaser or its designee.
18
(b) The Issuer hereby approves the form and content of the Official Statement relating to the
Certificates and any addenda, supplement nr amendment thereto, and approves the distribution of such
Official Statement in the reoffering of the Certificates by the Purchaser in final form, with such changes
therein or additions thereto as the officer executing the same may deem advisable, such determination to be
conclusively evidenced by his execution thereo£ The distribution and use of the Preliminary Official
Statement dated , 2011, prior to the date hereof is hereby ratified and confirmed.
(c) The Mayor and Mayor Pro Tem, the City Manager and City Secretary and all other officers,
employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized,
empowered and directed from time to time and at any time to do and perform all such acts and things and to
execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Issuer a
Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other instruinents, whether or not
herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this
Ordinance, the Certificates, the sale of the Certificates, the Notice of Sale and Bidding Instructions and the
Official Statement. In case any officer whose signature shall appear on any Certificate shalf cease to be such
officer before the delivery of such Certificate, such signature shall nevertheless be valid and sufhcient for al]
purposes the same as if such officer had remained in off'ice until such delivery.
Section 11. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings derived from
the investment of proceeds from t17e sale of the Certificates issued for the Projects shall be used along with
other Certificate proceeds for the Projects; provided that after completion of such purpose, if any of such
interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Pund.
It is further provided, however, that any interest earnings on Certificate proceeds that are required to be
rebated to the United States of America pursLiant to Section 9 hereof in order to prevent the Certificates from
being arbitrage bonds shali be so rebated and not considered as interest earnings for the purposes of this
Section.
Sectinn 12. CONSTRUCTION FUND.
(a) The Issuer hereby creates aiid establishes and shall maintain on the books of the Issuer a separate
fund ta be entitled the "Series 2011 Certificates of Obligation Construction Fund" (the °Construction Fund")
for use by the Issuer for payment of all lawful costs associated with the acquisition and construction of the
Projects as hereinbefore provided. Upon payment of all such costs, any moneys remaining on deposit in said
fund shail be trailsferred to the Interest and Sinking fund. Amounts so deposited to the Interest and Sinking
Fund shall be used in the manner described in SectiQiz 5 of this Ordinance.
(b) The Issuer may invest proceeds of the Certificates (including investment earnings thereon) issued
for the Projects and amounts deposited into the Interest and Sinking Fund in investments authorized by the
Public Funds Investment Act, Chapter 2256, Texas Government Code, as arnended; provided, however, that
the Issuer hereby covenants that the proceeds of the sale of the Certificates wil l be used as soon as practicable
for the purposes for which the Certificates are issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the fullest extent required
by law for the security of public funds.
Section 13. COMPLIANCE WITH RULE 15c2-12.
(a) Definitions. As used in this Section, the following ten-ns have the meanings ascribed to such terms
below:
19
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reaorts.
(i) The Issuer shall provide annually ta the MSRB, in a designated electronic format as
prescribed by the MSRB, within six months after the end of each fiscal year ending in or after 2011,
financial information and operating data with respect to the Issuer of the general type included in the
final Official Statement authorized by Section 10 of this Ordinance, being the informatian described
in Exhibit A hereto. Any financial statements so to be provided shall be (1) prepared in accordance
with the accounting principles described in Exhibit A hereto, or such other accounting principles as the
Issuer may be required to employ from time to time pursuant to state law or regulation, and (2) alidited,
if the Issuer commissions an audit of such statements and the audit is completed within the period
during which they must be provided. If the audit of such fiilancia] statements is not completed within
such period, then the Issuer shall provide unaudited financial statements within such period, and
audited financial statements for the applicable fiscal year to the MSItB, when and if the audit report
on such statements become available. All documents provided to the MSRB pursuant to this Section
shall be accompanied by identifying inforrnation as prescribed by the MSRB.
(ii) lf the Issuer changes its fiscal year, it wi11 notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to
provide financial information and operating data pursuant to this Section. The financial information
and operating data to be provided pursuant to this Section may be set forth in full in one or more
documents or may be included by specific reference to any document (including an official statement
or other offering document, if it is available from the MSRB) that theretofore has been provided to t17e
MSRB or filed with the SEC.
(c) Event Notices.
(i) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely manner (but not in excess of ten business days after the occurrence nf the event) of any of the
following events with respect to the Certificates, if such event is material within the meaning of the
federal securities laws:
1. Non-payment related defaults;
2. Modifications to rights of holders of the Certificates;
3. Certificate calls;
4. Release, substitution, or sale of property securing repayment of the Certificates;
5. The consummation of a merger, consolidatio», or acquisition involving an obligated
person or the sale of all or substantially all of the assets of the obligated person,
other than in the ordinary course of business, the entry into a definitive agreement
to undertake such an action or the termination of a definitive agreement relating to
any such actions, other than pursuant to its terms;
6. Appointment of a successor or additional trustee or the change of name of a trustee.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely manner (but not in excess of ten business days after the occurrence of the event) of any of the
20
following events with respect to the Certificates, without regard to whether such event is considered
material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements refleeting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (1RS Form
5701-TEB) or other material notices or determinations with respect to the
tax-exempt status of the Certificates, or other events affecting the tax-eYempt status
of the Certificates;
7. Tender offers;
8. Defeasances;
9. Rating changes;
10. Bankruptcy, insolvency, receivership or similar event of an obligated person
(iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer ta provide
financial infonnation or operating data in accordance with subsection (b) of this Section by the time
required by suc17 subsection.
(d) Liinitations, Disclaimers. and Amendments.
(i) The Issuer shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the Issuer remains an "obligated person" with respect to the
Certificates within the meaning of the Rule, except that the Issuer in any event will give notice of any
deposit made in accordance with this Ordinance or applicable law that causes the Certificates no longer
to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the Registered Owners and
beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer
undertakes to provide only the financial inforrnation, operating data, financial stateinents, and notices
which it has expressly agreed to provide pursuant to this Section and does not hereby u»dertake to
provide any other informarion that may be relevant or materia] to a complete preseiltation of the Issuer's
financial results, condition, or prospects or hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly provided herein. The Issuer does not
make any representation or warranty concerning such information or its usefulness to a decision to
invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTf1NCES SHALL 7'HE 1SSUER BE LIABLE TO THE
RL-GISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE 1SSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS SF,CTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, POR OR ON ACCOUNT OF ANY
SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
21
(iv) No default by the Issuer in observing or performing its obligations under this Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision of tllis
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section nlay be amended by the Issuer from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in 1aw, or a change in
the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisiops of this
Section, as so amended, would have permitted an underwriter to purchase or se11 Certificates in the
primary offering of the Certificates in compliance with the Rule, taking into account any amendme»ts
or interpretations of the Rule since such offering as we11 as such changed circumstances and (2) either
(a) the Registered Owners of a majority in aggregate principal amount (or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the outstandilig
Certificates consent to such amendment or (b) a person that is unaffiliated with the Issuer (such as
nationally recognized bond counsel) determined that such amendment will not materially impair the
interest ofthe Registered Owners and beneficial owners ofthe Certificates. The Issuer may also amend
or repeal the provisians of this continuing disclosure agreement if the SEC amends or repeals the
applicable provisian of the Rule or a court of final jurisdictian enters judgment that such provisions of
the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent
an underwriter from lawfully purchasing or selling Certificates in the primary offering of tlze
Certificates. If the Issuer so amends the provisions of this Section, it shall include with any amended
financial information or operating data next provided in accordance with subsection (b) of this Sectioll
an explanation, in narrative form, of the reason for the amendment and of the impact of any change in
the type of financial information or operating data so provided.
Section 14. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend this
Ordinance subject to the following terms and conditions, to-wit:
(a) The Issuer may from time to time, without the consent of any holder, except as otherwise required
by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or
omission in this Ordinance that does not materially adversely affect the interests of the holders, (ii) grant
additional rights or security for the benefit of the holders, (iii) add events of default as shall not be
inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests
of the hoiders, (iv) qualify this Ordinance Linder the Trust Indenture Act of 1939, as amenderl, or
corresponding provisions of federal laws from time to time in effect, nr (v) make such other provisions in
regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions
of this Ordinance and that shall not in the opinion of the lssuer's Bond Counsel materially adversely affect
the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Certificates aggegating in principal
amount a majority of the aggregate principal amount of then outstanding Certificates that are the subject of
a proposed arnendment shall have the right from time to time to approve a»y amendment hereto that may be
deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the
holders in aggregate principal amount of the then outstanding Certificates, nothing herein contained shall
permit or be construed to permit amendmettt of the terms and conditions of this Ordinance or in any of the
Certificates so as to:
(1) Make any change in the maturity of any ofthe outstanding Certificates;
(2) Reduce the rate of interest borne by any of the outstanding Certificates;
22
(3) Reduce the amount of the principal of, or redemption premiLUn, if any, payable on any
outstanding Certificates;
(4) Modify the terms of payment of principal or of interest or redemption premium on
outstanding Certificates or any of them or impose any condition with respect to such payment;
or
(5) Change the minimum percentage of the principal amount of Certif cates necessary for
consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall
send by U.S. mail to each Registered Owner of the affected Certificates a copy of the proposed amendment
and cause notice ofthe proposed amendment to be published at least once in a financial publication published
in The City of New York, New York or in the State of Texas. Such published notice shall briet7y set forth
the nature of the proposed amendment and shall state that a copy thereof is on file at the office of the Issuer
for inspection by all holders of such Certificates.
(d) Whenever at any time within one year from the date of publication of such notice the Issuer shall
receive an instrument or instruments executed by the holders of at least a majority in aggregate principal
amount of all of the Certifrcates then outstanding that are required for the arnendment, which instrurnent or
instruments shall refer to the proposed amendment and that shall specifically consent to and approve such
amendment, the Issuer may adopt the amendment in substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this
Ordinance shall be deemed to be modified a»d amended in accordance with such amendatory Ordinance, and
the respective rights, duties, and obligations of the Issuer and all holders of such affected Certificates shall
thereafter be determined, exercised, and enforced, subject in all respects to such amendment.
(f) Any consent given by the holder of a Certificate pursuant to the provisions of this Section shall be
irrevocable for a period of six months from the date of the publication of the notice provided for in this
Section, and shall be conclusive and binding upon all future holders of the same Certificate during such
period. Such consent rnay be revoked at any time after six months from the date of the publication of said
notice by the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but
such revocation shall not be effective if the holders of a majority in aggregate principal amount of the affected
Certificates then outstanding, have, prior to the attempted revocation, consented to and approved the
amendment. f
For the purposes of establishing ownership of the Certificates, the Issuer shall rely solely upon t11e
registration of the ownership of such Certificates on the Registration Books kept by the Payitlg
Agent/Registrar.
Section 15, DEFAULT AND REMEDIES.
(a) Events of Default. Each of the f'ollowing occurrences or events for the purpose of this Ordiizance
is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any ofthe Certificates when the
sarne becomes due and payable; or
23
(ii) default in the performance or observance of any other covenant, agreement or obligation of
the Issuer, the failure to perform which materially, adversely affects the rights ofthe Registered Owners
of the Certificates, including, but not limited to, tlleir prospect or ability to be repaid in accordance with
this Ordinance, and the continuation thereof for a period of 60 days after notic;e of such default is given
by any Registered Owner to the Issuer.
(b) Remedies for Default.
(i) Upon the happening of any Event af Default, then and in every case, any Registered Owner
or an authorized representative thereof, i»cluding, but not limited to, a trustee or trustees therefor, may
proceed against the Issuer for the purpose of protecting and enforcing the rights of the Registered
Owners under this Ordinance, by mandatnus or other suit, action or special proceeding in equity or at
law, in auy court of competent jurisdietion, for any relief permitted by law, iilcluding the specific
performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that
may be unlawful or in violation of any right of the Registered Owners hereunder or any combination
of such remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for the equal
benefit of al] Registered Owners of Certificates then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or under the Certificates or now or hereafter existing at law or in
equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to
accelerate the debt evidenced by the Certificates shall not be available as a remedy under this
Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any
other available remedy.
(iii) By acceptii7g the delivery of a Certificate autliorized under this Ordinance, such Registered
Owner agrees that the certifications required to effectuate any covenants or representations contained
in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or
charge against the officers, employees or agents of the Issuer or the members of its governing body.
Section 16. APPROPRIATION. To pay the debt service coming due on the Certificates prior to receipt
of the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which
are hereby certified to be on hand and available for such purpose, an amount, which together with capitalized
interest received from the sale of the Certificates, if any, will be suff icient to pay suc11 debt service, and such
amount shall be used for no other purpose.
Section 17. DISPOSITION OF F[INDS. The accrued interest received from the sale ofthe Certificates
shall be deposited to the Interest and Sinking Fund. The premium received from the sale of the Certificates
shall be applied as follows: the sui-n of $ shall be applied to pay costs of issuance; and the sum
of $ shall be deposited into the Construction Fund to be used for the payment of all lawful costs
associated with the acquisition and construction of the Projects as hereinbefore provided. The remaincler of
the proceeds of the sale of the Certificates shail be deposited to a Construction Fund to be used for the
24
payment of all lawful costs associated with the acquisition and construction of the Projects as hereinbefore
provided.
Section 18. EFFECTIVE DATE. In accordance with the provisions of Texas Government Code
Section 1201.028, this Ordinance shall be effective iminediately upon its adoption by the City Cou»cil.
Section 19. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or word in
this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by
a court of competent jurisdiction, such holding sliall not affect the validity nf the remaining portion of this
Ordinance, despite such invalidity, w}lich remaining portions sha11 reinain in fu11 force and effect.
[Execution page follows]
25
PASSED, APPROVED AND EFFECTIVE tliis April 5, 2011.
Mayor, City of Denton, Texas
ATTEST:
City Secretary, City of Denton, Tehas
APPROVED AS TO LEGAL FORM:
C~y% Attorney, City of Deriton, Texas
EXNiBIT A
Annual Financial Statements and Operating Data
The following information is referred to in Section 13(b) of this Ordinance:
The financial information and operating data with respect to the Issuer to be provided annually in accordance
with such Section are as specified (and included in the Appendix or under the headings of the Official
Statement referred to) below:
Tables 1 through 5, inclusive, and 7 through 14, inclusive
APPENDIX B(FINANCIAL STATEMENTS FOR THE LAST COMPLETED FISCAL YEAR WHICH
W1LL BE UNAUDITED, UNLESS AN AUDIT IS PERFORMED IN WHICN EVENT THE AUDITED
FINANCIAL STATEMENTS WILL BE MADE AVAILABLE)
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the notes to
the flnancial statelnents referred to in paragraph above.
A-1
NOTICE OF SALE
AND
BIDDING INSTRUCTIONS
ON
$32,100,000*
CITY OF DENTON, TEXAS
(Dentai County, )
CERTIFICATES OF OBLIGATION, SERIES 2011
Sealed Bids Due Tuesday, April 5, 2011, at 11:00 ANI, CDT
THE CERTIFICATES WILL NOT BE DESIGNATED AS "OUALIFIED TAX-E\EN[PT OBL[GATIONS" FOR FINANC[AL INSTITUTIONS.
THE SALE
CERTIr1CATGS OFFERED FOR SALE AT COA[PETITIVE BIDDING The City Of DentOn, TexaS (the "Clty") 1S Offering fOr Sale 1tS
$32,100,000* Certificates of Obligation, Series 2011 (the "Certificates"). Bidders may submit Uids for the Certificates by any of
the foiowing methods:
(1) Deliver bids directly to the City as desctibed below in "Bids Delivered to the City;"
(2) Submit bids electronically as described below in "Electronic Bidding Procedures;" or
(3) SuUmit bids by telephone or facsimile as described below in "Bids by Telephone or Facsimile."
BIDs DE[.ivEaEn'ro Crrv Sealed bids, piainiy marked "Bid for Certificates," should be addressed to "Mayor and City Council,
City of Denton, Texas," and should be delivered to the City's Financial Advisor at 777 Main Street, Suite 1200, Fort Worth, Texas
76102, prior to 11:00 AM, CDT, on the date of the sale.
ELECTRONIC BIDllING PROCEDURE Ally pi'OSpeCtlVe bladet' t}71t 1lltet7dS t0 SllVtl7it 211 @leCtt'Ot11C btd 117LISt SLIbllllt ItS EleCtPOIIIC
bid tlvough the facilities of PARITY. Subscription to i-DeaPs BIDCOMP Competitive Bidding System is required in order to
submit an electronic bid. The City will neither confirm any subscription nor be responsiUle for the failure of any prospective Uidder
to subscribe. Bidders suUmitting an electronic bid shall not be required to suUmit Official Bid Forms prior to award.
An electronic bid made through the facilities of PARITY shall be deemed an irrevocable offer to purchase the Certificates on the
terms provided in this Notice of Sale, and shall be binding upon the bidder as if made by a signed, sealed bid delivered to the City.
The City shatl not be responsible for any malfiuiction or mistake made by, or as a result of the use of the facilities of, PARITY, the
use of such facilities beitig the sole risk of the prospective bidder.
If any provisions of the Notice of Sale shall conflict with information provided by PARITY as the approved provider of
electronic bidding services, this Notice of Sale shall control. Fnrther information aboi►t PARITY, including any fee
charged, may be obtained from Parity Customer Support, 40 West 23rd Street, Sth Floor, New York, New York 10010,
(212) 404-8102.
For purposes of the bidding process, regardless of the bidding method, the time as maintained by i-Deal shall constitute the official
time. For information purposes only, bidders are requested to state in their electrmiic bids the true inte►•est cost to the City,
1s described under "Basis for Award" below. All electronic bids shall be deemed to incorporate the provisions of this Notice
of Sale and the Official Bid Form. Tlie winning bidder shall submit a signed bid form if not previously submitted.
BIDS BY TELEPHONE OR r+ACSIMILE B1dd0PS rilUSt SUbllltt, p1101' t0 Apl1t S, 2011, SIGNED OfflCtll Bld FOriT1S t0 DBVId
Medanich, First Southwest Company, 777 Main Street, Suite 1200, Fort Worth, Texas 76102, and submit their bid by telephone or
facsimile (fax) on the date of the sale.
Telephone bids will be accepted at (817) 332-9710, beriveen 10:00 AM, CDT and 11:00 AM, CDT on the date of the sale.
Fax bids will be received between 10:00 AM, CDT and 11:00 AM, CDT, on the date of the sale at (817) 336-5572, attention:
Rhonda Van Iderstine.
First Southwest Company will not be responsible for submitting ai►y bids received after the above deadlines.
The City and First Southwest Company are not responsible if such telephone or facsimile numbers are busy which prevents a bid
or bids fi-om being submitted on a timely basis.
First Southwest Company assumes no responsibility or liability with respect to any irregularities associated with the submission of
bids if any options are exercised.
* Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" herein.
PLpCE a,ND TiMe oF B[D OrENING... The bids for the Certificates wil) be puUlicly opened and read at the offices of the Financial
Advisor, at 11:00 AM, CDT, Tuesday, April 5, 2011.
AIvAaD oF THE CEa'rtFtcA'rES The City Council will take action to award the Certificates (ar reject all bids) at a meeting
scheduled to convene at 630 PM, CDT, on the date of the bid opening, and adopt an ordinance authorizing Uie Certificates and
approving the Official Statement (the °Certificate Ordinance").
THE CERTIFICATES
DESCrtIrTroN The Certificates will be dated April 1, 2011 (the "Dated Date"). Interest will accrue from the Dated Date and will
be due on Februaiy 15, 2012, and each August 15 and February 15 thereafter until the earlier of maturity or prior redemption. The
Certificates will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity. The Certificates will
mature on Februaiy 15 in each year as follows:
1VIATURITY SCHEDULE*
Principal
Principal
Principal
Year
Amount
Year
Amount
Year
Amouut
2012
$ 1,525,000
2019
$1,190,000
2025
$ 1,400,000
2013
2,195,000
2020
1,255,000
2026
1,470,000
2014
2,285,000
2021
1,320,000
2027
1,540,000
2015
2,400,000
2022
1,215,000
2028
1,615,000
2016
2,515,000
2023
1,275,000
2029
1,695,000
2017
1,090,000
2024
1,335,000
2030
1,775,000
2018
1,140,000
2031
1,865,000
OrTIoNAL REDENirTIoN The City reseives the riglit, at its option, to redeem Certificates having stated maturities on and after
Februaty 15, 2022, in whole or in part in piincipal amottnts of $5,000 or any integral multiple thereof, on FeUruary 15, 2021, or any
date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption.
ADJUSTD4ENT OF PRINCIPAL ADIOUNTS rWD/OIi TYPES OF BIDS Pr10i' t0 12:00 nOOn CDT OIl the day befOre the b1dS aTe due, the
City may, in its sole discretion, adjust the ptincipal amount set forth above (the "Maturity Schedtde") ancUor the type of bid required
on the Certificates. First Southwest Company, as Financial Advisor to the City, will give notice of any such adjustment by
Bloomberg avd Parity. Shoiild sucli adjustments be made, a revised Official Bid Form will be made available through i-Deal
Prospectus and PARITY. For purposes of this paragraph, the term "Maturity Schedule" shall include any adjustments to the
principal amounts shown above including the total par amount so made by the City Uy posting a Parity and Bloomberg Wire. Also
see "Conditions of the Sale" herein.
SERIAL CERTiFICATES AND/OR TERM CERTIFICATES Bidders may provide that all of the Certificates be issued as setial
Certificates or may provide that any rivo or more consecutive annual principal amotmts be combined into one or more term
Certificates.
MEvvn.a'roRY SiNiaNC Fv1vn If the successful bidder elects to alter the Maturity Schedule reflected above and convert principal
amounts of the Serial Certificates into "Term Certificates", such "Term Certificates" shall be subject to mandatory redemption on the
first February 15 nest following the last maturity for Serial Certificates, and annually thereafter on each February IS until the stated
maturity for the Term Certificates at the redemption prices of par plus accrued interest to the date of redemption. The principal
amounts of the Term Certificates to be redeemed on each mandatory redemption date shall be the principal amounts that would have
been due and payable in the Maturity Schedule shown above had no conversion to Term Certificates occurred. At least thirty (30)
days prior to each mandatory redemption date, the Paying AgenURegistrar shall select by lot the Term Certificates to be redeemed
and cause a notice of redemption to be given in the manner provided in the Preliminary Official Statement.
The principal amount of the Term Certificates required to be redeemed pttrsuant to the operation of such mandatory redemption
provisions may Ue reduced, at the option of the City, by tlie principal amount of the Temi Certificates of the same mahirity which (i)
shall have been acquired by the City at a price not exceeding the principal amount of such Term Certificates plus accrued interest to
the date or purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or (ii) shall have been redeemed pursuant
to the optional redemption provisions and not theretofore credited against a mandatory redemption requirement.
A final official statement will incorporate the mandatory redemption provisions for the Certificates in the event the successful
bidder elects to convert serial maturities into one or more Term Certificates.
BOOK-ENTRY-ONLY SYSTED9 Tlle City intends to utilize the Book-Entry-Only System of The Depository Trust Company
("DTC"). See °The Bonds and Certificates - Book-Entry-Only System" in the Preliminary Official Statement.
X Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" herein.
PAviNC AcFN'r/REGrs'raArt The initial Paying Agent/Registrar shall be Thc Bank of New York Mellon Trust Company, National
Association (see "The Bonds and Ceitificates - Paying Agent/Registrar" in the Preliminary Official Statement).
SouRCF oF PAmtEN'r The Certificates constihite direct obligations of the City, payable from a comUination of (i) the levy and
coilection of a direct and continuing ad valorem tax, witliin the limits prescribed by law, on all taxaUle property within the City, and
(ii) a limited pledge (not to exceed $1,000) of swplus net revenues of the City's Utility System, as provided in the Certificate
Ordinance.
Further details regarding the Certificates are set forth in the Preliminary Official Statement.
CONDITIONS OF THE SALE
TYPE OF B[DS AND INTGREST RATES ThC CCYfIfiCRtCS wlll bC S01C1 111 OI1C blOCIC Oll elt "A11 OY NOri¢" basis, and at a price of
not less than their par value and not ntore than 100.5'% of their principal lmount. Bidders are invited to name the rate(s) of
interest to be borne by tlie CertiGcates, provided that each rate bid must be in a multiple of 1/8 of i% or 1/100 of 1% and the net
effective interest rate must not esceed IS%. The highest rate bid may not exceed the lowest rate Uid by more than 3% in rate.
For CertificaEes having stated maturities mi and lfter Februar,y 15, 2022, no reoffering ,yield producing a dollar price less
than 98.00 for any individual mlturity will be accepted. The high bidder will be required to submit reoffering ,yields and
dollar prices prior to award. No limitation is imposed upon bidders as to the number of rates or changes which may be used.
All Certificates of one matin-ity must bear one and the same rate. No Uids involving supplemental interest rates will be
considered. Eacl1 bidder shall state in the bid the total interest cost in dollars and the effective interest rate determined thereby
(calculated in the manner prescribed by Chapter 1204, Texas Government Code), which stiall be considered inforniative only and
not as a part of the bid.
BAsis Fo►t ANvARI) The sale of the Certificates will Ue awarded to the bidder making a bid that conforms to the specifications
herein and which produces the lowest True Interest Cost rate to the City. The True Interest Cost rate is that rate which, when used to
compute the total present value as of dle Dated Date of all debt seivice payments o❑ tiie Certificates on the basis of semi-annual
compounding, produces an amount equal to the sum of the par value of the Ceitificates plus any premium bid (but iiot interest
accrued fiom the Dated Date to the date of their delivery). In the event of a bidder's error in interest cost rate calculations, the interest
rates, and premium, if any, set forth in the Of6cial Bid Form will be considered as the official bid.
Goou FArrfl Dcros►'r A Good Faith Deposit, payable to the "City of Denton, Texas", in the amount of $642,000.00, is required.
Such Good Faith Deposit shall be a bank cashier's check or certified check, which is to be retained uncashed by the City pending the
Initial Purchaser's compliance with the terms of the bid and the Notice of Sale and Bidding Instructions. Tlle Good Faith Deposit
may accompany the Official Bid Form or it may be submitted separately. If submitted separately, it shall be made available to the
City prior to the opening of the bids, and shall be accompanied by instructions from the bank on which drawn which authorize its use
as a Good Faith Deposit by the Initial Purchaser who shall be named in such instructions. The Good Faith Deposit of tlie Initial
Purchaser will be returned to Hie Initial Purchaser upon payment fa• tlte Certificates. No interest will be allowed on the Good
Faith Deposit. In the event the Initial Purchaser should fail or refuse to take up and pay for the Certificates in accordance with tlie
bid, then said check shall be cashed and accepted by the City as fiill and complete liquidated damages. The checks accompanying
bids other than the winning bid will be returned immediately after the bids are opened, and an award of the Certificates has been
made.
DELIVERY OF THE CERTIFICATES AND ACCOMPANYING DOCUMENTS
CUSIP NuNisExs It is anticipated that CUSIP identification numbers will appear on the Certificates, but neither the failure to
print ar type such ntmiber on any Certificate nor any error with respect thereto shall constitute cause for a failure or refiisal by the
Initial Purehaser to accept delivery of and pay far the Certificates in accordance with the terms of this Notice of Sale and Bidding
Instructions and the terms of the Official Bid Form. All expenses in relation to the printing or typing of CUSIP numbers on the
Certificates shall be paid by the City; provided, however, that the CUSIP Service Bureau charge far the assignment of the numbers
shall be the responsibility of and shall be paid for by the Initial Purchaser.
DELIVERY oF CEe'riFiCATES Initial Delivery will be accomplished by the issuance of one Initial Certificate (also called the
°Certificate" or °Certificates"), eitlier in typed or printed form, in the aggregate principal amoimt of $32,100,000, payable in stated
installments to the Initial Ptrrchaser or its designee, signed by the Mayor and City Secretaiy, approved by the Attorney General, and
registered and manually signed by the Comptroller of Public Accotmts. Upon delivery of the Initial Certificate, it shall be
immediately cancelled and one definitive Certificate for each maturity will be registered and delivered only to Cede & Co., and
deposited with DTC in connection with DTC's Book-Enhy-Only System. Delivery will be at the coiporate trust office of the Paying
Agent/Registrar in Dallas, Texas. Payment for the Certificates must be made in immediately available funds for unconditional credit
to the City, or as otherwise directed by the City. The Initial Purchaser will be given six business days' notice of the time fixed for
delivery of the Certificates. It is anticipated that delivery of the Certificates can be made on or about May 10, 2011, and it is
understood and agreed that the Initial Purchaser will accept delivery and make payment for the Certificates by 10:00 AM, CDT, on
May 10, 2011, or thereafter on the date the Certificate is tendered for delivery, up to and including May 24, 2011. If for any reason
the City is miable to make delivery on or before May 24, 2011, the City shall immediately contaet the Initial Purchaser and offer to
allow the Initial Purchaser to estend its offer for an additional thirty days. If the Initial Purchaser does not elect to extend its offer
within six days thereafter, then its Good Faith Deposit will be rehu-ned, and both the City and die Initial Purchaser shall be relieved
iii
of any fin-ther obligation. In no event shall the City be liable for any damages Uy reason of its failure to deliver the Certificates,
provided such failure is due to circumstances Ueyond the City's reasonable control.
CoND►'rIoNS'ro DE[.rvEav The obligation of the Initial Purchaser to take up and pay for the Certificates is suUject to the
Initial Purchaser's receipt of (a) the legal opinion of McCall, Parkhurst & Horton, L.L.P., Dallas, Texas, Bond Counsel for die
City ("Bond Counsel"), (b) ihe no-litigation certificate, and (c) the certification as to the Preliminaiy Official Statement, all as
fiirther descriUed in the Preliminary Official Statement.
In order to provide the City with infonnation required to enable it to comply with certain conditions of the hiternal Revenue Code
of 1986 relating to the exemption of interest on the Certificates from the gross income of their owners, the Initial Pin-chaser will
be required to complete, esecute, and deliver to the City (on or before the 6th business day prior to the delivery of the
Certifrcates) a ceirtification as to their "issue price" substantiaily in the form and to the effect attached hereto or accompanying
this Notice of Sale and Bidding Instructions. In the event tlie successful bidder will not reoffer the Certificates for sa1e, such
certificate may be modified in a manner approved by the City. In no event will tlie City fail to deliver the Certificates as a
result of the Initial Pu►•chaset•'s inability to sell a substantial amomit of the Certificates at a partici►lar p►•ice prior to
delivery. Each bidder, by submitting its bid, agrees to complete, execute, and deliver such a certificate by the date of delivery of
die Certificates, if its bid is accepted by the City. It will be the responsibility of the Initial Purcliaser to institute such syndicate
reporting requirements to make such investigation, or otherwise to ascertain the facts necessaiy to enable it to make such
certification with reasonable certainty. Any questions concerning such certification should be directed to Bond Counsel.
LEGA[, OrtNtoNS The Certificates are offered when, as and if issued, subject to the approval of the Attorney General of the
State of Texas. Delivery of and payment for the Certificates is subject to tlie receipt by the Initial Purchaser of opinions of Bond
Counsel, to the effect that the Certificates are valid and binding obligations of the City and that the interest on the Certificates
will be ercludabie from gross income for federal income tax pw-poses wider existing law, subject to the matters described under
"Tax Matters" in the Preliuiinary OfFcial Statement, including alternative minimum tax consequences for corporations.
CERTIP'1CATION OF PRELINiINARY OFFICIAL STATEnIENT... At t}12 titTte Of paytl1eltt f01' 811d Itllllal D0lN0Cy Of t}le CeTtlflCateS, thC
City will execute and deliver to the Initial Purchaser a certificate in the for-m set forth in the Preliminary Official Statement.
Cx.aNGE IN T.ax ExEn►YT ST.aTUS ....At any time before the Certificates are tendered for delivery, the Initial Purchaser may
withdraw its bid if the interest received by private holders on obligations of the same type and eharacter shall be declared to be
includable in gross income imder present federal income tax laws, either by ruling of the Intemal Revenue Service or by a decision of
any Federal court, or shall be declared taxable or be required to be taken into account in computing any federal income taxes, by the
ternls of any federal income tax law enacted subsequent to the date of this Notice of Sale and Bidding Instructions.
GENERAL
FiNaNCIAL AnvisoR First Southwest Company is employed as Financial Advisor to the City in connection with the issuance
of the Certificates. The Financial Advisor's fee for services rendered with respect to the sale of the Certificates is contingent
upon the issuance and delivery of the Certi6cates. First Southwest Company, in its capacity as Financial Advisor, has relied on
the opinion of Bond Coumsel and has not verified and does not assume any responsibility for the information, covenants and
representations contained in any of the legal documents with respect to the federal income tax status of the Certificates, or the
possible impact of any present, pending or future actions taken by any legislative or judicial bodies. In the normal course of
bttsiness, the Financial Advisor may from time to time sell investment securities to the City for the investment of bond proceeds
ar other funds of the City upon the request of the City.
BLUE SxY LnWs By submission of its bid, the lnitial Purchaser represents that the sale of the Certificates in states other than
Texas will be made only pursuant to exemptions from registration or, where necessary, the Initial Purchaser will register the
Certificates in accordance with the securities law of the states in which the Certificates are offered or sold. The City agrees to
cooperate with the Initial Purchaser, at the Initial Purchaser's written request and expense, in registering the Certificates or obtaining
an exemption from registration in any state where such action is necessary, provided, however, that the City shall not be obligated to
qualify as a foreign corporation or to execute a general or special consent to service of process in any such jurisdiction.
NoT pN OFFEx'ro SE►.L This Notice of Sale and Bidding Instructions does not alone constitute an offer to sell the Certificates,
but is merely notice of tlie sale of the Certificates. The offer to sell the Certificates is being made by means of tlie Notice of Sale and
Bidding Instructions, the Official Bid Forni and the Preliminary Official Statement. Prospective purchasers are urged to carefully
examine the Preliminary Official Statement to determine the investment quality of the Certificates.
ISSUANCE OF ADDITIONAL DEBT Tlle Clty's $10,845,000* Genecal Obligation Refimding and Improvement Bonds, Series
20] 1 are being offered for sale concurrently with, but separately from, the Certificates. Current plans call for tlle City to issue
approximately $46 million of general obligation debt, including the remaining voted but unissued debt, in the second quarter of
2012. This amount also includes approximately $38 million in self-supporting certificates of obligation related to the City's
Solid Waste operation and Utility System.
* Preliminary, subject to change. See "Adjustment of Principal Amount and/ar Types of Bids" herein
Iv
RATINcs The Certificates and the presently outstanding tax supported debt of the City are rated "Aa2" by Moody's Investors
Service, Ina ("Moody's") and "AA" by Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC
business ("S&P").
TNE PRELIDIINARY OFFICIAL STATEDIF,NT AND COniPL1ANCE WITH SEC RULE 15c2-12 The Clty ltaS pieUat'ed tlle
accompanying Preliminary Official Statement and, for the limited purpose of complying with SEC Rule 15c2-12, deems such
Preliminaiy Official Statement to be final as of its date within the meaning of such Rule for the purpose of review prior to bidding.
To the Uest knowledge and belief of the City, the Preliminaiy Official Statement contains information, including financial
information or operating data, concerning every entity, enteipiise, fimd, account, or person that is material to an evaluation of the
offering of the Certificates. Representations made and to be made Uy the City concerning the absence of material misstatcments and
omissions in the R-eliminary Official Statement are addressed elsewhere in this Notice of Sale and Bidding Instructions and in the
Preliminary Official Statement.
The City wiil furnish to the hiitial Purchaser, acting through a designated senior representative, in accordance widi instructions
received fi•om the Initial Purchaser, widiin seven (7) business days from the sale date an aggregate of 250 copies of the Official
Statement reflecting interest rates and other terms relating to the initiai reoffering of the Certificates. The cost of any Official
Statement in excess of the number specified shall Ue prepared and distributed at the cost of the Initial Purchaser. The Initial
Purchaser sliall be responsible for providing in writing die initial reoffering prices and other terms, if any, to the Financial Advisor by
the close of the next business day after the award. Except as noted above, the City asstimes no responsibility or obligation for the
disttiUution or delivery of any copies of the Official Statement in connection with the offering or reoffering of the subject securities.
CONTINUING DiscLosu[zE AcaEFNrEN'r The City will agree in the Certificate Ordinance to provide certain periodic
information and notices of material events in accordance with Securities and Exchange Commission Rule 15c2-12, as described
in the R-eliminary Of6cial Statement under "Continuing Disclosure of Infoimation". The Initial Purchaser's obligation to accept
and pay for the Certificates is conditioned upon delivery to the Initial Purchaser or agent of a certified copy of the Certificate
Ordinance containing the agreement desa-ibed under suclI heading.
CoINIrLIANCF WITH PaioR UNnertTAlaNGS During the last five years, the City has complied in all material respects with all
continuing disclosure agreements made by it in accoidance with SEC Riile 15c2-12.
ADDITIONAL COPIES OF NOTICE, BID FORbI AND STATEMENT A Ginlted numbet' Of addltlOnal COp1eS Of t1llS NOtlce of Sale atld
Bidding Instructions, the Official Bid Form and the Preliminary Official Statement, as available over and above the normal mailing,
may Ue obtained at the offices of First Southwest Company, Investment Bankers, 325 North St. Paul, Suite 800, Dallas, Texas 75201,
Financia) Advisor to the City.
On the date of the sale, the City will, in the Certificate Ordinance authorizing the issuance of the Certificates, confirm its approval of
the foim and content of the Preliminary Official Statement, and any addenda, supplement or amendment thereto, and authorize its
use in the reoffering of the Certificates by the Initial Purchaser.
MARK BURROUGHS
Mayor
City of Denton, Texas
ATTEST:
JENNIFER WALTERS
City Secretary
March 24, 2011
BOND YEARS
Certificates
Acauniilnted
Certificltes
1Vlatuf•ing
Amoimt
Bond Years
Bond Year•s
Nlattu•ing
2012
1,525,000
1,330.139
1,330.139
2012
2013
2,195,000
4,109.528
5,439.667
2013
2014
2,285,000
6,563.028
12,002.694
2014
2015
2,400,000
9,293.333
21,296.028
2015
2016
2,515,000
12,253.639
33,549.667
2016
2017
1,090,000
6,400.722
39,950389
2017
2018
1,140,000
7,834.333
47,784.722
2018
2019
1,190,000
9,367944
57,152.667
2019
2020
1,255,000
11,134.639
68,287306
2020
2021
1,320,000
13,031.333
81,318.639
2021
2022
1,215,000
13,209.750
94,528.389
2022
2023
1,275,000
15,137.083
109,665.472
2023
2024
1,335,000
17,184.417
126,849.889
2024
2025
1,400,000
19,421.111
146,271.000
2025
2026
1,470,000
21,862.167
168,133.167
2026
2027
1,540,000
24,443.222
192,576389
2027
2028
1,615,000
27,248.639
219,825.028
2028
2029
1,695,000
30,293.417
250,118.444
2029
2030
1,775,000
33,498.194
283,616.639
2030
2031
1,865,000
37,061.694
320,678.333
2031
Average Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9990 Years
OP'FICIAL BID FOR14I
Honorable Mayor and City Coimcil
City of Denton, Texas
Honorable Mayor and Members of the City Council:
April 5, 2011
Reference is made to your Preliminary Official Statement and Notice of Sale and Bidding Instructions, dated March 24, 2011 of
$32,100,000* CITY OF DENTON, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2011, both of which constitutc a part
hereof.
For your legally issued Certificates, as described in said Notice of Sale and Bidding Instructions and Preliminaiy Official Statement,
we will pay you par and accrued interest from date of issue to date of delivery to us, plus a cash premium of $ for
Certificates mattu-ing and bearing interest as follows:
Principal
Interes[
Principal
Interest
Principal
Interest
Ntahuity
Amomnt*
Rate
Maturity
Amowu*
Rate
Mahu-ity
Amount*
Rate
2/15/2012
$ 1,525,000
%
2/15/2019
$ 1,190,000
%
2/15/2025
$ 1,400,000
%
2/15/2013
2,195,000
%
2/15/2020
1,255,000
%
2/15/2026
1,470,000
%
2/15/2014
2,285,000
%
2/15/2021
1,320,000
%
2/15/2027
1,540,000
%
2/15/2015
2,400,000
%
2/15/2022
1,215,000
%
2/15/2028
1,615,000
%
2/15/2016
2,515,000
%
2/15/2023
1,275,000
%
2/15/2029
1,695,000
%
2/15/2017
1,090,000
%
2/15/2024
1,335,000
%
2/15/2030
1,775,000
%
2/15/2018
1,140,000
%
2/15/2031
1,865,000
%
Of the principal maturities set forth in the table above, term Uonds have been created as indicated in the following table (which may
include tnultiple term bonds, one term bond or no term bond if none is indicated). For those years which have been combined into a
term bond, the ptincipal amount shown in the table above shall be the mandatory sinking fimd redemption amounts in such years
except that the amount shown in the year of the tenn bond maturity date shall mature in such year. The term Uonds created are as
follows:
Year of
Maturity Date First Mandatory Principal Interest
February 15 Redemption Amount Rate
$ %
$ %
$ %
$ %
Our calcularion (which is not a part of this bid) of the true interest cost fi•om the above is:
TRUE INTEREST COST
The Initial Certificates shall be registered in the name of , which will, upon
payment far the Certificates, be canceled by the Paying AgenURegistrar. The Certificates will then be registered in the name of Cede
& Co. (DTC's partnership nominee), under the Book-Entry-Only System.
A bank cashier's check or certified check of the Bank, . in die amount of $642,000.00,
which represents our Good Faith Deposit (is attached hereto) or (has been made available to you prior to the opening of this bid), and
is submitted in accordance with the teims as set forth in the Preliminary Official Statement and Notice of Sale and Bidding
Instructions.
* Preliminary. subject to change. See "Adjustment of Principal Amount and/or Types of Bids" in the Notice of Sale and Bidding
Instnictions.
We agree to accept delivery of the Certificates utilizing the Book-Entiy-Only System through DTC and make payment For the Initial
Certificate in immediately availaUle fimds in the Corporate Trust Division, The Bank of New York Mellon Trust Company, Natioiia]
Association, not later than 10:00 AM, CDT, on May 10, 2011, or thereafter on the date the Ceitificates are tendered for delivery,
pursuant to the terms set fardi in the Notice of Sale and Bidding Instructions. It will Ue the oUligation of dhe purchaser of tlie
Certificates to complete the DTC Eligibility Questioimaire.
The undersigned agrees to complete, execute, and deliver to die City, at least six business days prior to delivery of the Ceitificates, a
certificate relating to the "isstte price" of the Certificates in the fonn and to the effect accompanying the Notice of Sale and Bidding
Instructions, with such changes thereto as may be acceptable to the City.
We agree to provide in writing the initial reoffering prices and other terms, if any, to the Financial Advisor bl' the close of the
nest business dny after the award.
Respectfully submitted,
Name of Undeitivriter or Manager
Authorized Representative
Phone Nwnber
Signature
Syndicate Members:
ACCEPTANCE CLAUSE
The above and foregoing bid is hereby in all things accepted by the City of Denton, Texas, subject to and in accordance with the
Notice of Sale and Bidding Instructions, this the Sth day of April, 2011.
ATTEST:
Mayor
City of Denton, Texas
City Secretary
CERTIFICATE OF UNDERWRITER
The undersigned hereby certifies as follows with respect to the bid and purchase of die City of Denton, Texas Certificates of
Obligation, Scries 2011 (the °Certificates"):
1. The undersigned is the duly authorized representative of the purchaser (the "Pw•chaser") of the Cei-tificates firom the City of
Denton, Texas (the °Issuer").
2. All of the Cei-tificates have been offered to members of the puUlic in a bona fide initial offering. For purposes of Uiis
Certificate, the term "public° does not include any bondhouses, Urokers, dealers, and similar persons or organizations acting in
the capacity of undeitivriters or wholesalers (including the Purchaser or members of the selling group or persons that are related
to, or controlled Uy, or are acting on behalf of or as agents far the imdersigned or members of the selling group).
3. Eaclt maturity of the Cei-tificates was offered to the public at a price which, on die date of such offering, was reasonably
expected by the Purchaser to be equal to the fair market value of such maturity.
4. Other than the obligations set forth in paragraph 5 hereof (the "Retained Maturity" or "Retained Matin-ities"), the first
price/yield at which a substantial amount (i.e., at least ten (10) percent) of the principal amount of each maturity of the
Cei-tificates was sold to the public is set forth below.
Principal
Offering
Amount
Year of Price
Mahring*
Maturity (%/Yield)
$ 1,525,000
2012
2,195,000
2013
2,285,000
2014
2,400,000
2015
2,515,000
2016
1,090,000
2017
1,140,000
2018
1,190,000
2019
1,255,000
2020
1,320,000
2021
Principal
Offering
Amount
Year of Price
Maturing*
Matm•ity (%1Yield)
$ 1,215,000
2022
1,275,000
2023
1,335,000
2024
1,400,000
2025
1,470,000
2026
1,540,000
2027
1,615,000
2028
1,695,000
2029
1,775,000
2030
1,865,000
2031
5. In the case of the Retained Maturities, the Purchaser reasonably expected on the offering date to sell a substantial amount (i.e.,
at least ten 0) percent} of each Retained Maturity at flie initial offering price/yield as set forth below:
Principal
Offeritig
Principal
Offering
Amount
Year of
Price
Amount
Year of Price
Maturing*
Maturity
(%/Yield)
Maturing*
Maturity (%/Yield)
$1,525,000
2012
$1,215,000
2022
2,195,000
2013
1,275,000
2023
2,285,000
2014
1,335,000
2024
2,400,000
2015
1,400,000
2025
2,515,000
2016
1,470,000
2026
1,090,000
2017
1,540,000
2027
1,140,000
2018
1,615,000
2028
1,190,000
2019
1,695,000
2029
1,255,000
2020
1,775,000
2030
1,320,000
2021
1,865,000
2031
* Preliminary, subject to change. See "Adjustment of Piincipal Amount and/or Types of Bids" in the Notice of Sale and Bidding
Instnictions.
7. The Purchaser understands that the statements made herein will Ue relied upon, by the Issuer in its effort to comply with the
conditions imposed by the Internal Revenue Code of 1986, and by Bond Counsel in rendering their opinion that the interest on
the Certificates is excludable from the gross income of the owners thereof.
EXECUTED and DELIVERED this day of , 2011.
(Name of Pw•chaser or Manager of Purchasing Syndicate)
By:
Title:
` . Ratinga
FirstSouthvvest niooav°s: "Aa?„
e~r0,, y a d Dated Dlarch 24, 2011 Sd:P: ""AA"
(see "Other Information -
NEIi' ISSIIE - Booli-Entrp-Onl) Ratings" herein)
In the opinion of Bond ('otuiaal, intzraat on the Bonds will ba ascludabla from croaa incoma for fadzral incoma tas ptupoaaa tuidzr atahttaa, raeulationa,
publiahed nilniga and coiut deciaiona eiiating on the date thereo£ aubject to the mattera deacribed iuider "Tai Mattera" herein, includ'nig the alternatice
mininuun tai on coiporationa.
THE BONDS Ai"ILL NOT BE DESIGNATED AS "QiTALIFIED TAX-ESEDIPT OBLIGATIONS" FOR FINAN('IAL INSTITiTTIONS
I $10,845,000*
C'ITI OF DENTON, TEIAS
(Denton ('ountp)
VEN{J'ON GENERAL ( )BLIGATI( )N REF'[TNDING AND IDIPR( )VEDIENT B( )NDS, SERIES 2011
Dated Date: April 1, 2011 Due: Februarp 15, as shuwn beluw
PAYDiENT TERDis Intereat on the $10,845,000* Cih of Denton General UbliLation Refiuidnig and Improcement BonJs, Seriea 2011 (the 'BonJs') nill
accnia from april 1, 2011 (tha "Datad Data"), will ba pacabla Fabruaiti li and aueuat li of aach caar, conunancine Fabniarc li, 2012, iuitil mahuih or
prior radamption, and will ba calculatad on the baaia of a>60-dac caar conaiatine of hwa1N a>0-dac montha. Tha dafinitiva Bonda will ba niitiallc
regiatered and delicered on1y to Cede dCo., the nominee of The Depoaitoiy Trtut Company ("DT(„) ptuauant to the Boolo-Entiy-Un1y Syatem deaxibed
hzrain. Banaficial ownzrahip of the Bonda mac ba acquirad in danominationa of $5,000 or intacral nuiltiplaa Hizraof within a mahuih. No phpsical
delicery uf the Bunds will be made tu the beneficial uwners thereuf. Principal o£ premiiun, if any, and intereat on the Bonda nill be payable by the
PavniL, ALentRegiatrar to Cede d Co., nliich nill make diatribution of the amoiuita ao paid to the participating membera of DTC for aubaequent payinent
to the banaficial ownzra of Hia Bonda. Saa "Tha Ublieationa - Book-Entiti-( )ilc Scatam" hzrain. Tha initial Pacine aeant Raeiatrar ia Tha Bank of Naw
Fork Mallon Truat ('ompanc, N. a., Dallaa, Tasaa (aaa "Tha Ublieationa - Pacme aeant'Raeistr-ar").
ALTTHORITI" FoR ISSL? 1Nt'E Tha Bonds ara i55uad piu5uant to the ('on5tihition and eanefal law5 of the Stata of TasaS, (Hia "Stata") nichidine
particularlc Tasaa Govzrnmant ('oda, Chaptzra 1207 and 133 1, as amandad, and ara diract oblieationa of the ('ih of Danton, Tasaa ( Hia "('ih pacabla
from an annual ad calorem tai levieJ, nithin the limita preacribed by lan, on all taiable properh niHiin the Cih, aa procided in the ord'nianx authorizing
the Bonda (the "Bond Ofd'nianx") ( aee "The UbliLationa -Authorih for Iaauance" and "The UbliLationa Seciuih and Soiuoe of Paement").
PiTxposE ProceeJs of the Bonda are eipected to be uaed (il to refiuid certiin outatand'nig obligationa of the Cih deacribed on Schedule I attached
hereto (the "Refiuided UbliLationa") for debt aeivix aacinLa and (ii) for carioiu atreet improcementa and park land aequiaitiona and improcementa, and
(iii) to pac the costs asaociatad with the iaauanca of the Bonda.
DIATiTRITI SC'HEDiTLE*
Principal
Interest Initial Ci JSIP
Principal
Amount
Maturitv Rate Yield Suffii ' 1
Amount
$-1,055,000
2012
$ 110,000
550,000
2013
115,000
570,000
2014
120,000
575,000
2015
125,000
600,000
201G
130,000
615,000
2017
135,000
600,000
10ltl
145,000
615,000
2019
150,000
6-40,000
202 0
160,000
670,000
2021
165,000
('IISIP Prefis: 248866
Interest Initial CUSIP
Maturitv Rate Yield Suffii '
2023
202-4
202 i
20')G
2 02 7
101tl
2029
2030
LV31
(Accrued Interest frum April 1, 2011 tu be added)
(1) ('USIP ia a reLiatered trademark of the Aneriean Baiil.era Asaociation. ('USIP dati herein ia procided by ('USIP Global Seivioea, managed by
StanJard d Poor'a Financial Seivicea LLC on behalf of the Aunerican Baiil.era Aaaociation. Thia dati ia not intended to xeate a databaae and doea not
azrva in anc wac aa a aubatihita for the Ci rSIP Szivicaa. NaiHizr the Cih nor the Fniancial adN iaor ahall ba raaponaibla for the aalaction or coffactriaaa of
the ('i rSIP munbefa aat forth hefain.
REDEDIPTION Tha ('ity ra5erva5 the riehk at it5 option, to radaam Bonds havine 5tatad mahuitia5 on and aftef Fabniarc 15, 2022, ni whola or in part in
principal amoiuita of $5,000 or anc intacral nuiltipla Hizraof, on Fabniarc li, 202 L or anc data thzraaftzr, at the par N alua thzraof plu.s accniad intzraat to
the date of redemption.
SEPARATE ISSIIES Tha Bonds ara baine offefad bc the Citv conciurantlc with the "Citv of Danton ('ertificata5 of Ublieation, Sefia5 2011" (tha
"Certificatea"), iuider a conunon Ufficial Statemenk and auch BonJs and Certificatea are hereniafter aometimea referfed to collecticele aa the
"Ubligationa." The Bonda and Certificatea are aeparate and diatnict aeciuitiea offerniga being iaaued and aold independently eicept for the conunon
O$icial Statamank and, whila Hia Oblieationa ahara czrtain conunon attributas, aach iaaua ia aaparata from the othzr and ahould ba raviawad and analczad
indapandantlc, inchidine the hpa of oblieation baine offzrad, ita tznna for pacmank Hia aaciuih for ita pacmank the riehta of the holdzra, the fadzral, atata
or local tii ocmaequencea of the piuchaae, onmerahip or diapoaition of the Ubligationa and other feahuea.
LEC:Ai iTT Tha Bonda ara offzrad for dalivziti whan, aa and if iaauad and racaivad bc the Initial Ruchaazr of Hia Bonda aubjact to the approvnie
opinion of the Attorney General of Telaa and the opinion of MeCall, Parlduuat d Horton L.L.P., Bond Cotuiael, Dallaa, Telaa ( aee Appendil C, "Fonna of
Bond Coiuiael'a Upiniona").
DELivExY It ia eipeeted that the Bonda nill be acailable for deliceiy tlrough The Depoaitoiy Tniat Company on May 10, 2011.
BIDS DUE TUESDAY, APRIL 5, 2011, AT 11:30 AM, CDT
* Pralimniarc, aubjact to chanea Saa tha Notica of Sala -"_adjuatmant of Principal Anioiuit and or Tcpaa of Bida".
il
`
'
'
l
. 1
~ . . _
Ratings:
~irstSoL~th est
nlnndp's: "A.i2"
e.rr',,,a y q i.izwd
Dated Dlarch 24, 2011
SSiP: „AA„
(see "Other Infnrmatinn -
NE'vV ISSLTE - Boolc-EntrN•-OnlN•
Ratings" herein)
In the opmion of Bond ~'ounsel, mterest o
n the Certificates icill be eschidable from gross income for federal me
ome tas purposes under stahites, regulations,
published rulings mid cuurt decisiuns exishn
g un the dnte thereuf, sublect tu the mntters described mider "Tnx nlntters"
herem, mcluding the nlternnhne mimmum tnx
un curpornhun,.
THE C'ERTIFICaTES NA'ILL NOT
BE DESIGNaTED aS "QLLaLIFIED T-NT-ESENIPT UBLIGaTIUNS"
FUR FINaNCLaL INSTITIITIUNS
$32,1011,000*
&
CITF OF DENTON, TESAS
4.4m
(Denton Counti•)
NJ'ON
CERTIF'ICaTESUFUBLIGaTIUN,SERIES2U11
Dated Date: April 1, 2011
Due: February 15, as shown below
Pai'MEN1' TExntia Interest un the $32,11)(1,~ ~0* ( 'in- uf Dentun ( lerhficnte" uf I~bhgnhun, Senes, 21 111 i the lerhficntes," i i~ill nccrue fronn apnl 1, 21 111 i the
"Dated Date" icill be pm`able Februan` 15 and August 15 of eaeh ~`ear, eommenemg Februan` 15. 21 ~ 11 mitil mahirin` or prior redemption, and icill be ealeulated on
the basis of a;(;,,-dm` ~`ear eonsistma of hceh e;, ~-dm` months The defimtn e~'ertifieates icill be mitialb,` reaistered and deln ered onh` to Cede L- ~'o , the nommee
uf The Depositurj- Trust ~'umpnnj- i'DT("' i pursunnt tu the Huuk-Entry-1 ailh- S~-stem deuribed herem Heneficinl umnership uf the , 'erhficntes, mm- be ncymred m
denonnnations of 5,0(11 1 or mtegral nniltiples thereof icitlnn a mahinn- No phN•sical delivery of the CerGficates will be made to the beneficial owners thereof.
Yrmeipal of premmm, if am`, and mterest on the Certifieates icill be pm`able b~` the Ym`mg Agent'Registrar to Cede L- ~'o ,ichieh icill make distribution of the
mnuunts su pmd tu the pnnccipnhng memberr: uf DT(' fur subseyuent pnj-ment tu the beneficinl uMnerr: uf the , 'erhficntes, See "The I~blignhuns - Huuk-Entrj--1 ~nly
System" herem The nnhnl Ym-mg agent'Registrnr is The Hnnk uf Nei~Iurk nlellun Trust , 'umpnnj-, N a, Dnllns, Texns isee "The I~bhgnhuns - Ym-mg
AaenL'Reaistrar" i
Airrxoiurr FoxIssiraNCE The Certifieates are issued pmsuant to the "onstihition and general laics of the State of Tesas, i the "State" i particularb, Subehapter
of Chapter 271, Tesas Local Go~ emment,'ode i the,'ertifieate of I-~bligation Aet of 1971 as amended, and eonstihite direct obligations of the ~'it~` of Denton, Tesas
i the "Vin-" i, pnj-nble fromi n cumbmnhun uf i i i the le~~- mid cullechun uf n direct mmunl nd ~nlurem tnx, i~ithm the Imnts prescribed bj, Im~, un nll tnxnble propern-
i~ithm the ~'in-, mid ni i n Imnted pledge uf surphis, net re~emies, uf the ~'in-',s Tlhlih S~-stem nut m excess uf $1,~~~~~ ns pro~ ided m the urdinmice nuthurizmg the
,'ertifieates i the "Certifieate I-~rdinanee" i i see "The I-~bhaations -Authont~` for Issuance" i
PuxPOsE Yroceeds fronn the snle uf the , 'erhficntes, i~ill be used fur i n i ncyuisihun uf eyuipment fur, nnd ncyuirmg, cunstructmg, mstnlling mid eyuippmg
additions, estensions, reno~ ations and impro~ ements to, the ~'in`'s icatem orks and seicer s~`stem, ib i aequisition of equipment for, and aequirmg, eonstnicting,
mstalling and equippmg additions, estensions, reno~ ations and mipro~ ements to, the,'in`'s electrie light and poicer s~`stem, i c i aequisition of ~ ehieles and equipment
fur, mid ncyuirmg, cunshuctmg, mstnllmg mid eyuippmg nddihuns, extensiuns, renu~nhuns mid impro~emenh tu, the ~'ity'~ solid i~nste dispusnl sS-stem, idi
renu~ nhuns tu, mid eyuippmg uf, exishng mumcipnl buildmgs, mcludmg,'in- Hnll Enst, mid i e i ncyuisihun uf ~ ehicles, mid eyuipment fur the , 'ih's, inutur puul, mid
also for the purpose of pm`mg all or a portion of the ~'in`'s contraehial obligations for professional ser~ ices, mchiding engmeers, architeets, attorne~`s, map makers,
auditors, and finaneial ad«sors, in comieetion icith said projects and said Certificates of I-~bligation
bUTL?RITP SC'HEDL?LE*
Principal
Interest
CUSIP Principal
Interest
Amount
Mahiritc Rate
Yield Suffis ' 1Amount
Maturitc Rate
$1,525,000
2012
$ 1,215,000
2022
2,195,000
2013
1,275,000
2023
2,295,000
2014
1,335,000
2024
2,400,000
2015
1,400,000
2025
2,515,000
2016
1,470,000
2026
1,090,000
2017
1,540,000
2027
1,140,000
2018
1,615,000
2028
1,190,000
2019
1,695,000
2029
1,255,000
2020
1,775,000
2030
1,320,000
2021
1,865,000
2031
(Accrued Interest from April 1, 2011 to be added)
C'LTSIP Prefis: 248866
CUSIP
Yield Suffis' li 1 i ~'T1SIY is, n registered trndemnrk uf the Anericnn Hnnkers a~socinhun ~'T1SIY dntn herem is pno~ ided by ~'T1SIY ~,lubnl Ser~ices, mnnnged by Stnndnrd 4
Your's Finmicinl Ser~ices, LL,' un behnlf uf the Anericmi Hmil.ers a~socinhun This, dntn is nut mtended tu crente n dntnbnse mid dues not ser~e in miy i~ny ns, n
substihite for the,'L1SIF' Ser~ iees Neither the,'in nor Financial Adh isor shall be responsible for the selection or eorreehiess of the ~'L1SIF' mmibers set forth herem
REnEnIPrxON The 1'ity reser~es the nght, nt ih uphun, tu redeem ~'erhficntes hn~mg stnted mnhinhes un nnd nfter Febninn- li, 21 C2, m i~hule ur m pnrt m
prmeipal amounts of $5,1 1 1 1 or am` mtegral multiple thereof, on Februan` 15, 21 n 1, or am` date thereafter, at the par ~ alue thereof phis acerued mterest to the date of
redemption
SEPaxarE IssirES The Certificates are bemg offered b~` the,'in` eonemrenth` icith the ",'in` of Denton General I-~bligation Refiuiding and hnpro~ ement Bonds,
Series 21 111" i the "Bonds" i, and such ~'ertifieates and Bonds are heremafter sometmies referred to eolleetn eb,` as the ",-~bligations " The ~'ertifieates and Bonds are
sepnrnte nnd distmct secunhes uffermgs bemg issued nnd suld mdependently except fur the cunnnun I~$icinl Stntement, nnd, i~hile the I~bhgnhuns shnre certnm
cunnnun nthibutes, ench issue is sepnrnte fromi the uther mid shuuld be re~ iei~ed mid minlyzed independenth-, mcluding the n-pe uf ublignhun bemg uffered, ih terms
for pa«nent, the securin` for its pa«nenk the rights of the holders, the federal, state or local tas consequenees of the purehase, oi«iership or disposition of the
I-~bligations and other feahires
LEr_aLTT1' The ~'erhficntes nre uYfered fur dehn ery i~hen, ns nnd if issued nnd recen ed bj, the Imhnl Yurchnser uf the ~'erhficnte, ~ublect tu the nppno~ mg
opimon of the Attorne~` General of Tesas and the opimon of Me,'all, Yarkhurst L- Horton L LP , Bond ~'omisel, Dallas, Tesas i see AppendLZ "Forms of Bond
i luunsel's I ~pnnuns" i
DELiN'Exr It is espected that the,'ertifieates icill be a~ ailable for deln en` through The Depositon` Trust ('ompam` on Mm` 1, l, 21 111
BIDS DUE TUESDAY, APRIL 5, 2011, AT 11:00 AM, CDT
* Yrelnmm,iry, ~ublect tu chnnge See the Nuhce uf Snle -"adjushnent uf Yrmcipnl Anuunt nndor TS-pes, uf Hid,"
This Officiul Stutement. irhi,h inclrrcles the ~oter yu,i~e. S~heclrrle uncl theAj)j'enchces herrto, clors not ~onshhrte un oft"r to sell or the soli, ituhon ot'un
otfcr to him in um'Jirriselieh~m to ujwpcrson to trhom it is imlutrlirl to mukc suchotJcr, soheituhon, or sulc.
.Vo elculcr, hrokcr, sulcsj)crson, ~)r othcr pcrson hus hccn muthom:cd to girc in1<wmuhon or t, I muke um, rcj>rescntuh~m othcr thun thosc eOWuincel in this
O>ji, iul Stutement, und. it'given or mude, srr,h other uitbrmuhon or ~ c~~resentuhons mrrst not he relied rg~on.
F'OPp7l7y)OScS Ot ~0777~~~1U77~~' lt'1fh R7de 1.512-1 2 Ot fhc sc',717'1/1C'S U70 E1', hU77,~~' 07777771SS1077 (fhC' "R71icrr), fh1S c~OC'71777~'77f ~0775/lfllf~'S U77 ()tt1C'1UisfUfc777c77f Ot"
the ( 'ihy trith resjwt to the uhligahons thut has hccn "elcemcellinul" h~v the ~'ihv us o{iti elutc cxecj)t fi"r the "mission "{rno more thun the
in1<n~muh~m
permitteel hr the Rrrle.
The uitbrmuhon set lbrth herrui hus hren ohtuinecl fi'om the ( 'ihv uncl other eorrrces hrlievecl to he reliuhle, hrrt srr,h uitbrmuhon is not,~rrurunteecl us to
aceirraciv or e'w7TI2tcncss unel is m"t to hc eonshvrcd us the rcj~rescntuh~m, j)romisc, ~n* guurantcc o{thc Finuneiul _~elris~n. This uWieiul Stutemcnt
'ontuitis. iti yurt. eshmutes uncl mutters ot'oq)itnoti irhi,h ure not intenclecl us stutemrnts ot'juct. uncl no re~~resentuhoti is mucle us to th ° 'orrr'hiess ot'
such cshmutcs unel 01n171017s, 01* thut thev trill he reuh:cel. _417Y in1<nmuh~m amel cxj)resswms q{ojnmm hercin eontaanad ure suh7cct to ehungc trithwut
noh-e. und neither the drliverv ot'this O>ji~iul Stutement nor um~ sule mude herrrrnder shull. 1110er um~ ~ircrnnstun-cN. 0reute um~ unIVicuhon thut there
hus hccn rno ehungc in the utfuas o{thc ( 'ih~ , W , Wcr mUttars elcserihcel hcrein sinec the dutc here,~f. Scc mhmnngDiseh~surc ,~{In1<n-muh, m" 1<~r u
cles'1*11)ho11 ot'the C'ihv's rrnclrrtukin,i~ toprovicle -ertuui uitbrmuhon on u 'onhnrang husis. . .
lreither the ( 'ih, nor its Finun, iul.~chisor muke um, ~r~~resentuhon us to the u-rrru,iV. ~om~~letenees. or ucleyrru,y ot'the uitbrmuhon srg~I)liecl h~v The
Dcjwsitor~° Trust('~~mj~am° 1<nusc in this U{Jieicrl Shrtcmcnt.
Thc eovcr pagc 1<w cueh scrics o{uhhgahons amtuins ecrtuin in1<nmuh~m 1<ngcncrul r lercnec onhv unel is m"t intcnUlcel us u summu~~v o{thc resjwhrc
Investors shorrld rrud the enm"! O~ji~iul Stutement. 11010ng ull s~he~lrrles und u~~~~en~h es hereto, to ohtuui uitbrmuhon essenhul to mukng un
1171<n'mcd inrestmcntelceisi,m.
Thc ugrcamcnGi O{thc ( 'ih, anel othcrs relutcel ho the uhligahons ure ermtuincel mdchv in the eonfraeGi elcscriheel hcrcin. Veithcr this uftieurl Shrtcmcnt mor
um, other stutement mucle in 'onnechon irith th ° ojj'er or sule ot'the Ohliguhons is to he ~onstrrrecl us ")nshhrhng un ugreementirith theprrr"huser ot'the
uhhgah, ms. I.l'7ESTuRS SH07 LD RE:41) THE ENTIRE uFFR 7,4L ST.4 TE1 LENT, 1:V( Z7 -DItit, _4LL S( 'HED7 LES _~PPEI~~R'ES _4 TT.4( 'HED
HERETO, TO OBT.1I.\' I.\ FORl L 1TIU ESSE.\'TL 1L TO 1 L 1kI.\'t ;.4\' I.\ FORI !ED I.\'i EST_l !E.\'T DEC7SI0
This Offi, iul Stutemrnt "ontuitis 'Fo~lrurc7-Look~ti,~" stutemrnts ir'ithin the mrutiiti,i~ ot'Se~hoti ?IE ot'the Jearrihes Es,hutige.4't ot'1 l_-1. us umenclecl.
Such shrtcmcnGi muiv inrolrc 4-77011,17 unel irnkrnotrn risks, imecrtuinhcs, unel Othcr luehns trhieh mui, causc the actuul resirlGi, j~crlbrmunec, unel
U'h1cl'C'777C'77fS f0 b c~1~~7'C'77f t7'0777 tllf7l7'~' 7'C'S7l/fS. ~~C7~07'777U77"!. U77d UChwl'C'777C77fJ 07' 1777~)bcd hl' S7lC'~7 t07'it'U7'c~-~OO~i.'777,~ SfUfc777~'77fS. I771'C'Sf07'S U7'C'
cuuh017eel thut the 'Wtuul remrlGi coirldelitfcr mutcriulh _1rom thosc sctfi"rth in thc 1<ntrurel-1~~~~k~ng shrtemcnG~.
Thc uhhgahons arc cscmj)t 1rom rcgisfrahon irith the Seeurihcs unel Esehungc ( 'ommission und amscquenthY hurc mot hccn r gistcrcel theretrith. Thc
re.i~isfruhon. yrruliti-uhon. or esem~~hon ot'the Ohl;i~uhons ui uc.orclun-e irith u1y)l1cuhle se,rrrihes luir Provisions ot'the)rrrisch,hon ui irhi,h the
uhligahons hurc hecn rcgistcrcel, yualilicel or esemj)tcel shoidel mothe rcgareleel us u rcer~mmcneluh~m thcrc"f:
TABLE OF C'ONTENTS
OFFI('IAL STATEnIENT SiTnInI.ARI" ............................................6
C'ITI OFFIC'IALS, STAFF AND C'ONSiTLTANTS 8
ELEC'TEP C)FFICIALS 8
SELECTEPAPbIINISTRATIVE STAFF R
C,NSULTANTS ANP APVISC,RS 8
INVESTnIENTS
TAYLE 14-('URRENTINVESTDIENTS
TAl DIATTERS 34
('ONTINIIINGDIS('LOSIIRE OF INFORMATION ....................>6
INTRODiTCT ION 9
THE OBLIGATIONS v
TAl INF( )RnIATI( )N 16
TAYLE 1-`ALUATI,N, ESEDIYTICINS ANP GENERAL
( )BLIi:ATI1 IN DEBT 21
TAYLE ? - TASAYLE ASSESSEP `ALUATI,=INS YI" CATE(*CIRI".... 22
TAYLE 3 -`ALUATI,=IN ANP GENERAL C1YLk *ATI,=IN DEYT
HIST, ~RI" .........................................................................2;
TAYLE 4- TAS RATE, LEVI" ANP C,=,LLEi'TI,=,N HIST,=IRI"......... 23
TdBLE 5- TEN LdR(*EST TdSYdI"ERS 23
TdBLE 6- ESTIMt-1TEP UVERLdYYIN(* TdS DEBT 24
DEBT INFORDIATION
TABLE 7 - (rENER-1L ( )BLI(*ATI, IN DEBT
S ERVT,'E REt1i rIREbIENT 5 2;
TAYLE 8- INTEREST ANP SINKIN(* FUNP BUP(*ET
PR, ~.iEi'TI, IN 26
TAYLE 9 - (',DIYUTATIC,N ,F SELF-SUYY,RTIN(* DEYT............ 26
TAYLE 10 -_-~UTHI=IRIZEP BUT LTNISSUEP GENERAL C1YLI(*ATI,=IN
REFi rNPIN(* dNP IMYR~ ~VEMENT B, INUS 26
TAYLE 11 - C)THER()YLI(:ATI,=INS .............................................?7
FINANC'IAL INFORDIATION 29
.
TdBLE L-(.HdN(:ES IN NET aSSETS 29
TAYLE LA - GENERAL FUNP REVENUES ANP ESYENPITURE
HIST, ~RI" 30
TdBLE 13 - 1\ 11 rNI''IYdL SdLES TdSHISM ~RI" 31
( )THER INF( )RnIATI( )N
37
RATINi rS
37
LITIi:ATI, IN
...;7
RE(*ISTRATI,=IN ANP QUALIFICATI,N ,F C1YLI(*ATI,=INS
F,R SALE
37
LEc *dL INVESTIVIENTS dNP ELI(*IBILITI" T, I SEc'i iRE Pi iBLI''
FUNUS IN TESAS
37
LEc *dL ( )YINIc ,NS dNP N, ~-LdTI(*dTI, IN CERTIFIc'dTE
...>R
ai rTHENTH'ITI", IF FINdN''I-1L DdTd dNP ( 1THER
INF,RDIATI,=IN
38
FINAN''IAL APVISi IR
;R
INITIAL PUR'JHASER,F THE B,=INUS
38
INITIAL PUR'JHASER,F THE CERTIFICATES
38
CERTIFH'dTI, ~N , ~F THE ( )FFD'I-1L STdTEMENT
39
F,RR'ARP-L,,KIN(* STATEDIENTS DISCLAIDIER
39
MISi'ELLANEi ii rS
39
SC'HEDiTLE OF REFiTNDED OBLIGATIONS .................Sehedule I
APPENDIC'ES
(iENER-1L INF, 'Rn~t-1TI, IN RE(*dRPIN(* THE ('dTI" a
ES,'ERYTSFR, ~M THE aNNi?-1LFINdN''I-1LREY,~RT B
F, ~RMS, ~F RINLi )i rNSEL'S ( )YINE INS
The cocer page hereo£ thia page, the appendicea included herein and
any addenda, aupplement or amendment hereto, are part of the Uffieial
Statcntcnt.
OFFICIAL STATEMENT SUMMARY
This sununatti' is subject in all respects to the inore coinplete uiYormation anii ilefuiitions contauleii or ulcorporateii ul this
Ufficial Statement. The offerul- of the Bonils anii CertiYicates to potential ulvestors is maiie only by means of this entire Ufficial
Statement. No person is authorizecl to detach this summau-y from this Official Statement or to otherNN-ise use it NN-ithout the entue
( )fficial Statement.
TxE Ci'rr The Citv of Denton (the °Cin•" ) is a political subilivision anii mutucipal corporation of the
State, locateii in Denton Counn•, Texas. The Citti• covers approximately 101.15 square miles
(see °Introduction - Description of the Citv").
TxE Boivns The $10,845,000* Cin• of Denton Ueneral Ubligation Refiulilulg anii Iinprovement Boniis,
Series 2011 are to mature on Februan• 15 ul the vears 2012 throu-h 2031 (see "The
Ubligations - Description of the Ubligations"
TxE CExTiFicaTES The $32,100,000* City of Denton Certificates of Obligation, Series 2011 are to mahire on
Februan• 15 ul the vears 2012 throu-h 2031 (see "The Ubligations - Description of the
Ubli,ations"
PaYniENT oF IVTExEST Interest on the Bonds and Certificates accnies from April 1, 2011, and is payable Februau-y 15,
2012, anii each Au-ust 15 anii Februaiti• 15 tliereafter until maturin• or prior reiiemption (see
"The Ubligations - Description of the Ubligations" anii "The Ubligations - Uptional
Reilemption"
AuTxoiuTY Fox Issu.uVCE.......... The Bonds aue issued pursuant to the Constihition and generail laNNs of the State, including
particularly Texas (iovenunent Coiie, Chapters 1207 anii 1331, anii an orditiLulce passeii by
the Cin• Council of the Cin• (see "The Ubli,ations - Autliorin• for Issuance"
The CertiYicates are issueii pursuant to the Constitution anii general laNi-s of the State,
parficularly Subchapter C of Chapter 271, Texas Locail ('mvernment Code, as aunendecl, and an
ordinance passecl by the City Cotmcil of the City (see "The Obligations - Authority for
Isstiance"
SECtriuTr Fox TxE Boivns The Bonils constitute iluect anii voteii cibligations of the City, payable from a ilirect aiumal aii
valorem tax levied, NN-ithin the limits prescribed by law, on all taxable property locatecl NN-ithin
the City (see "The Obligations - Sectuity and Source of Payment"
SEC'L?RITP FOR THE
CERTIFICATES Tlle Ce1tiYlcaYes co1lsYituYe dn'ect obli-aYiolls ot the Cln', payable Yrolll a colnblllaYion ot (1) a
du-ect annuail ad vailorem tax leviecl, Nvithin the limits prescribecl by law, on aill taxable propert~
Nvithin the City, and (ii) a limited pleclge (not to exceecl $1,000) of surplus net revenues of the
Citv's TTtilit-, Svstem (see "The Obligations - Sectuity and Source of Pavment"
REnEnzPTioN The City reseives the riglit, at its option, to reiieem Bonils anii Certificates, as the case may
be, having stated mahirities on and after Februau-y 15, 2022, in NN-hole or in paut in principal
aunounts of $5,000 or any integrail multiple thereof, on Februau-y 15, 2021, or any date
thereafter, at the par vailue thereof plus accrued interest to the date of redemption (see "The
( )bligations - ( )ptional Redemption"
T-AZ EZEnIPTioN Iti the opituon of Bonii Counsel, the ulterest on tlie Bonils anii Certiticates Ni-ill be excluilable
from gross income for feclerail income tax ptuposes tmder existing law, subject to the matters
describecl under "Tax Matters° herein, including the ailternative minimmn tax on corporations.
UsE oF PftoeEEns Proceeiis of the Boniis are expecteii to be useii (i) to refunii certain outstaniling cibligations of
the Cit-v described on Scheclule I attached hereto (the "Refiindecl Obligations" ) for debt
service savings and (ii) for various street improvements, and paul. 11nd acquisitions and
improvements, and (iii) to pay the costs associated NN-ith the issuance of the Bonds.
Proceeiis from the sale of the CertiYicates Ni-ill be useii for (a) aaluisition of equipment for,
anii aaluu-ulg, consttuctitig, installulg anii equippulg aiiilitions, extensions, renovations anii
unprovements to, the Cin•'s wateiworks anii seNi-er system: (b ) acquisition of equipment for,
anii aaluu-ulg, consttuctitig, installulg anii equippulg aiiilitions, extensions, renovations anii
improvements to, the City's electric light and poNN-er system; (c) acquisition of vehicles and
* Freliminau-v, subject to chlnge.
equipment for, anii acquuing, consttuctittg, ulstallitig anii equippitt-, aiiilitions, extensions,
renovations anii itnprovements to, the City's soliii Ni-aste ilisposal system: (ii) renovations to,
anii equippulg of, existulg municipal buildings, ulcluilulg Cin• Hall East anii (e) acquisition
of vehicles anii equipment for the Cin•'s motor pool, anii also for the purpose of pavitt-, all or
a portion of the City's contrachiail obligations for professionail services, including engineers,
auchitects, attornevs, map mail.ers, auditors, and ~inancial advisors, in connection NN-ith said
pro~jects and said Certi~icates of Obligation.
RaTiNCS The Obligations and the presently outstlnding general obligation debt of the Citv aue rated
"Aa2" by Moody's Investors Seivice, Inc. ("Moody's" ) and "AA" by Stlndaud & Poor's Rating
Seivices, a Stlndaud & Poor's Financial Seivices LLC business ("S&P"
BooK-ENTitr-ONLr SrsTEnz...... The iieYinitive Ubli-ations Ni-ill be initiallv re,istereii anii iielivereii onlv to Ceiie & Co., tlie
noniilee of DTC pursuant to tlie Bool.-Entrti•-Uidy System iiescribed hereul. Beneficial
oNi-nership of tlie Ubligations may be acquu-eii ul iienominations of $5,000 or ultegral
multiples thereof Ni-ithii1 a maturin•. No physical ileliven• of the Ubligations Ni-ill be maile to
tlie beneficial oNi-ners tliereof. Prulcipal of, premium, iY any, anii ulterest on tlie Ubligations
Ni-ill be payable by the Pavitt-, Agent/Registrar to Ceiie & Co., Ni°hich Ni-ill mal.e ilistribution of
tlie ainounts so paiii to tlie participatulg members of DTC for subsequent payment to the
beneficial oNi-ners of tlie Ubli,ations (see "The Ubli,ations - Bool.-Entrti•-Unb,• Svstem"
PaYniENT RECOitn The City has never defaultecl on the payment of its tax-supported indebteclness
SELEC'TED FYNANC'IAL INFORRUTION
Net
Ratio Funiieii
Fiscal
Taxable
Tax Debt
Per Capita
Tax Debt to
Yeau
Taxable
Assessed
Outstlnding
Ftmded
Taxable
%of
Endecl
Estimated
Assessecl
Valuation
at End
Tax
Assessecl
Totail Tax
9/30
Population
Valuation i3,
Per Capita
of Year "
Debt
Valuation
Collections
2007
106,843, 1,
$>,441,228,909
$50,927
$ 119,266J29
$ 1,116
2.19°io
99.81°io
2008
108,980",
6,089,499,775
55,877
129,439,594
1,188
2.13%
99>1%
2009
111,160'i'
6,291,359,112
56,597
122,835,000
1,105
1.95%
99.40%
2010
113,383'''
6,327,909,022
55,810
119,862,600
1,057
1.89°io
98.9>°io
2011
11>,6>1
6,230,117,9>18 4,
53,870
116,165,650 °
1,004'°"
1.86%'°"
9> >2%' '
(1) Sotuce: Citv ( )fficials.
(2) Sotuce: TTS Census.
(i) Valuations shoNN-n aue certified taxable assessed values reported by the Denton Centrail Appraisail District to the State
Comptroller of Public Accounts. Certified values aue subject to chlnge tlu-oughout the yeau as contested values aue resolvecl
and the Appraisal District updates records.
(4) Sotuce: Denton Centrail Appraisal District as of Ju1y 17, 2010.
( > ) Excludes self-supported general obligation debt.
(6) FrojectecL Includes a portion of the Bonds and the Certificates. Freliininau-y, subject to chlnge.
(7) Collections for paut yeau on1y, through T1nuau-y 31, 2011.
For additional information regarding the City, please contact
Bi-yan Langley David Meclanich
Chief Fulancial Ufficer Laura Alexaniier
City of Denton Fust SouthNN-est Company
215 E. McKinney Street or 777 Main Street, Suite 1200
Denton, Texas 76201 Fort Worth, Texas 76102
(940) 349-8224 (817) 3,2-9710
7
CITY OFFICIALS, STAFF AND CONSULTANTS
ELEC'TED OFFIC'IALS
T enn
Citv Council Expires
Mark Burroughs Mav, 2012
M avor
Pete Kamp M av, 2012
Mavor Pro Tem, At Large Place 5
James Iiin- M ay, 2012
Councilmember, At Lar,e Place G
Charlve He_4ns Mav, 2011
Councilmember, District 1
Dalton Uregory
Mav, 2011
Councihneinber, District 2
Jim En,elbrecht M ay , 2011
Councihneinber, District 3
Chris Watts Mav, 2011
Councilmember, District 4
SELEC'TED ADNIINISTRaTIVE STaFF
Name
Ueor,e C. Campbell
Howard Martin
Jon Fortune
Fred (rreene
Bivan Lan,lev
Jennifer K. Walters
Anita Bur~less
Potiition
Citv Mana;er
Assistant Citv Manaaer
Assistant Cih Manaaer
Atitiititant Citv Mana;er
Chief Financial ( )fticer
Citv Secretarv
Citti Attornev
CUNSIILTANTS ANDADN`ISURS
Auilitors Weaver, LLP
Dallas, Texas
Bonii Couiisel McCall, Parldmist K Horton L.L.P.
Dallas, Texas
Fuiancial Ailvisor Fust SoutliNi est Company
Fort Wortli, TeXas
8
OFFICIAL STATEMENT
RELATING TO
CITY OF DENTON, TEXAS
$10,845,000- $32,100,000-
GENERAL OBLIGATION REFUNDING AND CERTIFICATES OF OBLIGATION, SERIES 2011
IMPROVEMENT BONDS, SERIES 2011
INTRODUCTION
This Officiail Statement, NN-hich includes the Appendices hereto, provides certain information regarding the issuance of
$10,845,000* City of Denton General Obligation Refiinding and Improvement Bonds, Series 2011 (the "Bonds" ) and
$32,100,000* City of Denton Cerhi~icates of Obligation, Series 2011 (the °Certificates"). The Bonds and the Certificates
(collectively the )bligations" ) aue sepauate and distinct securities offerings being authorizecl for issuance tmder sepauate
ordinances (the "Bond Ordinance° and the °Certificate Ordinance", respectively, and collectively the )rdinances" ) to be
adoptecl by the City Council of the City, but aue being offered and sold purstlant to a common Official Statement, and NN-hile the
Bonds and Certificates shaue certain common attributes, each issue is sepauate and apart from the other and should be reviewed
and anailyzecl independently, including the l;ind and type of obligation being issued, its terms of payment, the security for its
payment, the rights of the holders, the federail, state or local tax consequences of the ptuchase, oNN-nership or disposition of the
Obligations and the covenants and agreements made NN-ith respect thereto. Capitailized terms usecl in this Official Statement have
the saune meauiings assigned to such terms in the Ordinances to be adopted on the date of saile of the Obligations, ex-cept as
otheilN-ise indicated herein.
There folloNNs in this Officiail Statement descriptions of the Obligations and certain ulformation regauding the City and its
finances. All descriptions of documents contained herein aue on1y summauies and aue qualified in theu- entuety by reference to
each such document Copies of such documents may be obtained from the City's Financial Advisor, Fust SouthNN-est Complny,
Dallas, Texas.
DESCiuPTioN oF TxE CiTr The Cin• of Dentcxl, Texas (tlie °Cin•°) is a political subilivision locateii ul Dentcxl Counn• operatirg-,
as a home-rule cin• uniler tlie laNi-s of tlie State of Texas anii a charter approveii by tlie voters ul 1959. The Cin• operates uniler tlie
CounciUManaler forin of uovermnent Ni-here tlie Mavor anii six Councihileinbers are electeii for sta-,ereii two-vear terms. The Cin•
Council formulates operatirg-, policy for tlie Cin• Ni-hile tlie Cin• Manager is tlie cluef ailniiiiistrative officer. The Cin• is
approxmiately 101.15 square miles nl area.
REFUNDED OBLIGATIONS
Proceeiis froin tlie sale of the Boniis Ni-ill be useii in part to refunii certain outstanilulg cibligations of the City iiescribeii on
Scheiiule I attacheii hereto ( the "Retuniieii Ubligations" The prulcipal anii ulterest iiue on tlie Refuniieii Ubligations are to be
paiii on tlie scheiiuleii interest payment ilates anii reiieinption ilates of such Refunileii Ubligations as shoNi-n in Scheiiule I from
funiis to be iiepositeii pursuant to an escrow agreement ( the "Escrow Agreement" ) Ni-ith respect to tlie Refuniieii Ubligations
betNi-een tlie Cin• anii The Baiik of New Yorl. Mellon Tiust Coinpany, N.A. (tlie "Escrow Agent"). The Bonii Urdulance
proviiies tliat from certain proceeiis of the sale of tlie Boniis receiveii froin tlie Initial Purchaser of the Bonils, to-ether Ni-ith otlier
fiuliis of the Cin•, the Cin• Ni-ill ileposit Ni-ith tlie Escrow Agent an ainount Ni-hich Ni-ill be sufficient to accomplish tlie ilischarge
anii Yitial payment of the Refunileii Ubligations on their respective reiieinption ilates. Such funiis Ni-ill be helii by tlie Escrow
Agent ul a special escrow account ( the "Escrow Funii" LTniier tlie Escrow Agreement, tlie Escrow Funii is urevocably pleiigeii
to tlie payment of the prulcipal of anii ulterest on tlie Retunileii Ubligations. The Baiik of New Yorl. Mellon Trust Coinpany,
N.A., ul its capacity as tlie payulg agent for the Refuniieii Ubligations, Ni-ill certih• as to tlie sufficiency of the ainounts iiepositeii
to tlie Escrow Fund to pay, Ni-hen iiue, tlie principal of anii ulterest on tlie Retuniieii Ubligations. Such atnounts ul tlie Escrow
Funii Ni-ill not be available to pay the Ubligations. By tlie iieposit of such ainounts Ni-itli tlie Escrow Agent pursuant to the Escrow
A~yreement, tlie Citti• Ni-ill have effecteii tlie ilefeasance of all tlie Refuniieii Ubli-ations ul accordance Ni-ith the law. It is the
opuiion of Bonii Counsel tliat as a result of such iiefeasance anii ul reliance upon tlie aforementioneii certiYication by tlie pavitig
a-ent for the Retuniieii Ubli~yations, the Retuniieii Ubli-ations Ni-ill be outstaniling only for the purpose of receivmg payments
from the atnounts helii in the Escrow Funii bv the Escrow Auent. anii such Retuniieii Ubliuations Ni-ill not be ileemeii as beuly
outstaniling cibligations of the Citti• payable from taxes or anv other revenues receiveii b-,• the Citti•, as tlie case mav be, or for tlie
purpose of applyulg any lunitation on the issuance of iiebt. The Cin• has covenanteii ul tlie Escrow AUreement to mal.e tuneh•
iieposits to tlie Escrow Funii, from lawfully available funiis, of any aililitional ainounts requireii to pay tlie principal of and
ulterest on the Refuniieii Ubliuations, if for anv reason the cash balance on iieposit or scheiiuleii to be on iieposit in tlie Escrow
Funii is ulsufficient to mal.e such payment.
* Preliiiinuti•, subject to chan-e. See tlie Notice of Sale _"Aiijustment of Prulcipal Aiilount anil/or Types of Biiis".
THE OBLIGATIONS
DESCiuPTioN oF TxE OsLieATioNS The Ubligations are ilateii April 1, 2011 (tlie "Dateii Date" anii mature on Februaiti• 15
ul each of the vears anii ul tlie ainounts shoNi-n on the cover page anii page 3 hereof. Interest Ni-ill acciue froin tlie Dateii Date,
Ni-ill be computeii on the basis of a 360-dav vear of tNi-elve 30-i1ay montlis, anii Ni-ill be payable on August 15 anii Februaiti• 15 of
each vear, conunencul- Februaiti• 15, 2012, until maturitv or prior reiieinption. The iieYinitive Ubligations Ni-ill be issueii only in
full-,' re-istereii form in anv ultegral multiple of $5,000 for any one maturity anii Ni-ill be initially registereii anii ilelivereii onl-,' to
Ceiie Co., the noniilee of The Depositon• Tiust Company ("DTC" ) pursuant to tlie Book-Entrti•-Unly System iiescribeii hereul.
Nu philsical delii-en- uf the Obligatiuns will be made tu the beneficial uwners thereuf. Pruicipal of, premium, if any, anii
ulterest on the Ubligations Ni-ill be payable by the Payulg Agent/Registrar to Ceiie Co., Ni-hich Ni-ill mal.e ilistribution of the
ainounts so paiii to tlie participatulg meinbers of DTC for subsequent payment to the beneficial oNi-ners of the Ubligations. See
"The Ubli,ations - Bool.-Entrti•-Unh• Svstem" hereul.
AuTxoiuTY Fox Issu.uVCE The Bonds aue being issued pursuant to the Constihition and general laNNs of the State of Texas,
particularly Chapters 1207 and 133 1, Texas Government Code, as aunended, and the Bond Ordinance.
The Cerhi~icates are beikg issuecl purstant to the Constihition and generail laNNs of the State of Texas, pauhicularly Subchapter C of
Chapter 271, Texas Local ('mvernment Code (the Cerhi~icate of Obligation Act of 1971), as aunendecl, and the Cerhi~icate Ordinance.
P[TRposE Proceeils of the Boniis are expecteii to be useii (i) to refunii certaul outstanilul- cibli-ations of tlie Cit-v iiescribeii on
Scheiiule I attacheii hereto (tlie "Retuniieii Ubligations" ) for ilebt service savittgs anii (ii) for various street itnprovements, anii
parl. lanii acquisitions anii itnprovements, anii ( iii ) to pay tlie costs associateii Ni-itli the issuance of the Bonils.
Proceeiis from the sale of the Certificates Ni-ill be useii for (a) acquisition of equipment for, anii aaluirulg, consttuctulg, installulg
anii equipping aiiilitions, extensions, renovations anii unprovements to, tlie Cin•'s waterworks anii seNi-er system: (b ) acquisition
of equipment for, anii acquirittg, consttucting, ulstallulg anii equippulg aiiilitions, extensions, renovations anii itnprovements to,
tlie Cin•'s electric light anii poNi-er system: (c ) acquisition of vehicles anii equipment for, anii acquu-ulg, constructing, ulstallulg
anii equippulg aiiilitions, extensions, renovations anii itnprovements to, tlie City's soliii Ni-aste ilisposal system: ( ii ) renovations to,
anii equippitt-, of, existulg municipal buililulgs, incluilitt-, City Hall East anil (e) aaluisition of vehicles anii equipment for tlie
Cin•'s inotor pool anii also for tlie purpose of paying all or a portion of tlie Cin•'s contractual cibligations for professional services,
ulcluilitt-, enguleers, arclutects, attorneys, map mal.ers, auilitors, anii fulancial aiivisors, in coiulection Ni-itli saiii prc~jects anii saiii
Certiticates of Ubli,ation.
SEC'LTRITI" AND S()LTRC'E ()FPAI"nIENT . . .
TI2e Bonz1s The Bonds constihite duect and voted obligations of the City and the principal thereof and interest thereon aue
payable from an annual ad valorem tax levied by the City, NN-ithin the limits prescribecl by law, upon aill taxable property in the
City, as provided in the Bond Ordinance.
772e ('ertificutes The Certi~icates constihite duect obligations of the City, payable from a combination of (i) a du-ect annual ad
valorem tax levied, NN-ithin the limits prescribed by law, on all taxable property NN-ithin the City, and (ii) a limited pledge (not to
exceecl $1,000) of stuplus net revenues of the Citv's TTtilitv Svstem (consisting of the electric system and the waterworl.s and
seIN-er svstem Ta.Z RaTE LrniiTaTioN All taxable property NN-ithin the City is subject to the assessment, levy and collection by the City of a
continuing, du-ect annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax
debt, including the Obligations, NN-ithin the limits prescribed by law. Article XI, Section of the Texas Constihition is applicable
to the City, and limits its maximum ad vailorem tax rate to $2 >0 per $100 Taxable Assessecl Valuation for all City purposes. The
Home Rule Chauter of the City adopts the constitutionally authorizecl max-imum tax rate of $2 >0 per $100 Taxable Assessed
Valuation. Administrativeh , the Attornev General of the State of Texas NN-ill permit allocation of $1 >0 of the $2 >0 maximum
tax rate for aill general obligation debt, based on 90% tax collection factor.
OPTioNAL REnEnzPTioN The Citv reserves tlie riglit, at its optioii, to reiieem tlie Ubligations havulg stateii maturities on anii
after Februan• 15, 2022 ul Ni-hole or ul part ul prulcipal ainounts of $5,000 or any ultegral multiple thereof, on Februaiti• 15, 2021
or anv ilate thereafter, at the par value thereof plus acciueii ulterest to tlie ilate of reiieinption. If less tlian all of the Boniis or
CertiYicates are to be reiieemeii, the Cin• mav select the maturities of Bonils or CertiYicates, as the case mav be, to be reileemeii.
If less than all tlie Boniis or Certificates of anv maturin• are to be reiieemeii, tlie Pavul, A,ent/Re,istrar (or DTC Ni-hile tlie
Bonils or Certificates, as the case mav be, are ul Book-Enttti•-Unl,,• form) shall iieterniiile b-,• lot tlie Boniis or Certificates, or
portions thereof, Ni-ithii1 such maturitti• to be reiieemeii. If a Bonii or Certificate (or any portion of the principal sutn tliereof ) shall
have been calleii for reiieinption anil notice of such reileinption shall have been given, such Bonii or Certiticate (or tlie prulcipal
atnount tliereof to be reiieemeii ) shall become iiue anii payable on such reiieinption ilate anii ulterest thereon shall cease to acciue
from anii after the reiieinption ilate, proviiieii tuniis for the payment of tlie reiieinption price anii acciueii interest thereon are helii
bv tlie Pavul, A,ent/Registrar on the reiieinption ilate.
10
With respect to any optional redemption of the Bonds or Certi~icates, as the case may be, unless certain prerequisites to such
reclemption requu-ed by the respective Ordinance have been met and money sufficient to pay the principal of and premimn, if
any, and interest on the Bonds or Certi~icates, as the case may be, to be redeemed NN-ill have been received by the Paying
Agent/Registrau prior to the giving of such notice of redemption, such notice may state that said reclemption NN-ill, at the option of
the City, be conditionail upon the satisfaction of such prerequisites and receipt of such money by the Paying Agent/Registrau on
or prior to the date fixed for such redemption or upon any prerequisite set forth in such notice of redemption. If a conditional
notice of redemption is given and such prerequisites to the reclemption aue not fulfilLed, such notice NN-ilL be of no force and effect,
the City NN-ilL not redeem such Bonds or Certi~icates, as the case may be, and the Paying Agent/Registrau NN-ilL give notice in the
minner in NN-hich the notice of reclemption NN-as given, to the effect that the Bonds or Certificates, as the case may be, have not
been redeemed.
No'ricE oF REnEnzP'rioN Not less tlian 30 i1ays prior to a reiiemption ilate for tlie Ubligations, tlie Cin• shall cause a notice of
reiieinption to be sent by LTniteii States mail, fu-st class, postage prepaiii, to the registereii oNi-ners of tlie Ubli,ations to be
reiieemeii, ul Ni-hole or in part. at tlie aiiilress of the registereii oNi-ner appearitt-, on the registration bool.s of the Paying
A-ent/Re-istrar at tlie close of busuless on tlie busuless day next preceiling the ilate of mailulg such notice. ANY NUTICE SU
MAILED SHALL BE Cc_)NCLTTSIVELY PFtESTrMED Tc_) HAVE BEEN DTrLY CTIVEN WHETHER c_)R Nc_)T THE
FtECTISTEFtED c_)WNER FtECEIVES SUCH Nc_)TICE. IF AN c_)BLICTATIc_)N ( (_)R ANY Pc_)RTIc_)N c_)F ITS PRINCIPAL
STrM) SHALL HAVE BEEN DTrLY CALLED Fc_)R FtEDEMPTIc_)N ANI) Nc_)TICE c_)F SUCH FtEDEMPTIc_)N DTrLY
CTIVEN, THEN TrPc_)N THE FtEDEMPTIc_)N DATE SUCH c_)BLICTATIc_)N ( (_)R THE Pc_)RTIc_)N c_)F ITS PFtiNCIPAL STrM Tc_)
BE FtEDEEMED) SHALL BECc_)ME DTrE ANI) PAYABLE, ANI), IF Mc_)NIES Fc_)R THE PAYMENT c_)F THE
FtEDEMPTIc_)N PFtiCE AFtE HELD Fc_)R THE PTrItPc_)SE c_)F SUCH PAYMENT BY UIE PAYINCT ACTENT/ItECTISTRAR
ANI) ALL c_)THER Cc_)NI)ITIc_)NS Tc_) FtEDEMPTIc_)N AFtE SATISFIED, INTEFtEST SHALL CEASE Tc_) ACCRTrE ANI)
BE PAYABLE FRc_)M ANI) AFTER THE FtEDEMPTIc_)N DATE c_)N THE PFtiNCIPAL AMc_)TTNT FtEDEEMED.
DEFE AsANcE The Urdinances proviiie tliat any Ubligation anii the interest thereon shall be ileemeii to be paiil, retueii, anii no
lon-er outstanilul- (a "Defeaseii Ubli-ation" ) withil tlie meanitt-, of such Urdulance Ni-hen payment of tlie prulcipal of such
Ubligation, plus ulterest tliereon to tlie iiue ilate eitlier (i) shall have been maiie or causeii to be maiie in accordance Ni-itli the
terms tliereof, or ( ii ) shall have been proviiieii for on or before such iiue ilate by urevocably iiepositulg Ni-ith or mal.mg available
to tlie Pavul, A,ent/Registrar for such pavment (1) laNi-fu1 monev of tlie LTniteii States of Atilerica sufficient to mal.e such
payment or (2) (ioveriunent Ubligations Ni-luch mature as to principal anii interest in such ainounts anii at such times as Ni-ill
ulsure tlie availabilin•, Ni-itliout reinvesttilent, of sufficient money to proviiie for such payment, anii Ni-hen proper arrangements
have been made bv the Cin• Ni-itli the Pavul- A-ent/Re-istrar for tlie payment of its seivices until all Defeaseii Ubligations shall
have become iiue anil pavable. At such titne as an Ubli,ation shall be iieemeii to be a Defeaseii Ubli-ation hereuniier, as
aforesaiii, such Ubli-ation anii the ulterest thereon shall no lon~ler be secureii by, payable from, or entitleii to tlie benefits of, tlie
aii valorem taxes hereul levieii anii pleiigeii as proviiieii in the Urdinance, anii such prulcipal anii ulterest shall be payable solely
from such inonev or (ioveriunent Ubligations.
Atiy inoneys so iiepositeii Ni-itli tlie Payulg Agent/Registrar may at tlie NiTitten iluection of tlie City also be ulvesteii in
(iovenunent Ubliuations, maturitt-, ul the ainounts anii tunes as hereulbefore set fortli, anii all income from such (ioveriunent
Ubliuations receiveii bv the Pavinu Auent/Registrar Ni-hich is not requireii for tlie payment of tlie Ubligations anii interest
tliereon, Ni-ith respect to Ni-hich such inoney has been so iiepositeil, shall be tunleii over to the City, or iiepositeii as ilirecteii in
NVritull to tlie City. The Urdinulces proviiie that "(iovermnent Ubli,ations" means (a) ilirect, noncallable cibli-ations of the
LTniteii States of Atilerica, ulcluilul- cibli-ations tliat are unconilitionalh• -uaranteeii bv the LTniteii States of Atilerica,
(b)noncallable cibli-ations of an a,encv or instrumentalin• of tlie LTniteii States of America, ulcluilulg cibligations that are
unconilitionalh' -uaranteeii or ulsureii bv tlie a,encv or ulstrutnentalit-v anii that, on the ilate the Cit-v Council approves such
iiefeasance, are rateii as to investtilent qualitti• by a nationally recognizeii investtilent ratulg fum not less tlian AAA or its
equivalent, anii (c) noncallable cibligations of a state or an agencv or a countti•, mutucipalin•, or other political subilivision of a
state tliat have been retuniieii anii tliat, on the ilate the Citti• Council approves such iiefeasance, are rateii as to investtilent qualitti•
bv a nationalh• reco-nizeii ulvestment ratitt-, fum not less tlian AAA or its equivalent.
LTpon such iieposit as iiescribeii above, such Defeaseii Ubligations shall no longer be regardeii to be outstanilulg cibligations
payable from aii valorem taxes levieii by tlie Cin• or from the otlier revenues pleiigeii to tlieir payment in tlie Urdulances, but Ni-ill
be payable only froin tlie funiis anii (iovermnent Ubligations iiepositeii ul escrow anii Ni-ill not be consiiiereii iiebt of tlie City for
any purpose. After fu-in banl:itt-, anii Yitianc,ial arrangements for the ilischarge anii Yitial payment or reileinption of the
Ubli,ations have been maiie as iiescribeii above, all rights of tlie Cin• to itutiate proceeilitigs to call the Ubligations for
reiieinption or tal.e any otlier action amenilulg the terms of the Ubligations are extulguisheii: proviiieii, hoNi-ever, that tlie right to
call tlie Ubli,ations for reileinption is not extulguisheii if the City: (i) ul the proceeilulgs proviilulg for the fu-m batil;itt-, anii
fulanc.ial arrangements, expressly reserves tlie ri~lht to call the Ubligations for reiiemption: anii ( ii )gives notice of tlie reseivation
of that ri-ht to tlie oNi-ners of tlie Ubli-ations uluneiliateh• folloNvul- tlie mal.ul- of tlie fu-m banl.ul- anii fulancial arran-ements:
( iii ) ilirects tliat notice of the reservation be incluiieii ul any reiiemption notices tliat it autliorizes.
11
BooK-EN'rxr-ONLr Srs'rEnz T1zis section clescribes 1zrni- ownerslzip of tlze Obligations is to be hnlnsf'erred and 1zoii- the
principal of; pretrriiurr, if an* I', and interest on tlze Obligutions are to be puid to anel accredited bv DTC' irlzile the Obligutions are
registered in it~s notrrinee narrre. T1ze inforirration in tlzis section concerrring DTC' and tlze Boo7,--Enhn•-Onlv Sistetrr 1zas been
pr•ovicled bi' DTC' for• irse in disclosirre dociurrents sirclz as tlzxs OIficial Stcitetrrent. T1ze C'ih• believes tlze soirrce of sirclz
infor-Ixation to be reliable, birt ta7,-es no responsibilih•for tlze accirrcIct• or cotrrpleteness tlzereof:
TI2e ('ifi ccennot cencl c1oes not give cem' cessurnnce tl2ut Ill DT(' 1~ri11 c1ish-ibrite pcn-itrents of clebt setl'ice on the Obligcetions, or
reclertrption or otl2er notices, to DT(' Pcerticipcents, I'I DT(' Pcerticipcents or otl2ers 11-i11 c1ish-ibrite clebt setl'ice l)cevrtrents pceicl to
DT(' or its norninee Ices the registerecl o1l-ner of tl2e Obligutionsl, or reclertrption or otl2er notices, to the Bencficicel (hwners, or
thUt tjlc'ti' 1P7// (lO SO 071 c4 hTllc'lti' bc4,17S, Ol' (J) L)TC 1P7// Sc'11,c' c471d UCt D7 fhc' TI1c47771c'P deSCl'7bed D7 th15 OfflClc4l StUtc'Tllc'71t. Thc'
current rnles cpplicceble to DT(' cere on file 1i-it12 the Securities cencl Excl2cen,~ze ('ortrrnission, cnul the currentproceclrlres ofDT(' to
be fbllol~rec1 in cleceling 1i-it12 DT(' Pcerticipcents cere ol2 file 1i-it12 DT('.
DTC NN-ilL act as sectuities depositoi-y for the Obligations. The Obligations NN-ill be issued as fiilly-registered securities registerecl
in the iiaune of Cede & Co. ( DTC `s parhiership nominee ) or such other naune as may be requestecl by an authorizecl representative
of DTC One fully-registered sectuity certificate NN-ill be issued for each maturity of the Obligations in the aggregate principal
aunount thereof and NN-ilL be deposited NN-ith DTC.
DTC, the world`s largest securities depositoi-y, is a limited-purpose h1ist company orglnizecl under the New Yorl. Banl:ing Law,
a"binl:ing orglnization" NN-ithin the meaning of the New Yorl. Banl:ing Law, a member of the Fecleral Reseive System, a
"cleauing corporation" NN-ithin the me'uiing of the New Yorl. TTniform Commercial Code, and a"cleauing agency" registered
purstiant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset seivicing for
over i.> million issues of TT.S. and non-TT.S. equity issues, corporate and municipail debt issues, and money marl.et inshliments
(from over 100 countries ) that DTC's participants ("Duect Pauticipants" ) deposit NN-ith DTC. DTC also facilitates the post-trade
settlement aunong Duect Participants of sailes and other sectuities transactions in deposited securities, tlu-ough electronic
computerizecl bool.-enh-y transfers and pledges betNN-een Duect Pauticiplnts' accounts. This eliininates the neecl for physical
movement of securities certi~icates. Duect Pauticiplnts include both TT.S. and non-TT.S. securities brol.ers and deailers, binl.s,
tr1ist complnies, cleauing corporations, and certain other orglnizations. DTC is a wholly-ownecl subsidiau-y of The Depositoi-y
Tnist & Cleauing Corporation ("DTCC" DTCC is the holding company for DTC, National Securities Clearing Corporation and
Fixed Income Cleauing Corporation, aill of NN-hich aue registered clearing agencies. DTCC is owned by the users of its regulatecl
subsidiauies. Access to the DTC system is also available to others such as both TT.S. and non-TT.S. securities brol.ers and dealers,
binl.s, tr1ist complnies, and cleauing corporations that cleau tlu-ough or maintain a custodiail relationship NN-ith a Duect Pauticipant,
either du-ect1y or indu-ect1y (°Induect Pauticipants" DTC has Stlndaud & Poor's highest rating: AAA. The DTC Rules
applicable to its Participants aue on file NN-ith the Sectuities and Exchlnge Commission. More information about DTC can be
found at «-\«N-.Jtcc.cuin and «-\«N-.Jtc.urL,.
Purchases of Obligations under the DTC system must be made by or tlu-ough Du-ect Participants, NN-hich NN-ilL receive a creclit for
the Obligations on DTC `s records. The oNN-nership interest of each achial purchaser of each Obligation ('Bene~icial Owner" ) is
in hirn to be recordecl on the Duect and Indu-ect Participants' records. Beneficiail Owners NN-ilL not receive ~NTitten confumation
from DTC of theu purchase, but Bene~icial Owners aue expected to receive NN-ritten confumations providing details of the
transactions, as NN-ell as periodic statements of theu- holdings, from the Duect or Induect Pauticipant tlu-ough NN-hich the Bene~icial
Owners entered into the transaction. Transfers of oNN-nership interest in the Obligations are to be accomplished by entries made
on the bool.s of Pauticiplnts acting on behailf of Beneficial Owners. Bene~icial Owners NN-ilL not receive certi~icates representing
theu- oNN-nership interests in the Obligations, except in the event that use of the bool.-enh-y system for the Obligations is
discontinuecl.
To facilitate subsequent transfers, all Obligations deposited by Du-ect Participants NN-ith DTC aue registerecl in the naune of DTC's
parhiership nominee, Cede & Co., or such other iiaune as may be requestecl by an authorized representative of DTC. The deposit
of Obligations NN-ith DTC and theu registration in the naune of Cede & Co. or such other DTC nominee do not effect any chlnge
in bene~icial oNN-nership. DTC has no l:nowledge of the achial Beneficial Owners of the Obligations; DTC `s records reflect on1y
the identit-v of the Du-ect Participant to NN-hose accotmt such Obligations aue creditecl, NN-hich may or may not be the Beneficiail
Owners. The Pauticipants NN-ill remain responsible for l.eeping account of theu- holdings on behalf of theu customers.
Conveyance of notices and other communications by DTC to Duect Pauticiplnts, by Du-ect Pauticipants to Indu-ect Participants,
and by Duect Pauticipants and Induect Pauticipants to Beneficial Owners NN-ill be governed by aurangements aunong them, subject
to any statutoi-y or regulatoi-y requu-ements as may be in effect from time to time. Beneficial Owners of Obligations may NN-ish to
t11.e certain steps to augment the transmission to them of notices of signiticant events NN-ith respect to the Obligations, such as
reclemptions, tenders, defaults, and proposed aunendments to the Obligation documents. For exaunple, Beneficiail Owners of
Obligations ma~ Nvish to ascertain that the nominee holding the Obligations for theu bene~it has agreed to obtain and transmit
notices to Bene~icial Owners. In the alternative, Bene~icial Owners may NN-ish to provide theu- iiaunes and addresses to the
registrau and request that copies of notices be provided duectly to them.
12
Redemption notices shall be sent to DTC If less thln all of the Obligations NN-ithin a maturity aue being redeemed, DTC's
practice is to determine by lot the aunotmt of the interest of each Duect Participant in such issue to be recleemecl.
Neither DTC nor Cede & Co. NN-ill consent or vote NN-ith respect to the Obligations miless authorized by a Duect Pauticiplnt in
accordance NN-ith DTC's procedtues. TTnder its usual procedures, DTC mails an Omnibus Froxy to the County as soon as possible
after the record date. The Omnibus Froxy assigns Cecle & Co.'s consenting or voting rights to those Du-ect Pauticipants to NN-hose
accounts the Obligations are creditecl on the record date (identified in a listing attached to the Omnibus Froxy).
Pavments on the Obligations NN-ilL be made to DTC. DTC `s practice is to credit Duect Participants` accounts, upon DTC `s receipt
of fiinds and corresponding detail information from the City or the Paying Agent/Registrau on payable dates in accordance NN-ith
theu- respective holdings shoNN-n on DTC `s records. Payments by Pauticipants to Bene~icial Owners NN-ilL be governed by stlnding
instrlictions and customau-y practices, as in the case NN-ith securities held for the accounts of customers in bearer form or registerecl
in "street naune,° and NN-ill be the responsibility of such Pauticiplnt and not of DTC, the Paying Agent/Registrau or the City,
subject to ann statutoi-v or regulatoi-y requuements as may be in effect from time to time. Payment to DTC is the responsibility
of the City, disbtusement of such payments to Duect Pauticipants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Duect and Indu-ect Pauticipants.
DTC may discontinue providing its seivices as securities depositoi-y NN-ith respect to the Obligations at any time by giving
reasonable notice to the City and the Paying Agent/Registrau. TTnder such cucumstlnces, in the event that a successor securities
depositoi-y is not obtained, Obligation certi~icates aue requued to be printed and delivered.
The City may decide to discontinue use of the system of bool.-entr-y transfers tlu-ough DTC (or a successor sectuities depositoi-y
In that event, Obligations NN-ill be printed and delivered.
I;se of ('ertcein Tetfitrs in Ot)2er Sections of tl2is O ficicel Stutertrent. In reading this Official Statement it should be tmderstood that
NN-hile the Obligations aue in the Bool.-Entr-y-( )n1y System, references in other sections of this Officiail Statement to registered
oNN-ners should be read to include the person for NNhich the Pauticipant acquues an interest in the Obligations, but (i) aill rights of
oNN-nership must be exercised tlu-ough DTC and the Bool.-Enh-y-( )n1y System, and ( ii ) except as described above, notices that are
to be given to registered oNN-ners under the Ordinances NN-ill be 9iven on1y to DTC.
Information concerning DTC and the Bool.-Entr-y-( )n1y System has been obtained from DTC and is not guauanteed as to
accuracy or completeness by, and is not to be construed as a representation by the City, the Financiail Advisor or the Initial
Purchaser.
Effect uf Terminatiun uf Buuk-Entn--OnlN- Si-stem In tlie event tliat tlie Book-Entrti•-Unl,,• Svstem is iliscontiilueii bv DTC or
tlie use of tlie Bool.-Enttti'-Unly System is iliscontinueii by tlie Citti', printeii Ubligations Ni-ill be issueii to tlie holiiers anii tlie
Ubli,ations Ni-ill be subject to transfer, exchai~e anii re~istration provisions as set fortli ul the Urdinances anii sununarizeii uniier
"The Ubli,ations - Transfer, Exchaiige anii Registration° below.
PAriNC AeENT/RECisTPUt The uutial Pavul, A,ent/Re,istrar for the Boniis anii the Certificates is The Baiik of New Yorl.
Mellon Tiust Coinpany, N.A., Dallas, Texas. Iti the Urdulances, tlie City retauls tlie right to replace the Pavitig Agent/Registrar.
The Citv coveiiLults to maultaul anii proviiie a Payulg Agent/Registrar at all titnes until the Boniis anii Certificates are iiu1v paiii
anii anv successor Pavul, A-ent/Re-istrar shall be a conunercial baiik or ttust company orgaiuzeii uniier tlie laNi-s of the State of
Texas or otlier entitti iiu1y qualifieii anii le~lallv authorizeii to seive as anii perfonn tlie iiuties anii seivices of Pavitig
Auent/Reuistrar for the Boniis anii Certificates. LTpon any change ul the Pavitig Agent/Registrar for tlie Boniis anii Certificates,
tlie City agrees to proinptly cause a Ni-ritten notice tliereof to be sent to each registereii oNi-ner of tlie Boniis anii Certificates, as
applicable, by LTniteii States mail, first class, postage prepaiii, Ni-hich notice shall also give tlie aililress of tlie new Payulg
Auent/Reuistrar.
Principal of tlie Boniis anii Certiticates is payable to tlie registereii holiier appearitig on tlie registration bool.s of tlie Pavitig
Auent/Reuistrar (tlie "Reuistereii Uwner" ) at tlie iiesignateii corporate ttust office of the Payulg Agent/Registrar upon surreniier
of tlie Boniis anii Certificates for payment. Ititerest on the Boniis anii CertiYicates is payable to the Register Uwners appearulg on
tlie registration bool.s of the Pavitig Agent/Registrar at the close of business on the Record Date ( iiientifieii below) anii such
ulterest shall be paiii by tlie Payulg Agent/Registrar by check maileil, fust class postage prepaiii, to the Register Uwner or by
such other arraitgement, acceptable to the Paying Agent/Registrar, requesteii by anii at the risl. anii ex-pense of the Registered
Uwner. If tlie ilate for the payment of the prulcipal of or ulterest on tlie Boniis anii CertiYicates shall be a Saturday, Sunilay, a
leual holiilav, or a i1av Ni-hen baiil;itt-, ulstitutions ul the cin• Ni-here the iiesignateii corporate office of tlie Payulu Auent/Reuistrar
is locateii is authorizeil bv law or executive order to close, tlien the ilate for such payment shall be tlie next succeeilinU i1av Ni-hich
is not such a Saturdav, Sunilav, leual holiilav, or dav Ni-hen banl.ul, institutions are autliorizeii to close: anii payment on such ilate
shall have the same force anii effect as if maiie on tlie origulal ilate payment Ni-as iiue.
13
TPUIITSFER, ESCFUIITGE AND REGISTPUTION Ill Yllz zVZllY Yllz BOOli-EllYlti'-U111C SCSYe111 SIlOU1d bz dlSGOllY111UZd, p1ll1Yzd
Ubli,ations Ni-ill be iielivereii to tlie Re,istereii Uwners anii tliereafter the Ubli~lations mav be transferreii anii exchanueii on the
reuistration bool.s of the Pavulu Auent/Registrar only upon presentation anii surreniier of such prulteii Ubligations to tlie Pavitig
Auent/Reuistrar anii such transfer or exchaitge shall be Ni-itliout expense or service chuge to tlie Registereii Uwner, except for
any tax or other govenmlental charges requueii to be paiii Ni-ith respect to such registration, exchulge anii transfer. Ubligations
mav be assiuneii bv tlie execution of an assiumnent form on tlie Ubliuations or bv other ulstrutnent of transfer anii assiuiunent
acceptable to tlie Pavitig Agent/Registrar. New Ubligations Ni-ill be iielivereii by the Payulg Agent/Registrar, ul lieu of the
Ubligations beulg transferreii or exchatt-yeii, at tlie iiesignateii office of the Payulg Agent/Revistrar, or sent by LTniteii States mail,
fu-st class, postage prepaiil, to the new Registereii Uwner or his iiesignee. To the extent possible, new Ubligations issueii ul an
exchatt-ye or transfer of Ubligations Ni-ill be iielivereii to the Registereii Uwner or assignee of tlie Registereii Uwner ul not inore
tlian t1n-ee busuless i1ays after tlie receipt of the Ubligations to be canceleii, anii tlie NiTitten u1stl-uMent of transfer or request for
exchait-ye iiu1y executeii b-,• tlie Registereii Uwner or his iiuh• autliorizeii ayent, ul form satisfacton• to tlie Pavul,y
Ag ent/Re~istrar. New Ubliuations reuistereii anii ilelivereii ul an exchatt-ye or transfer shall be ul any integral multiple of $>,000
for anv one maturity anii for a lil.e agr
g egate principal ainount as tlie Ubli ~ations surreniiereii for exchange or transfer. See "The
Ubli~yations-Book-Entiti•-Unl-,• Svstem" hereul for a iiescription of tlie system to be utilizeii uiitially ul regard to oNi-nerslup anii
transferabilin• of tlie Ubliuations. Neitlier tlie Citv nor the Pavul,y Auent/Registrar shall be requireii to transfer or exchulge any
Certiticate calleii for reiieinption, in Ni-hole or ul patt, Ni-ithii14> i1ays of tlie ilate fixeii for reiieinption: proviiieil, hoNi-ever, such
litiiitation of transfer shall not be applicable to an exchulge by the Registereii Uwner of tlie uncalleii balance of a Certificate or
Bonii.
RECOitn DATE Fox INTExEST PArnzENT The record ilate ("Record Date" ) for the ulterest payable on tlie Boniis anii
CertiYicates on anv interest payment ilate means the close of business on tlie last busuless i1ay of tlie month next preceiling such
ulterest payment ilate.
In tlie event of a non-payment of interest on a scheiiuleii payment ilate, anii for 30 i1ays thereafter, a new record ilate for such
ulterest payment ( a°Special Record Date" ) Ni-ill be establisheii by tlie Paying Agent/Re_Yistrar, if anii Ni-hen funiis for the payment
of such ulterest have been receiveii froin tlie Citv. Notice of tlie Special Record Date anii of tlie scheiiuleii payment ilate of tlie
past iiue ulterest (°Special Payment Date", Ni-hich shall be 15 i1ays after the Special Record Date) shall be sent at least five
business i1ays prior to the Special Record Date by LTniteii States mail, first class postage prepaiii, to tlie aiiilress of each
Reuistereii Uwner of a Bonii anii Certificate appearulg on tlie registration books of the Payulg Agent/Registrar at the close of
busuless on tlie last busuless i1ay next preceilulg tlie ilate of mailulg of such notice.
AniEVnniENTS In each Ordinance, the City has reseived the right to aunend the Ordinance NN-ithout the consent of any holder
of the respective Obligation for the purpose of aunending or supplementing the Ordinance to (i) cure any aunbiguity, defect or
omission therein that does not materillh adverselv affect the interests of the holders, (ii) grant additional rights or sectuit-v for
the benefit of the holders, (iii) add events of default as shall not be inconsistent NN-ith the provisions of the Ordinance that do not
materiallv adversely affect the interests of the holders, (iv ) qualify the Ordinance under the Tnist Indenhue Act of 1939, as
aunended, or corresponding provisions of federal laNN-s from time to time in effect or (v) mail.e such other provisions in regaud to
matters or questions auising under the Ordinance that are not inconsistent NN-ith the provisions thereof and NN-hich, in the opinion of
Bond Counsel for the Citv, do not materialh adversely affect the interests of the holders.
Each Ordinance fiirther provides that the holders of the Bonds or Certi~icates, as applicable, aggregating in principal aunount a
majoritv of the outstlnding Bonds or Certificates, as the case may be, shall have the right from time to time to approve any
aunendment not describecl above to the applicable Ordinance if it is deemed necessau-y or desu-able by the City; provided,
hoNN-ever, that NN-ithout the consent of 100% of the holders in original principal aunotmt of the then outstlnding Bonds or
Certificates so affected, no aunendment may be made for the purpose of: (i) mail.ing any change in the mahuity of any of the
outstlnding Bonds or Certi~icates; (ii) reducing the rate of interest borne by any of the outstlnding Bonds or Certificates; (iii)
reclucing the aunount of the principal of, or redemption premium, if any, payable on any outstlnding Bonds or Certi~icates; ( iv )
modifying the terms of payment of principail or of interest or redemption premium on outstlnding Bonds or Certi~icates, or
imposing any condition NN-ith respect to such payment, or (v) changing the minimum percentage of the principal aunount of the
Bonds or Certificates necessau-y for consent to such aunendment Reference is made to the Ordinances for fiuther provisions
relating to the aunendment thereof.
REnzEniES Each Urdinance establishes specific events of ilefault Ni-itli respect to tlie respective series of Ubligations. If tlie
Cin• iiefaults in tlie payment of tlie prulcipal of or ulterest on tlie Bonils or Certiticates Ni-hen iiue or tlie City ilefaults in the
cibseivance or performance of any of the covenants, conilitions, or cibligations of tlie Cin•, tlie failure to perform Ni-hich
materiallv, aiiverselv affects tlie ri~_Yhts of the oNi-ners thereof, incluilinu but not luniteii to, tlieir prospect or ability to be repaiii in
accordance Ni-ith the respective Urdulance, anii tlie continuation thereof for a perioii of 60 i1ays after notice of such iiefault is
Uiven bv anv oNi-ner to the Cin•, each Urdinance proviiles that any registereii oNi-ner of a respective Ubligation is entitleii to seel. a
NiTit of manilainus from a court of proper jurisiliction requu-ulg tlie Cin• to mal.e such payment or cibserve anii perform such
covenants, cibliuations, or conilitions. The issuance of a NiTit of manilamus mav be souiht if there is no othei available remeiiv at
law to coinpel perfonnance of the respective Ubligations or Urdulance anii the Cin•'s cibligations are not uncertaul or ilisputeii.
The remeiiv of manilatnus is controlleii by equitable prulciples, so rests Ni-ith the iliscretion of tlie court, but may not be
arbitrarilv refuseii. There is no acceleration of maturitv of tlie Ubliuations in tlie event of iiefault anii, consequently, the remeiiv
14
of mandaunus may have to be relied upon from yeau to yeau. The Ordinances do not provide for the appointment of a trlistee to
represent the interest of the oNN-ners of the respective Obligations upon any fvlure of the City to perform in accordance NN-ith the
terms of the Ordinances, or upon any other condition and accordingly all legal actions to enforce such remeclies would have to be
undertll.en at the initiative of, and be financecl by, the Registered Owners. The Texas Supreme Court has ruled in Tool.e v. City
of Mexia 197 S.W3d 325 (Tex. 2006) that a NN-aiver of sovereign immunity in a contrachial dispute must be provided for bY
stahite in "cleau and unaunbiguous" 11nguage. Because it is tmclear NN-hether the Texas legislahire has effectivel~ Nvaived the
City`s sovereign immunity from a suit for money caunages, oNN-ners of Obligations may not be able to bring such a suit against
the City for breach of the Obligations or Ordinance covenants in the absence of City action. Chapter 1371, Texas Government
Code (°Chapter 1371" NN-hich pertains to the issuance of public securities by issuers such as the City, permits the City to ~N-aive
sovereign immunity in the proceedings authorizing its debt, but in connection NN-ith the issuance of the Obligations, the City has
not Nvaivecl sovereign immmiity is not using the authority to do so as provided by Chapter 1371. Even if a judgment against the
City could be obtained, it could not be enforced by duect levy and execution against the City's propern . Ftuther, the Registered
ONvners cannot themselves foreclose on property NN-ithin the City or sell property NN-ithin the City to enforce the tax lien on taxable
property to pay the principal of and interest on the Bonds or the Certificates. Furthermore, the City is eligible to seek relief from
its creditors under Chapter 9 of the TT.S. Banl:ruptcy Code (°Chapter 9" Although Chapter 9 provides for the recognition of a
security interest representecl by a specifically pledged source of revenues, t h e pledge of ad v a il o r e m taxes in support of agenerail
obligation of a b1n1:rupt entity is not specificailly recognized as a security interest under Chapter 9. Chapter 9 also includes an
automatic stay provision that would prohibit, NN-ithout Ban1:ruptcy Cotut approvail, the prosecution of ann other le9al action by
creditors or Obligationholders of an entity NN-hich has sought protection under Chapter 9. Therefore, should the City avail itself
of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Banl:ruptcy Court (NN-hich
could requu-e that the action be heaud in Banl:ruptcy Court instead of other federal or state court); and the Ban1:ruptcy Code
provides for broad discretionau-y poNN-ers of a Ban1:ruptcy Court in administering any proceeding brought before it The opinions
of Bond Cotmsel NN-ilL note that aill opinions relative to the enforceability of the Obligations are quailified NN-ith respect to the
customau-y rights of debtors relative to theu creditors and by general principles of equity NN-hich permit the exercise of judicial
discretion.
Initi11h , the on1y Registerecl Owner of the Bonds and Certi~icates NN-ilL be The Depositoi-y Tnist Company. See "The Obligations
- Bool.-Entr-v-( )n1v Svstem° herein for a description of the duties of DTC NN-ith regaud to oNN-nership of the Bonds and Certi~icates.
THE RE1 L4IV"PER oF THIb' P.4c 3E LEFT BLd IV"TE\'TR LV:~LL P
15
TAX INFORMATION
An VaLOxEni Ta.Z LaNA' The appraisail of propert~ Nvithin the City is the responsibility of the Denton Centrail Appraisal District
(the "Appraisail District" Excludikg agriculturail and open-space 11nd, NN-hich may be taxecl on the basis of productive capacity, the
Appraisal District is requireii uniler V.T.C.A., Tit1e I, Tax Coiie, as ameniieii (tlie "Property Tax Coi1e" ) to appraise all propert~'
Ni-itliiil tlie Appraisal District on tlie basis of 100°io of its marl.et value anii is prohibiteii from applyulg any assessment ratios. Iti
deteiminim marl.et vailue of property, different methods of appraikll may be usecl, includikg the cost method of appivsail, the income
method of appraikll and the marl.et data comparixon method of appivsail, and the method considerecl most appropriate by the chief
appraiser is to be useil. State law turtlier lunits tlie appraiseii value of a resiiience homesteaii for a tax year to an ainount that
Ni-oulii not exceeii the lesser of (1) tlie marl.et value of tlie propern• for the inost recent tax vear that tlie marl.et value Ni-as
determined by the appraisal office or (2) the sum of (a) 10% of the property's appraised vailue in the preceding tax ~ eau, plus (b)
the property's appraised value in the preceding tax yeau, plus (c) the maul.et vailue of all ne~~~ improvements to the property. The
value placeii upon propert• Ni-itliiil tlie Appraisal District is subject to review by an Appraisal Review Board, consistingg, of sixteen
members appoulteii by tlie Board of Du-ectors of tlie Appraisal District. The Appraisal District is requu-eii to review tlie value of
propert~ Nvithin the Appraisal District at least evei-y tlu-ee years. The City may requu-e annuail review at its oNN-n expense, and is
enfitled to chaillenge the determination of appraisecl vailue of property NN-ithin the City by petition filecl NN-ith the Appraisail Review
Board. Reference is made to the Froperty Tax Code, for identi~ication of property subject to taxation; property ex-empt or NN-hich may be
exemptecl from taxation, if claimecl-, the appraisail of property for ad vailorem taxation ptuposes; and the proceclures and limitations
applicable to tlie levy anii collection of aii valorem taxes.
Arhicle VIII of the State Constihition ("Arhicle VIII" ) and State law provide for certain exemptions from property tax-es, the vailuation
of agriculturail and open-space 11nds at productivity vailue, and the exemption of certain personail property from ad vailorem taxation.
LTniier Section 1-b, Article VIII, anii State law, the governing boiiv of a political subilivision, at its option, may grant an
exemption of not less thln $3,000 of the marl.et value of the residence homestead of persons 65 yeaus of age or older and the
disabled from all ad valorem taxes thereafter levied bv the political subdivision. Once authorizecl, such exemption mav be
repealeii or iiecreaseii or increaseii in ainount (i) by the goveriing boiiy of the political subilivision or ( ii ) bv a favorable vote of a
majoritti' of tlie qualifieii voters at an election calleii by tlie goveniing boiiy of the political subilivision, Ni-hich election must be
cailled upon receipt of a petition signed by at least 20% of the number of quali~iecl voters NN-ho votecl in the preceding election of
the political subdivision. In the case of a decrease, the aunount of the exemption may not be reduced to less thln $3,000 of the
marl.et value.
The suiviving spouse of an individual NN-ho quailifies for the foregoing exemption for the residence homestead of a person 65 or
older ( but not the disablecl ) is entitlecl to an exemption for the saune property in an aunount equail to that of the ex-emption for
Ni-hich the iieceaseii spouse qualifieii if (i) tlie iieceaseii spouse ilieii ul ayear ul Ni-hich the iieceaseii spouse qualifieii for the
exeinption, (ii) the survivulg spouse Ni-as at least» years of a-e at the time of tlie iieath of tlie iniliviiiual's spouse anii (iii) tlie
propert- NN-as the residence homestead of the suiviving spouse NN-hen the deceasecl spouse died and remains the residence
homestead of the suiviving spouse.
In aiiilition to anv other exeinptions proviiieii by tlie Property Tax Coiie, tlie governing boiiy of a political subilivision, at its
option, may grant an exemption of up to 20% of the maul.et vailue of residence homesteads, NN-ith a minimum exemption of
$>,000.
In the case of resiiience homesteaii exemptions granteii uniier Section 1-b, Article VIII, aii valorem taxes mav continue to be
levied against the value of homesteads exemptecl NN-here ad valorem taxes have previously been pledged for the payment of debt
if cessation of the levy would impair the obligation of the contract by NN-hich the debt NN-as created.
LTniier Article VIII anii State law, tlie governing boiiv of a counn•, mutucipality or junior college ilistrict may proviiie for a freeze
on totail aunount of ad vailorem taxes levied on the residence homestead of a disabled person or persons 65 yeaus of age or older
above the aunotmt of tax imposed in the yeau such residence quaili~ied for such exemption. Also, upon receipt of a petition signed
by five percent of the registereii voters of tlie counn•, municipalin• or junior college ilistrict. an election must be helii to
iietermine bv majoritv vote Ni-hetlier to establish such a lunitation on taxes paiii on resiiience homesteaiis of persons 65 years of
age or NN-ho aue disablecl. TTpon providing for such exemption, the total aunount of taxes imposecl on such homestead cannot be
increased except for improvements (other thln maintenance, repairs or improvements requued to comply NN-ith governmentail
requirements) anii such freeze is transferable to a ilifferent resiiience homesteaii. Also, a survivulg spouse of a taxpaver Ni-ho
qualifies for the freeze on aii valorem taxes is entitleii to the same exeinption so long as tlie propern• Ni-as the resiiience
homestead of the suiviving spouse NN-hen the deceasecl spouse diecl and remains the residence homestead of the suiviving spouse
and the spouse NN-as at least »yeaus of age at the time of the death of the individuail`s spouse. Once establishecl such freeze
caiulot be repealeii or resculileii.
State law and Section 2, Arficle VIII, mandate an additional property tax exemption for disablecl veterans or the smvivikg spouse or
children of a deceasecl veteran NN-ho diecl NN-hile on active dut-v in the armecl forces; the exemption applies to either reail or personal
property Ni-itli tlie atnount of assesseii valuation exeinpteii ran-irg-, from $5,000 to a maxmiutn of $12,000, iiepenilent upon the
iie-ree of ilisabilin• or Ni-hether tlie exeinption is applicable to a survivulg spouse or chililreii: proviiieil, hoNi-ever, tliat begitmitig
in the 2009 tax veau, a disabled veteran NN-ho receives from the TTnited States Depauhment of Veterans Affaus or its successor 100
percent disability compensation due to a seivice-connected disability and a rating of 100 percent disabled or of individual
uneinplovabilin• is entitleii to an exeinption from taxation of tlie total appraiseii value of tlie veteran's resiiience homesteaii.
16
Arhicle VIII provides that eligible o~N-iiers of both agriculturail 11nd ( Section 1-d ) and open-space 11nd ( Section 1-d-1), includikg
open-space 11nd devotecl to f um or ranch ptuposes or open-space 11nd devotecl to timber production, may elect to have such property
appraiseii for propert~• taxation on tlie basis of its proiiuctive capacin•. The same lanii ma~• not be qualitieii uniler botli Section 1-~i
anii 1-ii-1. - - -
Nonbusiness personal property, such as automobiles or light tr1icl.s, are exempt from ad vailorem tax-ation unless the governing body
of a political subilivision elects to tax tlus property. Boats oNi-neii as nonbusuless property are exempt from aii valorem taxation.
Arhicle VIII, Section 1-j, provides for "freeport property" to be exemptecl from ad valorem taxation. Freeport property is definecl as
goods detainecl in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processikg or fabrication.
Notwitlistaniling such exeinption, counties, school ilistricts, junior college ilistricts anii cities may tax such tatigible personal
property proviiieii official action to tax the saine Ni-as tal.en before April 1, 1990. Decisions to contume to tax may be reverseii ul
the fiihue; decisions to exempt freeport property are not subject to reversal.
Article VIII, Section 1-n of tlie Texas Constitution proviiies for tlie exemption from taxation of "gooiis-ul-transit." "(iooiis-ul-
transit" is iiefuleii bv Section 11.253 of the Property Tax Coiie, Ni-hich is effective for tax years 2008 anii tliereafter, as personal
propern acquu-ecl or importecl into Texas and transportecl to another location in the State or outside of the State NN-ithin 175 days
of the date the property NN-as acquu-ed or imported into Texas. The exemption excludes oil, nahirail gas, petroleum products,
aircraft anii special ulventon•, incluilin- motor vehicle, vessel anii out-board motor, heaw equipment anii manufactureii housulg
ulventoiti•. Section 11.253 permits local govenmlental entities, on a local option basis, to tal.e official action bv Januan• 1 of tlie
yeau preceding a tax yeau, after holding a public heauing, to tax "goods-in-transit° dtuing the folloNN-ing tax year. A taxpaver may
on1y receive either the freeport exemption or the "goods-in-transit" exemption for items of personal property.
The Cin• or Denton Counn• mav create one or inore tax ulcrement fulancul- ilistricts ("TIF" ) Ni-itliiil tlie Cin• or Denton Counn•,
as applicable, and freeze the taxable vailues of property in the TIF at the value at the time of its creation. Other overlapping
taxing units levying taxes in the TTF inay agree to contribute all or part of fiihire ad valorem taxes levied and collected against
tlie value of property ul the TIF ul excess of the "frozen values° to pay or fulance tlie costs of certain public unprovements ul the
TIF. Taxes levieii bv the Cin• a,aulst the values of real propern• in the TIF in excess of tlie "frozen" value are not available for
generail city use but are restrictecl to paying or ~inancing °project costs" NN-ithin the TIF. The City ailso may enter into tax
abatement agreements to encotuage economic development TTnder the agreements, a property owner agrees to constrlict certain
unprovements on its property. The Cin• ul tum agrees not to levy a tax on all or part of tlie ulcreaseii value attributable to tlie
unprovements until tlie expuation of tlie a-reement. The abatement a-reement coulii last for a perioii of up to 10 years.
The City is also authorizecl, pursuant to Chapter 380, Texas Locail Government Code, as aunendecl (°Chapter 380" to establish
programs to proinote state or local economic iievelopment anii to stunulate busuless anii conunercial activin• ul tlie Cin•. lii
accordance Ni-itli a prograin establisheii pursuant to Chapter 380, the Cin• may mal.e loans or grants of public funiis for economic
development purposes, hoNN-ever no obligations securecl by ad valorem taxes may be issued for such purposes miless approved by
voters of the Cily.
EFFECTivE TAZ RATE ANn RoLLSAcK TAZ RATE LTniler the current Propern• Tax Coiie agoveniing boiiy of a taxulU unit is
requireii to aiiopt its aiulual tax rate per $100 taxable value for the utut before the later of Septeinber 30 or tlie 60th day after tlie
date the certi~iecl appraisal roll is received by the taxing unit, and a fvlure to adopt a tax rate by such requued date NN-ill result in
the tax rate for the taxing unit for the tax year to be the loNN-er of the effective tax rate calculatecl for that tax yeau or the tax rate
ailopteii by the taxulg unit for the preceilulu tax year. By each September 1 or as soon thereafter as practicable, tlie Citti• Council
ailopts a tax rate per $100 taxable value for the current vear. The tax rate consists of tNi-o components: (1 ) a rate for funilit-, of
maintenance and operation expenditures, and (2) a rate for debt service.
LTniier the Propern• Tax Coiie, the City must aiulually calculate anii publicize its "effective tax rate" anii "rollback tax rate". The
Cin• Council mav not aiiopt a tax rate tliat exceeiis tlie loNi-er of tlie effective tax rate or tlie rollback tax rate until it has helii tNi-o
public heauings on the proposed increase folloNN-ing notice to the taxpayers and otheilN-ise complied NN-ith the Froperty Tax Code.
If the adopted tax rate exceecls the rollback tax rate the quailified voters of the City by petition may requue that an election be
helii to iietermule Ni-hetlier or not to reiiuce tlie tax rate aiiopteii for tlie current year to tlie rollback ta~ rate.
"Effective tax rate° means the rate that NN-ilL produce last yeau's totail tax levy ( acljusted ) from this vear's totail taxable values
( acljusted "Acljusted° means lost values aue not included in the cailculation of last veau's taxes and new vailues aue not includecl
ul this vear's taxable values.
"Rollback tax rate° means the rate that NN-ill produce last yeau's maintenance and operation tax levy ( acljustecl ) from this veau's
vailues ( acljusted ) multiplied by 1.08 plus a rate that NN-ilL produce this yeau's debt service from this year's values (unacljusted )
iliviileii bv tlie anticipateii tax collection rate.
The Froperty Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize
an additionail one-hailf cent sailes tax on retail sailes of taxable items. If the additional tax is levied, the effective tax rate and the
rollback tax rate calculations are requueii to be offset by tlie revenue tliat Ni-ill be generateii bv tlie sales tax in the current vear.
Reference is made to the Froperty Tax Code for definitive requuements for the levy and collection of ad vailorem taxes and the
cailculation of the various defined tax rates.
17
PftoPExTr AssESSnzENT ANn TAZ PArnzENT Propern• Ni-itliiil the Cin• is generally assesseii as of Januaiti• 1 of each year.
Business inventoiti• may, at tlie option of the tax-paver, be assesseii as of Septeinber L Uil anii gas reseives are assesseii on tlie
basis of a valuation process Ni-luch uses an avera-e of the i1ai1y price of oil anii gas for tlie prior year. Taxes become iiue Uctciber
1 of the same vear, anii become iielitiquent on Februatti' 1 of the following year. Taxpayers 65 years olii or oliier are pennitteii
bv State law to pay taxes on homesteaiis ul four ulstalltilents Ni-itli tlie first iiue on Februan• 1 of each vear anii tlie fulal
ulstalliilent iiue on Au-ust 1.
PENALTiES ANn IVTEitEST Charges for penalty anii interest on tlie unpaiii balance of iieluxluent taxes are maiie as follows:
Cumulative
Cumulative
Montli
Penaln•
liiterest
Total
Februan•
6%
1 %
7%
March
7
2
9
April
8
3
11
Mav
9
4
13
June
10
>
1>
Julv
12
6
18
After Ju1y, penaltti• remauls at 12°io, anii interest acciues at a rate of one percent (1°io) for each inonth or portion of a inontli the
tax remauls unpaiii. A iielitiquent tax continues to ulcur tlie penaln• interest as lon, as the tax remains unpaiii, regardless of
Ni-hetlier a juiigment for the ileluxluent tax has been reniiereii. The purpose of unposulg such interest is to coinpensate tlie taxulg
unit for revenue lost because of tlie iielitiquency. In aililition, if an account is ilelulquent ul Ju1y, an attorney's collection fee of
up to 20°iu may be aiiiieii to tlie total tax penaltv anii interest charye. LTniier certaul circutnstances, taxes Ni-hich become
iielulquent on the homesteaii ot a taxpaver 65 years olii or oliier ulcur a penalty of 8°io per aiulutn Ni-ith no aiiilitional penalties or
ulterest assesseii. lii general, propern• subject to tlie Cin•'s lien may be solii, ul Ni-hole or ul parcels, pursuant to court order to
collect tlie ainounts iiue. Feileral law iioes not allow for the collection of penalty anii interest agaulst an estate ul ban-Luptcy.
Feileral ban-Luptcy law proviiies that an automatic stay of action by creilitors and other entities, incluiling goveriunental units,
Uoes ulto effect Ni-ith tlie filulg of any petition ul ban-Luptcy. The automatic stay prevents govenmlental units froin foreclosut-Y
on property anii prevents liens for post-petition taxes from attaching to property anii cibtauiitig secureii creilitor status unless, ul
either case, an order liftuly tlie stav is cibtaineii from the ban-Luptcy court. Iti many cases post-petition taxes are paiii as an
ailmuiistrative expense of the estate ul ban-Luptcy or by order of tlie ban-Luptcy court.
CiTY APPLicaTioN oF Ta.Z ConE The City grants an exemption to maul.et value of the residence homestead of persons 65
yeaus of age or older of $35,000 and has indicated a desue to increase the Over-65 exemption by an additional $5,000 each yeau
in 2012-2014 until the exemption aunotmt reaches $50,000. Disablecl taxpayers ailso receive a$10,000 exemption.
The City grants an additional one-half of one percent, or a minimum of $5,000 exemption of the maul.et vailue of residence
homesteads.
See Table 1 for a listing of the aunounts of the exemptions describecl above.
Ad valorem taxes are not levied bv the Citv against the exempt value of residence homesteads for the payment of debt.
The City does not tax nonbusiness personal property.
Denton County began collecting taxes for the City during the fiscal yeau 2006-07.
The City does not aillow split payments, and discounts aue not allowecl.
The City does not tax freeport property.
The City collects the additional one-hailf cent sailes tax for reduction of ad valorem taxes.
The City does tax "goods-in-transit".
The City has not adopted the tax freeze for citizens NN-ho are disabled or are 65 yeaus of age or older.
The City has adopted a tax abatement policy.
The City participates in one tax increment reinveshnent zone, NN-hich NN-as createcl in 2010.
18
TAZ AsA'rEnzEN'r PoLier The Citv has aiiopteii a tax abatement policy. In 1990, tlie City council ailopteii a resolution
settitt-, guiiielities anii criteria for grantulg abatements ul reulvesttilent zones createii Ni-ithii1 tlie Citti•. These ~uiiielities
specifically note that ulcentives are litiiiteii to coinpanies Ni-hich create new Nvealth anii iio not aiiverseh• affect existulu
businesses operatitt-, Ni-ithii1 the Citti•. The Cin• Council approveii tlie following tax abatement aureements:
• In 2001, a 100°io tax abatement for a tenn of ten vears Ni as granteii to Peterbilt Motors on the ulcremental value relatinu
to tlie expansion of tlieir ilivision heaiiquarters. The prc~ject Ni-as completeii anii the abatement Ni-ill expue in 2011.
• In 2003, a i>% tax abatement for a term of ~ive years NN-as grantecl to FloNN-ers Bail.ing Complny on the incrementail
vailue relating to the explnsion and renovation of a vacant facility in Denton. The pro~ject NN-as completecl and the tlu-ee-
phase project abatement NN-ill expue in 2011.
• In 2004, a 3>°io tax abatement for a tenn of five vears Ni as ~ranteii to Fastenal Coinpany for their 200,000 square foot.
million ilistribution center. The prc~ject Ni-as ilelayeii but coinpleteii in 2008 at an estimateii valuation of $15
million. The a-reement Ni-ill terniiilate u12013.
• In 2007, a 100% tax abatement for a term of up to seven years NN-as granted to Aldi Foods for theu- 500,000 squaue foot
$52 million distribution center. The abatement ~unount is basecl on the cost inctured by Aldi to conshlict a road to theu-
site. The pro~ject NN-as completed in 2009 and the agreement NN-ill terminate in 2016.
• In 2010, a 65% tax abatement agreement for a term of ~ive yeaus NN-as granted to Tauget Corporation for its 400,000
squaue foot frozen and refrigeratecl food distribution center. Tauget is expected to break ground in the Spring of 2011
and p11ns a 2012 opening of the facility.
CKATTEx 380 AexEEnzENTS The Citv has also entereii into Chapter 380 a-reements. Each a-reement is baseii on the
prc~jecfs contribution in either sales or propern• taxrevenue. The City Council approveii the followulg Chapter 380 agreements:
• In 2001, an agreement NN-as approved for the 450,000 square foot, $50 million Denton Crossing retail center. The
grantee receives one-third of the sales tax generatecl by the pro~ject for a maximum of fifteen yeaus as reimbursement
for public improvement costs related to the pro~ject The pro~ject NN-as completecl and the Chapter 380 ('rrant NN-as
initiated m 2005. The agreement NN-ill terminate m 2019.
• In 2003, an agreement Ni-as approveii for Sally Beauty Company for tlieir new ultenlational heailcluarters valueii at over
$29 million. The company receives agrant equal to 40% of tlie property tax paiii on tlie new facilin• anii equipment
for a perioii of ten years. The agreement Ni-ill terniillate in 2014.
• In 2004, an agreement Ni-as approveii for Teasley Parttiers for an urban sn•le mixeii-use iievelopment. The grantee may
receive one-third of tlie sales tax generateii by the prc~ject for a maxunutn of fifteen years as reitnbursement for public
unprovement costs relateii to the prcJect. The prcJect has not been completeii. Altliough a new hotel anii some
resiiiential units have been coinpleteii, no qualifyut-, retail has been constiucteii.
• In 2004, an agreement NN-as approved for Wincljaminer Ltd for TTnicorn Lail.e, an tubin sty1e mixecl-use development.
The grantee NN-ill receive one-third of the sales tax generated by the pro~ject for a maximum of fifteen yeaus as
reimbursement for public improvement costs related to the pro~ject Although the pro~ject is stilL tmder development, the
grantee has satistiecl the tlu-esholds established in the agreement The grant payments NN-ere initiatecl in December
2009. The agreement NN-ill terminate m 2023.
• In 2005, an agreement Ni-as approveii for (iraiute Properties for tlie 900,000 square foot busuless park prc~ject. Phase
one, consistulg of 397,000 square feet. Ni-as coinpleteii u12006. The coinpanv receiveii agrant equal to 50% of new
property tax revenue generateii at the site. The agreement haii a ten year term, hoNi-ever, the contract Ni-as tenliillateii ul
2010 Ni-hen SchlutnbeQger purchaseii a 150,000 square foot buililing anii aililitional lanii at tlie site.
• In 2007, an agreement NN-as approved for Allegilnce Hillview for the Rayzor Ranch mixed-use development The 400
acre pro~ject NN-ill have over one million square feet of retail and NN-ill be built in tNN-o phases. The agreement provides a
vau-ying rate of sales tax reimbursement basecl on public improvement costs, NN-hich include the widening of a state
highway that bisects the pro~ject The grantee NN-ill receive a maximum of $20 million over a 15 yeau term for phase one
and a maximum of $42 inillion over a term of 20 years for phase two. Approximately 360,000 squaue feet of retail in
phase one has been completed, NN-ith Saun's and Wail-Mart opening in Fall 2010.
• In 2008, an agreement NN-as approved for the explnsion of Josten's. The grant is based on 75% of the new property tax
revenue generated by the expansion for a term of seven yeaus. The pro~ject NN-as completed and the agreement NN-ilL
terminate in201>.
19
• In 2010, an agreement Ni-as approveii for (iranii Mesa, contract for SchlutnbeQger, equal to >0°io of new property tax
revenue -enerateii for tlieu 150,000 square foot regional maintenance facilitti•. The term of tlie a-reement is seven
years anii Ni-ill tenliiilate u12017.
ANNEZATioN PLANs Un Mav 4, 2010, the Cin• aiulexeii 15 areas of Ni-hich approxunately 3,377 acres Ni-ere uluneiliately
aimexeii anii approxunately 4,117 acres Ni-ere 'iven >-Vear non-aiulexation aureements. State law alloNi-s a property to not be
amlexeii for up to 45 vears tlu-ouuh non-aiulexation agreements. The 45 year perioii is calculateii over tlu-ee terms, not to exceeii
15 years per term. Since tlie fust non-amlexation aUreement terin offereii bv the Citti• Ni-as for onl\• five vears, tlie maxunum
possible total non-amlexation perioii possible Ni-ill be 35 years. It is estimateii tliat a total of 187 resiiients Ni-ere aiiiieii to the
City's population from tlie untneiliate aimexation of the approxitnateh• 3,377 acres.
Ati aililitional3 areas, totalulg approximately 1>95 acres, Ni-ere placeii u13-year amlexation plans tliat Ni-ere aiiopteii by the Cin•
Council on April 6, 2010. The Citti• Council Ni-ill consiiier tlie aiulexation of tliese tlu-ee areas, concluilitt-, ul May 2013. It is
estunateii that a total of 1,949 resiilents Ni-ill be ailiieii to the Cin•'s population if the tliree areas are amlexeii in theu entuetv.
HoNi-ever, it is utilil.ely tliat the full population prc~jections Ni-ill be realizeii upon amlexation since several property oNi-ners may
be offereii non-aimexation aureements. Sulce none of the propern• oNi-ners in the 3 areas have been offereii non-aimexation
agreements, it is quite possible tliat qualih•ulg properties may not be aiulexeii for up to 45 years.
State law requu-es tlie City to prepare a seivice plan that proviiies for fu11 municipal seivices ( iiefuleii to mean seivices proviiieii
bv tlie Cin• Ni-ithin its tu11-purpose bounilaries, incluilitt-, Ni-ater anii Ni-asteNi-ater service otlierNi-ise proviileii to sunilar areas ul the
Cin• but excluilul, uas anii electrical seivice ) to tlie aiulexeii areas. The Cin• mav proviile tlie services utilizing any of tlie
metliods bv Ni-hich it exteniis seivices to otlier areas of tlie Cin•. The cost to proviiie services to tlie areas, as Ni-ell as anv revenues
Uenerateii from tlie areas, Ni-ill occur inuneiliateh• Ni-itli reuard to some seivices anii ul phases over a tliree to five vear perioii in
reuard to other seivices but onl-,• as areas are Yitialh• aiulexeii. While the Cin• has prc~jecteii a total net aggregate cost of aiulexinu
all 9,089 acres (costs of services to the aiulexed areas niilus aililitional aii valorem taxes, sales taxes anii otlier revenues
Uenerateii froin tlie aiulexeii areas tlie fulancial unpact to tlie Cin• is not material sulce some of these properties mav be aiulexeii
over a 35 year perioii, anii possibly over a 45 year perioii. If tlie areas Ni-ere atulexeii Ni-itliiil >years, tlie cost Ni-oulii be
approxitnateh- $2,014,000. If the areas Ni-ere aiulezeii Ni-itliin 10 vears, the cost Ni-oulii be approxitnately $2,625,000.
The estimates above mal.e a nutnber of assutnptions regardulg expenilitures anii revenues over tlie next few years. The
overriilulg assutnption for tlie analysis is tliat tlie funilatnental iievelopment of the ilescribeii areas Ni-ill not chattge. Iti other
Ni-ords, the aiulexation cost estimate iloes not assume tliat any major iievelopment Ni-ill tal.e place ul tlie ilescribeii areas. Tlus
assutnption is beulg maiie for the cost estimate since aiiilitional iievelopments are merely a matter of speculation at tlus time.
The use of this assutnption, hoNi-ever, shoulii not be interpreteii to mean tliat tlie iiescribeii areas are not expecteii to iievelop over
tune.
20
TABLE 1- V_ALL?ATION, E_i"EbIPTIONS AND GENERAL OBLIC:ATIONDEBT
2010,11 Market Valuation Establishe3 b~, Denton Central Appraisal District $7,025,991,533
Less Exemptions-Reductions at 100° Market Value:
Resi3ence Homestea3 Eiemptions
$ 35,250,397
(_)eer 65 Exeinptions
166,562,941
Disable3 Persons Eiemptions
2,647,502
Disabled Veterans Exeinptions
17,330,691
A,riculhual Lan3 i Jse Pro3uctivity
292,G09,350
Historical Other Eiemptions
3,334,132
Freeport Exeinptions
134,326,466
Abatement Eiemptions
52,G51,273
Prorated Exeinpt Property
3,321,314
Pollution Eiemptions
32,472A 16
Homestead Cap Adjushneirt
5,316,098 795,873,580
201011 Ta3able Assessed Valuation (as of 7-17-10)
$ 6,230,117,958
Citv Fun3e3 Debt Pavable from A3 Valorem Taies ' i~
Ueneral Ubligation Bonds (as of2-1-11)
$116,915,000
Certificates of Obli;ation (as of 2-1-11)
113,115,000
Tax and Utlitv Svstem Bonds (as of 2-1-11)
58,820,000
The Certificates
32,100,000
The Bonds
10,845,000
Funded Debt Pavable from Ad Valorem Taxes $ 331J95,000
Less Self-Supportin, General Obli;ation Debti3,
Soli3 Waste SN,stem General Obli;ation Debt $ 29,722,400
Drainage Svstem (ieneral (_)bligation Debt 2,750,000
Utilitv SN,stem General Obli;ation Debt 173,350,000 205,322,400
Net Tai Supporte3 Debt Payable from A3 Valorem Taies $ 125,972,600
Interest an3 Sinlsn; Fun3 as of 1-31-11 (unau3ite3) $ 19,459,190
Ratio Total Fun3e3 Debt to Taiable Assesse3 Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.330„
Ratio Net Funded Debt to Taxable Assessed Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.020()
2011 Estimated Population - 115,651
Per Capita Taiable Assesse3 Valuation -$53,370
Per Capita Total Funded Debt -$2,869
Per Capita Net Fun3e3 Debt L039
(1) The nboce atntement of indebtedneaa doea not inelude $196,71_l5,l_II_I0 Utilitc Scatem Recenue Bonds na theae bonda nre pncnble aolelc from
the net revenue5 uf the i rtilitN- SN-Stem (the "SN-Stem" a5 defined in the urdinance5 authurizing Such bund5.
(2) Preliminai-y, Subj ect tu change.
(3) Aa m matter of poliec, the Cih procidea debt aerciee on ita genernl obligntion debt iaaued to fund improc ementa to ita Utilih Scatem, Solid
Wa5te SN-Stem and Drainage SN-Stem frum Surplu.5 revenue5 uf the5e SN-5tem5 (See "Table 7-('reneral Obligatiun Debt Service
Requirementa" nnd "Tnble 9 Computntion of Self-Supporting Debt"). Thia policc ia aul~ject to chnnge in the future.
The CitN-'S irtilitN- SN-5ten1 i5 cunlpn5ed uf the City'S entire esi5ting electnc, light and puNver Sy5ten1 and the esi5ting watenvurk5 and SeNver
SN-Stem. The City'S irtilitN- SN-Stein ('reneral Obligatiun Debt ha5 been i55ued tu finance impruveinent5 tu finance ur refinance irtility SN-Stem
improcementa nnd contrnctunl obligntiona nnd ia being pnid, or ia expected to be pnid, from Utilih Scatem recenuea. The Cih hna
$196,7115,111111 i rtilitN- SN-Stem Revenue BundS uut5tandin.upayable frum a pledge uf i rtiltv SyStem revenue5.
The Citc'a Solid Wnate Scatem (ienernl Ubligntion Debt hna been iaaued to tinnnee or retinnnee Solid Wnate Scatem improcementa nnd ia
being paid, ur i5 espected tu be paicl frum Sulid Wa5te SN-Stem revenue5. The City ha5 nu uut5tviding Sulid Wa5te SN-Stem Revenue Bunc1.5.
The Citc'a Drninnge Scatem (ienernl Ubliuntion Debt hna been iaaued to fin:uiee or retinnnee Drninnge Scatem improcementa nnd ia being
pnid or ia expeeted to be pnid, from Drninnge Scatem recenuea. The Cih hna no outatnnding Drninnge Scatem Recenue Bonda.
(4) Include5 a purtiun uf the Certificate5. Preliminai-y, Subject tu change.
(s) Includea n portion of the Bonds :uid Certiticntea. Preliminm-c, aubject to chnnge.
21
TaBLE Z- TaSaBLE ASSESSED VaLLLaTIUNS BF CaTEGURF
Tasable Appraiaed N`ahie for Fiaoal I"ear Ended September 30,
2011
2010
2009
0 0 of
°o of
°o of
('ataeorc
Amotutt
Total
Amotutt
ToLaI
Amotutt
Total
Real, Reaidential, Siuele Famile
$ 3,54>,009J4;
50.46°o
$ 3,47>, 374,(87
48.95°o
$3,397,880,407
48.( 3°o
Real,Reaidential,Multi-Famile
661,530,441
9.42°o
688,298,068
9.70°o
638,906,3 57
9.14°o
RaaLVaoantLotaTraota
149,930,858
2.1;°0
162,282,464
2?9oo
160,766,209
2.;0°0
RaaL Aoraaea(Land()tly)
3 52636,983
5.02°o
3 56,896,058
S.p;°„
330,913,400
4.74°o
Real,FannaudRauchhnpruN ementa
32,148,788
0.46°o
33,242,494
0.47°o
32,5?6,580
0.47°o
ReaLCunmiercialandhiduatrial
1,381,432,997
19.66°o
1,392,817,179
19.62°o
1,416,914,699
20.28°o
ReaLUil,Uaa,andUtherl\ dineralReaenea
116,459,175
1.66°o
68,616,710
0.97°o
51,531,540
0.74°o
Real and Taneibla PzisonaL iitilitiaa
66,756,673
0.95°„
79,577,104
1.12°o
84,395,222
1?1°o
Taneibla PzisonaL ('onmizroial andInduati7al
651,961,490
9?8°o
749,892,931
10.56°o
778,403,096
11.14°o
TanL,ible PeiaunaL Uther
16,634,472
0.24°o
17,779,752
0.25°o
20,656,852
0. 30°o
RealandSpecialPruperh,InN entui-y
,1,489,918
0.73°o
74,454,431
1.05°o
74,539,998
1.07°o
Tutal AppraiaedVahieBefureEsemptiuna
$ 7,025,991,538
100.00°o
$ 7,099,231,878
100.00°o
$ 6,987,434,360
100.00°o
Laaa: ToLalEaamptionaRaduotiona
(795,873,580)
(771,322,856)
(696,075,248)
Supplzuiznts
-
(1)
- (1
)
- (1
)
Taaabla AsaaaaadValtta
$6,230,117,958
$6,327,909,022
$6,291,359,112
Tasable Appraia
ed Value for
Fi
aoal I"aar Endad
Saptambzr 30,
2008
2007
a of
o of
Categoi-v
Anotutt
Total
Anotutt
Total
Raal, Raaidantial, Sinela Familc
$;,192,7R;,727
48.35o.,,
$2927,902,799
50.15°.0
Raal, Raaidantial,Multi-Familc
552635,146
8.37°o
454,710,640
7.79°„
Real,VaoantLuta.Traota
135,800,628
2.06°o
131,508,05;
2,25o„
Real, AoreaLe(Land(-)il\)
330,570,774
-5.01°o
277,588,810
4.7i°o
Real, FaiYn andRanch hnpruN ementa
51,987,396
0.79°o
29,732,528
0.51°o
RaaL ('onmizroial andhiduati7al
1,326,705,55;
20.09°„
1,085,722,43 5
18.600o
RaaL ()iL craa, and Othzrl\ linzral Raaer\ aa
46,500,010
0.70°o
57,823,640
o.vv°„
Real and TanLible PeiaunaL Utilitiea
68,372,262
1.04°o
62,085,822
1.06°o
TanL,iblePeiaunaLCunnnercialandInduatrial
785,231,437
11.89°o
73 7,260,202
12.63°o
TanL,iblePeiaunaLUther
19,919,54;
0.;0°o
23,654,377
0.41°o
Real Propzrh, I1tN`antorc
92,889,789
1.41°0
50,263,276
0.860o
Total AppraiaadValttaBaforaEaamptiona
$6,60;,;96,265
100.00°0
$5,R;R,252,5R2
100.00°0
Leaa: TutalEsemptiuna.Reduotiuna
(671,868,100)
(593,625,675)
Supplamanta
157,971,610
195,927,794
TaYat1jG AJJGJJG(1 `Ta1llG
$6,089,499,775
$ 5,441,228,909
(1) Valuations shoNi-n are certifieii taxable assesseii values reporteii by tlie Denton Central Appraisal District to the State
Coinptroller of Public Accounts. Certifieii values are subject to change t1u-oughout tlie vear as contesteii values are resolveii anii
tlie Appraisal District upilates records. For the Fiscal Year eniieii 2011, tlie values Ni-ere reporteii on Ju1y 17, 2010 baseii on
uiYormation as of Januan• 1, 2010.
(2) Due to a chulue ul Appraisal District reporting, supplements are ulcluiieii ul categon• ainounts.
22
TABLE 3- VALLATION AND GENERAL OBLIC:ATIONDEBT HISTORP
Ner
x1rio Ner
Fiscal
Taxable
Tax Debt
Tax Debt
Fundecl
Yeau
Taxable
Assessecl
Outstlnding
to Taxable
Debt
Endecl
Estimatecl
Assessed
Vailuation
at End
Assessed
Per
9/30
Population
Valuation ' 3,
Per Capita
of Year"
Valuation
Capita
2007
106,843'i'
$>,441,228,909
$50,927
$ 119,266,729
2.19%
$ 1,116
2008
108,980,i
6,089,499,77>
55,877
129,439,594
2.13%
1,188
2009
111,160'i'
6,291,359,112
56,597
122,835,000
1.95%
1,105
2010
113,383'''
6,327,909,022
55,810
119,862,600
1.89%
1,057
2011
115,65 V I ,
6,230,117,9>8 4,
53,870
116,165,650 °
1.86°io
1,004
(1) Sotuce: Citv ( )fficials.
(2) Sotuce: TTS Census.
(3) Valuations shoNi-n are certifieii taxable assesseii values reporteii b,,• tlie Denton Central Appraisal District to tlie State
Coinptroller of Public Accounts. Certifieii values are subject to change t1u-oughout the vear as contesteii values are resolveii
anii tlie Appraisal District upilates records.
(4) Source: Denton Central Appraisal District as of Ju1y 17, 2010.
( > ) Excludes self-supported general obligation debt.
(6) Frojected, includes a portion of the Bonds and a portion of the Certi~icates. Freliminau-y, subject to chlnge.
TABLE 4 - TA_i" RATE, LEN PAND COLLEC'TION HISTORP
F1sC11
Yeau
Disrriburion
Endecl
Tax
General
Interest and
% Current
% Total
9/30
Rate
Fund
Sinl:ing Fund
Tax Levv
Collections
Collections
2007
$ 0.62652
$ 0.44765
$ 0.17887
$ 34,273,862
9798°io
99.81°io
2008
0.66652
0.44765
0.21887
40,816,256
98.79%
99.51%
2009
0.66652
0.44765
0.21887
43,086,123
98.47%
99.40%
2010
0.66652
0.44765
0.21887
42,898,414
9895%
9895%
2011
0.68975
0.47088
0.21887
42,972,238
8552%
85.52%
(1) Tax levv for the 2011 veau is based on the Certified Value. Frior veaus represent acljusted values that include supplements.
(2) Collections for paut veau on1v, through T1nuau-y 31, 2011.
TABLE 5 - TEN LARGEST TA_i"PAPERS
Naune of Taxpayer
Colunibia MeiLical Center of Denton
Paccar Iac.
Inland WesternDenton Crossing Ltd PS
Cypress Denton StationLTD
UTE SouthNN-est Inc. DBA Verizon
UEL Tunberliiil.s LLCD
Devon Ener,~• Proiiuction Co. LP
Range Texas Production LLC
Denton Education Housing Corp.
SCI Gatewav at Denton Funii 25 LLC
Source: Denton Central Appraisal District.
Nahue of Froperty
HospitaUProfessional Buililitg
Diesel Tiucl. Manufacturulg
Real Estate Development
Residential Multifvnih
Telephone T Ttilitv
Resiiiential Multifanuh•
Gas LTtilitv
Gas T Ttilitv
Residentiail Multiflmi h
C onunercial Lots/Real, Iniiustrial
2010/11
°/u ot ToYal
Talable
Talable
Assessed
Assessed
Vailuation
Vailuation
$79 >OOJ89
1.28%
46,352,556
0J4%
45,253,799
0.73%
36,113,213
0 58%
33,371,000
0.54%
26,450,000
0.42°io
25,356,550
0.41%
22,097,378
035%
21,312,452
034%
21,246,903
034%
$3>7,U>4,64U
5J3%
23
CiENEPUL OBLIGATION DEBT LIDIITATION NO -zllzlal ObLL-aYlOll dzbt Ill1llYaY1O111S llIlpOSZd Oll YZlz Lllti' UIldzl GUllzllt SYLttz
law or the City's Home Rule Chauter (see "The Obligations - Tax Rate Limitation° for a description of the limitations on ad
valorem tax rates.
TABLE 6- ESTInIATED ON`ERLAPPING TAS DEBT
Expenilitures of tlie various taxitt-, entities Ni-ithii1 tlie territoiti' of tlie City are paiii out of aii valorem taxes levieii by such entities
on properties Ni-ithin the City. Such entities are uliiepeniient of tlie City anii may incur borrowul's to Yinance tlieir expenilitures.
This statement of ilirect anii estunateii overlapping aii valorem tax boniis ("Tax Debt" ) Ni-as iievelopeii from itiYormation
containeii ul "Texas Municipal Reports° publisheii by the Municipal Aiivison• Council of Texas. Except for tlie ainounts relatitt-,
to tlie Cin•, the Cin• has not uliiepeniiently verifieii tlie accuracy or coinpleteness of such uiYonnation, anii no person shoulii rely
upon such uiYormation as beitt-, accurate or complete. Futthermore, certaul entities listeii may have issueii aiiilitional TaxDebt
sulce tlie ilate hereof, anii such entities may have programs requu-ulg tlie issuance of substantial ainounts of aiiilitional TaxDebt,
tlie ainount of Ni-luch caiulot be iletenliiileii. The followulg table retlects the estinateii sliLue of overlappulg Tax Debt of the Cin•.
21_111_I ll
Cih'a
Authorized
Tasable
21111111
Tutal
EStimated
Overlapping
Butirni55ued
Aaaeaaed
Tnx
Funded
°~o
Funded Debt
Debt Aa Uf
Tasing JuriSdictiun
N'alue
Rate
Debt
applicable
a5 uf 2-1-11
2-1-11
Citv ofDenton
$6,231_1,117,958
$1_1.6897S
$12J,972,61_IU
11_II_I.1_II_I0~u
$12J,972,61_II_I
$ 3,994,1_II_II_I
Dentun Independent Schuul DiStrict
8,611L855,186
1.53111111
610,963,527
64.37°0
393,277,223
116,749,713
Denton Counh
~2,1_146,669,ibi
1_1.27391_I
496,91_II_I,1_II_I0
11.86°~u
158,932,341_I
331_1,713,873
argy1e Independent Schuul DiStrict
963,950,674
1.44I1111
55,188,117
7.911'?0
4,3~9,R61
-
Aubrec Independent School Diatrict
JI_12,761_1,729
1.541_II_II_I
53,442,142
1_I.1_13°~u
16,1_133
-
Knun hidependent Schuul DiStrict
2,141,115,382
1.48I11111
47,5511,3113
2.690o
1,279,1113
-
Pilut Puint Independent Schuul DiStrict
447,334,716
137111111
19,735,324
11.116"0
11,941
-
Ponder Independent School DiStrict
899,298,21_II_I
132491_I
31_I,5l_l5,l_II_II_I
2.1S°~u
655,858
-
Sanger Independent Schuul DiStrict
655,2711,399
1.36111111
28,442,339
1.117°0
3114,333
-
Totnl Direct nnd Uverlnpping Funded Debt
$S84,8U9,191
Ratiu uf Direct and Overlapping Fiuided Debt tu Tasable a55e55ed N"alikltiun .
9.390o
PerCapitaOverlappingFundedDeUt
$ 5,157.82
(1) Incluiies a portion of tlie Boniis anii a portion of tlie Certificates, less self-supporting iiebt. Preluninan•, subject to chulge.
(2) Retlects remauiitt-, authorization after tlie issuance of the Boniis.
24
TABLE 7- GENERAL OBLIGATION DEBT SERVICE REQLIIRENIENTS
N
Fiscal
Year
Ended
Outstanding Debt"'
The Bonds 12,
The Certificates 13'
930
Principal
Interest
Principal
Interest
Principal
Interest
2011
$ 17,600,000
$ 13,527,832
$ -
$ -
$ -
$ -
2012
20,060,000
11,535,313
4,055,000
473,463
1,525,000
2,056,077
2013
19,485,000
10,769,204
550,000
233,685
2,195,000
1,400,181
2014
18,770,000
9,987,429
570,000
216,885
2,285,000
1,293,781
2015
19,380,000
9,190,088
575,000
199,710
2,400,000
1,182,513
2016
18,120,000
8,372,573
600,000
182,085
2,515,000
1,065,781
2017
18,205,000
7,542,078
615,000
163,860
1,090,000
980,163
2018
18,160,000
6,676,252
600,000
144,885
1,140,000
927,200
2019
17,885,000
5,804,204
615,000
125,141
1,190,000
871,863
2020
17,915,000
4,947,716
640,000
103,468
1,255,000
813,794
2021
18,000,000
4,095,585
670,000
78,388
1,320,000
752,638
2022
17,890,000
3,264,409
110,000
62,650
1,215,000
692,431
2023
13,225,000
2,580,907
115,000
57,869
1,275,000
633,294
2024
13,340,000
2,013,803
120,000
52,725
1,335,000
571,306
2025
12,925,000
1,457,236
125,000
47,213
1,400,000
506,350
2026
7,170,000
1,028,296
130,000
41,313
1,470,000
438,188
2027
6,720,000
725,736
135,000
35,019
1,540,000
366,700
2028
5,370,000
468,453
145,000
28,188
1,615,000
291,769
2029
4,205,000
269,974
150,000
20,813
1,695,000
213,156
2030
4,425,000
91,533
160,000
12,863
1,775,000
130,744
2031
-
-
165,000
4,331
1,865,000
44,294
$288,850,000
$104,348,621
$ 10,845,000
$2,284,551
$32,100,000
$ 15,232,221
Less: Self-
Less: Self-
Less: Self-
Total
Supporting
Supporting
Supporting
Total
°oof
Outstanding
Solid Waste
Drainage
IItilit},
Debt Service
Principal
Debt
Debt 141
Debt
Debt 151
Requirements
Retired
$ 31,127,832
$ 3,645,631
$ 556,244
$ 11,925,189
$ 15,000,769
39,704,853
4,721,625
541,225
19,520,215
14,921,788
34,633,070
4,417,500
464,419
15,800,385
13,950,766
33,123,095
3,885,832
405,388
15,732,585
13,099,291
32,927,311
3,786,591
386,925
15,723,773
13,030,022
32.99°a
30,855,439
2,692,096
363,438
15,290,735
12,509,171
28,596,101
1,633,359
237,000
15,118,854
11,606,888
27,648,337
1,625,690
168,506
15,021,323
10, 832,818
26,491,208
1,610,046
-
14,961,691
9,919,470
25,674,978
1,595,996
-
14,939,318
9,139,664
63.29°a
b
~
24,916,610
1,273,617
-
14,929,081
8,713,912
~
23,234,490
1,171,272
-
14,403,669
7,659,549
y
~
17,887,069
949,657
-
10,611,000
6,326,412
~
iy
17,432,834
950,998
-
10,700,606
5,781,229
C)
16,460,799
887,238
-
10,781,619
4,791,943
88.33°a
~
10,277,796
824,859
-
5,341,119
4,111,819
y
9,522,454
680,766
-
5,378,769
3,462,920
O
7,918,409
581,141
-
5,421,669
1,915,599
6,553,943
504,472
-
5,471,822
577,649
6,595,139
503,522
-
5,513,569
578,048
99.39°a
2,078,625
276,413
-
1,597,050
205,163
100.00°a
$453,660,392
$ 38,218,319
$3,123,144
$244,184,038
$ 168,134,891
(1) "Outstanding Debt" does not uiclude lease/purchase obligations, includes self-supporting debt.
(2) Average life of the issue -5.200 `ears. Interest on the Bonds has been calculated at the rate of 3.90% for purposes of illustration.
(3) Average life of the issue - 9.990 `ears. Interest on the Certificates has been calculated at the rate of 4.75% for purposes of ilhistration. Prelnninarv, subject to change.
(4) Includes a portion of the Certificates. Preluninar}, subject to change.
(5) Inchides a portion of the Bonds and a portion of the Certiticates. Preliminarv, subject to change.
TABLE 8 - INTEREST AND SINKING Ft?ND BL?DGET PRO.TEC'TION
Tax Supported Debt Service Requirements. Fiscal Year Endim" 9 302011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 31.283.177
Interest and Sinkino, Fund Balanee as of 9 311 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 33~4.~ 3~
Interest and Sinkino, Fund Tal LevN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.771938
Budo,eted Transfers 16.280336
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,(1(1(1 33A57.809
Estimated Balanee. 9 30 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 1174.632
TABLE ) - CObIPL?T ATION OF SELF-SL?PPORTING DEBT
Net Revenue from Solid Watite Svtitem, Fitical Year Ended 9-3(1-1(1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,494,6(1(1
Letiti: Solid Watite SN-stem Revenue Bond Requirementti, 2011 Fitical Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -
Balance Available tbr ( )ther Punpotieti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,494,600
Solid Waste SN stem General (_)bligation Bond Requirements. 2011 Fiseal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.645.631
Balance S 848.969
Net Revenue from Draina;e Svtitem, Fitical Year Ended 9-3(1-1(1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2318,~33
Letiti: Draina;e SN-stem Revenue Bond Requirementti, 2011 Fitical Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -
Balance AvailabletbrOtherPunpotieti 2>318,533
Draina;e SN-stem (reneral ( )bli;ation Bond Requirementti, 2011 Fitical Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 56,244
Balance $ L761289
Net Revenue fromLTtilih SN-stem (Electric SN-stem and Waterworks and Sewer SNstem). Fiscal Year Ended 9-311-10..Sd7.241801
Letiti: iTtilihy Svtitem Revenue Bond Requirementti, 2011 Fitical Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,620,637
Balance AvailabletbrOtherPunpotieti ................................................................$24,622,164
iTtilihy Svtitein Ueneral ( )bli;ation Bond Requirementti, 2011 Fitical Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,925,189
Balallce $1?.696.975
TABLE IU - AL?THORIZED BL?T UNISSL?ED GENERAL OBLIC:ATION BONDS
Date
Amount
Purno,e
Authorizei
Authorizei
Transportation
2/5/2005
$ 27J00,000
Parks
2/5/2005
10J00,000
Buildings
2/5/2005
4,000,000
$ 42,400,000
AinoUnY
AinoUnY
Heretofore
Being
TTnissued
Issuei
Issued
Balance
$23J10,100
$ 1,190,000
$2J99,900
8,470,900
1,035,000
1,194,100
4,000,000
-
-
$ 36,181,000
$2,225,000
$ 3,994,000
ANTICIPATED ISSLA11TCE OF ADDITIONAL CiENERAL OBLIGATION DEBT AS SIlONi'll lll 7'ablz 10 abOVZ, LtYe1 YZlz 1SSUaL1GZ Ot YZlz
Bonils, the Cilti' Ni-ill have approxunately $3,994,000 of voteii but unissueii iiebt remaining to be issueii. Current plans call for tlie
Cit-,' to issue approxunately $46 million of -eneral cibli-ation iiebt, incluilitt-, tlie voteii but unissueii ilebt, in the seconii quatter
of 2012. This ainount also incluiies approxunately $38 million ul self-supporting certificates of cibligation relateii to the Cin•'s
Soliii Waste operation anii LTtilin• System.
26
TABLE 11 - OTHER OBLIC:ATIONS
The Citv has entered into capitail lease agreements. The folloNN-ing is a schedule of fiihue minimum lease payments under these
capital leases and the present value of the net minimum lease payments as of September 30, 2010:
Year
Aiulual
Enduig
Lease
30 Sep
Paament
2011
$1,153,252
2012
1,104,907
2013
7>8,964
2014
7>8,96,
201>
>8,497
2016-2018
120,958
Totail Minimum Lease Paament $ i,9»,>41
Less: Amount Representing Interest 359,412
Present Value of Miiiiinum Future Lease Pavinents $ 3>96,129
PENSioN Ftrivn The Cin• proviiles pension benefits for all of its full-tine einployees (except fu-efi-hters ) tlu-ou-h the Texas
Municipal Retirement System ("TMRS" a State-Nviiie ailniiiistereii pension plan. Employees may retire at ages 60 anii above
Ni-itli five or inore vears of seivice or Ni-ith twentv vears of seivice re-ardless of a-e, anii a meinber is vesteii after five vears. The
Cin• mal.es aiumal contributions to tlie plan equal to tlie ainounts acciueii for pension expense.
In December 2007, tlie TMRS Board of Trustees approveii chaitges in tlie actuarial assutnptions anii funiling methoiiology for all
TMRS plans. These chattges resulteii ul higher requu-eii contributions anii loNi-er funiieii ratios, anii tlie changes also causeii the
Cin•'s actuarial acciueii liabilitv to ulcrease significantly from 2006 to 2007. As of December 31, 2009, tlie Cin•'s utiYuniieii
actuarial acciueii liabilin• Ni-as $83,686,078 anii tlie funiieii ratio Ni-as 62.1°io. Be-ituiin- in 2009, the Cin• of Denton electeii to
°phase ul" hi-her contributions to TMRS over a perioii of eight vears in order to recogiiize the change to a prc~jecteii unit creilit
cost metlioii in tlie 2007 actuatial valuation. Bv iioul, so, tlie Citv is contributul, less than the actuarialh' iietermineii Atulual
Requueii Contribution (ARC anii tlierefore has acciueii a total net pension cibligation of $4,125,332 as of 9-30-10. In
subsequent years, tlus net pension cibligation Ni-ill contulue to increase until the tu11 actuarialh• iietenliiileii ARC is paiii by the
Cin•. The phase ul perioii Ni-ill last eight years from fiscal vear 2009 to fiscal year 2016.
For more iietaileii uiYormation conceniing tlie TMRS plan as Ni-ell as the City's lustorical unfuniieii actuarial acciueii liability for
calenilar vears 2007-2009, see Appenilix B, "Excerpts from the Cin•'s Comprehensive Amlual FuiLulcial Report" - Note V.A.,
page 52 anii Dhibit XII, page 63. -
DREDIEN'S RELIEF AND RETIREDIENT FIrND 7'llz L1lC plOV1dzS pz11SlOll bz11zt1tS t01 tll'zt1gIlYe1S Ylll'OUgIl Yllz DzllYDll Fll'z111z1TS
Relief anii Retuement Funii (tlie "Firemen's Funii" Firefighters may retire at a-es 50 Ni-ith twentv or more vears of service, anii
a meinber is vesteii after ten vears of creiliteii service. As of Deceinber 31, 2009, there Ni-ere (i) 63 retirees anii beneficiaries
receivul- benefits anii terniiilateii einployees entitleii to benefits but not yet receivulg them, (ii) 92 current einployees Ni-ho Ni-ere
vesteii anii ( iu ) 71 employees Ni-ho Ni-ere not vesteii. The Cin• maiie contributions equal to 14% of inember salaries for FY 2008-
09 anii 15.41% for FY 2009-10. For 2011, tlie Cin• has ulcreaseii its contribution rate to 17.17%. As of December 31, 2009 (the
most recent bieiuual actuarial valuation), the plan's utiYunileii actuarial acciueii liabilin• Ni-as $19,617 >47 anii the funiieii ratio
Ni-as 70.2°io. For inore iietaileii itiYormation conceriin- tlie Firemen's Funii as Ni-ell as tlie Cin•'s historical utiYunileii actuarial
accrueii liabilin• for calenilar vears 2005-2009, see Appenilix B, "Excerpts from the Cin•'s Coinprehensive Aiumal Fulancial
Report" - Note V.A., page 52 anii ENlubit XII, pa-e 63.
OTHER POST ENIPLOFNIENT BENEFITS (IASF3 T0101S0d Y110 SY1Y0Tri0riY Of G0ri0111 ACCOLlllhTlg SY'1T1daTdS NO. 45 ("GAS13 45"),
Accounting by Employers for Other Post-Employment Bene~its )PEB" in June 2004. The City implementecl ('rASB 45 for
the ~iscal yeau beginning October 1, 2007. ('rASB 45 sets forth stlndards for the measurement, recognition, and display of post-
employment bene~its, other than pensions, such as health and life insurance for current and fiihire retuees. Those subject to this
pronotmcement aue requued to: (i) measure the cost of benefits, and recognize other post-employment benefits expense, on the
accnial basis of accounting over the worl;ing lifetime of the employees; (ii) provide information about the actuarial liabilities for
promised bene~its associated NN-ith past seivices and NN-hether, or to what extent, the fiihire costs of those benefits have been
fimded; and provide information usefiil in assessing potentiail demands on the employer's fiihire cash flows. The employer's
contributions to OPEB costs that aue less thln an actuaui111y determined annuail requued contribution NN-ill result in a net OPEB
cost, NN-hich under C'rASB 45 NN-ilL be requued to be recorded as a liabilit-v in the emplover` s financial statements.
27
Achiauial valuations have been completecl by an outside consulting firm regauding the City's OPEB liability. The reports provide
the City NN-ith the City's OPEB requuements assuining the City's p11n offerings, designs, and cost shaue approach remain
constant.
Uctober 1.2009
7u1v 1.2OO7
Annual Required Contribution
$ 1314,901
$
879,280
Contribution Made
$ 370,759
$
69,696
Net (_)PEB (_)bli,,ation (_)bli,,ation - End of Year
~ 1520343
~
L606.533
LTnfunded Actuarial Accrued Liabilih
S 1(1944.544
S
79263)2
The City's (IASB 45 liability NN-as discussecl at length NN-ith the Audit/Finance Committee and the City Cotmcil. At the
conclusion of these discussions, the Citv Council concurred NN-ith the staff recommendation to fiind the Citv's OPEB costs on a
pay-as-you-go basis. The pay-as-you-go approach has been recommendecl since 1) this provides the loNN-est cost approach, 2) the
ARC is relatively smaill in compauison to the City's overall budget, and i) the pay-as-you-go cost is not forecasted to exceed the
ARC in the foreseeable fiihire. See Appendix B, "Excerpts from the City's Comprehensive Annuail Financial Report" - Note
V.B., pages 58 and 59.
THE RE1 L4IV"PER oF THIb' P.4c 3E LEFT BLd IV"TE\'TR LV:~LL P
28
FINANCIAL INFORMATION
TABLE IZ - CFLANGESINNETASSETS
RcN cuuca:
PruL,raui ReN emie:
CharL,ea fur Sen ioea
Uperating Ciranta and Cuntributiuna
Capital Ciranta and Cuntributiuna
Ueneral ReN emie:
Pruperh Tas
Salea Tas
( 4hzr TaaaaFaaa
Miaoallanaoua
Total RaN amta
F.anandihiras:
c ranzral c roN znunant
Riblio Safah
Publio Worka
Parka and Raoraation
Intzraat on Lone-Tznn Dabt
T(1t81 E3Pd114d4
Inoraaaa in Nat Asaata bafora Tranafzra
TTa11StZTS
Inoraaaa (Daoraaaa) in Nat Aaaata
Nat Aaaata at Baeinnine of I'aar
Net Aaaeta at End uf I-ear
Fia
oal I"aar Endad Saptambzr
30,
2010
2009
2008
2007
2006
$ 14J81,002
$ 14,924,77;
$ 13,917,248
$ 13,876,695
$ 13,965,099
3,407,085
?,181,136
3,306,325
1,991,224
3,712,817
15,206,424
3,641,296
7,308,398
5,399,220
5,536,786
43,144,645
4;,187,4;;
41,499,791
;4,7>6,>>6
;0,000,847
20,484,954
20,466,772
21,440,8;9
20,65;,9;2
20,34;,413
19,131,162
17,270,857
17,909,903
16,784,901
17,914,704
6,;75,678
5,741,097
7,501,;10
6,8;1,875
5,859,560
$122,5;0,950
$107,51;,;64
$112,88;,814
$101,294,20;
$ 97,;;;,226
$ 29,569,5;5
$ 27,482,1;1
$ 26,408,949
$ 22,145,804
$ 22,165,661
47,998,906
45,;68,78;
4;,426,526
42,161,674
;6,626,6;5
15,767,926
15,816,065
15,448,473
14,008,867
12,485,281
12,854,336
12,755,037
12927,020
11,564,247
10,497,241
5,121,;29
5,7;;,268
5,372,868
4,658,128
4,;;;,428
$111,;12,0;2
$107,155,284
$10;,58;,8;6
$ 94,5;8,720
$ 86,108,246
$ 11,218,918
$ 358,080
$ 9299,978
$ 6,755,483
$ 11,224,980
482,801
846,119
323,038
(13,475,571)
895,106
$ 11,701,719
$ 1,204,199
$ 9,62;,016
$ (6,720,088)
$ 12,120,086
142,;09,765
141,105 566
1;1,482,550
1;8,2026;8
126,082,5 52
$154,011,484
$14?,309J(5
$141,105,566
$1;1,48?,5>0
$138,202,638
(1) LTill-estricteii net assets, tlie part of tlie net assets that may be useii to meet the City's ongoitt-, cibligations, Ni-ere $46,480 >69
as of Septeinber 30, 2010 (see Appenilix- B, "Excerpts froin tlie Coinprehensive FuiLulcial Report"
29
TABLE IZA - GENERAL Ft?ND REN ENL?ES AND E_i"PENDITL?RE HISTORI"
Fiacnl Yenr Ended September 31_I,
evelllle8:
211111
211119
21111R
211117
211116
TnxeS
$5l_I,1_149,759
$49,769,861
$49,772,244
$45,842,915
$41,906,626
Licenaea nnd Peimita
1,198,552
1,265,733
1,1_181_Li81_I
1,097,323
1,383,169
Frnnchiae Fee
17,457,994
15,669,981
16,197,1_142
15,197,943
16,499,994
FineSnndForfeiture5
4,378,064
4,691,421_I
4,969,11_12
4,468,692
4,639,922
FeeS for Sercice
J,989,349
J,888,391_I
i,C,i7,C,73
4,439,571_I
3,661,522
IntereatRecenue
237,559
744,122
1,1_184,097
1,441,299
761,159
Intergocernmentnl
771_L164
718,453
779,158
381_L887
~4L968
Mi5cellnneou5
317,460
229,599
369,1_l52
i29,7i3
447,21_II_I
TotnlRecenue5
$81_1,3y8,yU1
$ 78,977,559
$79,91_18,y48
$ 73,398,382
$69,841,561_I
F.xuenditures:
('reneral ('ruvei7nnent
$22,1137,729
$21,31R,437
$1R,925,2711
$16,142,R3S
$16,3114,1127
Public Snfeh
43,156,478
41,999,464
39,619,71_17
36,776,654
35,1_173,613
Public Wurk5
6,516,276
6,73R,327
6,553,5711
5,561,166
4,9511,734
Pnrltiv nnd Recrention
9,837,1_173
11_I,1_116,114
11_1,231_1,81_II_I
7,312,1_178
6,817,1_178
Cnpitnl Uutlnv
691,881_I
$09,1_II_14
854,273
2,409,1_I01
281,258
Debt Sercice:
PrincipalRetireinent
1R5,154
223,1116
2112,11113
41,3111
-
TutalESpendihue5
$92,424,5911
$R1,1114,452
$76,395,623
$6R,243,1135
$63,426,7111
ESCe55 (Deficiencv) ufRevenue5 OverESpendihue5
$ (2,1125,699)
$ (2,126,993)
$ 3,523,325
$ 5,155,347
$ 6,414,8511
Other Financin2 Suiuce5lirye5l:
Capital L,ea5e5
$ -
$ 44,86S
$ 69,997
$ 1,1118,131
$ -
Trnnafera In
1,1_118,218
112,1_122
-
5,278,998
~79,878
SnleofCnpitnl Aaaeta
161_1,49i
-
193,37S
-
-
Trnn5fer5(Uut)
(421,21_II_I)
(612,J32)
(968,914)
(4,1_138,781)
(1,867,799)
Totnl Uther Fin:uicing Sourcea (Uaea)
$ 757,513
$ (455,645)
$ (71_l5,642)
$ 2,348,348
$ (1,287,921)
Net Chnngea in Fund Bnlnncea
$ (1,268,176)
$(2,i82,i38)
$ 2,817,683
$ 7,51_13,695
$ 5,126,929
FundBnlnnceantBeginning ofYenr
22,794,955
25,377,493
22,559,811_I
15,1_156,115
9,929,186
FundBnlnnceantEndofl"enr
$21,526,779
$22,794,955
$25,377,493
$22,559,811_I
$15,1_156,115
30
TABLE 13 - ML?NIC'IPAL SALES TA_i" HISTORP
The City has adoptecl the Mmiicipail Sailes and TTse Tax Act, V.T.C.A., Tax Code, Chapter 321, NN-hich grants the City the poNN-er to
impose and levy a 1% Local Sailes and TTse Taxwithin the City: the proceecls are creclitecl to the Generail Ftmd and aue not pleclgecl to
the payment of the Bonds. Collections and enforcements are effectecl tlu-ough the offices of the Comptroller of Riblic Accotmts,
State of Texas, NN-ho remits the proceeds of the tax, after decluction of a 2% seivice fee, to the City monthly. In T1nuau-y 1994, the
voters of the City approvecl the imposition of an additionail one-hailf of one percent of 1%) for propern tax reduction. In
September 2003, the voters of the City approvecl the imposition of an additional one-hailf of one percent of 1%) for the Denton
Cotmty Transportation Authority. The implementation of this tax began T1nuau-y 2004, and is aillocatecl du-ect1y to the Denton Cotmty
Transportation Authority.
Fiscal
Year
° (1 of
Equivalent of
Ended
Total
Ad Valorem
Ad Valorem
Per
9 30
Collected ' i
Tal Levv
Tax Rate
Capita
2007
$21,162,424
61.750 0
$03889
$ 198
2008
21,984,936
53.860
03610
202
2009
20,950,786
48.630()
03330
188
2010
21,O15,173
48.99°0
03321
18~
2011
7,590,284
17.66°0
0.1218
66
(1) Source: Cin• of Dentcxl Aimual Pro,rain of Seivices. Collections for 2007-2010 have been restateii to excluile payments for
economic ilevelopment ulcentives Ni-hich Ni-ere previously netteii from sales tax collections.
(2) C ollections tlirou~,li Januaiti• 31, 2011.
The sales tax breal.ilown for tlie Cin• is as follows:
Property Tax Relief
0 >0¢
Dentcxl Counh• Transportation Autliorih•
0>0¢
Citv Sales ~ TTse Tax
1.00¢
State Sales K TTse Tal
6.25e
Total
8.2>e
DNANCIAL PULICIES
Basis of Accountukg, The accountukg policies of tlie Cin• coiiYorm to generally accepteii accountukg prulciples of tlie
(ioveriunental Accountulg Stanilards Board anii program stanilards ailopteii by tlie (ioveriunent Fulance Ufficers Association of tlie
LTillteii States anii Canaila. The (iFUA has aNi-ardeii a Certiticate of Acluevement for Excellence ul FuiLulcial Reportukg totlie Cin• of
Denton for each of tlie fiscal vears enileii September 30, 1983 tlu-ougli September 30, 2009. The Cin•'s current report Ni-ill be
subnutteii to UFUA to ileternmle its eli-ibilin• for anotlier Certiticate.
The Cin• has also receiveii tlie UFUA's aNi-ard for Distukguisheii Builget Presentation each year sulce 1988.
The measurement focuses for tlie Enterprise Funils, Internal Seivice Funiis aaii Nonexpenilable Trust Funiis are income
ileterniiilation anii cost of seivice, respectively. Accordulgly, tlie accrual basis, whereby revenues anii ex-penses are iiientitieii ul tlie
accountulg perioii ul Ni-luch tliey are earneii anii ulcurreii anii net ulcome, is utilizeii for tliese futiils. The inoilitieii accrual basis,
Ni~herebv revenues are reco,nizeii Ni-hen tliev become botli measurable anii available for use iiurulg tlie year anii ex-penilitures are
reco-nizeii Ni-hen tlie relateii futiii liabilitv is ulcurreil, is useii for all otlier tunils.
Buil-etatti' Proceiiures As prescribeii by City Chatter tlie City Manager, anii Ni-itliiil tlie tune perioii requireii by law, submits to
tlie Cin• Council a proposeii buiiget for tlie fiscal year begunnkg, tlie followukg Uctciber 1. The buiiget ulcluiles proposeii
expenilitures anii revenues requu-eii to tunii tlie expenilitures. Followukg Council consiilerations, ameniltilents anii retinements, a
public hearukg, is ordereii anii coniiucteii for tlie purpose of cibtaining taxpayer conunents. The builget is fmally approveii anii
ailopteii by passage of an orduiLulce by tlie Cin• Council prior to tlie beguning of tlie fiscal year. The builget is ailopteii on a basis
consistent Ni-itli -enerally accepteii accountukg prulciples. The Cin• strives to maintain an uiu-eseiveii general iiuiii balaiice of 15-20%
of buil-eteii expenilitures.
31
INVESTMENTS
The Cit-v invests its investable fiinds in inveshnents authorizecl by Texas law in accorcllnce NN-ith inveshnent policies approvecl by the
Cin• Council. Botli Tezas law anii tlie Cin•'s ulvestrilent policies are subject to cliLut-e.
LECaL INA-ESTniEnrrs TTnder Texas law, the Cit-v is authorized to invest in (1) obligations, including letter of creclit, of the
LTniteii States or its a-encies anii ulstrumentalities, (2) ilirect cibli-ations of tlie State of Texas or its a-encies anii
instrlimentailities; (i) collateralizecl mortgage obligations duectly issued by a federail agency or inshumentality of the TTnited
States, the uniierlvul, securin• for Ni-hich is -uaranteeii bv an a,encv or ulstrlunentalin• of the LTniteii States: (4) otlier
obligations, the principal and interest of NNhich is guauanteecl or insured bv or bacl.ed by the fiill faith and creclit of, the State of
Texas or the LTniteii States or tlieir respective agencies anii instrumentalities: cibli-ations of states, a-encies, counties, cities,
and other political subdivisions of any state ratecl as to inveshnent quaility by a nation111y recognized inveshnent rating fum not
less than A or its equivalent (6) bonds issueil. assumeii or guaranteeii bv the State of Israel: (7) certiticates of iieposit anii share
certi~icates meeting the requu-ements of the Texas Public Ftmds Investment Act (Chapter 2256, Texas Government Code, as
ameniieii (the "PFIA" that are issueii bv or throu,li an institution tliat eitlier has its main office or a branch office ul Texas, anii
aue guauanteed or insured by the Federail Deposit Insurance Corporation or the National Credit TTnion Shaue Insurance Fund, or
are secureii as to prulcipal bv cibli,ations ilescribeii in clauses (1) tlu-ou-h (6) or ul any otlier matuler anii atnount proviileii by
law for City deposits, or aue invested by the City tlu-ough a depositoi-y instihition that has its main office or a branch office in the
State of Texas anii otherNi-ise meet the requirements of tlie PFIA, (8) tu11y collateralizeii repurchase agreements tliat have a
defined termination date, aue fiilly sectued by obligations describecl in clause (1), and aue placed tlu-ough a primau-y government
securities iiealer or a Yitiancial ulstitution doul- business ul the State of Texas, (9) certaul baiil.ers' acceptances Ni-ith tlie
remaining term of 270 days or less, if the short-term obligations of the accepting b1nk or its pauent are ratecl at least A-1 or P-1 or
tlie equivalent by at least one nationalh• reco-nizeii creilit ratul- agency, (10 ) conunercial paper Ni-itli a stateii maturin• of 270
days or less that is rated at least A-1 or P-1 or the equivalent by either (a) tNN-o nation111y recognized credit rating agencies or ( b)
one nationalh• reco-nizeii creilit ratulg agency if the paper is fu11v secureii bv an urevocable letter of creilit issueii bv a LT.S. or
state b1n1., (11) no-load money maul.et muhiail fimds registered NN°ith and regulatecl by the Securities and Exchange Commission
tliat have a ilollar Nvei-hteii avera-e stateii maturitv of 90 i1avs or less anii ulcluiie ul tlieir investtilent cibjectives the mainteiiLulce
of a stable net asset vailue of $1 for each shaue, and (12 ) no-load muhial fimds registered NN-ith the Securities and Exchange
Conunission that have an avera-e Nvei-hteii maturin• of less t1iLu1 tNi-o vears, invest exclusivelv ul cibli,ations iiescribeii in the this
paragraph, and aue continuously rated as to investment quality by at least one nationally recognizecl investment rating fum of not
less tlian AAA or its equivalent. If specifically authorizeil~ ul tlie authorizulg iiocument, bonii proceeiis may be ulvesteii in
guaranteed inveshnent contracts that have a definecl termination date and are securecl by obligations of the TTnited States or its
a-encies anii ulstrutnentalities in an ainount at least equal to tlie ainount of bonii proceeiis investeii uniier such contract, other
thln the prohibited obligations described in the next succeeding pauagraph.
The City may invest in such obligations du-ect1y or tlu-ough government inveshnent pools that invest solely in such obligafions
proviiled that tlie pools are rateii no loNi-er tlian AAA or AAA-in or an equivalent by at least one nationally reco-nizeii ratul- seivice.
The City may also contract NN-ith an investinent management fum registerecl under the Investment Advisers Act of 1940 (15
LT.S.C. Section 80b-1 et seq. ) or Ni-ith the State Securities Board to proviiie for the ulvestment anii management of its public tuniis
or other funds under its control for a term up to tNN-o years, but the City retains ultimate responsibility as fiduciau-y of its assets. In
order to renew or extenii such a contract, tlie Cin• must iio so bv order, ordulance, or resolution. The Cin• is specitically
prohibitecl from investikg in: (1) obligations NN-hose paYment represents the coupon payments on the outstlndikg principail ballnce of
tlie unilerlvui~' mortuaue-backeii securin• collateral anii pays no prulcipal: (2) cibligations Ni-hose payment represents tlie prulcipal
streaun of cash flow from the tmderlying mortgage-bacl.ecl sectuity and bears no interest. (i) collateralizecl mortgage obligations that
have a stateii fmal maturin• of ureater tliLul 10 vears: anii (4) collateralizeii mortuaue cibliuations tlie ulterest rate of Ni-hich is
determinecl by an index that acljusts opposite to the changes in a marl.et index.
Political subdivisions such as the City aue authorized to implement securities lending prograuns if (i) the securities loanecl under
tlie program are 100°io collateralizeii, a loan maiie uniler the program alloNi-s for termination at any tune anii a loan maiie uniier
the prograun is either secured by (a) obligations that are described in clauses (1) tlu-ough (6) of the first pauagraph under this
subcaption, (b ) urevocable letters of creilit issueii bv a state or national baiik that is continuoush• rateii b-,• a nationalh• reco-iuzeii
investment rating firm not less thln "A° or its equivailent, or ( c) cash investecl in obligations that aue described in clauses (1)
throu-h (6) anii (10 ) through ( 12) of the fust p uagraph uniier this subcaptioii, or an autliorizeii investtilent pool: ( ii ) securities
held as collateral under a 1oan aue pledged to the governmental body, held in the naune of the governmentail body and deposited at
tlie tune tlie investtilent is made Ni-ith the Citti• or a tliird part• iiesi,nateii bv tlie Cin•: (iii) a loan maiie uniier tlie prograin is
placecl tlu-ough either a primau-y government sectuities deailer or a financiail instihition doing business in the State of Texas; and
( iv ) tlie a-reement to lenii securities has a term of one vear or less.
INA-ESTniEnrr PoLiciES TTnder Texas law, the City is requu-ed to invest its fimds tmder NN-ritten inveshnent policies that primarily
einphasize safety of prulcipal anii liquiility: that aiiilress ulvesttilent iliversitication, vielii, maturity, anii tlie quality anii capability of
inveshnent management, and that includes a list of authorizecl inveshnents for City fimds, mavmmn ailloNN-able statecl mahuity of any
uliliviiiual ulvesttilent anii tlie maxmiutn averale ilollar-Nvei~liteii maturit-v alloNi-eii for pooleii futiii g --roups. All City tunils must be
investecl consistent NN-ith a formail1y adoptecl °Inveshnent Sh-ategy Statement° that speciticail1y adclresses each fimds` inveshnent Each
liiveshnent Stritegy Statement Ni-ill ilescribe its cibjectives concerni~: (1) suitabilin• of ulvestrilent n•pe, (2) preseivation anii safen• of
principail, (i) liquidity,(4) marl.etabilitv of each inveshnent, diversification of the portfolio, and (6) vield.
32
LTniler Texas law, Citv ulvesttilents must be maiie "Ni-itli juil-nent anii care, uniler prevailingg, cu-cumstances, that a person of
prudence, discretion, and intelligence would exercise in the mariagement of the person's oNN-n affau-s, not for speculation, but for
ulvesttilent, consiileringg, tlie prcibable safen• of capital anii tlie prcibable ulcome to be ileriveii." At least quarterly tlie ulvesttilent
officers of the City shaill submit an inveshnent report detliling: (1) the inveshnent posifion of the City,( 2) that aill inveshnent officers
joultly prepareii anii si-lleii tlie report. (3) tlie begunirg-, market value, any aiiilitions anii chan-es to market value anii tlie enilul-
vailue of each pooled fiind group, (4) the book vailue and marl.et vailue of each separately listed asset at the beginnnlg and end of the
reportugg, perioii, tlie maturin• ilate of each separately ulvesteii asset. (6) tlie account or lutiii or pooleii lutiii group for Ni-hich each
individuail inveshnent Nvas acquu-ecl, and (7) the compliance of the inveshnent portfolio as it relates to: (a) adoptecl inveshnent
strategy statements anii (b ) state law. No person may ulvest Cin• funils Ni-itliout express Ni-ritten autliorin• froin tlie Cin• Council.
AnniTioNAL Pfto«sioNS TTnder Texas law the City is additionally requu-ecl to: (1) aniruail1y review its adoptecl policies and
strate,ies: (2) aiiopt a ru1e, order, ordinance or resolution statin- tliat it has revieNi-eii its investtilent policv anii investtilent
strategies and records any chlnges made to either its investment policy or investment strategy in the respective nile, order,
ordulLulce or resolution: (3) requu-e any ulvestrilent officers' Ni-itli personal busnless relationslups or relatives Ni-itli fmns seel:un, to sell
sectuities to the entity to disclose the relationship and file a statement NN-ith the Texas Ethics Commission and the City Cotmcil; (4)
requu-e tlie registereii prulcipal of fnms seekng to sell securities to tlie Cin• to: (a) receive anii review tlie Cin•'s ulvestrilent policy, (b )
acl:nowleclge that reasonable controls and procecltues have been implementecl to preclude investment transactions conducted betNN-een
tlie Cin• anii tlie busuless oruanization tliat are not autliorizeii b-,• tlie Cin•'s investtilent policy (except to tlie extent that tlus
authorization is dependent on an analysis of the mail.eup of the City`s entu-e portfolio or requu-es an interpretation of subjective
investment stanilards anii (c) ileliver a Ni-ritten statement attestirg-, to tliese requirements: perform an ammal auilit of tlie
mariagement controls on inveshnents and adherence to the City`s inveshnent policy;( 6) provide speci~ic inveshnent traiiiiiig for the
Treasurer, Cluef FuiLulcial Ufficer anii nlvestrilent officers: (7) resh-ict reverse repuichase agreements to not inore tliLul 90 i1ays anii
reshict the inveshnent of reverse reptuchase agreement fimds to no greater than the term of the reverse reptuchase agreement. ( 8)
resh-ict tlie ulveshnent ul no-loaii mutual futiils ul tlie a-r
,e~ate tc~ no more tl~ul 1>°io of tlie entin•'s monthl~• averaue lutiii balance,
excludikg bond proceecls and reseives and other fimds held for debt seivice; (9) requu-e locail government inveshnent pools to confonn
to tlie new ilisclosure, ratug, net asset value, vielii calculatioii, anii aiivisoiti• board requirements: anii (10 ) at least aiulually review,
revise, and adopt a list of qualified brol.ers that are authorizecl to engage in inveshnent transactions NN-ith the City.
TABLE 14- CL?RRENT INN ESTnIENTS '1'
As of Januaiti• 31, 2011, tlie Citv's available funiis Ni-ere ulvesteii as follows:
Maul.et
Value
Bool.
Marl.et
Description
Percent
Value
Value
TT.S. FederailAgency Coupons
51.57%
$17>,767,497
$ 176,037,568
TT.S. Federail Agency Discounts
2.93%
9,984,749
9,993,820
TT.S. Federail Agency Callables
1.47%
4,996,753
5,001,780
Tr.s. Tre1st,rv sect,riries
7.05%
24>o4o>s,9
24>066>912
Pools
8.10°io
27,658,000
27,658,000
Ceiti~icates ofDeposit
28.88°io
98,599,000
98,599,000
100.00%
$ 341,046,838
$341,3>7,U8U
(1) There are no Citv fiinds invested in derivative securities (i.e., securities NN-hose rate of rehirn is determined by reference to
some other inshllment, index or commodity).
(2) CDs are eitlier fu11-,• ulsureii bv FDIC insurance or collateralizeii bv feiieral a,encv securities at a niiiiinutn of 102°io of
principail plus accrued interest or secured by Fecleral Home Loan Banlc letters of credit.
33
TAX MATTERS
OPINIONS
The Bonds ...On the date of initial delivei-y of the Bonds, McCall, Parkliurst & Horton L.L.P., Dallas, Texas, Bond Counsel to
the City, NN-ill render its opinion that, in accordance NN-ith stahites, regulations, publishecl nilings and court decisions existing on
the date thereof ("Existing Law" (1) interest on the Bonds for fecleral income tax purposes NN-ilL be excludable from the "gross
income° of the holders thereof and (2) the Bonds NN-ill not be treated as "specified private activity bonds° the interest on NN-hich
would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internail Revenue Code of 1986
(the °Code" Except as statecl above, Bond Counsel to the City NN-ill express no opinion as to any other federal, state or locail tax
consequences of the purchase, ownership or disposition of the Bonds.
The Certificates ...On the date of initial delivei-y of the Certificates, Bond Cotmsel to the City NN-ilL render its opinion that, in
accordance NN-ith Existing Law, (1) interest on the Certificates for federal income tax ptuposes NN-ill be excludable from the "gross
income° of the holders thereof and (2) the Certificates NN-ill not be treated as "specifiecl private activity bonds° the interest on
NN-hich would be included as an alternative minimmn tax preference item under section 57(a)(5) of the Code. Except as statecl
above, Bond Counsel to the City NN-ill express no opinion as to any other federal, state or local tax consequences of the purchase,
oNN-nership or disposition of the Certi~icates. See Appendix C- Forms of Bond Counsel` sOpinions.
In rendering each of the fore9oing opinions, Bond Counsel to the Citv NN-ilL reh upon (a) the City`s fecleral tax certi~icate NN-ith
respect to each issue, (b) covenants of the City NN-ith respect to aubitrage, the application of the proceeds to be received from the
issuance and saile of the Obligations and certain other matters, and (c), NN-ith respect to the Bonds, the certi~ication of the paying
agent for the Refiindecl Obligations that the aunotmt depositecl NN-ith the Escrow Agent NN-ill be sufficient to pay the principail of
and interest on the Refimded Obligation NN-hen due. Failure of the City to comply NN-ith these representations or covenants could
cause the interest on the Obligations to become includable in gross income retroactively to the date of issuance of the
Obligations.
Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on the
aforementioned information, representations and covenants. Bond Counsel's opinion is not aguauantee of a result The Existing
Law is subject to chlnge by the Congress and to subsequent judicial and administrative interpretation by the courts and the
Deparhnent of the Treasui-y. There can be no assurance that such Existing Law or the interpretation thereof NN-ilL not be chlngecl
in a minner NN-hich would adversely affect the tax treatment of the purchase, oNN-nership or disposition of the Obligations.
A niling NN-as not sought from the Internail Revenue Service by the City NN-ith respect to the Obligations or the pro~jects being
financed or refinanced thereNN-ith. Bond Counsel`s opinion represents its legal judgment based upon its review of Existing Law
and the representations of the City that it deems relevant to render such opinion and is not aguauantee of a result. No asstuances
can be given as to NN-hether or not the Internal Revenue Seivice NN-ill commence an audit of the Obligations, or as to NN-hether the
Internail Revenue Seivice would agree NN-ith the opinion of Bond CounseL If an audit is commenced, under current procedures
the Internal Revenue Service is lil.e1v to treat the Citv as the taxpayer and the holders of the Obligations may have no right to
pauticipate in such proceclure. No additional interest NN-ilL be paid upon any determination of taxability.
FEDERAL INC'ObIE TA_i" AC'C'OL?NTING TREATbIENT OF ORIGINAL ISSL?E DISC'OL?NT
The initial public offering price to be paid for one or more mahirities of the Obligations may be less thln the principal aunount
thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accnial period or be in
excess of one Vear (the )riginal Issue Discount Bonds" In such event, the difference betNN-een (i) the "stated redemption price
at mahuity° of each Original Issue Discount Bond, and (ii) the initiail offering price to the public of such Original Issue Discount
Bond would constihite original issue discount The "stated redemption price at maturity° means the sum of all payments to be
made on the Obligations less the aunount of all periodic interest payments. Periodic interest payments aue payments NN-hich aue
made during equal accnial periods (or during any unequal period if it is the initial or ~inal period ) and NN-hich aue made during
accnial periods NN-hich do not exceed one yeau.
TTnder existin9 law, any oNN-ner NN-ho has purchased such Originail Issue Discount Bond in the initiail public offering is entitled to
exclude from gross income (as defined in section 61 of the Code ) an aunount of income NN-ith respect to such Originail Issue
Discotmt Bond equal to that portion of the aunount of such original issue discotmt allocable to the accnial period. For a
discussion of certain collaterail federail tax consequences, see discussion set forth below.
In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity,
hoNN-ever, the aunount realized by such oNN-ner in excess of the basis of such Original Issue Discotmt Bond in the hlnds of such
oNN-ner ( acljusted upwaud by the portion of the originail issue discount allocable to the period for NN-hich such Original Issue
Discotmt Bond NN-as held by such initiail oNN-ner) is includable in gross income.
34
TTnder existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity
thereof ( in aunounts calculated as described below for each six-month period ending on the date before the semiannual
lnniversau-y dates of the date of the Bonds and ratably NN-ithin each such six-month period ) and the accrued aunount is added to an
initiail oNN-ner's basis for such Original Issue Discount Bond for purposes of deteriniiiing the aunount of gain or loss recognized by
such oNN-ner upon the redemption, sale or other disposition thereof. The aunount to be added to basis for each accnial period is
equal to (a) the sum of the issue price and the aunount of original issue discount accrued in prior periods multipliecl by the yield
to stated maturitv (determined on the basis of compounding at the close of each accnial period and properly acljusted for the
length of the accnial period ) less (b) the aunounts payable as cturent interest dtuing such accnial period on such Originail Issue
Discotmt Bond.
The federal income tax consequences of the purchase, oNN-nership, redemption, sale or other disposition of Originail Issue
Discotmt Bonds NN-hich are not purchased in the initiail offering at the initiail offering price may be determined according to niles
NN-hich differ from those describecl above. All oNN-ners of Originail Issue Discotmt Bonds should consult theu- oNN-n tax advisors
NN-ith respect to the determination for feclerail, state and local income tax ptuposes of the treahnent of interest accrued upon
reclemption, sale or other disposition of such Original Issue Discotmt Bonds and NN-ith respect to the federal, state, locail and
foreign tax consequences of the purchase, oNN-nership, redemption, sale or other disposition of such Originail Issue Discount
Bonds.
COLLATERAL FEDERAL INC'ObIE TA_i" CONSEQL?ENC'ES
The folloNN°ing discussion is a smnmau-v of certain collateral fecleral income tax consequences resulting from the purchase,
oNN-nership or disposition of the Obligations. This discussion is basecl on existing stahites, regulations, publishecl nilings and
court decisions, aill of NN-hich aue subject to chlnge or modi~ication, retroactively.
The folloNN°ing discussion is applicable to investors, other thln those NN-ho are subject to special provisions of the Code, such as
financial instihitions, property and casualty insurance complnies, life insurance complnies, oNN-ners of interests in a FASIT,
individual recipients of Sociail Security or Railroad Retu-ement bene~its, individuails allowecl an eauned income creclit, certain S
corporations NN-ith Subchapter C eaunings and profits and taxpayers NN-ho may be deemed to have inctured or continued
indebtedness to purchase tax-exempt obligations.
THE DISCTTSSI( )N C( )NTAINED HEFtEIN MAY N( )T BE EXHATTSTIVE. INVEST( )RS, INCLTTDING TH( )SE WH( ) AFtE
STTF3.lECT T( ) SPECIAL PR( )VISI( )NS OF THE C( )DE, SH( )TTLD C( )NSTTLT TEEIR OWN TAX ADVIS( )RS AS T( ) THE
TAX TFtEATMENT WHICH MAY BE ANTICIPATED T( ) FtEST TLT FR( )M THE PT TRCHASE, ()WNERSHIP ANI)
DISP( )SITI( )N ()F TAX-EXEMPT ()BLI(TATI( )NS BEF( )FtE DETERMININ(T WIIETHER T( ) PT TRCHASE THE
( )BLGATI( )NS.
Interest on the Obligations NN-ilL be includable as an acljustment for "acljustecl current earnings° to calculate the ailternative
minimum tax imposecl on corporations by section» of the Code.
Interest on the Obligations may be subject to the "branch pro~its tax° imposed by section 884 of the Code on the effectively-
connected earnings and pro~its of a foreign corporation doing business in the TTnited States.
TTnder section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, may be requu-ed to disclose interest
received or accrued during each taxable year on theu rehirns of federal income taxation.
Section 1276 of the Code provides for ordinau-y income tax treahnent of gain recognizecl upon the disposition of a tax-exempt
obligation, such as the Obligations, if such obligation NN-as acquu-ecl at a°maul.et discount° and if the fixed maturity of such
obligation is equal to, or exceecls, one yeau from the date of issue. Such treahnent applies to °maul.et discount bonds° to the
extent such gain does not exceecl the accrued maul.et discount of such bonds; although for this purpose, a de minimis aunount of
maul.et discotmt is ignorecl. A°maul.et discount bond" is one NN-hich is acquued by the holder at a purchase price NN-hich is less
thln the stated redemption price at mahuity or, in the case of a bond issuecl at an originail issue discotmt, the "revised issue price"
(i.e., the issue price plus accrued originail issue discotmt). The "accruecl marl.et discotmt" is the aunount NN-hich beaus the saune
ratio to the maul.et discotmt as the number of days during NN-hich the holder holds the obligation beaus to the number of days
betNN-een the acquisition date and the fiiiail maturity date.
STATE, LOCAL AND FOREIGN TA_i"ES
Investors should consult theu- oNN-n tax ldvisors concerning the tax implications of the purchase, oNN-nership or disposition of the
Obligations under applicable state or locail laws. Foreign investors should also consult theu oNN-n tax advisors regauding the tax
consequences unique to investors NN-ho aue not TTnited States persons.
35
CONTINUING DISCLOSURE OF INFORMATION
In each of the Ordinances the City has made the folloNN-ing agreement for the benefit of the holders and bene~icial oNN-ners of the
respective series of Obligations. The City is requued to observe each agreement NN-hile it remains obligated to advance fimds to
pay such Obligations. TTnder each agreement, the City NN-ilL be obligated to provide certain updated financiail information and
operating data annually, and the timely notice of specifiecl events to the Municipal Securities Rulemail:ing Board ("MSFLF3"
This ulformation NN-ilL be avvlable free of chauge from the MSFLF3 via the Electronic Municipal Maul.et Access ("EMMA" )
system at «\«v.eiiuna.insrh.urL,.
ANN[AL REPOitTS The City Ni-ill proviiie certaul upilateii Yitiancial uiYormation anii operatitt-, ilata to the MSFLB atumally.
The uiYonnation to be upilateii incluiies all quantitative Yinancial itlYonnation anii operatulg ilata Ni-ith respect to the City of tlie
,eneral type ulcluiieii ul this Ufficial Statement uniler Tables imtnbereii 1 t1u-ou1li > anii 7 tlu-ou-h 14 anii ul Appenilix B. The
City Ni-ill upilate anii proviiie this itiYormation Ni-ithii1 six inonths after the enii of each fiscal year enilin- ul or after 2011. The
Cin• Ni-ill proviiie the upilateii uiYormation to tlie MSFLF3.
The fulancial uiYormation anii operatulg ilata to be proviileii may be set forth ul fu11 in one or more iiocutnents or may be
ulcluiieii by specific reference to any ilocument available to tlie public on the MSFLB's Ititenlet Web site or ftleii Ni-ith tlie LTniteii
States Securities anii Exchan-e Conunission (the °SEC" as pennitteii by SEC Ru1e 15c2-12 (the "Ru1e" The upilateii
uiYormation Ni-ill include auiliteii Yinancial statements, if tlie Citv conunissions an auilit anii it is coinpleteii by the requireii time.
If auiliteii fulancial statements are not available by the requueii tune, tlie Cin• Ni-ill proviile unauiliteii YitiLulcial statements bv tlie
requireii titne anii auiliteii fulancial statements Ni-hen anii if such auiliteii Yitiancial statements become available. Ativ such
fulancial statements Ni-ill be prepareii ul accordance Ni-itli tlie accounting principles iiescribeii ul Appenilix B or such otlier
accountulg prulciples as the City may be requueii to employ from tune to tune pursuant to State law or regulation.
The Citv's current fiscal vear enii is Septeinber 30. Accordullly, it must proviiie upilateii uiYormation by March 31 ul each year,
unless tlie Cin• chan-es its fiscal vear. If tlie Cin• chul-es its fiscal vear, it Ni-ill notih• the MSFLF3 of the chul-e.
EN-ENT NoTieES The Cin• Ni-ill proviiie notice to the MSFLF3 of any of tlie followulg events Ni-itli respect to the Ubligations, if
such event is material Ni-ithil1 the meaiurl- of tlie feiieral securities laws: (1) non-pavment relateii iiefaults: (2) inoilifications to
ri-hts of holiiers of tlie Ubli,ations: (3) bonii calls: (4) release, substitution, or sale of property securitt-, repayment of the
Ubli,ations: tlie consununation of a merger, consoliilation, or aaluisition ulvolvitt-, an cibligateii person or the sale of all or
substantialh• all of the assets of the cibligateii person, otlier than in tlie ordinuti• course of busuless, the enttti• ulto a iieYitutive
a-reement to unilertal.e such an action or the tenliillation of a iiefitutive a-reement relatul- to anv such actions, otlier tlian
pursuant to its terms: anii (6) appointment of a successor or aiiilitional ttustee or tlie change of name of a ttustee.
The City Ni-ill also proviiie notice to the MSFtE3 of any of the folloNi-itt-, events Ni-itli respect to the Ubligations Ni-ithout regard to
Ni-hetlier such event is consiilereii material Ni-itliiil the meaning of tlie feiieral securities laws: (1) prulcipal anii ulterest payment
iieluxluencies: (2) unscheiiuleii ilraNi-s on iiebt seivice reserves retlectin- Yitiancial ilifficulties: (3) unscheiiuleii ilraNi-s on creilit
enhancements retlectitig fulancial ilitficulties: (4) substitution of creilit or liquiility proviiiers, or their failure to perfonn:
aiiverse tax opinions or the issuance by tlie Ititenlal Revenue Service of proposeii or fulal iieterminations of taxability, Notices of
Proposeii Issue (IRS Fonn 5701-TEB ) or other material notices or iletenliiilations Ni-ith respect to tlie tax-exeinpt status of tlie
Ubli,ations, or otlier events affectulg tlie tax-exeinpt status of the Ubligations: (6) teniier offers: (7) iiefeasances: (8) ratulg
changes: anii (9) ban-Luptcv, ulsolvency, receiverslup or sunilar event of an cibligateii person.
The Cin• Ni-ill proviiie notice of the aforementioneii events to tlie MSFLF3 ul a tunely maiuler (but not ul excess of ten busuless
i1avs after the occurrence of tlie event). The Cin• Ni-ill also proviiie tunely notice of any failure by tlie Cin• to proviiie aiumal
fulancial itiYormation in accordance Ni-ith its agreement iiescribeii above uniler "Amlual Reports."
LrniiTaTioNS aNn AniEVnniENTS The City has agreed to update information and to provide notices of specified events on1y
as described above. The Cit-v has not agreed to provide other information that may be relevant or material to a complete
presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided,
except as described above. The City mail.es no representation or warranty concerning such information or concerning its
usefiilness to a decision to invest in or sell Obligations at any fiihire date. The City disclaims any contrachial or tort liability for
daunages resulting in NN-hole or in part from any breach of its continuing disclosure agreement or from any statement made
purstiant to its agreement, although holders of Obligations may seek a NN-rit of mandaunus to compel the City to comply NN-ith its
agreement.
The City may aunend its continuing disclosure agreement from time to time to adapt to changed cu-cumstlnces that arise from a
chlnge in legal requuements, a chlnge in law, or a chlnge in the identity, nahire, stahis, or type of operations of the City, if ( i)
the agreement, as aunendecl, would have permittecl an tmdeilVriter to purchase or sell Obligations in the offering describecl herein
in compliance NN-ith the Rule, tail:ing into accotmt any aunendments or interpretations of the Rule to the date of such aunendment,
as NN-ell as such chlnged cu-cumstlnces, and (ii) either (a) the holders of a majority in aggregate principal aunount of the
outstlnding Obligations consent to the aunendment or (b) any person unaffiliated NN-ith the City ( such as nationally recognized
bond counsel ) determines that the aunendment NN-ill not materiailly impau- the interests of the holders and bene~icial oNN-ners of the
36
Obligations. The City may also aunend or repeal the provisions of this continuing disclosure agreement if the SEC aunends or
repeails the applicable provisions of the SEC Rule 15c2-12 or a court of finail jtuisdiction enters judgment that such provisions of
the SEC Rule 15c2-12 aue invailid, but on1y if and to the extent that the provisions of this sentence would not prevent an
underwriter from lawfully ptuchasing or selling Obligations in the primau-y offering of the Obligations. If the City so aunends the
agreement, it has agreed to include NN-ith the next financial information and operating data provided in accordance NN-ith its
agreement describecl above under °Annuail Reports° an expllnation, in narrative form, of the reasons for the aunendment and of
the impact of any chaiige in the type of financial information and operating data so provided.
ConIPLiANeE NViTx Pfuox UivnExT AKINCS Durulg the last five years, the Cin• has coinplieii ul all material respects Ni-ith all
contuluul, ilisclosure a-reements maiie bv it in accordance Ni-ith SEC Ru1e 15c2-12.
OTHER INFORMATION
RATINGS
The Ubligations anii the presently outstanilulg tax supporteii iiebt of the Citti' are rateii "Aa2° by Mooiiy's anii "AA° by S&-P. Ati
explanation of the sigiiificance of such ratings may be cibtauleii froin the coinpany furnishing the ratitig. The ratings retlect only
the respective vieNi-s of such orgaiuzations anii the Citti• mal.es no representation as to the appropriateness of the ratulgs. There is
no assurance that such ratuws Ni-ill contulue for ulv -iven perioii of tune or that tliev Ni-ill not be reviseii iioNi-nNi-ard or Ni-itliilraNi-n
entu-eh• bv eitlier or botli of such ratulg coinpanies, if ul the juii-ment of either or botli coinpanies, cu-cumstances so Ni-arrant.
Ati-,• such iioNi-nNi-ard revision or Ni-itliilraNi-a1 of such ratulys, or eitlier of them, mav have an aiiverse effect on the market price of
the Ubliuations.
I.ITIC: ATION
It 1S the OpllllOll Ot the L1ty AttD111ZC alld L1ty Statt tllat thZlZ 1S ll0 pZlldlllg, Ol t0 t11Zll' IillOwIZdgZ tlll'ZatZllZd, IltlgatlOll Ol Ot11Zf
proceeilitt-Y agaulst the Cin• that coulii have a material aiiverse fulancial unpact upon the Cin• or its operations.
REGISTRATION AND QLALIFICATION OF OBLIC:ATIONS FOR SALE
The sale of the Ubliuations has not been reuistereii uniier the Feileral Securities Act of 1933, as atneniieil, ul reliance upon the
exeinption proviiieii tliereuniler by Section 3( a)( 2): anii the Ubligations have not been qualifieii uniier the Securities Act of Texas
ul reliance upon various exeinptions contauleii thereul: nor have the Boniis or Certificates been qualifieii uniier the securities acts
of anv jurisiliction. The Cin• assutnes no responsibilitti• for qualification of the Boniis or Certificates uniier the securities laNi-s of
any jurisiliction ul Ni-hich the Ubligations mav be solil, assigneii, pleiigeii, hypotliecateii or otlieili-ise transferreii. This ilisclauner
of responsibilin• for qualification for sale or other ilisposition of the Ubligations shall not be consttueii as an ulterpretation of anv
kulii Ni-itli reuard to the availabilin• of any exemption from securities registration provisions.
I.EC:AL INN ESTnIENTS AND ELIGIBILITI" TO SEC'L?RE P[?BLIC' FI?NDS IN TE_i"AS
The ObliLiatiuns. Section 1201.041 of the Public Securin• Proceiiures Act (Chapter 1201, Texas (iovenunent Coiie) proviiies
tliat the UbliUations are negotiable ulstruments, ulvestment securities governeii by Chapter 8, Tex-as Busuless anii Conunerce
Coiie, anii are leual anii authorizeii ulvesttnents for ulsurance coinpatues, fiiiuciaries, anii trustees, anii for the sinl:in,y tuniis of
municipalities or otlier political subilivisions or public agencies of the State of Texas. In aiiilitioii, various provisions of the
Texas Fulance Coi1e proviile tliat, subject to a piuiience stanilard, the Ubligations are legal ulvesttilents for state baiil.s, savings
baiil.s, trust companies Ni-itli at least $1 million of capital, anii savulgs anii loan associations.
The Certificates. Section 271.051, Texas Local Government Code, provides that the Certificates aue legal and authorized
uivestments for baiil.s, savuigs banl.s, trlist compauiies, savin~s wid loan associations, uisurance compaiues, fiduciaries, tnistees
and guardilns, and for the sinl:ing fiinds of municipailities, school districts, and other political subdivisions or public agencies of
the State of Texas. The Certi~icates aue eligible to secure deposits of any public fiinds of the State, municipalities, school
districts, and other politicail subdivisions of the State, and aue legail security for those deposits to the extent of theu- maul.et vailue.
General Cunsideratiuns. For political subilivisions ul Texas tliat have aiiopteii ulvestment policies anii guiilelules ul accordance
Ni-itli the Public Funiis Investtnent Act (Texas (ioveriunent Coiie, Chapter 225(1), the Ubligations may have to be assigneii a
ratulg of at least "A° or its equivalent as to investtilent qualin• by a national rating agency before such cibligations are eligible
ulvesttnents for s".uly funiis anii otlier public tuniis. The Cin• has maiie no ulvestiuation of otlier laws, rules, reuulations, or
ulvestment criteria Ni-hich miUht apply to such ulstitutions or entities or Ni-luch miuht lunit the suitabilin• of the Ubliuations for
anv of the foreuouly purposes or liiilit the autliorin• of such ulstitutions or entities to purchase or ulvest in the Ubligations for
such purposes. The Cin• has maile no review of laNi-s ul otlier states to iietenliiile Ni-hether the Ubligations are legal investtilents
for various ulstitutions ul those states.
37
I.EC:AL OPINIONS AND NO-I.ITIC:ATION CERTIFIC'ATE
The City NN-ilL fiunish a complete transcript of proceeclings had incident to the authorization and issuance of each series of the
Obligations, including the unqualified approving legal opinions of the Attorney General of Texas approving the Initiail Bond and
Initial Certi~icate of each series and to the effect that the Obligations are vailid and legally binding obligations of the City, and
based upon examination of such transcripts of proceedings, the approving legal opinions of Bond Counsel, to lil.e effect and to
the effect that the interest on the Obligations NN-ilL be excludable from gross income for federal income tax purposes under Section
103( a) of the Code, subject to the matters described under "Tax Matters° herein. The customau-y closing papers, including a
certi~icate to the effect that no litigation of any nahire has been filed or is then pending to restrain the issuance and delivei-y of
the Bonds and Certificates or NN-hich would affect the provision made for theu- payment or security, or in any minner questioning
the validity of said Bonds and Certi~icates NN-ilL ailso be fiirnished. In its capacity as Bond Counsel, McCall, Paukliurst & Horton
L.L.P. has reviewed the information describing the Bonds and Certificates in the Officiail Statement to verif,, that such
description conforms to the provisions of the Bond Ordinance and Certificate Ordinance. In connection NN-ith the issuance of the
Bonds and Certificates, McCall, Paukliurst & Horton L.L.P. represents on1\ the City. The legal fee to be paid Bond Counsel for
services rendered in connection NN-ith the issuance of the Bonds and Certi~icates is contingent on the sale and delivei-y of the
Bonds and Certi~icates. The legail opinion NN-ill accompany the Bonds and Certificates depositecl NN-ith DTC or NN-ill be printed on
the Bonds and Certificates in the event of the discontinuance of the Bool.-Enh-y-( )n1y System.
The vauious legal opinions to be delivered concurrently NN-ith the delivei-y of the Obligations express the professional judgment of
the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion the attorney
does not become an insurer or guauantor of the ex-pression of professional judgment, of the transaction opined upon, or of the
fiihire performance of the parties to the transaction. Nor does the rendering of an opinion guauantee the outcome of any legal
dispute that may arise from the transaction.
AL?THENTIC'ITP OF FYNANC'IAL DATA AND OTHER INFORRUTION
The financial data and other information contained herein have been obtained from City records, audited financiail statements,
and other sotuces NN-hich aue believed to be reliable. There is no guauantee that any of the assumptions or estimates contained
herein NN-ilL be reailized. All of the smnmauies of the stahites, documents, and resolutions contained in this Officiail Statement are
made subject to aill of the provisions of such stahites, documents, and resolutions. These smnmaries do not ptuport to be
complete statements of such provisions and reference is made to such documents for fiirther ulformation. Reference is made to
original documents in aill respects.
F`INANC'IAL ADvISOR
Fust SouthNN-est Company is employecl as Financial Advisor to the City in connection NN-ith the issuance of the Obligations. The
Financiail Advisor's fee for services renderecl NN-ith respect to the saile of the Obligations is contingent upon the issuance and
delivei-y of the Obligations. Fust SouthNN-est Company, in its capacity as Financial Advisor, has reliecl on the opinion of Bond
Counsel and has not veri~iecl and does not assmne any responsibility for the information, covenants, and representations
contlinecl in any of the legal documents NN-ith respect to the federal income tax stahis of the Obligations, or the possible impact of
any present, pending, or fiihue actions tail.en by any legislative or judicial bodies.
The Financial Advisor to the City has provided the folloNN-ing sentence for inclusion in this Officiail Statement The Financiail
Advisor has reviewed the information in this Official Statement in accordance NN-ith, and as paut of, its responsibilities to the City
and, as applicable, to investors under the fecleral securities laNN-s as applied to the facts and cucumstlnces of this transaction, but
the Financial Advisor does not guauantee the accuracy or completeness of such information.
INITIAL P[?RC'FUSER OF THE BONDS
After requesting competitive bids for the Bonds, the City accepted the bid of (the °Initiail
Purchaser of the Bonds" ) to purchase the Bonds at the interest rates shoNNn on the cover page of the Official Statement at a price
of pau plus a cash premium of $74,830 >0. The Initiail Ptuchaser of the Bonds can give no assurance that any trading marl.et NN-ill
be developecl for the Bonds after theu sale by the City to the Initial Ruchaser of the Bonds. The City has no control over the
price at NN-hich the Bonds aue subsequently sold and the initial yield at NN-hich the Bonds NN-ill be priced and reoffered NN-ilL be
establishecl by and NN-ilL be the sole responsibility of the Initial Ptuchaser of the Bonds.
INITIAL P[?RC'FUSER OF THE CERTIFICATES
After requesting competitive bids for the Certificates, the City acceptecl the bid of (the
°Initial Purchaser of the Certi~icates" ) to purchase the Certificates at the interest rates shoNN-n on page i of the Officiail Statement
at a price of pau plus a cash premium (if any) of $ The Initial Purchaser of the Certificates can give no assurance
that any trading marl.et NN-ill be developecl for the Certi~icates after theu- saile by the City to the Initiail Purchaser of the
Certificates. The City has no control over the price at NN-hich the Certi~icates are subsequently sold and the initiail yield at NN-hich
39
the Certi~icates NN-ill be priced and reofferecl NN-ilL be establishecl by and NN-ilL be the sole responsibility of the Initial Ptuchaser of
the Cerrificates.
The Initiail Ptuchaser of the Bonds and the Initiail Purchaser of the Cerhi~icates are herein collectiveh referrecl to as the °Ruchasers".
CERTIFICATION OF THE OFFIC'I AL ST ATEbIENT
At the time of payment for and delivei-y of the Obligations, the City NN-ill fiirnish a certi~icate, executed by a proper City officer,
acting in such officer's officiail capacity, to the effect that to the best of such officer's l:nowledge and belief: (a) the descriptions
and statements of or pertaiiiing to the City contained in the Official Statement, and any addenda, supplement, or aunendment
thereto, on the date of the Official Statement, on the date of saile of the Obligations, and the acceptlnce of the best bid therefor,
and on the date of the delivei-y, NN-ere and are tr1ie and correct in all material respects; (b) insofau as the City and its affairs,
including its ~inancial affairs, aue concerned, the Official Statement did not and does not contain an untrlie statement of a
material fact or omit to state a materiail fact requu-ecl to be stated therein or necessau-y to mail.e the statements therein, in light of
the cucumstlnces under NN-hich they NN-ere made, not misleading: (c) insofau as the descriptions and statements, including
financiail data, of or pertaining to entities, other thln the City, and theu activities contlinecl in the Officiail Statement aue
concerned, such statements and data have been obtainecl from sotuces NN-hich the City believes to be reliable and the City has no
reason to believe that they are tmhlie in any material respect, and (d) there has been no material adverse change in the financiail
condition of the City since the date of the last audited fiiianciail statements of the City.
The respective Ordinances authorizing the issuance of the Obligations NN-ilL approve the form and content of this Officiail
Statement, and any addenda, supplement, or aunendment thereto, and authorize its fiuther use in the reoffering of the Obligations
b\ the Purchasers.
FORAV ARD-LOOIQNG ST ATEbIENTS DISC'LAIbIER
The statements contlinecl in this Official Statement, and in ain other information provided by the City, that aue not purely
historical, aue for~vard-lool:ing statements, including statements regauding the City's expectations, hopes, intentions, or strategies
regauding the fiihire. Readers should not place undue reliance on for~vaud-lool:ing statements. All for~vaud-lool:ing statements
included in this Official Statement aue basecl on information available to the City on the date hereof, and the City assmnes no
obligation to update any such for~vaud-lool:ing statements. The City's achial results could differ materially from those discussed
in such for~vaud-lool:ing statements.
The for~vaud-lool;ing statements included herein aue necessarily based on vauious assumptions and estimates and are inherently
subject to vauious risl.s and tmcertainties, including risl.s and uncertainties relating to the possible invalidity of the underlying
assumptions and estimates and possible chlnges or developments in social, economic, business, indush-y, marl.et, legal, and
regulatoi-y cu-cumstlnces and conditions and actions t11.en or omitted to be t11.en by third parties, including customers, suppliers,
business pauhiers and competitors, and legislative, judiciail, and other governmental authorities and officials. Assumptions
related to the foregoing involve judgments NN-ith respect to, aunong other things, fiihue economic, competitive, and maul.et
conditions and fiihire business decisions, aill of NN-hich aue difficult or impossible to predict accurately and many of NN-hich aue
beyond the control of the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the
for~vaud-lool:ing statements includecl in this Official Statement NN-ilL prove to be accurate.
MiSC'ELLANEOL?S
The Ordinances authorizing the issuance of the Obligations NN-ill approve the form and content of this Officiail Statement, and any
addenda, supplement or aunendment thereto, and authorize its fiuther use in the reofferikg of the Obligations by the Ptuchasers.
MARI~ BT TRR( )T T( THS
Mavor
Citv ofDenton, Texas
ATTEST:
JENNIFER K. WALTERS
Ciri Secretai-y
Citv ofDenton, Texas
39
SCHEDULE OF REFIINDED OBLIGATIONS'
Utilitv SN-stem Rei-enue Refunding and Impruvement Bunds, Series 2001
Prulcipal
Prulcipal
( )riginail Maturit-v
Interest
Amount
Amount
Datecl Date Date
Rate
Outstlnding
Refiindecl
4/15/2001 12/1/2011
>.000°io
$ 4,100,000
$ 4,100,000
12/1/2012
>.000°/u
470,000
470,000
12/1/2013
5.000%
500,000
500,000
12/1/2014
5.000%
520,000
520,000
12/1/2015
5.000%
550,000
550,000
12/1/2016
>.000°io
575,000
575,000
12/1/2017
>.12>°/u
570,000
570,000
12/1/2018
5.125%
600,000
600,000
12/1/2019
5.125%
630,000
630,000
12/1/2020
>.400°io
665,000
665,000
$ 9,180,000
$ 9,180,000
The 2011 - 2020 maturities Ni-ill be reiieemeii prior to origulal maturin• on June 10, 2011, at par.
Schedule I
* Frelimnlau-v, subject to ch'uige.
APPENDIX A
GENERAL INF( )ItMATT( )N FtEGAFLDING THE CITY
LoeA'rioN The Cin• of Denton is locateii ul tlie northern portion of tlie Dallas/Fort Wortli Consoliilateii Statistical Area
( CSMA The Citv is a part of the Dallas/Fort Worth Metroplex, anii is situateii at the apex of a triangle baseii by Dallas (38
miles to tlie southeast ) anii Fort Worth (36 miles to the soutliNi-est The Citv has excellent access to anii from all parts of the
area.
EeoNOnzie FtrTtTRE The fiscal vear 2009-2010 brou-ht excitul- neNi-s ul economic ilevelopment. Listeii below are just a few
of tlie hi-hli~hts.
-1L4.roRE~rrzoi-ER d'-I_NDr-sTRrAz XErr~,';
• Aldi Foods completed constrliction of theu- 500,000 squaue feet distribution center. The complny also improved
Westcotut Road as paut of theu- pro~ject and a condition of theu- tax abatement The Denton distribution center employs
approximately 100 and services more thln 25 Aldi grocei-y stores in the North Texas auea. The $50 million pro~ject
becaune fully operational Februau-y 2010.
• Target Curpuratiun selecteii Denton for theu new, automateii 400,000 square foot ilistribution center. The Denton
facililti• Ni-ill serve as a prototti•pe for future Target frozen anii refrigerateii fooii ilistribution centers. The $100 nullion
prc~ject Ni-ill be-ul construction ul Sprut-, 2011 anii Ni-ill open u12012 Ni-itli 115 einployees.
• Schlumberger, an oiltield service company, selectecl Denton as its site for a regional equipment maintenance facility.
The $18 million ptuchase and renovation pro~ject NN-ilL be completed and in operation in Spring of 2011.
DEr ED )rW~TTATD-FVD lIr ~~n 'rPAz ArnP~ )RT
The aurival of the Denton Municipal Auport's new au- traffic control toNN-er in May of 2004 precipitated a reclassification of au-
space from Class G to Class D dtuing daily operation hours of 8 am. and 8 p.m. and increasecl otu corporate jet traffic.
Denton Municipal Airport recently opened a$1.2 million terminal and completed realignment of a 7,000 foot
taxiNvay providing a secondau-y emergency 1lnding surface. The auport control toNN-er operates NN-ith radau display
capability inaugurated in October 2010 along NN-ith extendecl hours of operation from 6:00 AM tmtil 10:00 PM seven
(7) days each weel.. The airport seivices corporate jet traffic by providing tmcongested, Class D auspace and is a
major domestic and internationail flight training location. Frivate business gro~NIh at Denton Auport produced over
mijlion in new investment in hangars and office space in 2009. Frivate industry employment is over 400 worl.ers on-
site at the airport. A$1.2 million tax-iway extension pro~ject completed eau1y 1112011 has opened over 22 net acres for
new aviation development NN-ith duect taxiNvay access. An $8 million infrastructure improvement pro~ject, 95% fimded
tlu-ough agrant from the Texas Deparhnent of Transportation Aviation Division ( T~D( )T Aviation), NN-ilL be completed
in the second quarter of 2011 to add 1,000 feet of runway for a tota17,000 foot runway at Denton Auport. In addition
to operating as one of the most active fixecl-wing, general aviation airports in the TTnitecl States, the airport is host to
tNN-o major helicopter flight trainiiig businesses and services militau-y helicopters tlu-ough one of tNN-o airport fixed base
operators. A Foreign Trade Zone application has been completecl to include the Auport, sturounding businesses and
the TTniversity of North Texas Discovei-y Pauk reseauch facility in order to stimulate additional airport business
development The City Council recently adopted a 2010 Auport Business P11n to enhance development of the Auport
as a financi111y self-sufficient aviation enterprise NN-ith specific marl.eting and economic development incentives for
aviation industr-v.
RET.4IL lEii'.ti'
Constiuction of tlie mixeii-use iievelopment l:nown as Unicurn Lake contulues. Construction of the Villas of Tuscan
Hills, a 106 lot resiiiential conununitti• tliat overlooks the lal.e, is currenth• uniieili°av Ni-ith luxutti• homes sellul- from
$400,000- $700,000. Dogwooii Estates, an uliiepeniient livut-, conunufflin•, tlie Brick House (ivm, Culemark, Pour
House Urill, Washirl-ton Feiieral Savul-s anii Loan, anii ToNi-ne Center Baiik represent some of the busulesses that
have locateii ul tlie iievelopment. Recently, Cafe China, Los Toreros, Beth Marie's Ice Cream, Curves anii otlier retail
occupieii a new 20,000 square feet retail center. Iti aiiilition, tlie iievelopment is home to tlie Hilton HomeNi-ooii Suites,
Founilation Mana-ement Svstems, anii several new meilical offices.
• The Ra}-zor Ranch Market Place completed the constrliction of Hi9hway 380. Wal-Maut and Saun's opened in Fall
2010 along NN-ith several restatuants and other commercial and retail operations NN-ith a total of 360,000 NN as completed
in 2009-10.
• In aiiilition to over 63,000 square feet of miscellaneous retail, eleven new restaurants openeii ul Denton u12009-10,
Ni-itli a total square feet of 28,581. They ulcluiieii five trailitional restaurants anii tlu-ee Asian, tNi-o Mexican anii one
Inilian cuisine.
A-1
HE4LTHc '.4RE LV" -DEV"P L\
7'llZ 111Zd1GLtl SZGtDl GOllt111UZS t0 -lOw lll DZlltDll Ni'1tl1 all addlt1011Ltl 45,500 SCjULtI'Z tZZt Ot dOGtD1S' Ott1GZS, Ni'1llG11 ll1G1UdeS OllZ
llew phal'111aCC.
OTHER DEi ELOP_l IEYTS
• Hilton Uarden anii Sleep liul, Ni-luch are valueii at $11.4 million, completeii construction u12009-10.
INDL?STRP AND BL?SINESS
Majur Emplui-ers
Approvmate
Number of
Emplover
Descnption
Emplovees
i Jniversity of North Teias
Higher Education
7,949
Denton Independent School District
E3ucation
100
Denton State Supporte3 Livin, Center
Mental Healthcare
1,700
Peterbilt Motors - Headquarters aud Plant
Diesel Tnicks
1,450
Denton County
Countv Uoeernment
1,441
Citv of Denton
Citv Government
1,319
Teias Womens i Jniversity
Higher Education
855
Denton Regional Medical Center
Hospital Healthcare
350
Teias Health Resoiuces Presbyterian Denton
Hospital.Healthcare
800
Sallv Beautv Co. - International Headquarters
Beauty Supply Distribirtor
750
Therma3vme In3ustries -Victor Equipment'Tvveco
Welding Equipment
600
Anderson Merchaudisers
Distribution
450
Pro;ressive In3ustries MHMR ( Pro3uct Fulfillment)
State Uoeernmeirt
302
FEMA (Regional H(1 & Call Center) ' i~
Federal Uoeernment
300
James Woo3 Airto Park
Car'Tnick Sales'Serivce
230
Nuc;cniSteel
Steel Mauufacturing
200
Senior Care Health an3 Rehabilitation Center
Retirement Rehabilitation
200
Morrison Milling
Flour Cirain Mill
200
i Jnite3 Copper In3ustries
Copper Wire
196
Denton Rehabilitation and Nursing Center
Retirement. Rehabilitation
180
Wells Far,o
Financial Instiution
175
Austin Baker Industries
Automotiee Air Conditioning Parts
170
Jostens
Class Rin; Manufachuer
167
Tetra Pack
Aseptic Packaging
165
Safetv Iileen SN,stems
Chemical Recvclin;
164
Sl:vvievv Lieing Center of Denton
ICF MR Residential Care Facilitv
150
DeCiane Aerospace Precision Pattern Interiors
Jet Interior Manufachirin;
150
DATCU
Financial Instiution
150
The Vinta,e
Retirement Niusin; Home
140
Mavhill Hospital
Hospital.Healthcare
130
Lake Forest Goo3 Samaritan Villa,e
Retirement Center
130
Denton Uood Samaritan Village
Retirement Center
126
General Telemarketin; International
Call Center
120
Denton Publishigi Company
Nevvspaper
106
Ben E. Keith Beers
Distribution
103
Mavdav Manufacturin,Tailvvind Technologies
Aerospace Machined Parts
100
North Teias Hospital
Hospital Healthcare
100
Hulcher Services
Railroad Emergencv Response
100
A13i Foo3s
Distribution Center
100
(1 ) TTp to 1,100 during a disaster relief event.
Sotuce: City of Denton and Denton Chaunber of Commerce Economic Development Offices.
A-2
Denton is prouii to be home to nearly 41 companies and ulstitutions that employ 100 or more people, several of them
representing corporate, regional and internationail headquauters.
Well over 100 coinpanies tliat proiiuce, manufacture, anii ilistribute gooiis all over the Ni-orlii call Denton home. More than 4>00
complnies choose to do business in Denton. With smaill, medium, and lauge businesses operating in a vauiety of industries,
iliversin• is stren,tli ul Denton. Statistics show inost of tliese worl.ers are sl;illeii and receive tlieu- traunil- ri-lit here ul Denton.
EeoNOnzie ANn PoPtrLA'rioN G-AINS Historical population totals from LT.S. Census iiepict Denton's consistent population
increases commensurate NN-ithDenton's steady economic gro~Nih.
1940Census-
11,192
1950 Census -
21,345
1960 Census -
26,844
1970 Census -
39,874
1980 Census -
49,079
1990 Census -
66,270
2000 Census -
80,537
2010 Census-
113,383
estimatecl 2011 Population is 115,651' i'
(1) Cin• of Denton Population Estinate.
The Cin•'s ascension toNi-ard a top economic position ul Texas is attributable to the steaiiy uiYluence of govenunental activitti• tliat
include the annuail explnsion of the tNN-o state-supported universities, and due to several desu-able envuonmentail factors. Denton
is locatecl in a rich agriculhual, oil and gas production region-, is paut of the Daillas/Fort Worth Metroplex-, has proximity to tlu-ee
of Texas' larlest reservous (Lal.e Tex-oma is onl-,• 40 miles from Denton): a milii clitilate: and the itiYluential aspects of social,
culhirail and educational advlntages have promptecl professional worl.ers to select Denton as theu- residence.
EcoNOniic R.uVK-INC The folloNN-ing data NN-ere t11.en from the TT.S. Census Bureau's 2010 American Community Suivey.
% of Population Whose Age is
0-19
28%
20-34
33%
;>->4
2
»-64
8%
65 anii over
8°iu
Number of Householiis 36,926
Cin• of Denton Meilian Householii liicome 47,297
Cilv of Denton Household Income
$250,000+
1,00 1
$100,0004199,999
$50,000-$99,999
10,995
$35,000-$49,000
5,463
$25,000-34,999
4,020
Less tliLul or equal to $24,999
10,112
City of Denton Population by Occupation
Agriculture, foresttti', fishing anii lmntuig, and nillilt-,
0.9°iu
Constrliction
59%
Manufachuikg
8.2%
Wliolesale Traile
2 >°io
Ret1i1 trade
13.2%
7'1a11Spp1'tat1011, Ni'al'ZIlOUSlllg, and Ut.lI1t1ZS
4.7°/u
I11tO11111iY1011
2.2°/u
Fll1allCe and ll1SU1all1Ce, Te11 eStlte Tellt11 1lld lelSlllf~
>.>°/o
p10tZSSlOllitl, SG1Zllt.ltLC, iilld llliillii-ZlllZllt, iilld iid111llllSt1iitlVZ iilld Ni'iiSte llliillii-ZlllZllt SZIVIGZS
8.4°/u
Ftilucarional Seivices, and health care and sociail assistlnce
28J%
Arts, entertainment, and recreation, and accommodation, and food seivices
11.1%
Utlier seivices, except public ailmiiustration
4.6°io
Riblic Administration
4.0%
Source: LT. S. Census Bureau. 2005-2009 Aiilerican Conununity Survey, >year estunate.
A-3
EnzPLOrnzENT/LAsox FoxeE Accordul- to tlie Texas Worldorce Conunissioii, tlie Deceinber 2010 available worl.force ul
Denton is 64J00.
EnucaTioN Denton is home to the Universitv of North Tesas, founded in 1890, and Texas Woman's TTniversit-o , fotmded in
1901. Nortli Central Texas Colle-e, establisheii ul 1924, built an extension cainpus just outsiiie Denton's extraterritorial
jurisdiction (ETJ) in acljacent city, Corinth. The tNN-o universities and community college have a combinecl em-ollment of more
tlian 53,438 stuiients anii total einployment of approxunately 8,800 total einplovees.. Witli an eiirolliilent of over 36206, tlie
TTniversity of North Texas exceeds the combined em-ollment of Southern Methodist TTniversity in Dallas, Tex-as Clu-istiln
LTniversitv ul Fort Wortli anii Ftice LTniversin• in Houston. Texas Woman's LTniversin• has an approxunate eiirolltilent of 10,932
in Denton NN-ith an additiona12,426 students attending in Dallas and Houston.
The University uf Nurth Texas (LTNT) cainpus comprises a lanii area of more tlian 875 acres tliat ulcluiies Discoven• Park,
TTNT`s 285-acre reseauch parl.. The TTmversity encompasses nine colleges and schools of study and offers Bachelor`s degrees in
97 fieliis, Master's iiegrees ul 101 areas anii Doctoral programs in 49 ilisciplines. LTNT maintauls a lovi- 20:1 stuiient-facultv
ratio more prevalent aunong private rather than public instihitions. Nauned one of America`s 100 Best College Buys for 14
consecutive vears, LTNT is aiiilitionalh' listeii atnon- Atilerica's 100 Most Wu-eii Colle-es.
Texas Wuman's University (TWLT), a major state-supporteii teaching anii research ulstitutioii, it's tlie nation's largest public
universit-o attended primauily by NN-omen, NN-ho comprise 90% of attending students. Tlu-ough its seven schools and colleges,
TWLT offers 59 prograins leailulg to a Bachelor's iiegree, 67 Master's iiegree fieliis, anii Doctoral iiegrees in 24 specialization
aueas. TWTT experiencecl a 7 percent groNNth in em-ollment from 2008 to 2009 and NN-as ranl.ed aunong the nations top 20
universities Ni-ith tlie most iliverse stuilent populations by I:S. News and TT'or•1dReport ul 2009. TWLT's graiiuate prograins ul
occupational therapy and physicail therapy NN-ere ranl.ed aunong the nation's best ( I:S. Ne1~rs anu1 ii"orizl Reports 2009 Best
Uradirate Selzools In 2008, TWCT's Executive MF3A prograin Ni-as raiil.eii largest in the state by the Executive MF3A Council,
and in 2009, the American Association of Colleges of Nursing ranl.ed TWTT`s doctoral musing prograun the laugest in the
countrti•. The Center for Measurul, LTniversin• Perfonnance raiil.eii TWLT ainong the top 115 public universities nationNi-iiie ul
the number of doctorail degrees awardecl.
Nurth Central Texas Cullege (NCTC establisheii ul 1924, offers Associate Degrees ul a nuinber of fieliis anii core college
requu-ements for students transferring to TTNT and TWTT to complete theu- Bachelor's degrees. The student population of
NCTC's cainpus ul the aiijacent city of Corulth is just over 6,300. The ailniiiistration anticipates tlie stuilent population to
increase to 12,000 in the next few vears. NCTC serves the citizens of Denton NN-ith quality education by offering a broad scope
of eiiucational choices anii offers tlie local busuless conununit\• eiiucational options as Ni-ell. The competitive neeii to keep
employees cturent NN-ith modern technology and methodology is easier due to NCTC's customizecl training NN-hich teaches
curriculutn iievelopeii closely Ni-ith busuless management to ensure iniliviiiual coinpany neeiis are met. Iti 2007 tlie college
collaborated NN-ith regional gas drilling production complnies experiencing a critical shortage in trainecl professionails to develop
anii launch NC TC's neNi-est Associates Degree program ul (ias Enerly Proiiuction Management.
Denton Independent School District (DISD) encompasses almost 180 squaue miles and continues to be one of north Tex-as'
fastest-rovirrl- school ilistricts. Uver 22,850 stuilents eitrolleii for the 2009-2010 school vear in the ilistricYs 34 schools tliat
include 21 elementau-y schools (grades K-> six middle schools (6-8), tlu-ee high schools ( 9-12 one advanced technology
coinplex (11-12 one early chililhooii center, anii tNi-o altenlative schools. A seconii early chililliooii center Ni-ill open ul August
2010. Voters approved a November 2007 bond pacl.age for $282M to fund tNN-o nevo- elementau-y schools, one nevo- middle school,
iiesi-n plans for a 0' coinprehensive hi-li school, aililitional science labs anii prep rooms, anii safetti• anii securitti• teclulolo,Y
enhancements in aill district schools. The districYs "student centered" approach supports strong individualized instrliction and
smaller school size. DISD offers classes at each school for stuiients Ni-ho experience leamitt-, ilisabilities or hanilicaps.
Counselors, speech and 11nguage specialists, psychologists and reading and diagnostic consultlnts are avvlable for all grade
levels. DISD offers a nutnber of aiivanceii placement creilit classes anii iiual higli schooUcollege creilit classes anii its stuilents
routinely place aunong top recipients in state and national academic, fiiie arts, career technology, and athletic competitive events.
The ilistricYs La(irone Aiivanceii Teclulolo,v Coinplex offers state-of the-art facilities anii training ul nine aiivanceii ilisciplules
and serves as a model for the region and surrotmding states.
Dentun State Suppurted Lii-ing Center (furmerlN, Dentun State Schuul) is one of the countrti•'s most moilern anii progressive
educational instihitions for mentllh-disabled Texas residents. This state-supported facility is locatecl on a 200-acre site paid for
bv Denton citizens. Present facilities incluiie resiiiences tliat acconunoilate 530 resiiients, inore tlian 20 buililitigs for physically
hlndicapped individuals, and a,2 becl acute hospitail NN-ith supporting facilities such as X-ray, laboratoi-y, dental, and
pharmaceutical. Aililitional buililings ulcluiie a moilern ailniilistration buililulg, an acailemic buililul-, launiltti• facilitv, chapel,
maintenance shop and a ~N-auehouse. The schoo1has a staff of 1,700 NN-ith an annuail budget of over $73M.
A-4
Dentun Unii-ersities Expand Texas Woman's LTniversin• (TWLT) has -rown ilramaticallv. Stuilent eiirolliilent at tlie
TTniveisity`s home caunpus in Denton increasecl 68°io from 2001-2009 to just over 13,330 students. Almost hailf of TWiT students
(41%) aue graduate students. Similau groNN-th at the TTmversity`s Daillas and Houston satellite nursing caunpuses necessitatecl
recent constiuction prc~jects. A$40M TWLT Institute of Health Sciences-Houston facilin• openeii ul August 2006 anii a$>6M
TWLT Institute of Healtli Sciences-Dallas facilitti• brol.e urounii u12009. TWLT leaiis as a proviiier of critically neeiieii healtli care
professionals, boasting the nation's l lri` laugest College of Ntusing, and laugest nursing doctoral prograun. TWiT is proud of its
diversity: minority students comprise 43% of students. TWiT is one of on1y 16 TT.S. universities, and the on1y Texas university
selecteii to participate in tlie Atilerican Democracy Project Civic Agency initiative focuseii on encourauinu stuiients to be civic
IZadZfS lll thZll' GO11ll11U1llt1ZS.
TTniversity of North Texas (TTNT Among the nation's top 50 schools for Hisplnic and African American students, TTNT has
tlie largest resiiiential catnpus ul the North Texas Region anii is tlie largest proviiier of onlitie creilit courses atnoit-, Texas public
universities. LTNT's Discoveiti• Parl., a 285-acre, 553,000 square foot facility is home to LTNT's Enguleeritig School anii Center
for Advanced Research and Technology ( CART one of the nation's premier materiails science and engineering research
facilities. CART has been the recipient of almost $16 million in defense fiinding the past five yeaus and provides researchers
Ni-itli a unique groupitig of microscopes for nanoteclulolo-Y research anii for otlier critic,al aiivancement fieliis. Bachelor anii
Master iiegree progratns in Mechanical anii Energy Eiigineering Ni-ere aiiiieii in 2007 to LTNT's existulg College of Enguleerulg
prograuns in electrical engineering, materials science, computer science, and engineering technology. A new $33.2M Life
Sciences Building feahiring open reseauch laboratories that promote collaborative and interdisciplinau-y reseauch NN-ill complete in
Mav 2010. Iti 2009 LTNT brol.e grounii on tNi-o prc~jects: a$60 million (iolii LEED Certitieii Busuless Leaiiership Coinplex,
focuseii on glcibal economic anii business ilisciplities, anii a$78M, 30,000 seat stailiutn: botli iiue to coinplete u12011.
AeiucuLTtRE NorthNN-estern Denton County is one of the more diversified agricultural aueas in Texas. With soil types
ranging from rich black to sandy loaun, and good, soft artesiln NN-ater, it is ideal for diversifiecl farming and livestocl.. Frincipal
crops aue corn, NN-heat, oats, hav,grain sorghums and peanuts. Beef cattle, sheep, chicl.ens and turl.eys contribute a substlntial
anii steaiiv income atumallv to the farmers anii ranchers of tlie Countv. A ven' siuniYicant concentration of valuable Ni-orlii
chunpion horse farms east of tlie City's corporate bounilaries proviiie a prosperous economic resource for the area. Proiiucts
significant to the economy aue horses, beef, eggs, NN-heat, grain sorghums, hay, and musei-y crops.
Tit.uVSPOxTaTioN Denton is locatecl at the convergence of Interstate i> East and Interstate i> West on the north end of the
Dallas/Fort Worth Metroplex, approximately i> miles from the central business districts of both Dallas and Forth Worth. This
location along the NAFTA super highway provides great access to points north and south, NN-hich has led to a number of
distribution ~N-auehouse facilities choosing to locate in Denton. Addition111y, Denton is located on1y 20 miles northeast of Dallas-
Fort Worth Internationail Airport (DFW and both Daillas' Love Field Airport and Fort Worth's Meachaun International Auport
aue in close proximity to Denton. Alliance Auport, located less thln 15 miles southNN-est of Denton on Interstate i> West
provides access to a unique industriail airport and multimodail industrial parl.. Together, Alliance's access to highway, rail and
au- transportation offers an excellent opportunity for fiihire industrial gro~Nih.
Denton Countv Transportation Authority`s (DCTA ) priority pro~ject for the fiihire is the conshliction of a regional passenger rail
line, NN-hich connects Caurollton and Denton. The DCTA Rvl NN-ill meet groNN-ing transportation demands in eastern Denton
County. The pro~ject NN-ilL also provide a logical extension of the Dallas Area Rapid Transit (DART ) NorthNN-est Corridor line.
Implementation of DCTA rail seivice on the A-train is taugetecl for June 2011. In the Summer of 2010, the Denton City Council
approved the Denton Downtown Implementation P11n, NN-hich includecl zoning and development stlndauds that NN-ilL encourage
transit oriented development in the vicinity of the new rvl station enhancing the vibrant music, culhiral and retv111ndscape of
Denton's downtown.
The Kansas City Southern Railroad and the TTnion Pacific Railroad provide daily seivice to Denton. Full sNN-itching is avvlable,
proviilitt-, ilirect access to all major markets across tlie nation. (irevhounil/Trailwavs seives Denton throu,h Dallas anii
Ul;lalioma Citv. Motor frei,ht in Denton is incluiieii ul the Dallas/Fort Worth conunercial traiie zone anii is seiveii bv major
freight carriers.
B_aNKINC Tlu-ee additionail branches NN-ere conshucted in Denton's tNN-o mixed-use developments. Fust TTnited and Fust State
Bank opened in Rayzor Ranch and Washington Federal opened in TTnicorn Lail.e. There are 26 binl.s in Denton: Access Fust
Capital: Baiik of Atilerica: .1PMorgan Chase: BBLTA Compass Baiil.: Wells Fargo Baiil.: First Convenience: Fust State Baill.:
Proviiient Baiil.: Poult Banl.: First National Banl.: Marqbanl.: Meriilian Baiil.: State Baiil. anii Tiust ItiNi-ooii National Baiil.:
Synergy; Denton's on1y locally-owned b1n1., Northstar Banlc; Washington Federal Savings; ToNN-ne Center Banl.; DATCTT Credit
TTnion; Affiliated Banl.; Fust TTnited Banl. & Tnist. Legends Banlc; Members' Choice Fecleral Creclit TTnion; Pegasus Creclit
LTnion: State Farm Baiil.: anii First LTniteii Baiil. Ni-ith Denton's fust 'Banco° branch specializut-, ul seivulg Denton's Hispanic
GO11ll11U1llt-,'.
A->
GRONV TH INDIC'ES
Citv
State
Fitical
Buildim, Values(millions)
i
Water
SeNver
Electric
LTnemployment
LTnemployment
Year
Commercial
Retiidential
Total
Cutitomerti
Cutitomen
Cutitomerti
Rates
Rates
2QQ6
~ 61
$214
~ 275
28.8Q;
26951
41186
3970,,
4940,,
2007
64
219
283
29,783
28,020
43,607
3.840,,
4350,,
2008
131
157
288
29.679
28.019
44375
4.03011
d.nd°0
2009
132
131
263
30,288
28,674
45,1 53
5.96° 0
7.88° o
2010
82
82
164
30.889
29.1Q5
45357
6.iQ°o
Z{.QQ°o
(1) NeNN-Constrliction On1-, , Includes Multi-Famil\ as Commerciail and Duplexes as Residential
(2) Sotuce: Te~,as Worl.force Coininission.
MEnie AL Denton has become a re-ional meilical iiestulation servul- north Texas anii southern Ul;lalioma. Denton Re~lional
Meilical Center is a 208-beii commutun• hospital tliat seives the growing population of Denton, Wise, Cool.e, anii Montague
Counties. The hospital offers a tu11-spectrutn of healtlicare incluilinu aiivanceii open-heart surgen' anii neurosurgeiti' programs.
Denton Regional became tlie first hospital ul Denton Counn• to eam the prestigious Level II Chest Pain Center accreilitation by
tlie ultenlational non-profit Societti• of Chest Paul Centers anii is pursuing the Level III Trautna Center ilesignation. Since 2005,
tlie hospital has openeii a new $7 million, 13,500 square-foot i1ay surgen• center anii a new hospital tloor housitt-, a 29-beii,
$19M prouressive care unit. Denton Reuional's Center for Cancer anii Blooii Disorders, a coinprehensive cancer iliagnostic anii
treattnent center ulteuratul, eiiucation, nutrition, anii rehabilitation seivices openeii in 2008.
Texas Healtli Presbyterian Hospital of Denton (formerlv Denton Conununin• Hospital) celebrateii tlie granii opeiiiit-, of its
272,538 square-foot. 255-beii tacilitti' anii an 80,000 square-foot meilical office buililing in 2005. The hospital ex-paniieii its
Women's Center seivices ul 2006 Ni-itli tlie opening of a Level III Neonatal liitensive Care LTillt servulg Denton anii its
SU110UIld111- GO11ll11U1llt1ZS.
North Texas Hospital openeii a 60,000 square foot specialty hospital featuritt-, eight surgical suites anii 16 ulpatient beils u12005.
In 2007, North Texas Hospital becaine one of only four hospitals ul the Dallas-Fort Wortli re'ion to offer patients itnproveii
suruical outcomes bv utilizulu the $1M, state-of-the-art DaVulci rcibotic surgical suite. Uther new hospitals gaining Denton its
reputation as a regional meilical iiestination incluile Mayhill Hospital, a 40,000 square-foot facilitti• featuring physical
rehabilitation anii a behavioral health services hospital tliat openeii u1200> anii Ititegritti• Transitional Hospital, a 38,500 square
foot, $16 million iiollar lon-term acute care hospital tliat openeii ul 2007. Denton's rapiii meilical groNi-=tli continueii ul 2008,
aililitt-, inore tlian 123,000 square feet of new meilical offices anii treatment facilities: inost notablv the new 44,000 square foot,
$20 million Select Meilical Rehabilitation Hospital, inoiieleii after the renoNi-neii ILessler ulstitute for Rehabilitation.
RECxEaTioN Lail.e Ray Roberts, located approximately 8 miles northeast of the City`s corporate boundau-y on the Elm Fork
of the Trinity Ftiver, is a major NN-ater conseivation and flood control facility of more thln 799,600 acre-feet of storage that ailloNN-s
for an abundance of paul.s and other NN-ater and outdoor relatecl recreationail facilities. The nine mile C'rreenbelt
Hi1.eBil.e/Equestriln Trail, located betNN-een Lail.e Ray Roberts and L,il.e LeNN-isville, is a cooperative project made possible by
the Army Corps of Engineers and the Cities of Denton and Dallas. Neauby Lail.e LeNN-isvilLe, one of North Tex-as` laugest l,il.es is
one of Texas' most populau recreation aueas. Lail.e LeNN-isville has a shoreline of 183 miles locatecl entuely in Denton County.
Lail.e LeNN-isville attracts over 3,000,000 visitors to its shores annually. The upper reaches of the l,il.e aue on1y about i miles east
of the Denton City Limits, NN-hile the daun is 15 miles from downtown Denton. C'rrapevine L,il.e, another lauge body of NN-ater
created by the TT.S. Army Corps of Engineers, is locatecl in Denton and Taurant Cotmties. The daun is 23 miles from Denton.
Paul.s and recreational aueas abound on the shores of L,il.e Ray Roberts, L,il.e LeNN-isvilLe, and C'rrapevine L,il.e. Boating ~ishing,
hunting, sNN°imminz and aill NN-ater sports aue the favorite recreational pastimes, NN-hich, because of this auea` s favorable climate, aue
in use the yeau round.
The City of Denton Paul.s and Recreation Depautnent and the Denton Independent School District have created a pauhnership to
produce a signahire NN-ater recreation athraction. The $12.16 million Wateiworl.s Pauk openecl in 2003 and feahues fotu NN-ater
slides, a children's play pool, a 600 ft long continuous flow hibing river, outdoor aunphitheater, pavilions, asand volleyb111 court
and tNN-o indoor pools. The Hula Loop slide NN-as recently addecl to the Water Pauk and Nvork is underway to install an TTltra Violet
light sanitizing system to the outdoor pools. Other recently completed CIP pro~jects include the renovation and expansion of the
Senior Center, the addition of new peclestriln trails at Denia Pauk and TTnicorn Lail.e, the conshliction of Briercliff Paul., and
improvements to the courtyaud at City Haill and to the playground at Quail.ertoNN-n Paul.. Constrliction has just begun on trails in
Wheeler Itidge Pauk and bidding is currently t11.ing place to rebuild Owsley Pauk and to conshlict Speciailist Eaunest W. Daillas,
Jr. Veterans Memorial Paul.. The Paul.s and Recreation Depauhment is also lool.ing to the fiihue NN-ith the purchase of a 196 acre
pauk site that NN-ill eventuail1y become the home of athletic fields, wall.ing trvls, and a lauge multi-generational recreation and
fitiiess center.
A - 6
APPENDIX B
EXCERPTS FR( )M TIIE
CITY ( )F DENT( )N, TEXAS
C()MPFtEHENSI VE ANNT TAL FINANCIAL FtEP( )RT
For the Year Endecl September 30, 2010
The ndormation contained in this Appendix consists of ex-cerpts from the Cit-v of Denton,
Texas Comprehensive Annuail Financiail Report for the Year Ended September 30, 2010,
and is not intendecl to be a complete statement of the City's financial condition. Reference is
made to the complete Report for fiuther information.
Financial Advisc~ry Services
Frovided By
F'
Preliminary
$32,100,000
City of Denton, TeYas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Issue Summary
Total Issue Sources And LTses
Dated 04/01/2011 1 Delivered 04/01/2011
Sources Of Funds
Par amuiuit uf Bundy
Tutal tiuurces
Uses Of Funds
Cu5t5 uf ISSUVice
Depuyit tu Pruject Cun5trlictiun Fiuid
Roundina Amount
Tutal i?ses
3/21/2011 1 4:56 PM
Part 1 of 2
General
Solid
General Govt
General Govt
Govt - 20
Solid Waste -
Waste - 10
- 5 Year
- 10 Year
Year
5 Year
Year
$1,025,000.00
$480L000.00
$4.185.000.00
$225.000.00
$1,950,000.00
$1,025,000.00
$480,000.00
$4,185,000.00
$225,000.00
8,21111.94
4,3111.75
2,018.69
17,61111.47
946.26
1,9411,111111.1111
1,1119,111111.1111
481,111111.1111
4,165,111111.1111
225,000.00
1,799.06
1,689.2J
13,018.691
2,399.53
(946.26)
$1,950,000.00
$1,025,000.00
$480,000.00
$4,185,000.00
$225,000.00
Preliminary
$32,100,000
City of Denton, TeYas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Issue Summary
Total Issue Sources And LTses
Dated 04/01/2011 1 Delivered 04/01/2011
Sources Of Funds
Par amuiuit uf Bundy
Tutal tiuurces
Uses Of Funds
Cu5t5 uf ISSUVice
Depuyit tu Pruject Cun5trlictiun Fiuid
Roundina Amount
Tutal i?ses
3/21/2011 1 4:56 PM
Solid Waste - Wastewate Electric - 20
20 Year r- 5 Year Year
Part 2 of 2
Issue
Summarv
$3,485,000.00
$illll,llllll.llll
$211,2511,111111.1111
$32,11111,111111.1111
$3,485,000.00
$500,000.00
$20,250,000.00
$32,100,000.00
14,656.54
2,1112.811
85,163.55
135,111111.1111
3,4711,111111.1111
illll,llllll.llll
21L165,111111.1111
31,965,111111.1111
343.46
(2,11_12.81_I)
1163.sJ1
-
$3,485,000.00
$500,000.00
$20,250,000.00
$32,100,000.00
Preliminary
$32,100,000
City of Denton, TeYas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Issue Summary
Debt Service Schedule
Part 1 of 2
Date
Principal
Coupon
Interest
Total P+I
Fiscal Total
04M2011
-
-
-
-
-
02.1S2012
1,525,000.00
4.7SU°~o
1,329,920.85
2,854,920.85
-
08 1s 2012
-
-
726,156.25
726,156.25
-
09302012
-
-
-
-
3,581,077.10
112 li.'21113
2,195,111111.1111
4.7J11°o
726,156.25
2,921,156.25
-
08 . 1 i.'21113
-
-
674,112 i.l ll l
674,112 i.l ll l
-
093121_113
-
-
-
-
3,595,181.25
112 1521114
2,285,111111.1111
4JJ11"u
674,1125.1111
2,959,1125.1111
-
1_18 1 J21_114
-
-
619, 7J6.2 J
619, 7J 6.2 5
-
0931_I21_114
-
-
-
-
3,578,781.25
112 ji.'2015
2,4I111,111111.1111
4.7J11'?o
619,756.25
3,019,756.25
-
1_18. 1 J21_11 S
-
-
562,756.25
562,756.2 5
-
09302015
-
-
-
-
3,582,512.50
112 ji.'2016
2,515,111111.1111
4.7J11°o
562,756.25
3,1177,756.25
-
1_18. 1 i21_116
-
-
i I_13,1_12 i.l_II_I
5l_13,1_12 i.l_II_I
-
1193112116
-
-
-
-
3,5811,791.25
1_12. 1 J21_117
1, U91_I,1_II_II_I.1_II_I
4.7 S1_I°~u
i I_13,1_12 5.1_II_I
1, J93,1_12 5.1_II_I
-
1_18. 1 J21_117
-
-
477,137. 51_I
477,137. 51_I
-
09302017
-
-
-
-
2,070L162.50
02.1S2018
1,140,000.00
4.7SU°~o
477,137.50
1,617,137.50
-
118 1J21118
-
-
4511,1162511
4511,1162511
-
09302018
-
-
-
-
2,()67,2()().()()
02.1S2019
1,19U,UUU.UU
4.7SU°~o
450,062.50
1,640,062.50
-
08 li2019
-
-
421,800.00
421,800.00
-
0930I2019
-
-
-
-
2,061,862.51_I
1_12.1J21_121_I
1,255,1_II_II_I.1_II_I
4.7S1_I°~u
421,81_II_I.1_II_I
1,676,81_II_I.1_II_I
-
IIR 1i211211
-
-
391,993.75
391,993.75
-
093021_121_I
-
-
-
-
2,068,793.75
112 ji.'2021
13211,111111.1111
4.7J11°o
391,993.75
1,711,993.75
-
IIR 1i21121
-
-
361L643.75
361L643.75
-
0930121_121
-
-
-
-
2,1_172,637.51_I
112 ji.'?II??
1,215,111111.1111
4.7J11°o
361L643.75
1,575,643.75
-
1_18. 1 J21_122
-
-
331, 787. JI_I
331, 787. J I_I
-
0931_I21_122
-
-
-
-
1,91_17,431.25
112 ji.'2023
1,275,111111.1111
4.7J11°o
331,797.511
1,6116,797.511
-
1_18. 1 i21_123
-
-
31_11, i U6.2 i
31_I 1, iU6.2 i
-
09302023
-
-
-
-
1,908,293.75
112 15.'2024
1,335,111111.1111
4.7J11°o
3111,5116.25
1,636,5116.25
-
1_18. 1 i21_124
-
-
269,81_II_I.1_II_I
269,81_II_I.1_II_I
-
11931121124
-
-
-
-
1,9116,3116.25
1_12.1J21_12S
1,41_II_I,1_II_II_I.1_II_I
. .
4.7S1_I°~u
269,81_II_I.1_II_I
1,669,81_II_I.1_II_I
-
1_18. 1 J21_12 i
236, i il_I.1_II_I
236, i i I_I.1_II_I
-
11931121125
-
-
-
-
1,9116,3511.1111
1_12. 1 J21_126
1, 471_I,1_II_II_I.1_II_I
4.7 S1_I°~u
236, i il_I.1_II_I
1, 7U6, i i I_I.1_II_I
-
3/21/2011 1 4:56 PM
Preliminary
$32,100,000
City of Denton, TeYas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Issue Summary
Debt Service Schedule
Date Principal
0s 152026
-
09302026
-
112 1 J21127
1,540,000.00
08 1J2U27
-
09302027
-
02 li?0?R
1,615,000.00
1_18. 1 J 21_12 8
-
09302028
-
1_12. 1 i21_129
1,695,1_II_II_I.1_II_I
1_18. 1 J21_129
-
0930 2029
-
02.1J'2030
1,775,000.00
08 . 1 i.'211311
-
0930 2030
-
02. 1 S'2U31
1,865,000.00
0930?031
-
Total
$32,100,000.00
Yield Statistics
Bund Yeai Du111r5
Acernge Life
Acernae Coupon
Net Intere5t Cost (NIC)
Tiue Intere5t Cost (TIC)
Bund Field fur arbitrage Pu
rpu5e5
A11 Incluaice Cost (AIC)
IRS Form 8038
Net Intereat Cost
WeiWited Average Maturitv
Coupon
4.7S11'u
4.7J11° u
-4.7J11°~u
-4.7J11°~u
-1JSU°o
Interest
201,637.50
201,637.50
165,062.51_I
165,1162.511
126,706.2s
126,706.2s
86,450.00
86,450.00
-4-4,293.7s
-4-4,293.7s
$15,232,220.85
3/21/2011 1 4:56 PM
Total P+I
201,637.50
1,741,637.511
16 i, U62. J I_I
1,7811,1162.511
126,7U6.25
1,821,706.25
86,450.l ll l
1,861,450.00
44,293.75
L9U9,293.75
$47,332,220.85
Part 2 of 2
Fiscal Total
1,9118,187.511
1,9116, 71111.1111
L9116J6RJ5
1,9118,156.25
L9115,743.75
L9119,293.75
$320L67R33
9.9911 Yeai5
4.751111111111°~u
4.751111111111°~u
4J4i2222oo
4J4i??22°0
4. $1_12671_I ioy,
4.7500000oo
9.9911 Yeai5
Preliminary
$1,950,000
City of Denton, Texas
Coinbination TaY & Revenue Certificates of Obligation, Series ?O11
General Govt - 5 Year
Debt Service Schedule
Date
Princioal
Couaon
Interest
Total P+I
Fiscal Total,
04012011
112 1J21112
-
325,111111.1_II_I
-
4.7J11°u
-
81_1,79958
411j,789.sR
-
-
593.75
38
38,593.75
-
1_18 1i2U12
-
,
_
44~1,3R333
~~93~~;ZU12
112 li21113
380,IIII0.1_II_I
4.7J11'?~0
38.593.75
418,593J5
-
-
56b.75
29
29,56RJ5
-
Ub 15 '2013
-
.
_
44R,162.50
0930 2013
112 1521114
-
395,111111.1_II_I
-
4.7J11°~u
29,569.75
424,568.75
-
-
211
187.J11
21_I,187.J1_I
-
1_I$li.'2014
-
,
-
_
-1--1,756.2i
f19302f114
l12 15 '2015
-
41>,000.011
-
4.7JU°u
211,1$7.511
435,197.50
-
-
111
331.25
11_1,3312s
-
1_181i201S
-
,
09302015 112 152016
435,1_II_I0.1111
4.7JU"o
111,331.25
445.331.25
-
_
,331.2j
445
i~9~3U;2~~16
-
-
Tutal
$1,950,OOU.OU
-
$278,152A8
$2,228,152.08
-
Yield Statistics
$s.s55.s3
Bond Yenr Du111ra
3.111_)3 Years
avernae Life
4J499999°0
AvCS1gZ COlljlUll
4.7499999° u
Net Intere5t Coat (N1C)
4.7371787°0
Tiue Interest Cuat (TIC)
4J-4j2222u„
Bund I ield for ? rUitraQe Puipoae5
4.8912867°0
All Incluvice Coat (AIC)
IRS Form 8038
4.7499999" o
Net Interest Cust
3.01_13 Year5
weiahted acern,--e MntuntN
3/21/2011 1 4:56 PM
Preliminary
$1,025,000
City of Denton, Texas
Combuiation Tax & Revenue Certificates of Obligation, Series 2011
General Govt - 10 Year
Debt Service Schedule
Date
Principal
Coupon
Interest
Total P+I
Fiscal Total
04.'01 2011
-
-
-
-
-
1_12.1s2012
65,1_II_II_I.1_II_I
4.7J1_I°~o
42,466.32
11_17,46632
-
1_I$.li'21_112
-
-
22,81_II_I.1_II_I
22,81_II_I.1_II_I
-
09302012
-
-
-
-
131_1,26632
112 li21113
911,111111.1111
4.7J11°u
22,81111.1111
112,81111.1111
-
08 1s2013
-
-
20L662.50
20L662.50
-
09302013
-
-
-
-
133,462.50
02 li 2014
90,000.00
4JSOoo
20L662.50
110L662S0
-
1_18.1s2014
-
-
18,525.1_I0
18,525.1_II_I
-
0931_I21_114
-
-
-
-
129,187.51_I
1_12.1s201J
9i,1_II_II_I.1_II_I
4.7J1_I°~o
18,525.1_I0
113,525.1_II_I
-
1_181s21_11S
-
-
16,268.75
16,268.75
-
0930201s
-
-
-
-
129,793.75
02 1s 2016
100L000.00
4JSOoo
16,268J5
116,268J5
-
08 1s2016
-
-
13,993.75
13,993.75
-
09302016
-
-
-
-
130L162.50
1_12.1s2017
11_li,l_II_II_I.1_II_I
4.7J1_I°~o
13,893.75
118,893.75
-
1_I$.li'21_117
-
-
11,41_II_I.1_II_I
11,41_II_I.1_II_I
-
09302017
-
-
-
-
131_1,293.75
1_12.1s21_118
111_I,1_II_II_I.1_II_I
4.7S1_I°~u
11,41_II_I.1_II_I
121,41_II_I.1_II_I
-
118 1s 21118
-
-
8,797.511
8,797.511
-
09302018
-
-
-
-
130L187.50
112 li21119
11J,111111.1111
4.7J11'?u
8,797.511
123,797.511
-
118 1s 21119
-
-
6,056.25
6,056.25
-
09302019
-
-
-
-
129,843.75
1_12. 1 s21_12 U
12 J,1_II_II_I.1_II_I
4. 7J1_I°~o
6,1_I i(,.2 5
131,1_I i 6.2 5
-
1_18. 1 s'21_121_I
-
-
3,1_187. 51_I
3,1_187. 51_I
-
0931_I21_121_I
-
-
-
-
134,143.75
112 ji'2021
1311,111111.1111
4.7J11°o
3,087.511
133,087.511
-
09302021
-
-
-
-
133,087.50
Tutal
$1,025,000.00
-
$285,428.82
$1,310,428.82
-
Yield Statistics
Bond Yenr pollnr5
$6,1_I09.1_13
averase Life
5.862 Year5
A \-eiase Cuupull
4.7511111111110u
Net Intere5t Cuyt (NIC)
4.7511111111110u
Tiue Intereat Coat (TIC)
4.7428862°~o
Bondl"ieldfor Arbitrnae Purpoaea
4.74S2222°~o
A11 Incluaic e Coat (AIC)
4.828391_12°~o
IRS Form 8038
Net Intere5t Cuyt
4.7511111111110u
WeiWhted average Mahirit5-
5.862 Year5
3/21/2011 1 4:56 PM
Preliminary
$480,000
City of Denton, Texas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
General Govt - 20 Year
Debt Service Schedule Part 1 of2
Date
PrincilDal
CouPon
Interest
Total P+I
Fiscal Total,
04012011
-
'
-
112 1 J21112
S,01111. UI_I
4.7J11°. u
19.RR6.67
?~,R86.67
-
-
28125
11
11,281.25
-
1_18 1 i21_112
-
.
_
36,16Z92
~~93~~;ZU12
-
"
112 1 i21113
1 i,l ll ll l.l_II_I
4J511'? 0
11,291.25
26,281.25
-
-
925.00
10
1U,92J,i)U
-
Ub 15 2013
-
,
-
_
37,206.2s
0930 2013
-
-
112 152014
1 i,l ll ll l.l_II_I
4.75I I° 0
1 U,92 5. UU
2 5,92 5. UI I
-
-
111
568J5
111,i69.7s
-
IIR 1i21114
-
,
-
_
36,493.7~
f19302f114
-
-
l12 15 '2015
211,000.00
4.750°~o
111,56$.75
3U,j69.7J
-
-
111
093.75
11_I,03.7s
-
1_181 i'201 S
-
,
_
411,662. JI I
I?I11 i
11931
'
-
_
02152016
2().UUU.~~()
4.7SU°o
10L093.75
3U,03Js
-
-
G19.7S
9
9,618J~
-
118, lj21116
-
,
_
39,712. 50
0930 2016
112 1J2017
211,1_II_II_I.1111
4.7J1_I°u
9,619.75
29,619.75
-
-
143J5
9
9,143J5
-
IIR li 21117
-
,
_
3R,762. ~t_~
i17
ti9'3~~'2t
-
-
_
021j2U1R
20,UUU.()()
4.750°~
9,143.75
29,143.75
-
-
668.75
8
8,668.7J
_
118 1 i?1118
-
,
-
_
37,R12.~0
~~9'3~~ 2U18
-
-
112. 1 i?1119
21_I,111111.1_II_I
4.7J110~u
8,668.75
28,668.75
-
-
193.75
9
R,193.7~
-
O8 lj'?019
-
,
-
_
36,R62.JU
~~9'3~~;2U19
-
-
112. 1 i'?112U
21_I,111111.1_II_I
4.7J11°~u
9,193.75
28,193.75
-
-
719.75
7
7,71RJi
-
IIR1S21_1211
-
,
-
_
,912.~0
35
i~9'3iN2U2i~
-
-
112, li.'?1121
25,IIIIII.00
4.7J11°~o
7..718.75
31.718.75
-
-
12 J.1111
7
7,12 i, l_II_I
-
11 R1 i21_121
-
,
_
39,8~}3.75
~~93U'2~~?1
-
'
02.1i2022
25,()()().00
4.75O°~0
7,125.00
32,125.00
-
-
531.25
6
6,~312i
-
IIR15'2U22
-
,
_
3R,6i6.?i
1193U21122
-
-
123
112 li21
2;,IIUU.1111
4.7J1_luu
6,531.25
31.53125
-
_
937.50
5
5.937.5I_I
-
I IR1 S21123
'
,
_
37,469.75
M ~31) '2II'13
o? 1J21_124
2i,lll_II1.1111
4.7J1_I°o
5,937.5I1
3U.937.J1_I
-
-
343.75
5
5,343.75
-
112i 1S'?II?-1
-
,
_
36,ZR1.2s
I193021124
-
-
02152025
3U,UU().()()
4.7S0°0
5,343J5
35,343J5
-
-
~~31.25
~},(,31.2i
-
I18. 15.'~112i
-
,
-
_
39,975.00
0931121_12 i
-
-
3/21/2011 1 4:56 PM
Preliminary
$480,000
City of Denton, Texas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
General Govt - 20 Year
Debt Service Schedule Part 2 of 2
Date
PrincilDal
CouPon
Interest
Total P+I
Fiscal Total,
li.'2I_126
112
31L01_II_I.011
4.7J1_I°~o
4.63125
34,631.2;
-
,
-
3 91R.75
3,918J~
-
IIR 1~21126
-
-
_
38,5511.1111
09302026
15.'71_127
112
-
311,1_II_II_I.1111
-
4.751_I°~o
3,918.7s
33,919.75
-
,
2116.25
3
3,21_16.25
-
I IR. 1 i21127
,
_
37,125.UU
i~9'3i~'2U27
-
"
(121J2(128
30,000.00
4.750°u
3,206.25
33,206.25
-
-
493.75
2
2,493.75
-
IIR li'21128
-
,
_
3 i, 71111.1111
~~9~3~~;~U28
-
"
02.152029
35,000.00
4.750-u
2,493.75
37,493.75
-
-
662.50
1
L662.50
-
U8152024
-
,
_
39,1 ~6.2 ~
~~9~3~~;2U29
-
-
112. 1 i211311
3 i_I 11111.1_II_I
4.7J I I'? a
1,662. JI_I
36,662. il l
-
-
831.25
831.2i
-
1_I8 1 S'21_130
-
_
_
37,493.75
iN~3U'N30
li21131
112
-
35,111111.1_II_I
'
4.7J11'?o
831+25
35,831.25
-
,
-
_
35,R31.25
~~9'3~~ 2U31
-
'
Tutal
$480,000.00
-
$275,674.17
$755,674.17
Yield Statistics
'
$5,RI13.67
Bond Fenr Dullaus
12.1191 Years
avernac Life
7i11110111°0
a\-ernae Cuupon
~.7JUU0111° u
Net Intere5t Coat (NICI
-4J4~9776°'0
Tnie Intere5t Cuat (TIC)
-1J4i~~~~~o
Bond Field fur Arbitrage PuipuSea
4.7~)-432R4° ~
all Inclu.5ive CoSt (AIC)
IRS Form 8038
4.75UU001oo
Net Intere5t CoSt
12.091 1'em'S
Wcighted AveraQe nIahirih
3/21/2011 1 4:56 PM
Preliminary
$4,185,000
City of Denton, TeYas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Solid Waste - 5 Year
Debt Service Schedule
Date
Principal
Coupon
Interest
Total P+I
Fiscal Total
04012011
-
-
-
-
-
02.1S2012
700,000.00
4.7SU°~o
173,386.88
873,386.88
-
08 1s 2012
-
-
92J69J5
92J68J5
-
11931121112
-
-
-
-
956,155.63
1_12.1J21_113
811_I,1_II_II_I.1_II_I
4.7S1_I°~u
82,768.75
892,768.75
-
08 1s2013
-
-
63,531.25
63,531.25
-
09302013
-
-
-
-
956,31_II_I.1_II_I
1_12.1J21_114
8S1_I,1_II_II_I.1_II_I
4.7S1_I°~u
63,531.25
913,531.25
-
08 152014
-
-
43,343.75
43,343.75
-
09302014
-
-
-
-
956,875.1_II_I
112 ji.'2015
9911,111111.1111
4.7J11'?o
-}3,3-}3.75
933,343.75
-
118 1J 21115
-
-
22,2116.25
22,2116.25
-
0931_I21_11S
-
-
-
-
9ii,iil_I.1_II_I
112 li.'2016
935,111111.1111
4.7J11°o
22,2116.25
957,2116.25
-
093121_116
-
-
-
-
957,206.25
Total
$4,185,000.00
-
$597,086.88
$4,782,086.88
-
Yield Statistics
Bimd Fear Diill'u5 $12,5711.25
Acernae Life 3.1_II_14Yenra
Aveiase Cuupull 4.7511111111110u
Net Intere5t CoSt (NIC) 4.751_II_II_II_II_I°u
Tnie Intere5t CuSt (TIC) 4.7371913"o
Bond I"ield for Arbitrnae Purpoaea 4.74S2222°o
all Inclu.5ive CuSt ( aIC) 4.99126111"0
IRS Form 8038
Net Intere5t Cuyt 4.751111111111'?u
Weiahted Acernae 1\lnturih 3.1_II_14Yenra
3/21/2011 1 4:56 PM
Preliminary
$225,000
City of Denton, Texas
Combuiation Tax & Revenue Certificates of Obligation, Series 2011
Solid Waste - 10 Year
Debt Service Schedule
Date
Principal
Coupon
Interest
Total P+I
Fiscal Total
04.'01 2011
-
-
-
-
-
02.1s2012
1S,000.00
4.7SU°~o
9,321.88
24,321.88
-
08 1s2012
-
-
4,987.50
4,987.50
-
09302012
-
-
-
-
29,30938
112 li21113
211,111111.1111
4.7J11'?u
4,997.511
24,997.511
-
08 1s2013
-
-
4,512.50
4,512.50
-
09 302013
-
-
-
-
29, 500.00
02 li 2014
20L000.00
4JSOoo
4,51250
24,512.50
-
1_18. 1 s'2014
-
-
4,1_13 7. J I_I
4,1_137. JI_I
-
09302014
-
-
-
-
28, i il_I.1_II_I
1_12. 1 s21_11 S
21_I,1_II_II_I.1_II_I
4.7 S1_I°~u
4,1_13 7. J I_I
24,1_137. JI_I
-
1_18. 1 s21_11 S
-
-
3, J62. 51_I
3, J 62. 51_I
-
09 30201s
-
-
-
-
27,600.00
112 ji'21116
211,111111.1111
4.7J11'?o
3,562.511
23,562.511
-
II8 1J21116
-
-
3,II87.511
3,II87.511
-
119 311.'2116
-
-
-
-
26,6511.1111
1_12. 1 s21_117
2 5,1_II_II_I.1_II_I
4.7 S1_I°~u
3,1_187. J I_I
2 8,1_187. JI_I
-
1_18 1 s 21_117
-
-
2,493.75
2,493.75
-
09302017
-
-
-
-
30,581.25
02.1s2018
25,000.00
4.7SU°~o
2,493.75
27,493.75
-
08 1s 2018
-
-
1'900.00
1'900.00
-
09 302018
-
-
-
-
29,393.75
112 1s?IU9
?i,llllll.llll
4JJ11°o
1'91111.1111
26,91111.1111
-
08 1s2019
-
-
1,306.25
1,30625
-
09302019
-
-
-
-
28,206.25
1_12. 1 s'21_121_I
2 5,111_II_I.1_II_I
4.7 S1_I°~u
1,306.2 5
26,3 U6.2 5
-
1_18. 1 s'21_121_I
-
-
712. 51_I
712. 51_I
-
09302020
-
-
-
-
27,1_118.75
112 ji'2021
311,111111.1111
4.7J11°o
712.511
311,712.511
-
09302021
-
-
-
-
30L712.50
Tutal
$225,000.00
-
$62,521.88
$287,521.88
-
Yield Statistics
Bond I"enr pollnra
$1,316.2 i
averase Life
J.RJII Year5
A \-eiase Cuupull
4.751111111140u
Net Intere5t Cuyt (NIC)
4.751111111140u
Tiue Intereat Coat (TIC)
4.742871_17°o
Bondl"ieldfor Arbitrnae Purpoaea
4.74S2222°o
A11 Incluaice Coat (AIC)
4.828S672°o
IRS Form 8038
Net Intere5t Cuyt
4.751111111140u
Weighted average Mahirit5-
-S.RS11 Year5
3/21/2011 1 4:56 PM
Preliminary
$3,485,000
City of Denton, Texas
Coinbination TaY & Revenue Certificates of Obligation, Series ?O11
Solid Waste - ?0 Year
Debt Service Schedule Part 1 of2
Date
Princiual
Couaon
Interest
Total P+I
Fiscal Total,
04012011
-
-
-
112 1 J21112
JI_I,111111.1_II_I
4.7S11°u
144,3 RJ.49
19 4,385 .49
-
1_18 li'2U12
_
275,966.74
~~93~~;2U12
112 li21113
11J,111111.1_II_I
4.7J11'?o
81,JR1.2i
196,~81.2i
-
-
l.()()
78
b5i
7b,RJi).UU
-
Ub. 15 7013
-
_
,
_
275,431.25
09 30 2013
-
-
112 152014
121_I,111111.1_II_I
4. 7J I I° u
79, R ill.l_IU
19 R, 8 JI_I.1111
-
-
1
I00.1111
76
76,111111.1_II_I
-
1_18: 152014
-
_
,
-
_
274,850.00
09302014
-
-
l12 15 2015
125,000.00
4.750°~o
76,000.1111
201.lIlIl1.UU
-
-
1
131.2 i
73
73.11312 5
-
1_18 1 i'2U 1S
-
_
,
_
274,1131.25
1193012111 i
-
"
112 li.'2016
1311,1_I00.1111
4J5I_I°~o
73,1_131.25
21_13.1131.25
-
-
943.7J
69
G2943.7 J
-
09 . 1 j'2016
-
,
_
272,975.1111
1193121116
112 1521_117
140LI_I00.1111
4.751_I°~o
69,943.75
209,943.75
-
-
618.7s
66
66,618.75
-
IIR 1i21117
-
,
_
t_
276,J62.J1
i17
ti9'3~~'2t
-
-
_
U21j20lh
145,UUO.lll1
4.750°~o
66,618.75
211,618.75
-
-
175.1_I0
63
63,175.1111
~
08 . 1 i?1118
-
,
_
27~},793.75
~~N'3~~ 2U1R
'
-
112, li?IU9
lill,lllll_I.1_II_I
4.7J11'?0
63,175.1_II_I
213,175.1111
-
-
612.5I)
59
59,612.5(1
-
IIR 1~~21119
-
,
-
_
27?.7x7so
09302019
-
-
112, li'21120
1611,11111_I.1_II_I
4JJIlu,u
59,612.51_I
212612.511
-
-
1_IR1 S'2020
-
-
_
275,425.011
09302020
-
-
02, 1;'?()?1
165,OOU.UU
4.7SOoso
5 S.R12.iU
220L812.SO
-
-
893.75
51
51,893.75
-
I IR1 i21_121
-
,
272,7116.25
0930 21121
'
112.1i21122
175,11110.00
4.75110~u
51,993.75
226,893.75
-
-
737.50
47
47,737.50
-
(iR15'2022
-
,
_
274,631.2i
1193U21122
-
-
123
112 li21
1RJ,UOII.IIII
4.7J1_I"o
47,737.511
232,737.51_I
-
_
-
343.75
43
43,343.75
-
I IR1 i21_123
-
,
_
276,IIR1.2~
119 30 21123
-
'
112 1J21_124
191_I,UUll.llll
4.7J1_I"o
43,343.7;
233,343.75
-
-
831.2j
38
38,831.25
-
O8 1;21124
-
,
-
_
272,175.111_I
I1930~21124
-
-
02152025
200,001).00
4.7S1_)"0
38,831.25
23R,R31.25
-
-
()Rl.2i
34
3-1,IIR1.?i
-
IlR 15'~~~~i
-
,
-
_
272,912._511
0931121_I2i
-
-
3/21/2011 1 4:56 PM
Preliminary
$3,485,000
City of Denton, Texas
Coinbination TaY & Revenue Certificates of Obligation, Series ?O11
Solid Waste - ?0 Year
Debt Service Schedule Part 2 of 2
Date
Princiual
Couaon
Interest
Total P+I
Fiscal Total,
li.'2I_126
112
2111.1_II_II_I.1111
4.751_I°~o
34,1_181.25
244,091.25
-
,
-
29M93J5
29,093.75
-
(~R 1j'2(Cti
-
-
_
273,175.UU
~~93~~;2U26
15.'21_127
112
-
2211,1_II_II_I.1111
-
4.7S1_I°~o
29,093.75
249,1193J5
-
,
-
968.75
23
23,868.75
-
IIR 1i21127
-
,
_
272,962.5U
U93~12U27
-
_
(121J2(128
235,000.00
4.7J0'?u
23,86R.7J
258,868.75
-
-
297.50
19
18,287.511
-
IIR li'2112R
-
,
_
277,156.25
~~9~3~~;2U28
-
"
02.1J2029
245,000.00
4.7Jf1°o
18,287.50
263,287.50
-
-
469J5
12
12.469.75
-
U8152029
-
,
-
_
27J,7J6.25
~~9~3~~;2U29
-
-
112. 1 i211311
2 i;,l ll lll.l_II_I
4J511'? 0
12,468.75
267.468.75
-
-
412. JI I
6
6.412. s1_I
-
1_18. 1 i.'21_131_I
-
,
_
_
273,hh1.2~
i~9~3U'~~~3~~
1 i71131
()2
-
2 70,I II IIl.1_II_I
'
4J5I I'? 0
6,413. JI_I
276,412. J I I
-
.
-
_
276,~}12.J1_I
09302031
-
'
Tutal
$3,485,000.00
-
$2,005,672J9
$5,490,672.99
-
Yield Statistics
'
$42.224.69
Bond Fenr Dullaus
12.116 Years
avernae Life
4.751_I001111° u
a\-ernac Cuupoii
~.7JUU01111° u
Net Intere5t Coat (NICI
:}.7:}i981_II_I"o
Tnie Intere5t Cuat (TIC)
-1J4i~~~~~o
Bond Field fur Arbitrage PuipuSea
4J9-43012° ~
all Incli~.5ive CoSt ( aIC)
IRS Form 8038
4.75000 u u 0oo
Net Intere5t CoSt
12.ll61'em'S
Weitjhted AveraQe nIahuih'
3/21/2011 1 4:56 PM
Preliminary
$500,000
City of Denton, Texas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Wastewater - 5 Year
Debt Service Schedule
Date
PrincilDal
Coupon
Interest
Total P+I
Fiscal Total,
04012011
112 1J21112
-
8~,111111.1_II_I
-
4.7J11°~u
-
21_1,71J.28
1115,715.29
-
-
85625
9
9,8J6.2i
-
1_18 li21_112
-
,
0930ZU12
112 1 i21113
11_II_I,111111.1_II_I
4.7J I I°,u
9. R i6.2 i
1119, RJ 6.2 J
-
-
-1R125
7
7,4R1.25
-
UR 15 2013
-
.
_
117,337.50
0930 2013
112 1521114
-
11_IU.111111.1_II_I
-
4.7J11°~u
7.491.2i
1117,481.25
-
-
106.25
S
J,1116.2i
-
IIR li21114
-
,
-
_
112,~87.Jf1
09302014
l12 15 '2015
-
105,000.00
-
4.7JU°u
5,106.25
110,1116.25
-
-
612. JI I
2
2,612. il_I
-
1_181 i.'?I_11 S
-
,
_
112,71R.7~
09302015
U2152U16
110,UUU.00
4.7SU°o
2,612.50
112,612.5U
-
_
112,612.~~~
iN~3U;2M6
-
-
Tutal
$SUU,00(1.UU
-
$70,827J8
$570,827.78
-
Yield Statistics
$L491.11
Bond Yenr Du111ra
2.9b2 Years
avernae Life
4.750000 1°0
A\-CS1gZ COlljlUll
]51_IU0111"u
Net Intere5t Coat (N1C)
4.7370939°0
Tiue Interest Cuat (TIC)
4J-4j2222o.
Bund I ield for ? rUitraQe Puipoae5
4.8922248oo
All Incluvic e Coat (_1IC )
IRS Form 8038
4.75U)UU1°o
Net Interest Cust
2.982 Yeary
Wei hted acern,--e 1\lnturitN-
3/21/2011 1 4:56 PM
Preliminary
$20,250,000
City of Denton, TeYas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Electric - 20 Year
Debt Service Schedule
Part 1 of 2
Date
Principal
Coupon
Interest
Total P+I
Fiscal Total
04M2011
-
-
-
-
-
02.1S2012
28U,UUU.UU
4.7SU°~o
838,968.75
1,118,968.75
-
08 1s 2012
-
-
474,297S0
474,297S0
-
09302012
-
-
-
-
1,593,256.25
112 li.'21113
665,111111.1111
4.7J11'?o
474,297.511
1,139,297.511
-
IIR 1i21113
-
-
458,493.75
458,493.75
-
09302013
-
-
-
-
1,597,781.25
112 15.'2014
695,111111.1111
4.7J11'?o
458,493.75
1,153,493.75
-
1_18 1 J21_114
-
-
44 L987. JI_I
44 L987. JI_I
-
0930I2014
-
-
-
-
1,595,481.25
112 li.'21115
7311,111111.1111
4.7J11'?u
441,997.511
1,171,997.511
-
1_18. 1 J21_11 S
-
-
424,651_I.1_II_I
424,651_I.1_II_I
-
09302015
-
-
-
-
1,596,637.50
112 1J2116
765,111111.1111
4JJ11°o
424,6511.1111
1,199,6511.1111
-
1_18 1 J21_116
-
-
406,481.2 5
406,481.2 5
-
1193112116
-
-
-
-
1,596,131.25
1_12.1J2017
81_II_I,1_II_II_I.1_II_I
4.7J1_I°~u
406,481.25
1,206,481.25
-
118 1S21117
-
-
387,481.25
387,481.25
-
09302017
-
-
-
-
1,593,962.50
02.1S2018
840,000.00
4.7SU°~o
387,481.25
1,227,481.25
-
08 1s2018
-
-
367,531.25
367,531.25
-
11931121118
-
-
-
-
1,595,1112.511
1_12.1J21_119
881_I,1_II_II_I.1_II_I
4.7S1_I°~u
367,531.25
1,247,531.25
-
IIR 1i21119
-
-
346,631.25
346,631.25
-
0930I2019
-
-
-
-
1,594,162.51_I
. .
1_12.1J21_120
925,1_II_II_I.1_II_I
4.7J1_I°~o
346,631.25
1,271,631.2i
08 . 1 i.'211211
-
-
32 4, 662. J I I
32 4, 662. J I I
-
0931_I21_121_I
-
-
-
-
1,596,293.75
112 ji.'2021
9711,111111.1111
4.7J11°o
324,662.511
1,294,662.511
-
08 . 1 i.'21121
311 L 62 i.l ll l
311 L 62 i.l ll l
-
093121_121
-
-
-
-
1,596,287.51_I
112 li.'21122
1,I11J,111111.1111
4.7J11°o
3111,625.1111
1,316,625.1111
-
1_18 1s21_122
-
-
277, 518.75
277, 518.75
-
09302022
-
-
-
-
1,594,143.75
112 li.'21123
1,1165,111111.1111
4.7J11°o
277,518.75
1,342,518.75
-
1_18. 1 J21_123
-
-
2 52, 22 5.1_II_I
2 52, 22 5.1_II_I
-
09302023
-
-
-
-
1,594,743.75
112 15.'21124
1,1211,111111.1111
4.7J11°o
252,225.00
1,372,225.1111
-
1_18. 1 S21_124
-
-
22 J, 62 5.1_II_I
22 J, 62 5.1_II_I
-
11931121124
-
-
-
-
1,597,8511.1111
1_12.1J21_12S
1,171_I,1_II_II_I.1_II_I
. .
4.7S1_I°~u
225,625.1_II_I
1,395,625.1_II_I
-
1_18. 1 J21_12 i
197, 83 7. J I_I
197, 83 7. J I_I
-
11931121125
-
-
-
-
1,593,462.511
1_12. 1 J21_126
1,231_I,1_II_II_I.1_II_I
4.7 S1_I°~u
197, 83 7. J I_I
1,42 7, 83 7. J I_I
-
3/21/2011 1 4:56 PM
Preliminary
$20,250,000
City of Denton, TeYas
Coinbination TaY & Revenue Certificates of Obligation, Series 20 11
Electric - 20 Year
Debt Service Schedule
Date Principal
0s 152026
-
093121_126
-
112 1 J21127
1,2911,111111.1111
1_18. 1 J 21_12 7
-
09302027
-
021s2028
1350L000.00
08 1S2U28
-
0930202R
-
02. 1 S'2U29
1,415,000.00
1_18. 1 J21_129
-
0930 2029
-
02.1S'2030
1,485,000.00
08 1s2030
-
0930 2030
-
02. 1 J'2U31
1,560,000.00
09302031
-
Total $20,250,000.00
Yield Statistics
Bund Yeai Du111r5
Acern5e Life
Acernae Coupon
Net Intere5t Cost (NIC)
Tiue Intere5t Cost (TIC)
Bund Field fur arbitrage Pur
j)u5e5
A11 Incluaice Cost (AIC)
IRS Form 8038
Net Intereat Cost
WeiWited Average Maturitv
Coupon
4.7S11'u
4JSOoo
-1JSU°o
-1JSU°o
-1JSU°o
Interest
168,625.00
16$,625,00
13Z9R7.511
137,997.50
105,925.00
_105,925.00
_72,318.7s
72,318.7s
37,050.00
37,050.00
$11,656,856.25
3/21/2011 1 4:56 PM
Total P+I
168,625,1111
1,458,625,1111
13Z9R7.511
1,497,997.511
11_I i, y2 i.l_I I_I
1,521_1,92 5.1_II_I
72,318.75
1,557,31RJ5
3 7, I l i 11.1111
1,597,I1511.1111
$31,906,856.25
Part 2 of 2
Fiscal Total
1, 596,462. 51_I
1,596,612511
1,593,912.511
1,593,243.75
1,594,369.75
1,597,I 1i11.1111
$245.40750
12.ll9 Yeai5
4.751111111111°~u
4.751111111111°~u
4J459815oo
4J4i??22°0
4.79428J1_I°~u
4.7500000oo
12.ll9 Yeai5
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of April l, 2011(this "Agreement" bv and betiveen the Citv
of Denton, Teias (the "Issuer"), and The Basilc ofNeN-, York Mellon Trust Company, National Association,
Dallas, Teias, a limited purpose national banlcing association with tnist povvers (the "Banlc").
RECITALS
WHEREAS, the Issuer has du1v authorized and provided for the issuance of its Certificates of
Obligation, Series 2011 (the "Securities"), such Securities to be issued iu fullv registered form onlv as to the
p3~-ment of principal 3nd interest thereon; 3nd
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof in
accordance vvith the "Ordiuance" (hereiuafter defined); and
WHEREAS, the Issuer has selected the Basilc to seitire as Paviug Agent/Registrar in connection NN ith
the p3yment of the principal of, premium, if 3ny, 3nd interest on said Securities 3nd vvith respect to the
registration, transfer and eichange thereof bv the registered o-,-,ners thereof; and
WHEREAS, the Banlc has agreed to seitire in such capacities for and on behalf of the Issuer and has
fiill povver and authority to peiform and seii e as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follovvs:
ARTICLE ONE
APPOINTMENT OF BANIi AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment.
The Issuer hereby appoints the Banlc to seii e as Paying Agent with respect to the Securities. As
Paviug Agent for the Securities, the Banlc shall be responsible for payiug on behalf of the Issuer the priucipal,
premium (if anv), and interest on the Securities as the satne become due and payable to the registered ovvners
thereof, all iu accordance N-vith tlus Agreement and the "Ordiuance" (hereiuafter defiued).
The Issuer hereby appoiuts the Basilc as Registrar vvith respect to the Securities. As Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the
ovvnerslup of said Securities and N-vith respect to the transfer and eichange thereof as provided hereiu and iu
the "Ordinance."
The Banlc hereby accepts its appointment, and agrees to seii e as the Paying Agent and Registrar for
the Securities.
Section 1.02. Compensation.
As compensation for the Bank's seii ices as Paying Agent/Registrar, the Issuer hereby agrees to pay
the Baiik the fees aiid aiiiounts set forth in Schedule A attached hereto for the first N-ear of tlus Agreement aiid
thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for seii ices as
Paviug Agent/Registrar for muuicipalities, N-,1uch shall be supplied to the Issuer on or before 90 days prior
to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the follovving Fiscal
Year.
Iu addition, the Issuer agrees to reuiiburse the Baiik upon its request for all reasonable eipenses,
disbursements and advances incurred or made bv the Banlc in accordance vvith any of the provisions hereof
(iucludiug the reasonable compensation and the eipenses and disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of tlus Agreement, eicept as othei-xvise eipressly provided or unless the conteit
otheivvise requires:
"Acceleration Date" on any Security means the date on and after v,hich the principal or any or a11
iustalliiients ofiuterest, orboth, are due and payable on any Security -,-,luchhas become accelerated pursuant
to the terms of the Securitv.
"Banlc Office" means the principal corporate tnist office of the Bank as indicated on the signature
page hereo£ The Baiik N-vi11 notifi- the Issuer iu vvriting of any change in location of the Baiik Office.
"Fiscal Year" means the fiscal N-ear of the Issuer, endiug September 30.
"Holder" and "Security Holder" each means the Person iu N-,hose nasiie a Securitt- is registered iu the
Security Register.
"Issuer Request" and "Issuer Ordinance" means avritten request or ordinance signed in the name of
the Issuer by the Mayor of the Issuer delivered to the Basilc.
"Legal Holida~-" means a da~- on N~1uch the Baiik is requued or authorized to be closed.
"Ordiuance" means the ordiuance of the governing body ofthe Issuer pursuant to N-, luch the Securities
are issued, certified bv the City Secretaiv or anv other officer of the Issuer and delivered to the Banlc.
"Person" means any inditi-idua1, corporation, partnership, joint ti-enture, associcition, joint stoclc
company, trust, uniucorporated orgasuzation or goveriuiient or any agency or political subdivision of a
government.
"Predecessor Securities" of any particular Securitv means evei-v previous Securitv evidencing all or
a portion of the sasiie obligation as that evidenced by such particular Security (and, for the purposes of tlus
~
definition, any mutilated, lost, destroyed, or stolen Securitt- for NN1uch a replacement Security has been
registered and delivered in lieu thereof pursuant to Section 4.()6 hereof and the Ordinance).
"Record Date" has the meaning assigned to such term in the Ordinance.
"Redemption Date" v,hen used vvith respect to any Security to be redeemed means the date fiied for
such redemption pursuant to the terms of the Ordiuance.
"Responsible Officer" N-,hen used vvith respect to the Baiik means the Chairman or Vice-Chairman
of the Board of Directors, the Chairman or Vice-chairman of the Eiecutive Committee of the Board of
Directors, the President, any Vice President, the Secretaiy, any Assistant Secretaiy, the Treasurer, any
Assistlnt Treasurer, the Cashier, anv Assistlnt Cashier, anv ~Tnist Officer or Assistlnt Tnist Officer, or anv
other officer of the Baiik customarily peiformiug functions suiular to those performed by any of the above
designated officers and also means, vvith respect to a particular corporate tnist matter, anv other officer to
N-,hom such matter is referred because of lus lcno-,-,ledge of and fasiuliaritv the pai-ticular subject.
"Securitv Register" means aregistermaiutaiued bv the Baiik on behalf ofthe Issuer providiug for the
registration and transfer of the Securities.
"Stated Maturity" means the date specified in the Ordinance the principal of a Security is scheduled
to be due and payable.
Section 2.02. Other Definitions.
The terms "Bank," "Issuer," and "Securities (Security)" have the meanings assigned to them in the
recital paragraphs of tlus Agreement.
The term "Paviug Agent/Registrar" refers to the Baiik iu the peiformance of the duties and functions
of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent.
As Paying Agent, the Bank shall, provided adequate collected fimds have been provided to it for such
purpose by or on behalf of the Issuer, pay on behalf of the Issuer the priucipal of each Security at its Stated
Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Banlc
at the Baiik Off~ice.
As Paying Agent, the Baiik shall, provided adequate collected funds hatire been provided to it for such
purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Securitv v, hen due, bv
computiug the asiiount of iuterest to be paid each Holder and prepariug and sendiug checks by Uuited States
Mail, fust class postage prepaid, on each payment date, to the Holders of the Securities (or their Predecessor
Securities) on the respective Record Date, to the address appeariug on the Securitt- Register or by such other
method, acceptable to the Banlc, requested in vriting by the Holder at the Holder's rislc and eipense.
Section 3.02. Payment Dates.
The Issuer hereby instnicts the Batilc to pay the principal of and interest on the Securities on the dates
specified iu the Ordinance.
Section 3.03. Reporting Requirements.
To the eitent required by the Code or the Treasuiv Regulations, the Basilc shall report to the Holders
and the Internal Revenue Seii ice the amount of interest paid or the anount treated as interest accnied on the
Bond Nv1uch is required to be reported by the Holders on their returns of federal income tai.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register - Transfers and Exchanges.
The Banlc agrees to lceep and maintain for and on behalf of the Issuer at the Banlc Office boolcs and
records (hereiu sometuiies referred to as the "Security Register"), and, if the Banlc Office is located outside
the State of Teias, a copy of such books and records shall be kept in the State of Teias, for recording the
nasiies and addresses ofthe Holders ofthe Securities, the transfer, eichange and replacement ofthe Securities
-ind the payment of the principal of and interest on the Securities to the Holders and containing such other
iuformation as mav be reasonably required by the Issuer and subject to such reasonable regulations as the
Issuer and the Bank may prescribe. All transfers, eichanges and replacement of Securities shall be noted in
the Securitv Register.
Eveiv Securitt- surrendered for transfer or eichange shall be dulv endorsed or be accompanied by
awritten instniment of transfer, the signature on vvhich has been guaranteed by an officer of a federal or state
basilc or a member of the Fiuancial Iudustiv Re(,ulatoiN- Authoritv, iu form satisfactoiv to the Banlc, dulv
executed bv the Holder thereof or his agent du1y authorized in vvriting.
The Bank may request any supporting documentation it feels necessaiv to effect a re-registration,
transfer or eichange of the Securities.
To the eitent possible and under reasonable circumstances, the Basilc agrees that, iu relation to an
eichange or transfer of Securities, the eichange or transfer by the Holders thereofvvill be completed and nevv
Securities delivered to the Holder or the assignee of the Holder in not more than tluee (3 ) busiuess davs after
the receipt of the Securities to be cancelled in an eichange or transfer and the vritten instniment of transfer
or request for eichange duly eiecuted by the Holder, or lus duly authorized agent, iu form and masiner
satisfactoiv to the Paying Agent/Registrar.
Section 4.02. Security Certificates.
The Issuer shall provide an adequate inventoiy of priuted Securities to facilitate transfers oi
eichanges thereo£ The Banlc covenants that the inventoiv of printed Securities vvill be lcept in safelceeping
pendiug their use, and reasonable care be eiercised by the Banlc iu maiutai.u.i.ng such Securities in
safelceeping, vvhich shall be not less than the care maintained by the Banlc for debt securities of other political
subdivisions or corporations for Nv1uch it seitires as registrar, or that is maiutained for its oNNn securities.
4
Section 4.03. Form of Security Register.
The B3nlc, 3s Registr3r, vvill maintain the Security Register rel3ting to the registr3tion, p3yment,
transfer and eichange of the Securities iu accordance Nvith the Basilc's general practices and procedures iu
effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form
other than those Nv1uch the Basilc has currently atirailable and currently utilizes at the tuiie.
The Securitv Register may be maintaiued iu vvritten form or iu any other form capable of beiug
converted into written fonn vvithin a reasonable time.
Section 4.04. List of Security Holders.
The Batilc vvi11 proti-ide the Issuer at any time requested by the Issuer, upon payment of the required
fee, a copy of the iuformation contaiued iu the Security Register. The Issuer may also inspect the iuformation
contained in the Security Register at any time the Banlc is customarily open for business, provided that
reasonable tuiie is alloNved the Banlc to provide an up-to-date listiug or to convert the iuformation iuto NN ritten
form.
The Banlc vvill not release or disclose the contents of the Security Register to any person other than
to, or at the NN ritten request of, an authorized officer or employee of the Issuer, eicept upon receipt of a court
order or as otheivvise requued by 1avv. Upon receipt of a court order and prior to the release or disclosure of
the contents of the Securitv Register, the Basilc N-vill notifi- the Issuer so that the Issuer mav contest the court
order or such release or disclosure of the contents of the Security Register.
Section 4.05. Return of Cancelled Securities.
All Securities surrendered to the Banlc, at the designated Payment/Transfer Off~ice, for payment,
redemption, transfer, or replacement, shall be promptly cancelled by the Banlc. The Batilc vvi11 proti-ide to the
Issuer, at reasonable inteitirals determiued by the basilc, a certificate evidenciug the destruction of canceled
Securities.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities.
The Issuerhereby instructs the Basilc, subjectto the applicable provisions ofthe Ordiuance, to deliver
and issue Securities in eichange for or in lieu ofmutilated, destroved, lost, or stolen Securities as long as the
sasiie does not result iu an overissuance.
Iu case any Security shall be mutilated, or destroyed, lost or stolen, the Banlc, iu its discretion, may
eiecute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing
a number not contemporaneously outstandiug, iu eichange and substitution for such mutilated Securitv, or
in lieu of and in substittition for such destroved lost or stolen Security, on1y after (i) the filing bv the Holder
thereof Nvith the Basilc of evidence satisfactoiv to the Basilc of the destruction, loss or theft of such Securitt-,
and of the authenticitv of the ovnership thereof and (ii) the fiirnishing to the Bank of indemnification in an
asiiount satisfactoiv to hold the Issuer and the Basilc harniless. All eipenses and charges associated N-vith such
indemnitv and vvith the preparation, eiecution and delivei-v of a replacement Security shall be borne by the
Holder of the Security mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer.
The Banlc vvill, vvithin a reasonable time after receipt of vritten request from the Issuer, fiirnish the
Issuer iuformation as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon
the tmnsfer or exchange of any Securities pursuant to Section 4. O1, and Securities it has deliti-ered in exchange
for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANIi
Section 5.01. Duties of Bank.
The Banlc undertalces to peiform the duties set forth hereiu and iu the Ordinance and agrees to use
reasonable care in the peiformance thereof.
Section 5.02. Reliance on Documents, Etc.
(a) The Banlc may conclusively rely, as to the truth of the statements and correctness of the
opinions eipressed therein, on certificates or opinions fiirnished to the Banlc.
(b) The Batilc shall not be liable for anv error of judgment made in good faith by a Responsible
Off~icer, unless it shall be proved that the Banlc N-vas negligent iu ascertaiu.i.ng the pertinent facts.
(c) No provisions of tlus Agreement shall require the Banlc to eipend or rislc its oN-,n funds or
otheivvise incur anv financial liability for peiformance of any of its duties hereunder, or in the eiercise of any
of its rights or powers, if it shall hatire reasonable grounds for believiug that repayment of such funds or
adequate indemnity satisfactoi-v to it against such risks or liabilitv is not assured to it.
(d) The B3tilc m3v re1y 3nd shall be protected in 3cting or refraining from 3cting upon 3ny
resolution, certificate, statement, instrument, opiuion, report, notice, request, direction, consent, order, bond,
note, security, or other paper or document believed by it to be genuine and to have been signed or presented
by the proper party or pai-ties. Without luiiitiug the generalitt- of the foregoiug statement, the Basilc need not
exatnine the ovnership of anv Securities, but is protected in acting upon receipt of Securities containing an
endorsement or iustruction of transfer or povver of transfer N-,1uch appears on its face to be signed by the
Holder or an agent of the Holder. The Bank shall not be bound to malce any investigation into the facts or
matters stated in a resolution, certificate, statement, iustrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document supplied by Issuer.
(e) The Banlc is also authorized to transfer fiinds relating to the closing and initial delivei-v of
the Securities iu the masiner disclosed iu the closiug memorandum as prepared by the Issuer's fiuancial
advisor or other agent. The Bank mav act on a facsimile or e-mail transmission of the closing memorandum
aclcnovvledged by the fmancial advisor or the Issuer as the fiual closiug memorandum. The Basilc shall not
be liable for anv~ losses, costs or expenses arising directly or indirectly from the Batilc's reliance upon and
compliance NN ith such iush-uction
(f) The Basilc mav consult vvith counsel, and the vvritten advice of such counsel or any opiuion
of counsel shall be fiill and complete authorization and protection with respect to any action taken, suffered,
6
or onutted by it hereunder iu good faith and iu reliance thereon.
(g) The Banlc may eiercise any of the po-,-, ers hereunder and peiform any duties hereunder either
directly or by or through agents or attorneys of the Banlc.
Section 5.03. Recitals of Issuer.
The recitals contained hereiu NNith respect to the Issuer and iu the Securities shall be talcen as the
statements of the Issuer, and the Bank assumes no responsibility for their correctness.
The Basilc shall in no event be liable to the Issuer, any Holder or Holders of anv Securitv, or anv other
Person for anv aiiiount due on anv Securitv from its oN-,n funds.
Section 5.04. May Hold Securities.
The Basilc, iu its individual or anv other capacitt-, may become the o-,-, ner or pledgee of Securities and
mav otheivvise deal vvith the Issuer with the same rights it vvould have if it vvere not the Paying
Agent/Registrar, or anv other agent.
Section 5.05. Moneys Held by Bank.
The Bank shall deposit anv monevs received from the Issuer into a segregated account to be held by
the Banlc solely for the benefit of the oN-,ners of the Securities to be used solely for the payment of the
Securities, vvith such monevs in the account that eiceed the deposit insurance available to the Issuer bv the
Federal Deposit Iusurance Corporation, to be fully collateralized N-vith securities or obligations that are eligible
under the lavvs of the State of Teias and to the eitent permitted by the lavvs of the United States of America
to secure and be pledged as collateral for such accounts until the priucipal and iuterest on such securities hatire
been presented for payment and paid to the ovvner thereof. Payments made from such account shall be made
by checlc draN-,n on such account uiiless the oN-,ner of such Securities shall, at its oN-,n eipense and rislc, request
such other medium of p3yment.
Subject to the Unclaimed Propertv Lavv of the State of Teias, any money deposited vvith the Banlc
for the payment of the priucipal, prenuum (if any), or interest on anv Securitt- and remai.u.ing unclaiiiied for
thcee N-ears after the fmal maturitv of the Securitv has become due and payable vvill be paid by the Batilc to
the Issuer if the Issuer so elects, and the Holder of such Security shall hereafter loolc only to the Issuer for
paymentthereof, and allliability ofthe Banlcvvithrespectto suchmonies shallthereupon cease. Ifthe Issuer
does not elect, the Banlc is directed to report and dispose of the funds iu compliance N-vith Title Sii of the
Teias Property Code, as amended.
Section 5.06. Indemnification.
To the eitent permitted by laN-,, the Issuer agrees to iudennifi- the Banlc for, and hold it harniless
against, any 1oss, liability, or eipense incurred ithout negligence or bad faith on its part, arising out of or
iu connection N-vith its acceptance or admiuistration of its duties hereunder, includiug the cost and eipense
c -iga
inst any claim or liability in connection with the exercise or performance of any of its povvers or duties
UlldeT tlllS AbTeelllellt.
7
Section 5.07. Interpleader.
The Issuer and the Banlc agree that the Bank may seek adjudication of any adverse claim, demand,
or controversv over its person as Nve11 as funds on deposit, in either a Federal or State District Court located
in the State and Countv v,here the administrative offices of the Issuer is located, and agree that seii ice of
process by certified or registered mail, retum receipt requested, to the address referred to iu Section 6.t_)3 of
this Agreement shall constihite adequate seii ice. The Issuer and the Banlc fiirther agree that the Banlc has
the right to file a Bill of Iuterpleader iu any court of competent jurisdiction NNithin the State of Teias to
determine the rights of 3ny Person claiming 3ny interest herein.
Section 5.08. Depositoiy Trust Company Services.
It is hereby represented and ivarranted that, in the event the Securities are otheiNNise qualified and
accepted for "DepositoiN- Trust Company" seitirices or equivalent depositoiv trust seitirices bv other
organizations, the Batilc has the capability and, to the extent ANithin its control, ivi11 comply ivith the
"Operational Arrangements," effective August 1, 1987, N-,1uch establishes requirements for securities to be
eligible for such type depositoi-v tnist seii ices, including, but not limited to, requirements for the timeliness
of payments and funds availability, transfer tumaround tuiie, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
hereto.
Section 6.01. Amendment.
This Agreement may be amended on1y by an agreement in writing signed by both of the parties
Section 6.02. Assignment.
This Agreement may not be assigned by either pai-ty ivithout the prior vritten consent of the other.
Section 6.03. Notices.
Any request, demand, authorization, direction, notice, consent, 'waiver, or other document provided
or permitted hereby to be given or fiirnished to the Issuer or the Banlc shall be mailed or delivered to the
Issuer or the Banlc, respectively, at the addresses shokNn on the signature page of tlus Agreement.
Section 6.04. Effect of Headings.
hereof.
The Article and Se ction headings hereiu are for conveuience only and shall not affect the constru ction
Section 6.05. Successors and Assigns.
All covenants and agreements hereiu by the Issuer shall bind its successors and assigns, -,-,hether so
eipressed or not.
8
Any corporation or association iuto N-,1uch the Banlc may be converted or merged, or vvith N-,1uch it
mav be consolidated, or to v,hich it may sell, lease, or transfer its corporate tnist business and assets as a
N-,hole or substantially as aN-,hole, or any corporation or association resultiug from any such conversion, sale,
merger, consolidation, or transfer to v,-hich it is a parn , ipso facto, shall be and become successor Paying
Agent/Registrarhereunder and vested vvith all ofthe povvers, rights, obligations, duties, remedies, discretions,
immunities, priti-ileges, and a11 other matters as vvas its predecessor, vvithout the execution or filing of any
iustruments or anv further act, deed, or conveyance on the pai-t of any of the pai-ties hereto, anythiug hereiu
to the contraiv notivithstanding.
Section 6.06. Severability.
Iu case any provision herein shall be iuvalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in an~ i-vay be affected or impaired thereby.
Section 6.07. Benefits of Agreement.
Nothing herein, eipress or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy, or claiiii hereunder.
Section 6.08. Entire Agreement.
This Agreement and the Ordinance constitute the entire agreement betNN een the parties hereto relative
to the Basilc actiug as Payiug Agent/Registrar and if any conflict eiists beri-, een his Agreement and the
Ordinance, the Ordinance shall govern.
Section 6.09. Counterparts.
Tlus Agreement may be eiecuted iu any number of counterparts, each of luch shall be deemed an
original and all ofv,hich shall constitute one and the sane Agreement.
Section 6.10. Termination.
Tlus Agreement vvi11 termiuate (i) on the date of fiual payment of the priucipal of and iuterest on the
Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (6()) days written
notice; provided, hooever, an early termiuation of tlus Agreement by either pai-ty shall not be effective until
(a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice has been given to the Holders of the Securities of the appoiutment of a successor Pao-iug
Agent/Registrar. Furthermore, the Banlc and Issuer mutually agree that the effective date of an ear1y
termination of tlus Agreement shall not occur at any tuiie N-, luch N-vould disrupt, delay or otheivvise adverseh-
affect the payment of the Securities.
The resigning Paying Agent/Registmr may petition any court of competent jurisdiction for the
appoiutiiient of a successor Payiug Agent/Registrar if an iustrument of acceptance by a successor Payiug
Agent/Registmr has not been deliti-ered to the resigning Paying Agent/Registmrvvithin sixt~- (60) days after
the giviug of such notice of resignation.
Upon an early termination of tlus Agreement, the Banlc agrees to promptly transfer and deliver the
Security Register (or a copy thereofl, together with other pertinent boolcs and records relating to the
9
Securities, to the successor Payiug Agent/Registrar designated and appointed by the Issuer.
The provisions of Section 1.02 and of Article Five shall suitirive and remaiu iu full force and effect
follov, ing the termination of this Agreement.
Section 6.11. Governing Law.
Teias.
Tlus Agreement shall be construed iu accordance -,-,ith and governed by the la-,-,s of the State of
[Remaiuder of page iutentionally left blasilc]
10
IN WITNESS WHEREOF, the parties hereto hatire eiecuted tlus Agreement as of the day and N-ear
first above vritten.
THE BANIi OF NEW YORIi MELLON TRUST COMPANY,
NATIONAL ASSOCIATION
Bv
Title
2001 Bivan Street, l lth Floor
D1111S, Z'e115 75201
CITY OF DENTON, TEXAS
By
Mavor
21 5 E. McIiinney
Denton, Teias 76201
SCHEDULE A
Paviug Agent/Registrar Fee Schedule
: OODY'S
INVESTCY@t5. 5fRVICE
New Issue: OC}C}Y'S ASSIGNS Aa2 ATING TO TFIE CI OF C}ENTON'S (TX) $11.5 ILLION
GENE L OBLIGATION REFIINC}ING ANC} I PROVEMENT BONC}S, SERIES 2011, ANC} $32.1
ILLION CERTIFICATES OF OBLIGATION, SERIES 2011
GIobal Credit Research W 17 YMar 2011
RATING AFFECTS $332.4 MILLION IN OUTSTANDING PARITY BONDS, INCLUDING CURRENT LSSUES
Municipality
TX
Moodys Rating
ISSUE RATING
General Obligation Refunding and Improvement Bonds, Series 2011 Aa2
Sale Amount
6cpected Sale Date
Rating Description
Certificates of Obligation
Sale Amount
6cpected Sale Date
Rating Description
Opinion
$11,470,000
04/01 /11
General Obligation Limited Tax
$32,120,000
04/01 /11
General Obligation Limited Tax
Aa2
NEW YORK, Mar 17, 2011 Nbody's Investors Service has assigned aAa2 rating to the City of Denton's (TX) $11.5 million General Obligation
Refunding and Improvement Bonds, Series 2011, and $32.1 million Certificates of Obligation, Series 2011. Concurrently, Nbody's has affirmed
the Aa2 rating on the city's $288.8 million in outstanding parity debt. Proceeds from the sale of the bonds will be used to refund certain
maturities of the city's outstanding bonds for net present value savings, to fund various street projects and make park land acquisitions and
improvements. Proceeds from the sale of the certificates will be used to make various utility system upgrades, and renovate existing municipal
buildings.
RATING RATIONALE
The bonds and certificates are secured by an annual ad valorem tax levied against all taxable property in the city, within the limitations
prescribed by law. The certificates are additionally secured by a limited pledge (not to exceed $1,000) of surplus net revenues of the city's utility
system. The rating reflects the city's sizable tax base located in Denton County, a history of sound fiscal practices evident by ample reserves
despite recent draws and elevated but manageable debt burdens that are expected to increase over the intermediate term given additional
borrowing plans.
STRENGTHS
Sizable tax base with diverse economy located in Denton County, within proximity to the cities of Dallas and Fort Worth
History of prudent financial management
CHALLENGES
Elevated but manageable debt burdens expected to increase in the intermediate term
DETAILED CREDIT DISCUSSION
MODERATED TAX BASE GROWTH IN THE RECENT TERM FOLLOW ING SIGNIFICANT DECADE- LONG EXPANSION
Nbody's expects the city's tax base will experience modest to moderate growth over the intermediate term given the availability of land,
economic prospects, and a diverse economy providing employment opportunities in various industries. Located in Denton County (general
obligation rating Aaa), the city is located north of the Dallas Fort-Worth metroplex, approximately 38 miles northwest of Dallas (general
obligation rating Aa1/stable), and 36 miles northeast of Fort Worth (general obligation rating Aa1/stable). Population within the city has grown
significantly, with an estimated growth of 43.6% to 115,651 residents in 2011 within the last decade, per city estimates. In line with population
growth, the city's tax base has exhibited significant expansion averaging 9.1 % annually between fiscal years 2001 and 2010. In more recent
times, taxable value growth has been more moderated, with a 0.6% growth to $6.3 billion in fiscal year 2010. In fiscal year 2011, taxable values
declined 1.5%, despite a total new construction value of $135 million, as development activity slowed considerably and the city experienced
valuation softness in the commercial/industrial sector, in line with trends observed across the nation. Although officials report some current
economic activity, management anticipates a 2% decline in values in fiscal year 2012, due to continued non-residential devaluation. For fiscal
year 2013, officials anticipate a modest increase of 3%, with an annual increase of 4% in fiscal year 2014 and beyond. The city's economy is
diversified with a combination of sectors including agriculture, healthcare, higher education, and manufacturing. Although officials report the
closing of an office facility for a lingerie company, several developments continue to support the local economy. Officials report current
developments including an auto manufacturing center, a new retail distribution center, a regional oil maintenance center, and expansion to a
mixed use complex, all within the next two years that will provide more than 600 jobs for the local economy. The city does not exhibit
concentration with its major taxpayers, with the top ten accounting for 5.7% of fiscal year 2011 taxable values.
The city exhibits wealth levels comparable with the nation. The 1999 per capita income was $19,365, which was 98.7% of the state's, and
89.7% of the nation's. The 1999 median family income was $51,419, which was 112.1 % of the state's, or 102.7% of the nation's. Given
institutional presence with two major universities, unemployment rates continue to track well below state and national averages. In December
2010, the unemployment rate was 6.3%, much lower than the state's 8%, and the nation's 9.1% for the same time period.
FINANCIAL POSITION EXPECTED TO STABILIZE IN THE NEAR TERM
Nbody's considers the historical financial performance of the General Fund to be favorable, and recognizes recent and current expenditure
pressures will require prudent financial management. However, we expect the city's financial position will stabilize following the draw anticipated
at the end of the current fiscal year. Following the draw of $2.6 million in fiscal year 2009 that reduced reserves to $22.8 million (a healthy 28.8%
of General Fund revenues), the city experienced a subsequent operating deficit of $1.3 million in fiscal year 2010, as revenues continued to
decline due to the slowing of the national economy. The $1.3 million deficit was more modest than the originally anticipated draw of $4.5 million
as management implemented several cost containing measures including hiring freezes. Amodest draw of $600,000 is expected at the end of
the year, reducing the total General Fund balance to $20.9 million (a healthy 25.7% of 2010 General Fund revenues). Looking ahead at fiscal
year 2012, officials expect a balanced budget and flat growth in the General Fund. The city's reserve policy calls for a minimum of 15 - 20%
($13.7 million to $18.2 million for fiscal year 2010) of budgeted expenditures. The city has consistently maintained reserves well above the
policy requirement, and we expect that to continue over the intermediate term. Nbody's believes the maintenance of satisfactory reserves is
crucial to the operating flexibility of the city.
The city received a majority of its 2010 revenues from property taxes (35.8%), sales taxes (25.1 and franchise fees (21.4%). Over the past
five years, sales taxes grew an annual average of 1.5%. In fiscal year 2010, collections grew a modest 0.1 following a decline of 4.5% in
2009, to a total of $20.5 million. In fiscal year 2011, the budget included a 5.5% increase in total collections to $21.6 million, due to a change in
calculation for economic development incentive rebates. Ninus the rebates, base level collections included only a 2% increase. Year to date,
collections are up 14% over the prior year. Officials anticipate this trend will continue, and may slightly increase through the reminder of the
year.
MODERATE DEBT PROFILE WITH FUTURE BORROWING PLANS
All of the city's debt is fixed rate and the city is not party to any derivative agreements. Inclusive of the current sale, the city's direct debt burden
is moderate at 2.1% of fiscal 2011 full value (9.5% overall) when netting out self supporting debt. Including self supporting debt, the direct debt
burden increases to 5.4% (12.8% overall). Net revenues of the utility system currently provide satisfactory debt service coverage for all utility-
supported debt (revenue and GO). We expect the city to adjust rates as needed to maintain the self-supporting nature of the certificates of
obligation issued for utility improvement purposes. The high overall debt burden is due to sizable borrowings by Denton ISD (general obligation
rated Aa3), and Denton County (general obligation rating Aaa). Payout of all outstanding debt (including self-supporting) is average with 66.6% of
principal retired in ten years. The city anticipates a bond election within the next five years for infrastructure needs and other purposes. With
future borrowing plans, we expect the city's debt burdens will increase but remain manageable over the intermediate term.
W HAT COULD MAKE THE RATING GO UP
Significant and ongoing tax base expansion
Stabilized financial operations, yielding an increase in reserve levels
WHAT COULD MAKE THE RATING GO DOWN
Continued erosion of reserve levels
Tax base contraction
Significant borrowing coupled with a stagnant or contracting tax base
Failure of utility system net revenues to cover general obligation debt service requirements
KEY STATISTICS:
2011 Estimated population: 115,651
2011 Full Valuation: $6.2 billion
2011 Full Value Per Capita: $53,870
1999 Per Capita Income (as % of TX and US): $1,365 (98.7% and 89.7%)
1999 Median Family Income (as % of TX and US): $51,419 (112.1% and 102.7%)
Direct Debt Burden (excluding self supporting debt): 2.1%
Overall Debt Burden (excluding self supporting debt): 9.5%
Payout of principal (all outstanding debt): 66.6%
2010 General Fund balance: $21.5 million (26.4% of General Fund revenues)
General Obligation Limited Tax (GOLT) Debt Outstanding: $332.4 Nillion
PRINCIPAL METHODOLOGY
The principal methodoloqy used in this ratinq was General Obliqation Bonds Issued by U.S. Local Governments published in October 2009.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, and
public information.
Nbody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating.
Nbody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources
Nbody's considers to be reliable including, when appropriate, independent third-party sources. However, Nbody's is not an auditor and cannot in
every instance independently verify or validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Nbodys.com for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to a time before Nbody's Investors Service's Credit Ratings were fully
digitized and accurate data may not be available. Consequently, Nbody's Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for
further information.
Please see the Credit Policy page on Nbodys.com for the methodologies used in determining ratings, further information on the meaning of
each rating category and the definition of default and recovery.
Analysts
Adebola Kushimo
Analyst
Public Finance Group
Nbody's Investors Service
Michelle Smithen
Backup Analyst
Public Finance Group
Nbody's Investors Service
Contacts
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
Nbody's Investors Service
250 Greenwich Street
New York, NY 10007
USA
' OO.Y'S
Bf+lVESTORa SE@iVICE
O 2011 Nbody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODI^S"). All rights reserved.
CREDIT RATINGSARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE
RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE
SECURITIES. MIS DEFINES CREDIT RISKAS THE RISK THATAN ENTITY MAY NOT MEET ITS
CONTRACTUAL, FINANCIAL OBLIGATIONSAS THEY COME DUEANDANY ESTIMATED FINWVCIAL LOSS
IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESSANY OTHER RISK, INCLUDING BUT
NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGSARE
NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE
INVESTMENT OR FINANCIALADVICE, WVD CREDIT RATINGSARE NOT RECOMMENDATIONS TO
PURCW4SE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE
SUITABILITY OFAN INVESTMENT FORANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS
VNTH THE EXPECTATION WVD UNDERSTANDING THAT EACH INVESTOR VNLL MAKE ITS OWN STUDY
WVD EVi4LUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR
SALE.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO,
COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAYBE COPIED OR OTHERWISE REPRODUCED,
REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD,
OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN W HOLE OR IN PART, IN ANY FORM OR
MANNER OR BYANYMEANS WHATSOEVER, BYANYPERSON WITHOUT MOODY'S PRIOR WRITTEN
CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and
reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information
contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that
the information it uses in assiqninq a credit ratinq is of sufficient quality and from sources Nbodys considers to be
reliable, including, when appropriate, independent third-party sources ~However, MOODY'S is not an auditor and
cannot in every instance independently verify or validate information received in the rating process. Under no
circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part
caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within
or outside the control of MOODI^S or any of its directors, officers, employees or agents in connection with the
procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such
information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever
(including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages,
resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections,
and other observations, if any, constituting part of the information contained herein are, and must be construed solely
as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities.
Each user of the information contained herein must make its own study and evaluation of each security it may
consider purchasing, holding or selling. NO WARRANTY EXPRESS OR IMPLIED, AS TO THE ACCURACY
TINELINESS, COMPLETENESS, MERCHANTABILITYOR FITNESS FOR ANY PARTICULAR PURPOSE OFANY
SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S INANY FORM OR
MANNER WHATSOEVER.
MIS, a wholly-owned credit rating agency subsidiary of Nbody's Corporation ("MCO"), hereby discloses that most
issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and
preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating
services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies
and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain
affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS
and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at
www.moodvs.com under the heading "Shareholder Relations - Corporate Governance - Director and Shareholder
Affiliation Policy."
Any publication into Australia of this document is by MOODY'S affiliate, Nbody's Investors Service Pty Limited ABN 61
003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided
only to "wholesale clients" within the meaning of section 761 G of the Corporations Act 2001. By continuing to access
this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a
representative of, a"wholesale clienY' and that neither you nor the entity you represent will directly or indirectly
disseminate this document or its contents to "retail clients" within the meaning of section 761 G of the Corporations
Act 2001.
Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Nbody's Japan K.K. ("MJKK")
are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like
securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". M1KK is a
wholly-owned credit rating agency subsidiary of Nbody's Group Japan G.K., which is wholly owned by Nbody's
Overseas Holdings Inc., a wholly-owned subsidiary of MCO.
This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities
of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to
make any investment decision based on this credit rating. If in doubt you should contact your financial or other
professional adviser.
Denton, Texas
Primary Credit Ana/yst . , ' • ,
Russell Bryce
US$32.12milCertificatesofObligation, Series2011, dated04/Ol/2011, due02/15/2031
Dallas
(1) 214-871-1419
Long Term Rating AA/Stable New
russell_bryce «
US$11.47milGeneralObligationRefundingand/mprovemerrtBonds, Series2011, dated04/Ol/2011,
standardandpoors.com
Secondary Contact: Edward R
due 0211512031
McGlade
Long Term Rating AA/Stable New
New York
(1) 212-438-2061
edward_mcglade «
Ratiorlale
standardandpoors.com
Standard & Poor's Ratings Scrvices assigned its 'AA' long-tcrin rating to Denton, Texas' scrics
2011 gencral obligation (GO) refunding and iillprovcinent bonds and scrics 2011 ccrtificates
of obligation. At thc samc timc, Standard & Poor's afI`irined its 'AA' long-tcrin rating and
undcrlying rating (SPUR) on thc city's existing GO debt. Thc outlook on all ratings is stablc.
Thc ratings rcllect our vicWof thc city's:
■ Participation in thc dcep and divcrsc Dallas-Fort Worth MSA;
■ Vciy strong I`inancial position, with sound rescrves, despitc recent declines; and
■ Stablc employment basc, which fcatures highcr-education and public sector employment
opportunities and a continually expanding commercial sector.
Thesc strengths are somcwhat offset by our vic\v of thc city's growth-driven capital nceds and
inodcratcly high ovcrall net debt burden as a pcrcent of inarket valuc.
An ad valorem propcrty tax pledgc, within thc limits prescribed by law, secures thc bonds
and thc ccrtificates. Thc ccrtil`icates arc also secured by a pledgc of suiplus net revenucs of thc
city's utility systcin, not to excced S1,000. Bond procceds will bc used to refund a portion of
thc city's debt outstanding, whilc ccrtil`icatc procceds will bc used for improvcinents to thc
RatingsDirect city's watcrworks and scwcr systcin, clectric light and powcr systcin, solid-wastc disposal
Pub/icationDate systein, and existing inunicipal buildings, and for the acquisition of vehicles for the city's
March 24, 2011 inotor pool.
De»to», Texas
Denton, wluch has a population of about 113,000 according to the 2010 census, is roughly 35 t7iiles
nord1 of, and equidis[ant from, Dallas and For[ Word1. Residents have casy access to bod1 ci[ics along
Intcrstatc 35. Whilc job opportunitics exist in mantIfacturing and somc industry along with thc
rapidly growing retail and setvice sectors the health care, public, and lugher-educalion sectors
account for the top eight leading et7iployers. Median household incot7ie indicators are good, in our
opinion, at 89`.'o of thc national avcragc despitc a significant student population, which tends to
depress incoinc levcls.
Assessed value (AV) increased by t7iore than 50`'n over five years to nearly $6.29 billion in fiscal
2009. However, AV has ret7iained relalively flat over the past two years because of the nalional
recession's impact on propcrty valucs in thc city. AV rcinained essentially I1at at $6.33 billion in I`iscal
2010 and declined by 1.51'o to $6.23 billion for I`iscal 2011. Market value, an indication of wealth, is
adequate, in our view, at about $54,000 per capita. The city is not dependent on any of its principal
taxpayers, with the 10 leading taxpayers accounting for what we consider to be a vety diverse 5.7`'n of
total AV.
Af[cr incrcasing cach ycar from fiscal 2002 to I`iscal 2008, sales tax collections dropped by 4.5`.'c`) in
fiscal 2009. However, sales tax revenues stabilized in fiscal 2010, ending the year essentially flat
cot7ipared to the previous year. OfI`icials indicate that the city's year-to-date sales tax collections have
incrcased 14.3`'o in fiscal 2011.
Ovcrall, Denton's I`inancial posi[ion rcinains vcry s[rong, in Our vicw, despi[c recent declines in thc
general fund balance In fiscal 2010, the city's general fund declined by $1.3 t7iillion, below the original
budgeted drawdown of $3.9 t7iillion, as the city took steps to reduce expenditures, induding freezing
hiring. In addition, sales tax revenucs excceded initial estimates by about $1 million. Despitc this net
declinc, thc I`iscal 2010 unrescrved gencral fund balancc rcinained vcry s[rong, in Our vicw, a[ $21.5
t7iillion, or 26.1`'n of operating expenditures. For fiscal 2011, Denton budgeted for a$1.2 t7iillion
decline in the general fund, allhough ofI`icials currently expect an overall decline of about $600,000
based on highcr than budgeted sales tax collections. Whilc thc ciry expects thc gencral fund balancc to
excced its policy of maintaining a minimum of 15`.'c`) in rescrvc, managcinent intends to makc any fund
balance in excess of its t7iinit7iut7i requiret7ients available for future approprialions to fund nonrecurring
itet7is. The city's property tax rate increased by 2.3 cents per $100 of AV to 69.0 cents; it ret7iains in
linc with thosc of comparablc citics in thc MSA.
Standard & Poor's considcrs Denton's I`inancial inanagcinent practices "good° undcr i[s Financial
Managet7ient Assesst7ient (FMA) t7iethodology, indicating that financial practices exist in t7iost areas
but that governance ofI`icials t7iight not fort7ialize or regularly t7ionitor all of thet7i. Managet7ient
includes a fivc ycar financial forecas[ for thc gencral, wa[cr, wastewa[cr, and solid was[c funds, as wcll
as a fivc ycar capital improvcinent plan as part of its annual budget. For I`iscal 2011, thc city revised its
resetve policy for the general fund, establishing a target fund balance reserve equivalent to between
15`'n and 20`'n of budgeted expenditures, up frot7i the previous target of between 12`', n and 15`'In`.
Officials indica[c tha[ this incrcasc in thc target levcl is intended to providc grca[cr pro[ection in casc of
cincrgencics.
After accounting for self-support for debt service provided by the city's utility systet7is, we view the
city's overall net debt burden as t7ioderately high at 9.4`'n of t7iarket value and lugh at $5,087 per
capi[a. Becausc of Denton Independent School Dis[rict's undcr[aking of a largc capi[al program,
ovcrlapping debt from thc district accounts for about two thirds of thc city's ovcrall net debt burden.
Sta»dard & Poor's I A1vaLYsls 2
De»to», Texas
Debt service as a percent of total governt7iental expenditures has ret7iained relatively stable over tit7ie,
and was modcratc, in our opinion, at about 14`''o in fiscal 2010. Thc city's capital plan calls for thc
issuancc of about $46.3 million from I`iscal 2011 through fiscal 2015 for gencral govcrninent purposes,
S51.0 t7iillion for electric systet7i purposes, and a cot7ibined $75.4 t7iillion for water, wastewater, and
solid-waste systet7i purposes. City officials anticipate the issuance of approxit7iately $46 t7iillion in
additional debt in I`iscal 2012, including $38 million in sclf supported debt rclated to thc utility systcins.
Combined, thc city's pension and othcr postemployment benefits (OPEB) unfunded liability is an
estit7iated 1.8`'n of t7iarket value.
Outlook
Thc s[ablc Outlook rcllects Our expecta[ion tha[ ovcr thc nex[ two ycars Denton will maintain a
I`inancial position in linc with its forinal rescrvc policy. Whilc wc do not expect to changc thc ratings
over the outlook horizon, we could lower the ratings if the city's financial posilion were to deteriorate
significantly or if the city's overall debt burden were to increase substantially. However, if the city's
ovcrall dch[ burden wcrc to modcra[c signil`icantly, wc cOuld raisc thc ra[ings.
PellSlOl1 A71d oPEB obIlbc1t1071S Al'e MOC~eSt
We view Denton's pension and OPEB obligalions as relalively t7iodest. Cot7ibined, the city's pension
and OPEB unfunded liability is an estiinated 1.8`'o of inarket valuc Thc city participates in thc Texas
Municipal Retircinent Systcin (TMRS), which is administcred by thc statc of Texas. Thc city's annual
contribution to the pension systet7i was $8.8 t7iillion in fiscal 2010, or about 79`'n of the annual
required contribution. The unfunded pension liability through TMRS was $83.7 t7iillion as of Dec 31,
2009, or about 137`.''o of covcred payroll. Thc city separatcly provides pension bencl`its to membcrs of
its firc departinent through contributions to thc Denton Fircinen's Rclicf and Retircinent Fund (FRRF),
a single-et7iployer, deI`ined benefit plan. The city's annual contribution to the FRRF plan was S 1.0
t7iillion in fiscal 2010, or 100`'n of the annual pension cost. The unfunded pension liability for the
FRRF plan was S 19.6 million as of Dec. 31, 2009, or about 154`''o of covered payroll. The city also
provides hcaldl insurancc bencl`i[s to retirces, which i[ pays for on a pay as yOu go basis; thc unfunded
liability was S 10.9 t7iillion as of Oct. 1, 2009. For fiscal 2009, the city funded 29`'n of the annual
OPEB cost, or about $371,000.
i• ,
Economic statistics
Pnpula[inn
115,651
Median household EBL `%4, of U.S.
89
Per capita E61, of U.S.
92
Total market value per capita (S)
53,810
Nei direci debi (5000~)
129,514
Net direct debt per capita
Net direct debt `%4, of market value 2.1
Asse~sed value (5000~) 6,230,118
Market value (SOOOs) 6,230,118
Elil - effeciive huying inLome, Popuhiion Mnd inLome -Source, Cldriids
www.stendardandpoors.cot71 3
De»to», Texas
i- , , ,
Economic statistics
PopulaUOli
115,651
Financial statistics (fiscal year end)
913012010
913012009
913012008
General fund balance (SOOOti)
21,521
22,194
25,311
General fund balance, `%4, of yeneral fund expenditure~
26.1
28.1
33.2
Unre~erved fund balance (50M,)
21,521
22,195
25,253
Uiireserved fuiid balaiice, of yeiieral fulid expelxhtures
26.1
28.1
33.1
Total yeiieral fulid expelxhtures (SOOOs)
82,425
81,104
16,386
Total yeneral fund expenditureti one year chanye (`%4J
1.6
6.2
11.9
Tnial general fund revenue~ (50M,)
80,399
18,918
19,909
Total yeiieral fuiid reveliues oiie year chaiiye 1
1.8
(1.2)
8.9
Related Criteria And Research
USPF Critcria: GO Dcht Oct. 12. 2006
Sta»dard & Poor's I A1vaLYsls 4
Copyriyht by Standard & Poor's Financial Serviceti LLC (S&P) a subtiidiary of The McGraw Hill Companieti, Inc. All riyhts retierved. No
part of this information may be reproduced or distributed in any form or by any means, or stored in a databatie or retrieval system,
Nrithout the pnor wntten pernussioii of S&P. S&P, its affiliates, aiid/or their third party providers have exclusive propnetary nyhts in the
iliformaUOli, i[icluchiiy raUiiys, creclit rela[ed aiialyses aiid da[a provided hereiii.
This information shall not be used for any unlaNrful or unauthorized purpotieti. Neither S&P, nor its affiliateti, nor their third party
providers yuarantee the accuracy, completenetis, timelinetis or availability of any information. S&P, its affiliateti or their third party
providers aiid their chrectors, officers, shareholders, employees or ayeiits are iiot respoiisible for aiiy errors or onussioiis or for the
results obtaiiied from the use of such iiiformatioii. S&P, ITS AFFILIATES AND THEIR THIRD PARTY PROVIDERS DISCLAIM ANY AND ALL
EXPRESS OR IMPLIED WARRANTIES, INCLUDING, 6UT NOT LIMITED T0, ANY WARRANTIES OF MERCHANTA6ILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR USE In no event shall S&P, its affiliateti or their third party providers and their directors, officers,
shareholders, employeeti or ayents be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special
or consequential damayeti, cotits, expenseti, leyal feeti, or lotiseti (indudiny, Nrithout limitation, lotit income or lotit profits and
opportuluty costs) in coniection Nrith auy use of the iiiformaUOii coiitaiiied hereiii eveii if advised of the possibility of such damayes.
The ratinys and aedit related analyseti of S&P and its affiliateti and the obtiervations contained herein are statements of opinion ati of
the date they are expretised and not statements of fact or recommendations to purchatie, hold, or sell any securitieti or make any
invetitment decisions.
S&P assumes iio obliyatioii to update auy ilIformatioll folloNrilly publicatioii. Users of the iiiformatioii coiitaiiied hereiii should iiot rely
on any of it in makiny any invetitment decision. S&P's opinions and analyseti do not addretis the suitability of any security. S&P doeti
not act ati a°fiduciary° or an invetitment advisor. While S&P hati obtained information from sourceti it believeti to be reliable, S&P doeti
not perform an audit and undertaketi no duty of due diliyence or independentverification of any information it receiveti. S&P keepti
certaiii activities of its busiliess uluts separa[e from each other in order to preserve the iiidepeiideiice aiid objectivity of each of these
activities.
As a retiult certain businetis units of S&P may have information that is not available to other S&P businetis units. S&P hati etitablished
policieti and procedureti to maintain the confidentiality of certain non public information received in connection with each analytical
process.
S&P's Ratinys Serviceti businetis may receive compensation for its ratinys and aedit related analyseti, normally from issuers or
underNrriters of securitieti or from obliyors. S&P retierveti the riyht to disseminate its opinions and analyseti. S&P's public ratinys and
analytieti are made available on itti Web tiiteti wnmw! Imnd~ird~indnunr, , om (free of charye) and ~~mw! mlinn~;dirp,cl , um (tiubticription),
aiid may be distnbuted throuyh other meaiis, includiny via S&P publicatioiis aiid third party redistnbutors. Additioiial iiiformatioil about
ourratiiiysfeesisavailableat~ ~ wwC1iud1id11uduuuis,cuin,u
Standard & Poor's useti billiny and contact data collected from subticribers for billiny and order fulfillment purpotieti, and occatiionally to
inform subticribers about products or serviceti from Standard & Poor's, its affiliateti, and reputable third partieti that may be of interetit to
them. All subscnber billiiiy aiid coiitact da[a collectecl is storecl iIi a secure da[abase in the U.S. aud access is linuted to authonzed
persoiis.
If you Nrould prefer not to have your information used ati outlined in this notice, if you Nrish to revieNr your information for accuracy, or
for more information on our privacy practiceti, pleatie call us at (1) 212 438 7280 or Nrrite to us at privacy,<<titandardandpoors.com For
more iiiformatioii about The McGraNr-Hill CompaIes' Customer Pnvacy Policy please visit wwwwww,incai1Nw hilLcuin, ui nill,-v,hCinl.
Permissions: To reprint translate, or quote Standard & Poor's publications, contact Client Serviceti, 55 Water Street, New York, NY
10041; (1) 212 438 9823; or by email to: re~earch reque~&<<~tandardandpoors.com.
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM: Jon Fortune ~
SUBJECT
Consider adoption of an ordinance considering all matters incident and related to the issuance,
sale and delivery of up to $10,845,000 in principal amount of "City of Denton General
Obli(yation Refunding and linprovement Bonds, Series 2011"; authorizing the issuance of the
bonds; approving and authorizing instniments and procedures relating to said bonds; and
enacting other provisions relating to the subject.
BACKGROUND
Tlus bond sale was previously discussed with the Audit/Finance Committee on Febniary 15,
2011, and the City Council on March 1, 2011. At the time of these discussions, staff anticipated
refundint', existint., utility system revenue bonds as part of this issuance, if marlcet conditions
were favorable. Based on the advice of the City's financial advisor, First Southwest Company,
marlcet conditions are favorable, and as such, staff requests approval to proceed with the
refunding. This bond sale includes the issuance of bonds to fund projects approved by the voters
in the 2005 Bond Election and to refund existin~ utility system revenue bonds.
Staff recommends the sale of $2,225,000 in General Obligation Bonds (GOs) for General
Governinent, which is less than originally intended in the FY 2010-11 Capital I~nproveinents
Prograin (CIP). The FY 2010-11 CIP totaled $6,219,000. However, in order to accoininodate
project scheduling, staff is oiily recommending the issuance of $2,225,000. The remaiiung
projects will be budgeted in the FY 2011-121 CIP. Below is a listing of GO funded projects for
FY 2010-11:
1. Residential Streets- $1,190,000
Mack Park Restrooms/Concessions - $ 505,000
3. North Lalces Parlc Restrooins/Concessions - $ 300,000
4. Goldfield Tennis Center - $ 230.000
Total - $22,222) 5,000
Staff recommends refunding $9,180,000 in principal amount of existint., utility system revenue
bonds. This refunding is a current refunding, which is defined as the process of selling a new
issue of bonds to obtain funds needed to retire eYisting securities that are callable witlun 90 days
of the issuance of the new bonds. The eYisting utility system revenue bonds are callable on June
1, 2011, and the attached ordinance includes the required Notice of Redemption. The City's debt
policy requires that the present value savings of a current refunding exceed the costs of refunding
the bonds. The City's preliminary debt schedule projects the cost of issuance at $59,478 and the
net present value savings at $434,3??.213 or 4.73% of the par amount of refunded bonds.
Agenda Inforination Sheet
April 5, 20 11
Page 2
Below is a summary of the eYisting utility system revenue bonds, that staff proposes to refund
with GOs:
PROPOSED REFLJNDING
2001 Rev Ref & linp (Electric) - $ 3,160,000
2 001 Rev Ref & linp (Water) - $ 3,775,000
2001 Rev Ref & Lnp (Wastewater) - $ 2.245.000
Total - $ 9,180,000
The refunding will not eYtend the maturity date of the eYisting debt, and approYimately $5722,000
in excess debt service reserves will applied to the refunding. In the past, outstanding debt
associated with the utility system has been refunded with Utility System Revenue Refunding
Bonds. These bonds have a lower underlying credit rating (Aa?/AA-) than General Obligation
Refunding bonds, and as a result, cost more to issue. To counteract tlus issue, staff proposes to
sell General Obligation Refunding Bonds at a substantial savings. This is due to the higher
overall credit rating (Aa2/AA) of the City and the eliinination of a bond reserve requireinent. If
the debt is refunded in tlus maiuier, the debt will be gLiaranteed by the full faith and credit of the
City, not just the utility system revenues. As a result of tlus approach, staff anticipates that the
cost of the refunding will be approximately $0.6 million less than Utility System Revenue
Refunding Bonds over the life of the debt.
The bonds will be sold through a competitive bid process. The City's financial advisor, First
Southwest Company, will accept bids on April 5, 2011, with the closin~ and delivery of funds
planned for May 10, 2011. Interest rates, pricing and all other information from the successful
bidder will be included in the finalized Official Statement following the City Council's award of
the bid. For your review, staff has attached a copy of the ordinance and preliminary official
statement.
Concurrently with the sale of the bonds, the City anticipates the sale of approYimately
$32,100,000 of Certificates of Obligation (CO), wluch is also on the April 5, 2011, City Council
agenda for consideration. Staff has discussed the CO and GO issuances in detail with the bond
rating agencies. Standard and Poor's has affirmed the City's bond rating of AA, and Moody's
has affirmed the City's bond rating of Aa2. These rating reports have been included as eYlubits
in the CO issuance agenda item mentioned above.
RECOMMENDATION
Staff recommends approval of the ordinance.
PRIOR ACTION/REVIEW (CouncilBoards/Commissions)
On Febniary 15, 2011, the Audit/Finance Committee unaiumously recommended approval to
forward the upcomin~ bond issuance to the City Council for consideration.
On March 1, 21011, the City Council discussed the sale of General Obligation Bonds on April 5,
2011, including a possible refunding of eYisting utility system revenue bonds.
Agenda Inforination Sheet
April 5, 20 11
Page 3
EYHIBITS
1. Ordinance
2. Notice of Sale
3. Preliminary Official Statement
4. Preliminary Schedule - GO Refunding & linprovement Bonds, Series 21011
5. Paying Agent/Registrar Agreement
6. Escrow Agreeinent
Respectfully submitted,
n
. ~
~ .
Bryan Langley
Chief Financial Officer
Prepared By:
~
~
Antoiuo Puente, Jr.
Assistant Director of Finance
ORDINANCE NO. 2011 -
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP 1'O $10,845,000 IN PRINCIPAL
AMOUNT OF "CITY OF DENTON GENERAL OBLIGATION REFUNDING AND
IMPROVEMENT BONDS, SERIES 2011"; AUTHORIZING TI-IE ISSUANCE OP THE
BONDS; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING TO SAID BONDS; AND ENACTING OTHER PROVISIONS RELATING
TO THE SUBJECT
THE STATE OF TEXAS .
COtJNTY OF DENTON :
CITY OF DENTON .
WHEREAS, by virtue of elections held within the City of Denton, Texas ("the Issuer") on February
5, 2005, this City Council became authorized to issue, sell and deliver the general obligation bonds of the
Issuer, of which there have been issued heretofore, are authorized ta be issued by this Ordinance, and will
remain authorized but unissued hereafter, as described in Schedule I attached hereto and incorporated herein;
WHEREAS, this City Council finds and determines that it is necessary and proper to order the
issuailce, sale and delivery of suc11 voted bnnds;
WNEREAS, the City has previously issued, and there are presently outstanding, revenue bonds of
the Issuer secured by a pledge of revenues derived by the Issuer frotn the ownership and operation of the
Issuer's Utility System (consisting of the Issuer's cambined waterworks system, sanitary sewer system, and
electric light and power system);
WHEREAS, certain of such previously issued and outstanding revenue bonds are inteiided to be and
shall be refunded pursuant to this Ordinance, the revenue bol7ds to be refunded beii7g described in Schedule
II attaclled hereto and incorporated herein (collectively, the "Refunded Obligations");
WHEREAS, Chapter 1207, Texas Government Code, authorizes the Issuer to issue refunding bonds
and to deposit the proceeds from the sale thereof, together with any other available funds or resources,
directly with a paying agent for the Refunded Obligations or a trust company or commercial bank that does
not act as a depository far the Issuer and is named in these praceedings, and such deposit, if made before the
payment dates of the Refunded Obligations, shall colistitute the making of finn banking and financial
arrangements for the discharge and final payment of the Refuncled Obligations;
WHEREAS, C1lapter 1207, "I"exas Government Code, further authorizes the Issuer to enter into an
escrow or similar agreement with such paying agent for the Refunded Obligations or trust company or
commercial bank with respect to the safekeeping, investment, reinvestment, administration and disposition
of any such deposit, upon such terms and conditions as the Issuer and such paying agent or trust company
or commercia] bank may agree,
WHEREAS, The Bank of New York Mellon "Trust Company, N.A. is the paying agent For the
Refiinded Obligations, and the Escrow Agreement, wherein The Bank of New York Mellon Trust Company,
N.A. is the Escrow Agent, hereinafter authorized constitutes an escrow agreement of the kind authorized and
pennitted by said Chapter 1207;
WHEREAS, the City Council hereby finds and declares a public purpose and it is in the best interests
of the Issuer to refund the Refunded Obligations is in order to achieve a debt service savings and to
restructure the Issuer's outstanding debt service, and that such refLlpding will result in a present value debt
service savings of approximately $ and an actual debt service savings of approximately
$ to the Issuer;
WHEREAS, all the Refunded Obligations mature or are subject ta redemption prior to maturity
within 20 years of the date of the bonds hereinafter authorized;
Wf-IEREAS, the Bonds hereinafter authorized to be issued were voted and are to be issued, sold and
delivered pursuant to the general laws of the State of Texas, including Texas Government Code Cllapters
1207 and 1331, as alnended, and the Issuer's Home Rule Charter; and
WHEREAS, it is afficially found, determii7ed, and declared that the Ineeting at which this Ordinance
has been adopted was open to the public and public notice of the time, place and subject matter of the public
business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required
by the applicable provisions of Texas Government Code Chapter 551; Now, Therefore
TI-IE COUNCIL OF THE CITY OF DENTON HERFBY ORDAINS:
Section 1. RECI1'ALS, AMOUNT AND PURPOSE OF THE SONDS. The recitals set forth in the
preamble hereof are incorporated herein and sliall have the same force ancl effect as if set forth in t17is Section,
The Bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the
aggregate principal amount of $10,845,000, to wit: (i) $$,620,000 for the public purpose of refunding the
Refunded Obligations; (ii) far the purpose ofthe acquisition of property and making improvements for public
purposes in said Issuer, to wit: (a) $1,190,000 for street irnprovements and (b) $1,035,000 for park land
acquisitions and improvements, all in accordance with and subject to the election propositions authorizing
such bonds (the "Improvement Projects"); and (iii) to pay the eosts incurred in connection with the issuailce
of the Bonds (collectively, the °Projects").
Sectian 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND MATURITIES AND
INTEREST RATES OF BONDS. Each bnnd issued pursuant to this Ordinance shall be designated: "CITY
OF DENTON GENERAL OSLICATION REFUNDING AND IMPROVEMENT BOND, SERIES 2011,"
and initially there shall be issued, sold, and delivered hereunder one fully registered bond, without interest
coupons, dated April 1, 2011, in the principal amount stated above and in the denominations hereinafter
stated, numbered T 1 (the "Initial Bond"), with bonds issued in replacement thereof being in the
denominations and principal amounts her-einafter stated and numbered consecutively from R-l upward,
payable to the respective Registered Owners thereof (with the Initial Bond being made payable to the
Purchaser as described in Section 10 hcreof), or to the registered assignee or assignees of said Bonds or any
portion or partions thereof (in each case, the "Registered Owner"), and said Bonds shall mature and be
payable serially on February 15 'rn each of the years and in the principal arnounts, respectively, and shall bear
interest from the dates set forth in the FORM OF BOND set Forth in Section 4 of this Ordinance to their
respective dates of maturity or redemption prior to maturity at the rates per annum, as set forth in the
following schedule:
2
Principal Interest
Years
Ainount Rates
2012
$4,055,000 %
2013
550,000
2014
570,000
2015
575,000
2016
600,000
2017
615,000
2018
600,000
2019
615,000
2020
640,000
2021
670,000
Principal lnterest
Years
Amoul7t Rates
2022
$110,000 %
2023
115,000
2024
120,000
2025
125,000
2026
130,000
2027
135,000
2028
145,000
2029
150,000
2030
160,000
2031
165,000
The term "Boi7ds" as used in this Ordinarlce shall mean and include collectively the bonds initially issued and
delivered pursuant to this Ordinance and all substitute bonds exchanged therefor, as well as all dther substitute
bonds and replacement bonds issued pursuant hereto, and the term "Bond" shall mean any of the Bonds.
Section 3. CHARACTERIS7'iCS OF THE BONDS.
(a) Ref2istration. Transfer. Conversion and Exchanae: Authentication. The Issuer shall keep or cause
to be kept at the principal corporate trust office of The Bank of New York Mellon Trust Company, Natiol7al
Association, Dallas, Texas, (the "Paying Agent/Registrar"), books or records far the registration of the
transfer, conversion and exchange of the Bonds (the "Registration Sooks"), and the Issuer hereby appoints
the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers, conversions attd exchanges under such reasonable regulations as the Issuer and
Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations,
transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record
in the Registration Books the address ofthe Registered Owner af each Bond to which payments with respect
to the Bonds shall be mailed, as herein provided; but it shall be the duty of each Registered Owner to notify
the Paying Agent/Registrar in writiilg of the address to which payments shall be mailed, and such interest
payinents shall not be mailed unless such notice has been given. The Issuer shall have the right to inspect
the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying
Agent/Registrar s11a11 keep the Registration Sooks confidential and, unless otherwise required by law, shall
not permit their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard
ar customary fees and charges for making such registration, transfer, conversion, exchange and delivery of
a substitute Bond ar Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds shall
be made in the manner provided and with the effect stated in the FORM OF BOND set forth in this
Ordinance. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any suc11 Bond, date and manually sign saici Bond, and no such
Bond shall be deemed to be issued nr outstanding unless such Band is so executed. The Paying
Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for canversion and exchange.
No additional ordinances, orders, or resolutions need be passed or adopted by the governing body of the
Issuer or any other body or person so as to accomplish the foregoing conversion and exchange of any Bond
or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of
the substitute Bonds in the manner prescribed herein, and said Bonds shall be printed or typed on paper of
customary weight and strength. Pursuant to Chapter 1201, Government Code, as amended, the duty of
conversian and exchange of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, apd,
upon the execution of said Bond, the converted and exchanged Bond shall be valid, incontestable, and
enforceable in the same manner and with the same effect as the Bonds that initially were issued and delivered
pursuaiit to this Ordinance, approved by the Attorney General of the State of Texas (the "Attorney General")
and registered by the Comptroller of Public Accounts of the State of Texas (the "Comptroller").
(b) Pavment of Bonds vzd lnterest. The Issuer hereby further appoints the Paying Agent/Registrar
to act as the paying agent for paying the principal of and interest on the Bonds, all as provided in this
Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and
the Paying Agent/Registrar with respect ta the Bonds, and of all conversions and exchanges of Bonds, and
all replacements of Bonds, as provided in this Ordinance. However, in the event of a nonpayment of interest
on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payrnent
(a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the
paymejlt of such interest have been received from the Issuer. Notice of the past due interest shall be sent at
least five (5) business days prior to the Special Record Date by United States mail, first-class postage prepaid,
to the address of each Registered Owner appearing on the Registration Books at the close of business on t11e
last business day next preceding the date of mailing of such notice.
(c) In General. The Bo11ds (i) shall be issued in fully registered form, without interest colipons, with
the principal of and interest on such Bonds to be payable only to the Registered Owners thereof, (ii) may or
sha11 be redeemed prior tn tlYeir scheduled maturities (notice of which shall be given to the Paying
Agent/Registrar by the Issuer at least 45 days prior to any such redemption date), (iii) may be converted and
exchanged for other Bnnds, (iv) may be transferred and assigned, (v) shall have the cliaracteristics, (vi) shall
be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Bonds shall be payable,
and (viii) shall be administered and the Paying Agent/Registrar and tl7e Issuer shall have certain duties and
responsibilities with respect to the Bonds, all as provided, and in the manner and to the effect as required or
indicated, in the FORM OF BOND set forth in this Ordinance. The Initial Bond is not required to be, and
shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in conversion
ofand exchange for any Bond or Bnnds issued under tllis Ordinance the Paying Agent/Registrar sha11 execute
the Paying Agent/Registrar's Authentication Certificate, in the form set forth in the FORM OF BOND.
(d) Pavina Aaent/Reeistrar for the Bonds. The Issuer cavenants with the Registered Owners of the
Bonds that at all times while the Bonds are outstanding the Issuer will provide a competent and legally
qualified bank, trust company, financial institution, or other entity ta act as and perform the services of Paying
Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar will be a single
entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not
less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior
to the next principal or interest paymeilt date after such »otice. In tlle event that the entity at any time acting
as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) shnuld resign or
otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally
qualifed bank, trust coinpany, financial institution, or other agetlcy to act as Paying AgentlRegistrar under
this Ordiilance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar
promptly shall transfer and deliver the Registration Boaks (or a copy thereof), along with all other pertinent
books and records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed by the
Issuer. Upon any change in the Paying AgentlRegistrar, the Issuer promptly will cause a written notice
thereof to be sent by the new Paying Agent/Registrar to each Registered Owner of the Bonds, by United
States mail, first-class postage prepaid, which notice also shall give the address of the new Paying
Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be
deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be
delivered to each Paying Agent/Registrar.
(e) Authentication. Except as provided below, no Bond shall be valid or obligatory for any purpose
or be entitled to any security or benefit of this Ordinance unless aiid until there appears thereon the Paying
Agent/Registrar's Authentication Certificate substantially in the form provided in this Ordinance, duly
authenticated by manual execution of the Paying Agent/Registrar. It shall not be required that the same
authorized representative of the Paying Agent/Registrar sign tlle Paying Agent/Registrar's Autllentication
Certificate on all of the Bonds. In lieu of the executed Paying Agent/Registrar's Autheritication Certificate
described above, the Initial Bond delivered on the closing date shall have attached thereto the Comptroller's
Registration Certificate substantially irt the farm provided in this Ordinance, manually executed by the
Comptroller or by her duly authorized agent, which certificate shall be evidence that the Initial Bond has been
duly approved by the Attorney General and that it is a valid and binding obligation of the Issuer, and has been
registered by the Comptral]er.
(f) Book-Entrv-Onlv Svstem. The Bonds issued in exchange for the Initial Bond shall be initially
issued in the form of a separate single fully registered Bond for each of the maturities thereof. Upon initial
issuance, the ownership of each such Bond sha11 be registered in the name of Cede & Co., as nominee of The
Depository Trust Company, New York, New York ("DTC"), and except as provided in subsection (g) hereof,
all of the nutstanding Bonds shall be registered in the nalne of Cede & Co., as nominee of DTC.
With respect to Bonds registered in the name ofCede & Co., as nominee of DTC, the Issuer and the
Paying Agent/Registrar shall have nn responsibility or obligatinn to any securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations on whase behalf DTC was created
("DTC Participant") to hold securities to facilitate the clearance and settlement of securities transactions
among DTC Participants or to any person on behalf of whom such a DTC Participant holds an interest in the
Bonds. Without limiting the immediately preceding sentence, the Issuer and the Paying Agent/Registrar sha11
have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any
DTC Participant with respeet to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant
or any other person, other t17an a Registered Owner of Bonds, as shown on the Registration Books, of any
notice with respect to the Bonds, or (iii) the payment to any DTC Participant or any other person, other than
a Registered Owner of Bonds, as shown in the Registration Books of any amount with respect to principal
of or interest on the Bands. Notwithstanding any other provision ofthis Ordinance to the contrary, the Issuer
and the Paying Agent/Registrar sha11 be entitled to treat and consider the person in whose name each Band
is registered i17 the Registration Books as the absolute owner of such Bond for the purpose of payment of
principal and interest with respect to such Bond, for the purpose of registering transfers with respect to such
Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and
interest on the Bonds only to or upon the order of the Registered Owners, as shown in the Registration Books
as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of
principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a
Registered Owner, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the
Issuer to make payments of principal and interest pursuant to t11is Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice tn the effect that DTC has determined to substitute a new nominee
in place of Cede & Co., and subject to the provisians in this Ordinance with respect to interest checks being
mailed to the Registered Owner at the close of business on the Record Date, the words "Cede & Co." in this
Ordinance shall refer ta such new nominee of DTC.
The previous execution and delivery of the Blanket Issuer Letter of Representations with respect to
obligations of the Issuer is hereby ratified and confirmed; and the pravisions thereof s17a11 be fully applicable
to the Bonds.
(g) Successor Securities Depositorv; Transfers Outside Book-Entrv-Ot11v Svstem. In the event that
the Issuer determines that DTC is incapable of discharging its responsibilities described herein and in the
Blanket Issuer Letter of Representations to DTC or that it is in the best interest of the beneficial owners of
the Bonds that they be able to obtain certificated Bonds, the Issuer shall (i) appoint a successor securities
depository, qualified to act as such under Section 17A of the Securities and Exchange Act of 1934, as
amended, notify DTC and DTC Participants of the appointment ofsuch successor securities depository and
transfer one ar more separate Bonds to such successor securities depository or (ii) notify llTC and DTC
Participants of the availability through DTC of Bonds and transfer one or more separate certificated Bonds
to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shail no longer
be restricted to being registered in tlie Registration Books in the name of Cede & Co., as nominee of DTC,
but may be registered in the name of the successor securities depository, or its nominee, or in wliatever name
or names Registered Owners transferring or exchanging Bonds shall designate, in accordance with the
provisions of this Ordinance.
(h) Pavments to Cede & Co. Notwithstanding any other provision af this Ordinance to the contrary,
so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, a11 payments with respect
to principal of and interest on sLich Bond and all notices with respect to such Bond sliall be made and given,
respectively, in the manner provided in the Blanket Issuer Letter of Representations to DTC.
(i) Cancellation of Initial Bond. On the closing date, the Initial Bond, representing the entire
principal amount of the Bonds, payable in stated installments to the purchaser designated in Section 10 or its
designee, executed by manual or facsimile signature of the Mayor and City Secretary of the Issuer, approved
by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to such
purchaser or its designee. Upon payment for the Initia] Bond, the Paying Agent/Registrar shall cancel the
Initial Band and deliver to DTC on behalf of such purchaser one registered definitive Bond for each year of
maturity of the Bonds, in the aggregate principal amount of all of the Bonds for such maturity. To the extent
that the Paying Agent/Registrar is eligible to participate in DTC's FAST 5ystem, pursuant to an agreement
between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Bonds
in safekeeping for DTC.
(j) Conditional Notice of Redemation. With respect to any optional redemption of the Bonds, unless
the prerequisites to such redemption required by this Ordinance have been met and maneys sufficient to pay
the principal nf and premium, if any, and interest on the Bonds to be redeemed shall have been received by
the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall state that said
redemption may, at the option of the Issuer, be conditional upon the satisfaction of such prerequisites and
receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or
upon any prerequisite set forth in such notice of redemptian. If a conditional notice of redemption is given
and such prerequisites to fhe redemption and sufficient moneys are not received, such notice shall be of no
force and effect, the Issuer shal] not redeem such Bonds aiid the Paying Agent/Registrar shall give notice, in
the manner in which the notice of redemptian was given, to the effect that the Bonds have not been redeemed.
Section 4. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assigmnent and the form of Comptroller's
Registration Certificate to be attached to the Bands initially issued and delivered pursuant to this Ordinance,
shall be, respectively, substantially as follows, with such appropriate variations, omissions or insertions as
are permitted or required by this Ordinance.
(a) [Form of Bond]
NO. R-
Interest Rate
UNITED STATES OF AMERICA
STATE OF TEXAS
CI1'Y OF DENTON
GENERAL OBLIGATION
REFUNDING AND IMPROVEMENT BOND
SERIES 2011
Dated Date
April 1, 2011
RECISTERED OWNER:
PRINCIPAL AMOUNT:
Maturity Date
February 15,
PRINCIPAL
AMOUNT
$
CUSIP No.
DOLLARS
ON THE MATURITY DATE specified abave, the City of Denton, in Denton County, Texas (the
"Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to
pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner"), on the Maturity Date specified above, the Principal Amount specified above. The Issuer promises
to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-day year of twelve 30-
day months) from April 1, 2011 at the Interest Rate per annum specified above. Interest is payable on
February 15, 2012 and semiannually on each August 15 and February 15 thereafter to the Maturity Date
specified above, or the date of redemption prior to maturity; except, if this Bond is required to be
authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such
Principal Amount shall bear interest from the interest payment clate next preeeding the date of authentication,
Linless such date of authenticatioil is after any Record Date but or1 or before the next follrrwing interest
payment date, in which case such principal amount shall bear interest from such next following interest
payment date; provided, however, that if on the date of authentication hereof the interest on the Bond or
Bonds, if any, for which this Bond is being exchanged is due but has not been paid, then this Bond shall bear
interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United
States of America, without exchange or collection charges. The principal of this Bond shall be paid to the
Registered Owner hereof upon presentation and surrender of this Bond at maturity, or upon the date fxed for
its redemption prior to maturity, at the principal corporate trust aFfice of The Bank ofNew York Mellon Trust
Company, National Association, ballas, Texas, which is the "Paying Agent/Registrar" for t11is Bond. The
payment of interest on this Bond shall be made by the Paying Agent/Registrar to the Registered Owner hereof
on each interest payment date by check ar draft, dated as of such interest payment date, drawn by the Paying
AgentlRegistrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the
issuance of this Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such
purpase as hereinafter provided; and such check or draft sha11 be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, on eacli such i»terest paylrrent date, to the Registered Owner
hereof, at its address as it appeared on the last business day of the month preceding each such date (the
"Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In
addition, interest may be paid by suc17 other method, acceptable to the Paying Agent/Registrar, requested by,
and at the risk and expense of, the Registered Owner. In the event of a non-payment of interest on a
scl7eduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received fram the Issuer. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States Inail, first-class postage prepaid, to the
address of each Registered Owner of a Sond appearing on the Registration Books at the close of business on
the last business day next preceding the date of rnailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this $ond prior to maturity
as provided herein shall be paid to the Registered Owner upon presentation and surrender of this Bond for
redemption and payment at the principal corporate trust office of the Paying Agent/Registrar. The Issuer
covenants with the Registered Owner of this Bond that on or before each principal payment date, interest
payrnent date, and accrued interest payment date for this Boj1d it will nzake available to the Paying
Agent/Registrar, fram the "Interest and Sinking Fund" created by the Sond Ordinance, the amounts required
to provide for the payment, in immediately available funds, of all pt•incipal of and interest on the Bonds, when
due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday or a day on which banking institutions in the city where the principal corporate trust
office ofthe Paying Agent/Registrar is located are authorized by law or executive arder to close, then the date
for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day
on which banking institutions are authorized to close; and payment on such date shall have the same force
and effect as if made an the original date payment was due.
THIS BOND is one of a series of Bonds dated Apri1 1, 2011, authorized in accordance wit11 the
Constitutinn and laws of the 5tate of Texas in the principal amount of $10,845,000 for the public purposes
of (i) refunding certain outstanding obligations of the Issuer, (ii) the acquisition of property and making
improvements for public purposes in the Issuer, to wit: street improvements and park land acquisitions a17d
improvements, and (iii) paying the costs incurred in cannection with the issuance of the Bonds.
ON FEBRUARY 15, 2021, or on any date thereafter, the Bonds of this series may be redeemed prior
to their scheduled maturities, at the option of the lssuer, with funds derived from any available and lawful
source, as a whole, or in part, and, if in part, the particular Bonds, or portions thereof, to be redeemed shall
be selected and designated by the lssuer (provided that a partion of a Bond may be redeemed only in an
integral multiple of $5,000), at a redemption price equal to the principal amount to be redeerned plus accrued
interest to the date fixed for redemption.
AT LEAST 30 days prior to the date fiaed for any redemption of Bonds or portions thereof prior to
maturity a written notice of such redemptio» shall be se»t by the Paying Agent/Registrar by United States
mail, first-class postage prepaid, to the Registered Owner of each Bond to be redeemed at its address as it
appeared on the 45th day prior to such redemption date; prnvided, however, that the failure of the Registered
Owner to receive such ilotice, or any defect therei» or in the sending or mailing thereof, shall not affect the
validity or effectiveness of the proceedings for the redemption of any Bond. By the date fixed for any such
redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price far the Bonds or portions thereof that are to be so redeemed. If such written notice of
redemption is sent and if due provision for such payment is made, a11 as provided above, the Bonds or
portions thereof that are to be sa redeemed thereby automatically shal] be treated as redeemed prior to their
scheduled maturities, and they sha11 not bear interest after the date fixed for redemption, and they shail not
be regarded as being outstanding except for the right of the Registered Owner to receive the redemption price
from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of any Bond sha]1
be redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the sarrie rate, in
any denomination or denominations in any integral multiple of$5,000, at the written request ofthe Registered
Owner, ai7d in aggregate principal amount equal to the umredeemed portioii tliereof, wi11 be issued to the
Registered Owner upap the surrender thereof for cancellation, at the expense of the Issuer, all as provided
in the Band Ordinance.
IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been
deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available fllnds
sufficient to redeem all the Bonds called for redemption, such notice may state that it is conditional, and is
subject to the deposit ofthe redemption moneys with the Paying Agent/Registrar or legally authorized escrow
agent at or prior to the redemption date. If such redemption is not effectuated, the Payittg Agent/Registrar
shall, within five days thereafter, give notice in the manner in which the notice of redemption was given that
such moneys were not so received and shall rescind the redemption.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Boiid Ordinance, tllis
Boiid may, at the request of the Registered Owner ar the assignee or assignees hereof, be assigned,
transferred, converted into and exchanged for a like aggregate principal amount nf fully registered Bands,
without interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case may
be, having the same denomination or denominations in aizy integra] multiple of $5,000 as requested in writing
by the appropriate Registered Owner, assignee or assignees, as the case may be, upon surrender afthis Bond
to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set fot-ih in
t11e Bond Ordinance. Among other requirements for such assignn7ent and transfer, this Boiid must be
presented and surrendered to the Paying flgent/Registrar, together with proper instruments of assignment,
in form and with guarantee ofsignatures satisfactory to the Paying Agent/Registrar, evidencing assignment
of this Bond or any portion or portions herenf in any integral multiple of $5,000 to the assignee or assignees
in whose name or nan7es this Bond or any such pnrtion or portions hereof is ar are to be registered. The Form
of Assignment printed or endorsed on this Bond may be executed by the Registered Owner to evidence the
assigmnent hereof, but such method is not exclusive, and other ittstruments of assignment satisfactory to the
Paying Agent/Registrar may be used to evidence the assigninent of this Bond or any portion or portions
hereof from time to time by the Registered Owner. The Paying Agent/Registrar's reasonable standard or
customary fees and charges for assigning, transferring, converting and exchanging any Bond or portion
thereof will be paid by the Issuer. In any circumstance, any taxes or governrnental charges required to be paid
with respect thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange,
as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required
to make any such transfer, conversion, or exchange (i) during the period cominencing with the close of
business on any Record Date and ending with the apening of business on the next following principal or
interest payment date, or (ii) with respect to any Bond or any portion thereof called for redemption prior to
maturity, within 45 days prior to its redemptioi7 date.
IN THE EVENT any Paying Agent/Registrar For the Bonds is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it prnmptly will appoint
a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the
Registered Owners of the Bonds.
IT IS HERF.,BY certified, recited and covenanted that this Boiid has been duly and validly authorized,
issued and delivered; that all acts, conditions and things required or proper to be performed, exist and be done
precedentto or inthe autharization, issuance and delivery ofthis Boiid have been performed, existed and been
do»e in accordance with law; and that annual ad valorem taxes sufficienti to provide for the payment crf the
interest on and principal of this Bond, as such interest comes due and such pri»cipal matures, have been
levied and ordered to be levied against all taxable property in said Issuer, and have been pledged for such
payment, within the limit prescribed by law.
9
THE ISSUER HAS RF,SERVED THE RIGHT to ainend the Bond Ordinance as provided therein,
and under some (but not all) circumstances amendments thereto must be approved by the Registered Owtters
of a majority in aggregate principal amount of tlle outstai7ding Bonds.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby acknowledges
all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond Ordinance is duly recorcled and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees that the tenns and provisions of this Bond and
the Bond Ordinance constitute a contract between each Registered Owner hereof and the Issuer.
IN WITNESS WHEREQF, the Issuer has caused this Bond ta be signed with the manual or facsimile
signature of the Mayor of the Issuer (or in the Mayor's absence, of the Major Pro-Tem) and countcrsigned
with the manual or facsimile signature of the City Secretary of said Issuer, and has caused the official seal
of the Issuer ta be duly impressed, or placed in facsimile, on this Bond.
(sianature)
City Secretary
(SEAL)
(b) [Form of Paying Agent/Registrar's Authenticatio» Certificate]
(si2nature)
Mayor
PAYING AGENT/REGISTFtAR'S AUTHENTICATIUN CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Comptroller's Registration Certificate)
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in the text of this Bond; and that this Band has been issued in conversion or replacement of, or in
exchange for, a bond, bonds, or a portion of a bond or bonds of a series that originally was appraved by the
Attorney General af the State of Texas and registered by the Comptroller of Public Accounts of the State of
Texas.
Dated:
(c) [Form of Assignment]
The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas
Paying Agent/Registrar
By:
Authorized Representative
ASSIGNMENT
For value received, the undersigned hereby se11s, assigns and transfers unto
Please insert Social Security or Taxpayer ldentification Number of Transferee
10
(Please print or typewrite name and address, including zip code, of Transferee.)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoi»ts
, attorney, to register the transfer of the within Bond
on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an NO"TICE: The signature above must correspond
eligible guarantar institution participating in a with the name of the Registered Owner as it
securities transfer association recognized appears upon the front af this bond in every
signature guarailtee progratn. particular, without alteration or enlargement or any
change whatsnever.
(d) [Form of Comptroller's Registration Certificate]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity and approved by the Attorney
General of the State of Texas, and that this Bond has been registered by the Comptroller of Public Accounts
of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(coMPI'ROLLEK's sEAL)
(e) [Initial Bond Insertions]
(i) The Initial Boiid shall be in the form set forth in paragrapll (a) of this Section, except that:
A. iminediately under the name of the Bond, the headings "Interest Rate" and "Maturity
Date" shall both be completed with the words "As shown below" and "CUSIP No. " shall
be deleted.
B. the first paragraph shall be deletea and the following will be inserted:
"THF CITY OF DENTON, TEXAS, in Denton County, Texas (the "Issuer"), being a political subdivision
and rnunicipal corporatian of the State of Texas, hereby promises to pay to the Registered Owner specified
above, or registered assigns (hereinafter called the "Registered Owner"), on Pebruary 15 in each ofthe years,
in the principal installments and bearing interest at the per annum rates set forth in the following scliedule:
11
Years Principal Installinents Interest Rates
(Information from 5ection 2 to be inserted)
The Issuer prnmises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-
day year of twelve 30-day months) fram April 1, 2011 at the respective Interest Rate per annum specified
above. Interest is payable on February 15, 2012, and semiamlually on each August 15 and February 15
thereafter to the date of payment of the principa] installment specified above, or the date of redemption prior
ta maturity; except, that if this Borid is requirecl to be authenticated and the date of its authentication is later
than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from the i»terest
payment date next preceding the date ofauthenticatio», unless sueh date of authentieation is after any Record
Date but on or before the next farlawing interest payment date, in which case such principal amount shall bear
iiiterest from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for whicli this Bond is being exchanged is
due but has not been paid, then this Bond shall bear interest from the date to which such interest has been paid
in full."
C. "I'he lnitial Bond shall be numbered "T-1."
Section 5. INTEREST AND SINKING FtJND.
(a) A special Interest and 5i»king Fund (the "Interest and Sinking Fund") is hereby created solely for
the benefit ofthe Bonds, and the Interest and Sinking Fund shall be established and maintained by the Issuer
at an official depository bank of the Issuer. The Interest and Sinking Fund shall be kept separate and apart
from all other funds and accounts of the Issuer, and shall be used only for paying the interest on and principal
of the Bonds. All ad va]orem taxes levied and collected for and on account of the Bonds, togetlzer with any
accrued interest received upon sale of the Bands, shall be deposited, as collected, to the credit of the Interest
and Sinking Fund. During each year while any of the Bonds or interest thereon are outstanding and unpaid,
the gavernii7g body of the tssuer shall compute and ascertain a rate aild amaunt of ad valorem tax which will
be sufficient to raise and produce the money required to pay the interest on the Bonds as such interest
becomes due, and to provide and maintain a sinking fund adequate to pay the principal of its Bonds as such
principal matures or is scheduled for redemption (but never less than 2% of the original principal amount of
the Bonds as a sinking fund each year). Said tax shall be based on the latest approval tax rolls of the Issuer,
with full allawance being made for tax delinquencies and the cost of tax collection. Said rate and amount of
ad valorem tax is hereby levied, and is hereby ordered to be Ievied, against all taxable property in the Issuer
for each year while any of the Bonds or interest thereon are otrtstanding and unpaid; and said tax shall be
assessed and collectetl each such year and deposited to the credit of the aforesaid Interest and Sinking Fund.
Said ad valorern taxes sLlfficient to provide for the payment of the interest on and principal of the Bonds, as
such interest comes due and such principal rnatures or is scheduled for redemption, are hereby pledged for
such payment, within the limit prescribed by law. Notwithstanding the requirements of this Section, if
Surplus Revenues or other lawfully available rnoneys of the Issuer are actually on deposit or budgeted and
appropriated to be deposited in the Interest and Sinking Fund in advance of the time when ad valorem taxes
are scheduled ta be levied for any year, then the amount of taxes that otherwise would have been required
to be levied pursuant to this Section may be reduced to the extent and by the amount ofthe Surplus Revenues
or other lawfully available funds then an deposit or budgeted and appropriated to be deposited in the Interest
and Sinking Fund. For purposes of this Section, "Surplus Revenues" means revenues derived by the Issuer
from the ownership and operation of the Issuer's Utility System (coiYSisting of its combined waterworks
system, sai7itary sewer system, and electric light and power system) that remain after the payment of all
maintenance and operatian expenses therenf, and all debt service, reserve and other requirements in
12
connection with all of the Issuer's revepue obligations (now or hereafter outstanding) or contractual
obligations (now or hereafter existing) which are payable from a11 or any part of the net revenues of the
Issuer's Utility System. If Surplus Revenues are budgeted and appropriated for deposit into the Interest and
Sinking Fund, the Issuer:
(i) shall t1°ansfer and deposit in the I»terest and Sinking I'und each month an amount of not less than
1/1 2th of the annual debt service on the Bonds ta be paid from Surplus Revenues until the amount on
deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the
Bonds;
(ii) shall establish, adopt and maiiltaii7 an annual budget that provides for either the monthiy deposit
of sufficient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally available
funds on hand at the time of the adoption of the annual hudget, or a combinatian thereof, into the
Interest and Sinking Fund for the repayment of the Bonds; and
(iii) sha11 at all times maintain and collect sufficient Utility System rates and charges in conjunctian
wit17 any other legally available funds that, after payment of the costs of operating and maintail7i»g the
Utility System, produce revenues in an amount not less than the debt service requirements of all
outstanding Utility System revenue bonds of the Issuer and other obligations of the Issuer which are
secured in whole or in part by a pledge of revenues of the Utility System and for which the Issuer is
budgeting the repayment of such obligatioi7s from the revenues of the Utility System, or the Issuer shall
provide documentation which evidences the levy of an ad valorem tax rate dedicated to the Interest and
Sinking Fund, in conjunction with any other legally available funds except Utility System rates and
charges, sufficient for the repayment of Utility System debt service requirements.
(b) Chapter 1208, Texas Government Cade, applies to the issuance of the Bonds and the pledge of the
taxes granted by the Issuer under this Section and Section 9, respectively, and is therefore valid, effective,
and perfected. Should Texas law be amended at any time while the Bonds are outstandiiig and unpaid, the
result of such amendment being that the pledge of the taxes granted by the Issuer under this Section is to be
subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, in order to preserve to
the Registered Owners of the Bonds a security interest in said pledge, the Issuer agrees to take such measures
as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of
Chapter 9, Texas Business & Commerce Code and enable a filing of a secui•ity interest in said pledge to
occur.
Section 6. DEFEASANCE OF BONDS.
(a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer outstanding
(a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (d)
of this Section, when payment of the principal of such Bond, plus ii7terest thereon to the due date (whether
such due date be by reason of tnaturity or atherwise) either (i) shall have been made or caused to be made in
accordance with the terms thereaf, or (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an escraw
agreement or other instrument (the "Future Bscrow Agreement") for such payment (1) lawful morley of the
United States of America sufficient to make such payment or (2) Government Obligations that mature as to
principal and interest in such amounts and at such times as will insure the availability, without reinvestment,
af sufficient money to provide for such payment, and when proper arrangements have been made by the
Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bands shall have
became due and payable. At suc17 time as a Bond shall be deemed to be a Defeased BorYd hereunder, as
aforesaid, such Bond and the interest thereon shall no langer be secured by, payable from, or entitled to the
13
benefits of, the ad valorem taxes herein levied and pledged as provided in this Ordinance, and such principal
and interest sha]] be payable solely from such money or Government Obligations. Natwithstanding any atlier
pravision of this Ordiizallce to the contrary, it is hereby provided that any deterinination not to redeein
Defeased Bonds t17at is made in conjunctian with the payment arrangeme»ts specified in Subsection (a)(i) or
(ii) of this Section shall not be irrevocable, provided that: (1) in the proceedings providing for such payment
arrangements, the Issuer expressly reserves the right to call the Defeased Bonds for redemption; (2) gives
notice ofthe reservatiQn of that right to the Registered Owners ofthe Defeased Bonds immediately following
the making of the payment arrangements; and (3) directs that notice of the reservation be included in any
redemption notices that it autllarizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer
be invested i11 Government Obligatians, maturing in the amounts and times as hereinbefore set forth, and all
income from such Government Obligatians received by the Paying Agent/Registrar that is not required for
the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall
be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow Agreement
pursuant to wlzich the money and/or Government Obligations are held fnr the payment of Defeased Bonds
may contain provisions permitting the investment or reinvestment of such moneys in Goverrunent Obligations
or the substitution of other Government Obligations upon the satisfaction of the requirements specified in
Subsection (a)(i) or (ii) of this Section. All income from such Govermnent Obligations received by the
Paying Agerzt/Registrar which is not required for the payment of the Defeased Bonds, with respect to which
such money has been so deposited, shall be remitted to the Issuer or deposited as directed in writing by the
Issuer.
(c) T'he term "Government CJbligations" means (i) direct, noncallable obligations of the United States
of America, including obligations that are unconditionally guaranteed by the United States of America., (ii)
noncallable obligations of an agency or instrumentality ofthe United States ofAmerica, including obligations
that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the
gaverning body of the lssuer adopts or approves the proceedings autharizing the financial arrangements, are
rated as tn investment quality by a nationally recognired investrnent rating firm not less than AAA or its
equivalej7t, and (iii) noncallable obligations ofa state or an agency or a county, mlmicipality, or other polieical
subdivision of a state that have been refunded and that, on the date the governing body of the Issuer adopts
or approves the proceedings authorizing the financial arrangements, are rated as to investment quality by a
nationally recognized inveshnent rating firm not less than AAA or its equivalent.
(d) Unti1 all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar s11a11
perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been
defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by
this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds of a
maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Bonds by such
random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BdNDS.
(a) Renlacement Bonds. In the event aily outstanding Bond is damaged, mutilated, lost, stolen or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a new Bond of the
same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen or destroyed Bond,
in replacement for such Bond in the manner hereinafter provided.
14
(b) Application for Reolacelnent Bonds. Application for replacement of dai-naged, mutilated, ]ost,
stolen or destroyed Bonds shall be made by the Registered Owner thereof to the Paying Agent/Registrar. In
every case of loss, theft or destruction of a Bond, the Registered Owner applying for areplaceinent Bond sha11
furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them
to save each of thein harmless from any loss or damage witl7 respect thereto. Also, in every case of loss, theft
or destructinn of a Bond, tlie Registered Owner shall furnish to tlie [ssuer and to the Paying Agent/Registrar
evidence to their satisfaction of the loss, theft or destruction of such Bond, as the case may be. In every case
of damage or mutilation of a Band, the Registered Owner sha11 surrender to the Paying Agent/Registrar for
cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Ordinance, ii7 the eveiit
any such Bond shall have matured, and no default has occurred that is then continuing in the payment of the
principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the payment of
the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing
a replacement Bond, provided security oi• indemnity is furnished as above provided in this Section.
(d) Chariae for Issuiniz Reblacement Bonds. Prior to the issuance of any replacement Bond, the Paying
Agent/Registrar shall charge the Registered Owner of such Bond with all legal, printing, and other expenses
in connection therewith. Every replacement Bond issued pursuant to the provisions of this Section by virtue
of the fact that any Bond is lost, stolen or destroyed shall constitute a contractual obligation of the Issuer
whether or not the lost, stolen or destroyed Bond shall be found at any time, or be enforceable by anyone, and
shal] be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds
dLily issued Lunder this Ordinallce.
(e) Authoritv for Issuinp- Realacement Bonds. In accordance with Sec. 1206.022, Government Code,
this Section 7 of this Ordinance sha11 constitute authority for the issuance of any such replacement Bond
without necessity of further actian by the governing body of the Issuer or any other body or person, and the
duty of the replacement of such Bonds is hereby authorized and iinposed upon the Paying Agent/Registrar,
and the Paying Agent/Registrar sha11 authenticate and deliver such Bonds in the form and manner and with
tlie effect, as provided ip Section 3(a) of this Qrdinance for Bonds issued in conversion and eYChange for
other Bonds.
Section 8. CUSTODY, APPROVAL, AND RI:GISTRATION OF BONDS; BOND COUNSEL'S
OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED;
ENGAGEMENT OF BOND COUNSEL.
(a) The Mayor of the Issuer is hereby authorized to have control of the Initial Bond and all necessary
records and proceedings pertaining to the Bonds pending its delivery and its investigation, examination, and
approval by the Attorney General, and its registration by the Comptroller. Upon registration of the Itlitial
Bond said Comptroller (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate attached to such Bond, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on such Bond. The approving legal opinion of the Issuer's Bond CoLulsel
and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Bonds issued and
delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience
and information ofthe Registered Owners ofthe Bonds. In addition, if bond insurance is obtained, the Bonds
may bear an appropriate legend as pravided by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Bonds is subject to the initial
purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond
coLrnsel to the Issuer, which opinioi7 shall be dated as of and delivered on the date of initial delivery of tlle
15
Bonds ta the initial purchaser. The engagement of such firm as bond counsel to the issuer in connection with
the issuance, sale and delivery of the Bonds is hereby approved and confirmed. "The execution and delivery
of an engagement letter between the Issuer and such firm, with respect to suc17 services as bond counsel, is
hereby authorized in such form as may be approved by the Mayor, and the Mayor is hereby authorized to
execute such engagement letter.
Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTERBST ON THE BONDS.
(a) Covenants. The Issuer covenants to talce any action necessary to assure, or refrain from any action
that would adversely affect, the treatinent of the Bo11ds as obligations described in section 103 of the Internal
Revenue Code of 1986, as amended (the °Code"), the interest on which is not includable in the "gross
i»come" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants
as fallows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds (less
amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in
section 141(b)(6) of the Code or, if more tha11 10 percent of'the proceeds or the projeets financed or
refinanced therewith are so used, such amounts, whether or not received by the Issuer, with respect to
such private business use, do not, under the terms of this Ordinance or any underlying arrangement,
directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on
the Bonds, in contravei7tion of section 141(b)(2) of the Code;
(2) to take aily action to assure that in the event that the "private bUSiiless use° described in
subsection (1) hereof exceeds 5 percent of the proceeds ofthe Bonds or the projects financed therewith
(less amounts deposited into a reserve fund, if any) then t17e amourlt in excess of 5 percent is used for
3"pYlVdle bUS1TieSS USe" th1t IS "Y01c1t2d° a11C1 1701 °d15pYOp01't1011ati0," W1t111ll t11C Iliea111i1g of 5eC11011
141 (b)(3) of the Code, to the govenimental use;
(3) to take any actiQn to assure that no amount that is greater than the lesser of $5,000,000, or
5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly
or indirectly used to fiiia»ce loans to persons, other than state or 1oca1 governmental units, in
contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Bonds being treated as
"private activity bonds" within the meaning of sectian 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being "federally guaranteed"
within the meaning of section 149(b) of the Code;
(6) to refrain from usillg any portion of the proceeds of tlle Bonds, directly or indirectly, to
acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as
defined in section 148(b)(2) of the Code) that produces a rnaterially higher yield over tlze term of the
Bonds, other than investment property acquired with -
(A) proceeds of the Bonds invested for a reaso»able temporary period of 3 years or less
or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are needed
for the purpose for which the bonds are issued,
16
(B) arnounts invested in a bona fide debt service fund, within the meaning of section
1.14$-1(b) of the rules and regulations of the United States Department of the Treasury
("Treasury Regulations"), and
(C) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amounts do not exceed 10 percei7t of the proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of
the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of
section 148 of the Cade (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code
(relating to advance refundings); and
(8) to pay to the United States of America at least ance during eac11 five-year period (beginning
on the date of delivery of the Bonds) an amount that is at ]east equal to 40 percent of the "Excess
Earnings," within the meaning of section ] 48(o of the Code and to pay to the United States of America,
not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required
to be paid as a result of Excess Earnii7gs under section l 48(o of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a"Rebate Fund"
is hereby established by the Issuer far the sole beneflt of the United States of America, and such Rebate Fund
shall nat be subject to tlle claim of any other person, includitig without liniitation the Bondholders. 'I'he
Rebate Fund is established for the additiottal purpose of compliance with section 148 of the Code.
(c) Use of Praceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer understands
that the term "proceeds" includes °disposition proceeds" as defined in the Treasury Regulations and, in the
case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to
the date of issuasice of the Bonds. It is the understanding of t11e Issuer that the covenants contained herein
are intended to assure compliance with the Code and any regulations or rulings promulgated by the United
States Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated that modify or expand provisions ofthe Code, as applicable to the Bonds, the Issuer will not be
required to coimply wit17 a1ry covenant contained herein to the extent that sLtich failLire to comply, in the
opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In the event that regu]ations or rulings are
hereafter promulgated that impose additianal requirements applicable to the Bonds, the Issuer agrees to
comply with the additional reqtilirements to the extellt necessary, in the opinioll of nationally recogrtized bond
counsel, to preserve the exemption frnm federal income taxation of interest an the Bonds under section 103
of the Code. In furtherance of such intentian, the Issuer hereby autharizes and directs the Mayar to execute
any documents, certificates or reports required by the Code and to make such elections, on behalf of the
Issuer, that may be pennitted by the Code as are cQnsistent with the purpose for the issuance of the Bonds.
(d) Allocation of. and Limitation on. Exaenditures for the Proiects. The Issuer covenants to account
for the expenditure of sale proceeds and investment earnings to be used for the constrLiction and acquisition
of the Improvement Projects an its books and records by allocating proceeds to expendittires within 18
months of the later of the date that (1) the expenditure is made, or (2) the Improvement Proj ects are
completed. The faregoing notwithstanding, the Issuer sha11 not expend proceeds of the sale of the Bonds or
investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of
the Bonds, or (2) the date the Bonds are retired, unless the Issuer obtains an opinion of nationally-recogr7ized
bond counsel that such expenditure will not adversely affect the status, for federal income tax purposes, of
the Bonds ar the interest thereon. For purposes hereof, the Issuer shall not be obligated to comply with this
17
covenant if it obtains an opiniop that such failure to comply wi11 not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
(e) Disnosition of Proiects. The Issuer covenants that the Prajects and the projects refinanced by the
Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of casli or
other compensation, unless the Issuer obtains an opinion of natinnally-recognized bond cowlsel that such sale
or other disposition wi11 not adversely affect the tax-exempt status of the Bonds. For purposes of the
foregoing, the partion ofthe property comprising personal property and disposed in the ordinary course shall
not be treated as a transactian resulting in the receipt of casli or other cornpensation. For purposes hereof,
the Issuer shall not be obligated to comply with this cQVenant if it obtains a legal opinion that such failure to
comply will not adversely affect the excludability far federal income tax proposes froin gross income of the
interest.
(f) Reimbursement. This Ordinance is intended to satisfy t11e officia] intent requirements set farth in
section 1.150-2 of the Treasury Regulations.
5ection 10. SALE OF BONDS E1ND APPROVAL OF OFFICIAL STATEMENT; PURTHER
PROCEDURES.
(a) The Sonds are hereby sold and shall be delivered to ,
(the"Purchaser") for cash for the par value thereaf and accrued interest therean to date of delivery, plus a cash
premium of $ . The Bonds shall initially be registered in the name of the Plu-chaser or its
designee. It is officially faund, determined, and declared that the Bonds have been sold at public sale to the
bidder affering the lowest intei•est cost, after receiving sealed bids pursuant to an Notice of Sale ai7d Bidding
Instructions and Preliminary Officiai Statement prepared and distributed in comiection with the sale of the
Bonds. Said Notice of Sale and Bidding Instructions and Preliminary Official Statement, and any addenda,
supplement, or anlendment thereto have been and are hereby approved by the governing body of the Issuer,
and their use in the affer and sale of the Bonds is hereby approved. The Initial Bond shall be registered in
the name of the Purchaser or its designee.
(b) The Issuer hereby approves the form and content of the Official Statement relating to the Bonds
and any addenda, supplement ar amendment thereto, and appraves the distribution of such Official Statement
'rn the reoffering of the Bonds by the Purchaser in final form, with such changes therein or additions thereto
as the nFficer executing the same may deem advisable, such determination to be conclusively evidenced by
his execution thereof. The distribution and use afthe Preliminary Official Statement dated , 2011
prior to the date hereof is hereby ratified and confirmed.
(c) The Mayor and Mayor Pro Tem, the City Manager and City Secretary and all other officers,
employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized,
empowered and directed from time to time and at any tiine to do and perforrn all suc11 acts and things and to
execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the lssuer a
Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other instruments, whether or not
herein mentinned, as may be necessary or desirable in order to carry out the terins and provisions of this
Ordinance, the Bonds, the sale of the Bonds, the Notice of Sale and Bidding Instructions and the Official
Statement. In case any officer whase signature shall appear on any Bond shall cease to be such officer before
the delivery of such Bond, such signature shall nevertheless be valid and sufficient for a11 purposes the same
as if such officer had remained in office lultil sucli delivery.
Section ll. INTEREST EARNINGS ON BOND PROCEEDS. Interest earnings derived from the
investment of proceeds froirt the sale of the Bonds issued for the Improvement Projects shall be used along
18
with other Bond proceeds for the Improvement Projects; provided that after completion of such purpose, if
any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is further provided, however, that any interest earnings on Bond proceeds that are required
to be rebated to tl7e Ui7ited States of America pursuant to Section 9 liereof i» order to prevent the Bonds from
being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of this
Section.
Section 12. CONSTRUCTION FUND.
(a) The Issuer hereby creates and establishes and shall maintain on the books of the Issuer a separate
fund to be entitled the "Series 2011 General Obligation Bonds Construction Fund" (the "Construction Fund")
for use by the Issuer for payment of all lawful costs associated with the acquisitioi7 and construction of the
Improvement Projects as hereinbefore provided. Upon payment of all such costs, any moneys remaining on
deposit in said fund s11a11 be trarlsferred to the Interest and Sinking fund. Amounts so deposited to the Interest
and Sinking Fund shall be used in the manner described in Sectian 5 of this Ordinance.
(b) The Issuer may invest proceeds of the Boi7ds (including investment earnings thereon) issued for
Improvement Projects and amounts deposited inta the Interest and Sinking Fund in investments authorized
by the Public Funds Investment Act, Chapter 2256, Texas Govermnent Code, as amended; provided,
however, that the Issuer hereby covenants that the proceeds of the sale of the Bonds will be used as soon as
practicable for the purposes for which t11e Bonds are issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the fiillest extent required
by law for the security of public funds.
Section 13. COMPLIANCE WITH RULE I5c2-12.
(a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms
below:
"MSR13" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended fram time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Renorts.
(i) The lssuer shall provide annually to the MSRB, in a designated electronic format as
prescribed by the MSRB, within six months after the end of each fiscal year ending in or after 2011,
financial information and operating data with respect to the Issuer of the general type included in the
final Official Statement authorized by Section 10 of this Ordiiiance, being the information described
in Bxhibit A hereto. Any financial statements so to be provided sha11 be (1) prepared in accordance
with the accounting principles described in Exhibit A hereto, ar such other accounting principles as the
Issuer may be required to employ from time to time pursuant to state law ar regulation, and (2) audited,
if the Issuer commissions an audit of such statements and the audit is completed within the period
during which they must be provided. Ifthe audit of such financial statements is not completed withiii
such period, then the lssuer shall provide unaudited financial statements within such period, and
audited financial statements for the applicable fiscal year to the MSRB, when and if the audit report
19
nn sucli statements became available. All documeiYts provided to the MSRB pursuant ta this Section
shall be accompanied by identifying information as prescribed by the MSRB.
(ii) If the Issuer changes its fiscal year, it will rlotify t11e MSRB of the chailge (and of the date
of the new fiscal year end) priar to the next date by which the Issuer otherwise would be required to
provide financial information and operating data pursuant to this Section. The financial infonnation
and operatiiYg data to be provided pursuant to this Section may be set forth in full in one or more
c3ocLUrients or may be included by specific reference to any document (including an afficial statement
or other offering document, if it is available from the MSRB) that theretofore has been provided ta the
MSRB or filed with the SEC.
(c) Event Notices.
(i) The Issuer shall 1lotify the MSRB in an electronic format as prescribed by the MSRF3, in a
timely manner (but not in excess of ten business days after the occurrence of the event) of any of the
following events with respect to the Bonds, if such eve»t is rnaterial within the meaning oftl7e federal
securities laws:
Non-payment related defaults;
Modifications to rights of holders of the Bands;
Bond calls;
Release, substitution, or sale of property securii7g repayment of the Bonds;
The consummation of a merger, consolidation, or acquisition involving an obligated
persan or the sale of all or substantially a11 of the assets of the obligated person,
other than in the ordinary course of business, the entry into a definitive agreement
to undertake such an action or the termination of a definitive agreement relating to
any such actions, other than pursuant to its terms;
Appointment of a successor or additionai trustee or the change of name of a trustee.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely man»er (btit not in excess of ten business days after the occurrence of the event) of any of the
fallowing events with respect to the Bonds, without regard to whether such event is considered material
within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. tJnscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, nr their failure to perform;
6. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the
tax-exempt status ofthe Bonds, or other events affecting the tax-exempt status ofthe
Bonds;
7. Tender offers;
8. Defeasances;
9. Rating changes;
10. Bankruptcy, insolvency, receivership or similar event of an obligated person
20
(iii) The Issuuer shall izotify the MSRB, in a timely manner, of any failure by the Issuer to provide
financial information or operating data in accordance with subsection (b) of this Section by the time
required by such subsection.
(d) Limitations, Disclaimers. and Ainendments.
(i) The Issuer shall be obligated to observe and perforrn the covenants specified i» this Section
for so long as, but only for so long as, the Issuer remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the tssuer in any event will give notice of any
deposit made in accordance with this Ordinance or applicable law that causes the Bonds no Ionger to
be outstanding.
(ii) The provisions of this Section are for the sole benefit of the Registered Owners and
beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or clairn hereunder to any other person. The Issuer undertakes
to provide only the financial i»forination, operating data, finallcial statements, a»d notices which it has
expressly agreed to provide pursuattt to this Section and does not hereby undertake to provide any other
information that may be relevant or material to a complete presentatiori of the Issuer's financial results,
conditiop, or prospects or hereby undertake to update any information provided in accordance with this
Section or atherwise, except as expressly provided herein. The Issuer does not make any representation
or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any
future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTEI2ED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON,
IN CONTRACT OR T'ORT, FOR DAMAGES RESULTING 1N WHOLE OR IN PART FROM ANY
BREACII BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECT10N, BUT EVERY RIGHT AND REMEDY OF ANY
SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH
SHALL SE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFiC PERFOFrMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision af this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, ar otlterwise limit the
duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer froln time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change in
the identity, nature, status, or type of operations of the Issuer, but only if ) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary
offering of the Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Ru1e since such offering as well as such changed circumstances and (2) either (a)
the Registered Owners of a majority in aggregate principal amount (or any greater amount required by
any other provision of this Ordinance that authorizes such an amendment) of the olrtstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the lssuer (such as nationally
recognized bnnd counsel) determined that such amendment will not material]y impair the interest of
the Registered Owners and beneficial owners of the Bonds. The Issuer may also amend or repeal the
provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provisian of the Rule or a court of final jurisdiction enters judgment that such provisians of the Rule
are invalid, but only if and to the extent that the provisions of this sentence would not prevent an
21
underwriter from lawfully purchasing or selling 13onds in the primary offering of the Bonds. If the
Issuer so amends the provisions ofthis Section, it shall include with any amended financial information
or operating data next provided in accnrdance with subsection (b) of this Section an explanation, in
narrative form, of the reason for the amendment and of the impact of any change in the type of financial
information or operati»g data so provided.
Section 14. METHOD OF AMENI7MENT. The Issuer hereby reserves the right to arnend this
Ordinance subject to the following terms and conditions, to-wit:
(a) The lssuer may from time tn time, without the consent of any holder, except as otherwise required
by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or
omission in this Ordinance that does not materially adversely affect the interests of the 1lolders, (ii) grant
additional rights or security for the benefit of the holders, (iii) add everrts of default as shall not be
inconsistent with the provisions of this Ordinance and that sha11 not inaterially adversely affect t17e interests
of the holders, (iv) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or
corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in
regard to matters or questions arising under this Ordinance as shall lrot be inconsistent wit1Y the provisio»s
of this Ordinance and that shall not in the opinion of t11e Issuer's Bond Counsel materially adversely affect
the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in principal amount
a majority of the aggregate prii7cipal amount of then outstandillg Bonds that are the subject of a proposed
amendment shall have the right from time to time to apprave any amendment hereto that may be deemed
necessary or desirable by the lssuer; provided, however, that without fhe consent of 100% of the holders in
aggregate principal amount of the then outstanding Bonds, nothing herein contained shall permit or be
construed to permit amendment of the terms and conditions of this Ordinance or in any of the Bonds so as
to:
(1) Make any chal7ge ii1 the matLirity of aiiy of the outstandiizg Bonds;
(2) Reduce the rate of interest barne by any ofthe outstanding Bonds;
(3) Reduee the amount of the prineipal of, or redemption premium, if a»y, payable on any
outstanding Bonds;
(4) Modify the terms of payment of prineipal or of interest or redemption premiui-n an
outstanding Bonds or any of them or impose any condition with respect to such payment; or
(5) Change the minimum percentage of the principal amount of Bonds necessary for cor7sent to
such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this 5ection, the Issuer shall
send by U.S. mail to each Registered Owner of the affected Bonds a copy of the proposed amendment and
cause notice of the proposed amendment to be published at least once in a financial publication published in
The City of New York, New York or in the State of Texas. Such published notice sha11 briefly set forth the
nature of the proposed amendrnent and sha11 state tllat a copy thereof is on file at the office of the Issuer for
inspection by all holders of such Bonds.
(d) Whenever at any time within one year f'rom the date of publication of such notice the lssuer shall
receive an instrument or instruments executed by the holders of at least a inajority in aggregate principal
22
amount of all of the Bands then outstanding that ai•e required for the ainendment, which itlstruanent or
instruments shall refer to the proposed amendment and that shall specifically consent to and approve such
amendment, the ]ssuer may adopt the amendment in substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this
Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and
the respective rights, duties, arid obligations of the Issuer and all holders of such affected Bonds shall
thereafter be determined, exercised, and enforced, subject in all respects to such amendment.
(f) Any consetlt given by the holder of a Bond pursuant to the provisions of this Section sha11 be
irrevocable for a periad of six manths fram the date of the publication of the notice provided for in this
Section, and shall be conclusive and binding upon a11 future holders of the same Bond during such period.
Such consent may be revoked at any time after six months from the date of the publication of said notice by
the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but such
revocation shall not be effective if the holders of a tnajority in aggregate principal amount of the affected
Bonds theil outstanding,llave, prior to the attempted revocation, coiisented to and approved the amendment.
For the purposes of establishing ownership of the Bonds, the lssuer shal] rely solely upon the
registration of the ownership of such Bonds on the Registration Books kept by the Paying Agent/Registrar.
Section 15. DEFAUI_,T AND ItENIEDIES.
(a) Events of Default. Each of the following occurrences or events for the purpose of this Ordinance
is hereby declared ta be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds when the same
becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation of
the issuer, the failure to perform which materially, adversely affects the rights ofthe Registered Owners
ofthe Bonds, including, but not limited to, their prospect or ability to be repaid in accordance with this
Ordinance, and the continuatiofl thereof for a period of 60 days after potice of such default is given by
any Registered Owner to the Issuer.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any Registered Owner
or an alithorized representative thereof, includirlg, but not limited to, a trustee or trustees therefor, may
proceed against the Issuer for the purpose of protecting and cnforcing the rights of the Registered
Owners under this Ordinance, by mandamus or other suit, action or special praceeding in equity or at
law, in any court of competent jurisdiction, for any relief permitted by law, including the specific
performance of any cavenant or agreeme»t contained herein, or thereby to enjoin any act or thing that
may be unlawfiil or in violation of any right of the Registered Owners hereunder or any combination
of such remedies.
(ii) It is provided that all such proceedings shall be instituted and mailltained for the equal
benefit of all Registered Owners of Bonds then outstanding.
23
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity;
provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate
tlle debt evidenced by the Bonds shall not be available as a relnedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved sha11 not be deemed a waiver of any
other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such Registered
Owner agrees that the certifications required to effectuate any covenal7ts or representations contained
in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary Iiability or
charge against the officers, employees or agents of the Issuer or the members of its goverrring body.
Sectian 16. APPROVAL OF ESCROW AGREL;MENT AND TRANSFER OF FIJNDS. The Mayar
ofthe Issuer is hereby authorized and directed to execute and deliver and the City Secretary of the Issuer is
hereby authorized and directed to attest an Escrow Agreement with The Bank of New York Mellon 1"rust
Company, National Association, in substantially the form presented at this meeting. In addition, the Mayor
or other officer of the Issuer is authorized to purchase such securities, to execute subscriptions for the
purchase of United States Treasury Securities, State and Local Governi7lent Series, ai1d to authorize such
contributions, as may be necessary far the Escrow Fund.
Section 17. REDEMPTION OF REFUNDF,D OBI,IGAT(ONS.
(a) The Issuer hereby directs that the Refunded Obligations be called for redemption on the dates set
forth on Schedule 11. F,ach of such Refunded Obligations shall be redeemed at the redemption price of par
plus accrued interest. The Mayor ofthe Issuer is hereby authorized and directed to issue or cause to be issued
the Notices af Redemption of the Refunded Obligations in the form set forth in Exhibit B attached hereto by
the paying agentlregistrar(s) for the Refunded Obligations.
(b) In addition, the payipg agent/registrar(s) for the Refunded Obligations is hereby directed to provide
the appropriate notices of redemptinn and defeasance as specif ed by the ordinar7ces authorizing tlle issuance
of the FZefunded Obligations and is hereby directed to make appropriate arrangelnents so that the Refunded
Obligations may be redeemed on their respective redemption dates. The Refunded Obligations shall be
presented for redemption at the paying agent/registrar therefore, and shali not bear interest after the date fixed
for redemption.
(c) The source of funds for payment of the principal of and interest on the Refunded Obligatinns on
their respective maturity or redemption dates shall be frorn the funds placed in escrow with the Lscrow Agent,
pursuant to the Escrow Agreement approved in Section 16 of this Ordinance.
Sectian 18. APPROPRIATION. To pay the debt service coming due on the Bonds prior to receipt of
the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which are
hereby certified to be on hand and available for such purpose, an amount, which together with capitalized
interest received from the sale of the Bonds, if any, will be sufficient to pay such debt service, and such
amount shall be used for no ather purpose.
24
Section 19. DISPOSITION OF FUNDS. The accrued interest received from the sale of the Sonds in
the amount of $ shall be deposited ta the Interest and Sinking Fund. The premium received
from the sale of the Bonds in the amount of $ shall be applied as follows: the sum of
$ shal] be applied ta pay costs of issuance; and the sum af $2,225,000 shall be applied against
voted authorizatian and deposited into the Construction Fund and used for the purposes approved by the
voters at the electioil. Proceeds of the Bonds in the amount of $ shall be deposited into
the Escraw Fund for the Refunded Obligations. The remainder of the proceeds af the sale of the Bonds in
the amount of $ shall be deposited to a Construction Fund and used for the purposes
approved by the voters at the election.
Section 20. EFFECTNE DATE. Irt accordance with the provisions of Texas Gavernment Code
Sectiol7 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council.
Section 21. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or word in
this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by
a court of competent jurisdiction, slzch holding shall not affect the validity of the remaining portion of this
Ordinance, despite such invalidity, which remaining portions sha11 remain in fuli force and effect.
[Execution page follows]
25
PASSED, APPROVED AND EF"PECTIVE this April 5, 2011.
Mayor, City of Denton, Texas
ATTEST:
City Secretary, City of Denton, Texas
APPROVED AS TO LEGAL PORNI:
~f '
~,City Attorney, City,oi` Denton, Texas
~
Puroose
Februarv 5. 2005 Electian
Senior Center & Library
(Prop. 1)
Street, Roadway, Sidewalk &
Traffic Control
(Prop. 2)
Park Improvements
(Prop. 3)
SCHEDULEI
Voted Bands
Amount
Amount Previously Unissued
Authorized Issued Balance
$4,000,000
$4,000,000
$0
27,700,000
10,700,000
23,710,100
8,470,900
3,989,900
2,229,100
Amount
Being
Issued*
$0
1,190,000
1,035,000
* Includes principal and premium.
SCHEDULEII
Schedule of Refunded Obligations
City of Denton Utility System Revenue
Refunding and Improvement Bonds
Series 2001
Principal Principal
Maturitv Date Amount Amount
Outstandine Refunded
12/01 /2011
$4,100,000
$4,100,000
12/O1/2012
470,000
470,000
12/01/2013
500,000
500,000
12/O1/2014
520,000
520,000
12/01/2015
550,000
550,000
12/O1/2016
575,000
575,000
12/O1/2017
570,000
570,000
12/O1/2018
600,000
600,000
12/O1/2019
630,000
630,000
12/O1/2020
665,000
665,000
Tota1
$9,180,000
$9,180,000
Call Date: June 1, 2011
EXNIBIT A
Annual Financial Statements and Operating Data
The following inforrnation is referred to in Section 13(b) of this Ordinailce:
The financial information and operating data with respect to the Issuer to be provided annually in accordance
with such Section are as specified (and included in the Appendix or uilder the hEadings of the Official
Statement referred to) below:
Tables I through 5, inclusive, and 7 through 14, inclusive
APPENDIX B(FINANCIAL SIATEMENTS FOR THE LAST COMPLETED FISCAL YEAR WF-IICH
WILL BE UNAUDITED, UNLESS AN AUDIT IS PERFORMED IN WHICH EVENT THE AUDITED
FINANCIAL STATEMENTS WILL BE MADE AVAII,ASLE)
Accounting Principles
The accounting principles referred to in such Section are tlie accounting principles described in the notes to
the financial statements referred to in paragraph above.
A-1
EXHIBIT B
NOTICE IS HEREBY GIVEN that the City ofDenton, Texas has called for redemption the outstanding
Bonds of the City described as follows:
City of Denton Utility System Revenue Refunding and Improvement Bonds, Series 2001, dated April
15, 2001, scheduled to mature on December 1, 2011 through December 1, 2020, aggregating $9,180,000 (and
being all of the outstanding bonds of said series scheduled to mature nn and after December 2011);
Call date: June 1, 2011; redeemable at a redemption price of par plus accrued iilterest at the principal
corporate offices af The Bank of New Yark Mellon Trust Company, N.A., only upon presentation by the
owner thereaf.
If moneys sufficient for the payment of such redemptian price are held by or on behalf of the paying
agent, the described Bonds shall became due and payable on the redemption date specified, and the interest
thereon shall cease to accrue from and after the redemption date.
In compliance with section 3406 of the Internal Revenue Code of 1986, payors making certain
payments due on debt securities may be obligated to deduct and withhold 30 percent of such payment from
the remittance to any payee who has failed to provide such payor with a valid taxpayer identification number.
To avnid the imposition of the withholding of tax, such payees should submit a taxpayer identification
number when surrendering the bonds for redemptian.
Notice of Redemption
NOTICE 1S FURTHER GIVEN that a11 Bonds should be submitted to one of the following address:
First Class/Regisiered/
Certified Mail
Exnress Deliverv
Hand Deliverv
The Bank of New York Mellon
Trust Company, N.A.
Global Carparate Trust
P.O. Box 396
East Syracuse, New York 13057
Dated: , 2011
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
1 I 1 Sanders Creek Parkway
East Syracuse, New York 13057
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate 'I"rust
Corporate Trust Window
101 Barclay Street
1ST Floor East
New York, New York ] 0286
By: The Bank of New York Me11nn Trust Company, National Association
B-1
NOTICE OF SALE
AND
BIDDING INSTRUCTIONS
ON
$10,845,000*
CITY OF DENTON, TEXAS
(Denton Cowity)
GENERAL OBLIGATION RErUNDING AND IMPROVEMENT BONDS, SERIES 2011
Se11ed Bids Due Tuesclay, April 5, 2011, at 11:30 AM, CDT
THE BONDS WILL NOT BE DESIGNATED AS "OUALIFIED TAX-EXEMPT OBLIGATIONS" FnR FINANCIAL INSTITUTIONS.
THE SALE
BoNns OrrEaEn roR Sa►,c n'r ComtrLTiTivE BIDDING TIlO City of Dentou, Texas (the "City") is offeriug for sale its
$10,845,000* General OUligation Refuuding and Improvement Bonds, Series 2011(the "Bonds"). Bidders may suUmit bids for the
Bonds Uy any of the following methods:
(1) Deliver Uids directly to the City as described Uelow in "Bids Delivered to the City;"
(2) Subnut bids electronically as descriUed Uelow in "Elech•ouic Bidding Procedures;" or
(3) SuUmit Uids Uy telephone or facsinule as descriUed Uelow in "Bids Uy Telephone or Facsimile."
BIDS DrLrvERrn'ro C1'rv Sealed bids, plainly marked "Bid for Bonds," should Ue addressed to °Mayor aud City Council, City
of Denton, Texas," aud should be delivered to the City's Financial Advisor at 777 Main Street, Suite 1200, Fort Worth, Texas 76102,
prior to 11:00 AM, CDT, on the date of the sale.
E[,ccTRONic BIDViNG PROCEuuRE Any prospecrive Uidder that intends to suUmit an electronic Uid must suUmit its electronic
Uid through the facilities of PARITY. Subscription to i-DeaPs BIDCOMP Competitive Bidding System is required in order to
sttbmit an electronic bid. The City will neither confirm auy suUscription nor be respovsible for the failure of auy prospective bidder
to suUscriUe. Bidders suUmitting an electronic bid shall not Ue required to submit Official Bid Forms prior to award.
An elech•oivc Uid made tlirough the facilities of PARITY shall Ue deemed an irrevocable offer to purchase the Bonds on the tenns
provided in this Notice of Sale, and shall Ue Uiuding upon the Uidder as if made by a sigued, sealed Uid delivered to the City. The
City shall not be responsiUle for any malfunction or nustake made Uy, or as a result of the use of the facilities of, PARITY, tlie use of
such facilities Ueing tlie sole risk of the prospective Uidder.
If an}, provisions of the Notice of Snle shall conflict with information provided b,y PARITY as tlie Rpproved provicler of
electronic biddiitg services, tliis Notice of Sale shall control. Ftu•ther information abont PARITY, including any fee
cliarged, may be obtainect from Parity Customer Si►pport, 40 West 23rd Street, Stli Floor, New Yoi•lc, New York 10010,
(212) 4048102.
For purposes of the Uidding process, regardless of the Uidding meUiod, the time as maintained Uy i-Deal shall constitute the official
rime. For informaHon purposes onl,y, bidders are reqnested to state in their electronic bids the true interest cost to the City,
as clescribecl wider "Basis fm• Award" below. All electronic bids shall be deemed to incorporate the provisions of this Notice
of Sale and tlie Official Bid Form. The wiiuiing bidder sliall submit a signed bid form if uot previously submitted.
Btns ny TcLErcloNE oR racs►miiLE Biddeis must submit, prior to April 5, 2011, SIGNED Official Bid Fonns to David
Medanich, Fiist Southwest Company, 777 Main Street, Suite 1200, Fort Worth, Texas 76102, and suUmit their Uid Uy telephone or
facsiniile (fax) on the date of the sale.
Telephone Uids will Ue accepted at (817) 332-9710, between 10:30 AM, CDT and 1130 AM, CDT on the date of the sale.
Fax Uids will Ue received Uetweeu 1030 AM, CDT and 11:30 AM, CDT, on the date of the sale at (817) 336-5572, attention:
Rhovda Van Ideistine.
First Southwest Company will not be responsible for submitting any bids received :►fter 8ie lbove deadlines.
The City and First Southwest Compauy are not responsible if such telephone or facsimile niunbers are Uusy which prevents a Uid
or Uids fi-om being suUmitted on a timely Uasis.
* Preliminary, subject to change. See "Adjushnent of Principal Amount ancUor Types of Bids" herein.
First Southwest Company assumes no responsibility or liability with respect to any irregularities associated witU the suUmissiou of
Uids if any options are exercised.
PLncE atvn TmtE or BID OrENiNC... The bids for the Bonds will be publicly opened and read at the offices of tlie Financial
Advisor, at ] 1:30 AM, CDT, Tuesday, Apri15, 2011.
AwAxn or 'rxE BoNns The City Couucil will take action to award the Bouds (or reject all bids) at a meeting scheduled to
coirvene at 630 PM, CDT, on the date of the bid openiug, aud adopt an ordinance authorizing the Bonds aud approving the OfFcial
Statiement (the "Boud Ordinance").
THEBONDS
DcscRirT[oN The Bonds will Ue dated April 1, 2011 (the "Dated Date"). viterest will accrue fi•om the Dated Date and will Ue
dne on February 15, 2012, and each August 15 and February 15 thereafter until the earlier of maturity or prior redemption. The
Bonds will Ue isstted only in fully registered fortn in any integral nniltiple of $5,000 for auy one maturity. Tlte Bonds will mature on
FeUruaiy 15 in eacb year as follows:
MATURITY SCHEDULE*
Principal
Principal
Principal
Year
Amoturt
Year
Amount
Year
Amoiint
2012
$ 4,055,000
2019
$ 615,000
2025
$ 125,000
2013
550,000
2020
640,000
2026
130,000
2014
570,000
2021
670,000
2027
135,000
2015
575,000
2022
110,000
2028
145,000
2016
600,000
2023
115,000
2029
150,000
2017
615,000
2024
120,000
2030
160,000
2018
600,000
2031
165,000
OP'rioNaL RrnEn7rT1oN The City reserves the right, at its option, to redeem Bonds havivg stated mahirities on aud after
February 15, 2022, in wliole or in part in principal amouuts of $5,000 or any integral multiple thereof, on FeUruaiy 15, 2021, or any
date thereafter, at the par value thereof plus accrued interest to the date fixed for redemprion.
AnJUS'rnicN'r or P[uNC[rAL An►ouN'rs ANn/ott Trrrs or BIDS Prior to 12:00 noon CDT on the day Uefore tlie Uids are due, the
City may, in its sole discretion, adjust the principal amount set fortli aUove (the °Maturity Schedule") and/or the type of Uid required
on the Bonds. Fiist Southwest Compauy, as Financial Advisor to the City, will give notice of any such adjustuient by BloouiUerg
and Parity. Shoiild such adjustments be made, a revised Of6cial Bid Fonn will Ue made available tlnnugh i-Deal Prospectus and
PARITY. For purposes of this paragiaph, the teim "Mahuiry Schedule" shall uiclude auy adjustments to the principal amounts
shown above iucluding the total par amouvt so made by the City by posting a Parity and B1oomUerg Wire. Also see "Conditions of
the Sale" herein.
ScainL BoNns aNn/oa Tcami BoNns Bidders may provide that all of the Bonds Ue issued as serial Bonds or may provide that any
two or more consecutive aunual principal amounts be combined into one or more terui Bonds.
MaNnn'rottY SttvtaNC FUNn If the successful Uidder elects to alter the Maturity Schedule reflected aUove and convert principal
amounts of the Serial Bonds into "Term Bonds", such °Term Bonds" shall Ue snUject to uiaudatory redetnption ou tlie fiist FeUruaiy
IS next following the last maturity for Serial Bonds, and annually therea$er on eaeh Febriiaiy 15 until the stated maturity for Hle
Tenu Bonds at the redemption prices of par plus accrued interest to the date of redemption. The principal amounts of the Tenn
Bonds to Ue redeemed on each maudatoiy redemption date shall Ue the principal amounts that woiild have Ueen due and payaUle in
the Mahuity Schedule shown aUove had no conversion to Tenn Bonds occtiiTed. At least thirty (30) days prior to each mandatoly
redempriov date, the Paying Agent/Registraz• sball select Uy lot the Term Bonds to be redeemed and cause a uorice of redemption to
Ue given in the manuer provided in the Preliminaiy Official Statement.
The principal amount of the Tenu Bonds required to Ue redeemec3 puisuant to tlie operation of such maudatoiy redemption
provisions may Ue reduced, at the option of the City, Uy the priucipal amount of the Term Bonds of the same maturity which (i) shall
have been acquired Uy the City at a price not exceedivg the principal amount of such Tenn Bonds plus accrued interest to the date or
purchase thereof, and delivered to the Payivg AgendRegistrar for cancellation or (ii) shall have Ueen redeemed piusuant to the
optional redemption provisions and not theretofore credited against a maudatory redemption requirement.
A final official statement will incorporate the mandatoiy redeiuption provisions for the Bonds in the event the successfiil bidder
elects to convert serial maturities into one or more Term Bonds.
* Preliuiinary, subject to change. See "Adjushnent of Principal Amount aud/or Types of Bids° herein.
Bootc-EN'rRV-ONLY Svs'rUmt The City intends to utilize the Book-Eutry-Oiily System of The Depositoiy Trust Company
("DTC"). See °The Bonds - Book-Enhy-Oiily System" in the Preliminaiy Official Statement.
PAY►NC AcEN'r/RFc]s'rRnR... The initia] Paying AgenURegish•ar shall be T(ie Bank of New York Mellon Trust Company, National
Association (see "Tlie Bonds - Payiug Agent/Registrar" in tlie Pre]iulinaiy Official Statement).
SouRCE or PnmtENT The Bonds are direct and voted general oUligations of tlle City payaUle out of the receipts from an
auvual ad valorem tax levied, witUin the limits prescribed Uy law, on all taxaUle property located within the City, as provided iu
the Bond Ordiuavice.
Further details regarding the Bonds are set forth in the Preliminaiy Official Statement
CONDITIONS OF THE SALE
TYPG OP BIDS AND INTGRGST RATCS TI1C BOIidS WIII be SOId ill oltC b10C1C Oll :llt "All or None" blsis, 1nd at a price of
100.69% of their principnl ninowit. Biddeis are invited to naule the rate(s) of interest to be Uorne Uy the Bonds, provided that
each rate bid must be in a multiple of 1/8 of 1% or 1/100 of 1% and Nie net effective iuterest rate must not exceed IS%. The
higliest rate Uid ulay not exceed the lowest rate Uid by more thau 3% in rate. For Bonds having stated mahirities on and after
February 15, 2022, no reoffering yield producing a dollar price less tlian 98.00 for 1ny individual maturity will be
accepted. Tlie liigli bidder will be reqnired to submit reoffering yields and dollar prices prior to award. No litnitation is
imposed upon Uidders as to the number of rates or changes which ntay be used. All Bonds of one maturity must bear one aud the
saule rate. No Uids involving supplemental interest rates will be considered. Each Uidder shall state in the bid tlie total interest
cost in dollars and tlie effective interest rate determined thereUy (calculated in the manner prescribed Uy Chapter 1204, Texas
Governmeut Code), which shall be covsidered ivfarinative only and not as a part of tUe Uid.
BASis roR AwAan The sale of the Bonds will be awarded to the Uidder making a Uid tUat conforms to the specifications herein
and wlvch produces the lowest True Interest Cost rate to die City. The True Iiiterest Cost rate is that rate which, when nsed to
compute the total present vatue as of the Dated Date of all debt service paymeuts on the Bonds on tUe Uasis of senu-amnial
couipouuding, produces an amottnt eqiial to the stnn of the par value of the Bonds plus any preininm bid (but uot interest acerued
from the Dated Date to the date of theu• deliveiy). Iv the event of a Uidder's error in interest cost rate calculations, tlie interest rates,
and premium, if any, set forth in the Official Bid Forni will be considered as the official Uid.
Goon rnrrH DErosi'r A Good Faitli Deposit, payaUle to the "City of Deuton, Texas", iu the amouut of $216,900.00, is required.
Such Good Faith Deposit shali be a Uuik casluer's check or certified check, which is to be retained uncaslied by the City pendijtg tlie
Initial Purehasei's compliance witli the terms of the Uid and the Notice of Sale and Biddiug Insh•uctions. The Good Faith Deposit
ulay accompauy the Official Bid Form or it may be submitted separately. If suUmitted separately, it shall be made availaUle to tlle
City prior to tlie opening of the bids, and shall be accompanied by insh-uctions fi•om the banl< on which drawn which authorize its lise
as a Good Faith Deposit Uy the Initial Purchaser who shal] be named in such instractiovs. The Good P'aitli Deposit of flhe Initial
Pircliaser will be retw•ned to the Liitial Pm•cli:►ser upmi payment fm• tite Bonds. No interest will be allowed on the Good Faith
Deposit. In the event the Initiai Puivhaser should fail ar refuse to take up and pay for the Bonds in accordance with the Uid, then said
check shall be cashed and accepted Uy the City as fitil and complete liquidated damages. Tlle checks accompanying Uids otlier than
the winuing bid will be returned immediately after the Uids are opened, and an award of the Bonds has been made.
DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS
CUSIP NuntBERS It is auricipated tliat CUSTP identification numbeis will appear on the Bonds, but neither the failtire to print or
type such numUer on any Bond nor auy eiTor with respect thereto shall constitute cause for a failure or refiisal Uy the Initial Purcbaser
to accept deliveiy of and pay for tlle Bonds in accordance with the tenns of this Notice of Sale and Bidding Iiistructio»s and the
terms of the Official Bid Form. All expenses iv relation to the printiug or typivg of CUSTP numbers on tlie Bonds sliall be paid by
the City; provided, liowever, that the CUSIP Service Bureau charge for tlle assigmnent of tlie nuuiUers sltall be the responsiUility of
and shall be paid for by the Iuirial Purchaser.
DELtvERY oF BoNns Initial Delivery will be accomplished Uy the issuauce of one Initial Bond (also called the "Bond" or
"Bonds"), either iu typed or printed fonn, iu the aggregate principal amouut of $10,845,000*, payaUle in stated installments to tlie
Initial Purchaser or its desiguee, signed by the Mayor and City Secretary, approved Uy the Attomey General, aud registered aud
manually signed Uy the Comptroller of PuUlic Accounts. Upon deliveiy of the Iiutial Bond, it shall be immediately cancelled and
ove definitive Bond for each maturity will be registered and delivered only to Cede & Co., aud deposited with DTC in comiection
with DTC's Book-Eutry-Only System. Delivery will be at the corporate trust office of the Paying Agent/Registrar in Dallas, Texas.
Payment for the Bonds must be made iu immediately availaUle fiuids Por unconditional credit to the City, or as otlierwise directed by
the City. The Initial Purchaser will be given six business days' norice of Hle time fixed for deliveiy of flie Bonds. It is anticipated
that delivery of the Bonds can be made on or about May 1Q 2011, aud it is understood and agreed that the Initial Purchaser will
accept deliveiy and make payment for the Bonds Uy 10:00 AM, CDT, on May 10, 2011, or tliereafter on the date tlie Bond is
teiidered for delivery, up to and including May 24, 2011. If for any reason the City is uvaUle to uiake delivery on or Uefore May 24,
2011, the City shail inunediately contact the Iiutial Purchaser and offer to allow the Initial Purcbaser to extend its offer for an
additional tlurry days. Tf the viitial Purcliaser does not elect to extend its offer within six days thereafter, Hien its Good Faith Deposit
will be retumed, aud Uoth the City and the Initial Purchaser shall be relieved of any finther oUligarion. In no event shall the City be
iii
liaUle for any damages Uy reason of its failure to deliver the Bovds, provided such failure is due to circumstances Ueyond the City's
reasovaUle control.
CoNDITroNS 'ro Dc[.rvERV The obligation of the Initial Purehaser to take up and pay for tlie Bonds is subject to the Iuitial
Purcliasei's receipt of (a) the legal opinion of McCall, Parkhuist & Horton, L.L.P., Dallas, Texas, Bond Counsel for tlie City
("Boud Counsel"), (b) flie no-litigation certificate, and (c) the certification as to the Preliminary Officia] Statement, all as fiirther
described in tlte Preliminaty Official Statemeiit.
In order to provide the City with iitformation required to enable it to comply with certain conditions of the Internal Revenue Code
of 1986 relating to tlie exemption of interest on the Bonds from the gross income of their owners, the Initial Purchaser will be
required to complete, execute, and deliver to the City (on or Uefore the 6th business day prior to the delivery of the Bonds) a
certification as to their "issue price" suUstantially in the form and to the effect attacUed llereto or accompanying this Notice of
Sale aud Bidding Iustructious. In the event the successfit] bidder will not reoffer the Bonds for sale, such cerdficate may be
modified in a manner approved Uy the City. In no event will the City fail to deliver the Boncls as a restdt of tlle Initial
Purcliaser's inability to sell substantial amotuit of the Bonds at a particiilnr price prior to ctelivery. Each bidder, Uy
suUmitting its Uid, agrees to complete, execute, aud deliver such a certificate on or Uefore tlie 6°i Uusiness day prior to the date of
delivery of the Bonds, if its Uid is accepted Uy tlie City. It will Ue the responsiUility of the Initial Purchaser to institute such
syiidicate reporting requirements to make sLich iirvestigation, or otherwise to ascertain the facts necessaiy to enable it to iuake
such certification with reasonaUle certaiuty. Any questions coucerning such ceitification should Ue diiected to Bond Counsel.
LccnL OriNIoNS The Bonds are offered wlien, as and if issued, subject to tlie approval of the Attorney General of the State
of Texas. Delivery of and paymeirt for the Bonds is suUject to the receipt by tlie Initial Pttrcliaser of opinions of Bond Counsel, to
the effect that the Bonds are valid and binding obligations of tlie City and that the iuterest ou the Bonds will be excludable from
gross income for federal income tax puiposes under existing law, subject to tlie matters descriUed under "Tax Matters" in the
Preliminary Official Statement, inclttding alternative miuimum tax consequences.
CCRTI['ICATION Oi' PRCLInIINARY OrRICIAL STATCn1GNT At tlle tilne Of pdynlent f0]' and Itutial DeliVely of the BOI1dS, thC Clty
wili execute and deliver to tlie Initial Purcliaser a ceitificate in the form set forth in tlie Preliminaiy Official Stateuient.
CHANCr iN TAx ExrnirT S'rA'rus ....At auy time Uefore the Bonds are tendered for delivery, the Iuitial PurcUaser may withdraw its
Uid if the interest received Uy private holders on obligations of the same type and character shall be declared to Ue includaUle in gross
income under present federal income tax laws, eitlier Uy rtiling of the Interual Revenue Seivice or Uy a decision of auy Federal court,
or shall be declared taxable or be reqttired to Ue taken into account in coniputing airy federal iucome taxes, Uy the tenns of airy
federai income tax law enacted subseqttent to the date of this Notice of Sale and Bidding Lishuctions.
GENERAL
FiNANCIAL Anvisoa First Southwest Company is employed as Financial Advisor to the Cily in connection with the issuance
of tUe Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon tlie
issuance and deliveiy of the Bonds. Fiist Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of
Bond Counse] and has not verified and does not assume auy responsibility for the information, covenauts and representations
contained iu any of the legal documents witli respect to the federal income tax stahis oF the Bonds, or the possible impact of any
present, pending or firture actions taken Uy auy legislative or judicial Uodies. In the normal course of business, the Fiuancial
Advisor may from time to time sell invesnnent securities to flhe City for the invesfiient of bond proceeds or other fands of the
City upon the reqttest of the City.
Bt,uc SxY LAWs By submission of its Uid, the butial Purchaser represents that the sale of the Bonds in states otlier than Texas
will be made only puisuant to exemptions fi•om registration or, where necessary, the Initial Purchaser will register the Bonds in
accordance witli the securities law of the states in which the Bonds are offered or sold. The City agrees to cooperate with the Iiiitial
Purchaser, at the uiitial Purchasei's written request and expense, in registering the Bonds or oUtaining an exemprion fi•om registration
in any state where sucli action is necessary, provided, however, tllat the City shall not Ue obligated to qualify as a foreign corporation
or to execute a general or special conseut to service of process iu any such jurisdiction.
NoT Atv Orrca To SEt,t, This Notiee of Sale aud Bidding uistructions does not alone coustitute au offer to sell tUe Bouds, Uut is
merely notice of the sale of the Bouds. The offer to sell the Bonds is Ueing made Uy means of the Notice of Sale and Bidding
Instructions, the Official Bid Form and the Preliminary Offieial Statement. Prospective purchaseis are m•ged to carefiilly examine the
Preliminary Official Statement to determine the investment quality ofthe Bonds.
IssuANCF or AuniTioNnt, DEBT... Tlie City's $32,100,000* Certificates of Obligation, Series 2011 are being offered for sale
concurrently with, but separately fi•om, the Bonds. Current plans call for the Ciry to issne approximately $46 million of general
oUligation deUt, including the remaining voted but unissued debt, in the second quarter of 2012. This amomrt also includes
approximately $38 million in self-supporting certificates of oUligation related to the City's Solid Waste operation and Utility
System.
* Preliminaty, subject to change. See "Adjustment of Principal Amoimt and/or Types of Bids" herein.
iv
Rn'rrtvcs The Bonds and the presently outstanding tax sttpported deUt of tlie City are rated "Aa2" Uy Moody's Itivestors
Service, Ina (°Moody's") aud "AA" Uy Staudard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC
bttsuiess ("S&P"). .
THE PRELIMINARY OPrICIAL STATGMENT AND COnIPLIANCG \\'ITFI SEC RULG 15C2-12 Th0 Clty llaS pt'epat'ed flle
accompauyiug Preliminaiy Official Statement aud, for tlie linuted purpose of complying with SEC Rule I5c2-12, deenis sueh
Preliminary Official Statement to Ue final as of its date within the meauing of such Rule for the purpose of review prior to bidding.
To the Uest 1<uowledge and Uelief of tlie City, the Preliminaiy Official Statement contains informatiov, includ'uig financial
information or operativg data, concei7iing every entity, enteiprise, fuud, account, or peison that is material to an evaluation of tlie
offering of the Bonds. Representations made aud to be made by the City concerning the absence of material misstatements aud
omissious in the Preliminaiy Offieial Statement are addressed elsewhere in Nus Norice oP Sale and Biddiug Insh-nctions aud in the
Preliminary Official Statement.
The City will fiirnish to the vutial Purcliaser, actiug tlirough a designated seuior representative, in accordance with iustructions
received from tlle Initial Purchaser, witliin seven (7) Uusiness days fi-oui tlie sale date an aggregate of 250 copies of the Official
Statement reflecting interest rates and other tenns relating to the initial reoffering of the Bonds. The cost of any OfFicial Statement in
excess of the uumUet specified shall Ue prepared and distriUuted at tlte cost of the uiitial Pnrchaser. The Initial Pnrchaser shall Ue
responsible for providing in writing the initial reoffering prices and otlier terms, if any, to the Financial Advisor by the close of the
uext business day after the award. Except as noted above, the City assumes uo respovsiUility or oUligatiou for the distriUution or
deliveiy of any copies of the Official Statement in connection with the offering or reoffering of the subject securities.
CoN'riNUiNC DisCLOSURE AcRLEntENT Tlie City will agree in the Bond Ordinance to provide certain periodic iuformation
and notices of material events in accordance witli Securities and Exchange Conunission Rule 15c2-12, as described in the
Prelinunary Official Statement uuder "Continuing Disclosure of Infonnation". The Initial Purchaser's oUligation to accept aud
pay for the Bonds is conditioned upon deliveiy to the Initial Purchaser or agent of a certified copy of the Bond Ordinance
containing ihe agreement described under such heading.
Conirr.IANCC Wi'rIi PRioR UNncRTAiatvcs During the last five years, the City has complied in all material respects with all
continuivg disclosure agreements made Uy it in accordance with SEC Rule 15c2-12.
AuviT[oNat, CoriEs or NoTtCC, BID roRm a.Nn S'rA'rEMENT A limited numUer of additioval copies of this Notice of Sale aud
Bidding Instructions, the Official Bid Form and tlie Preliniiiary Official Statement, as available over and above the normal mailing,
may be obtaiued at tlie offices of Fiist Southwest Company, Inveshnent Baukeis, 325 Nortli St. Paul, Suite 800, Dallas, Texas 75201,
Finaucial Advisor to the City.
On the date of the sale, the City will, in the Bond Ordinauce authoriziug the issuance of the Bonds, confirm its approval of the form
and content of tlie Prelitninary Official Statement, aud auy addenda, snpplement or amendment thereto, and authorize its lise in the
reoffering of the Bonds by the Initial Purcliaser.
ATTEST:
JENNIFER WALTERS
City Secretaiy
MARI{ BURROUGHS
Mayor
City of Dentou, Texas
March 24, 2011
BOND YEARS
Bonds
Accmm►lated
Bonds
Mattu•ing
Amoiuit
Bond Years
Bmicl Years
Matnring
2012
$ 4,055,000
3,536.861
3,536.861
2012
2013
550,000
1,029.722
4,566.583
2013
2014
570,000
1,637.167
6,203.750
2014
2015
575,000
2,226.528
8,430.278
2015
2016
600,000
2,923.333
11,353.611
2016
2017
615,000
3,611.417
14,965.028
2017
2018
600,000
4,123333
19,088.361
2018
2019
615,000
4,841.417
23,929.778
2019
2020
640,000
5,678.222
29,608.000
2020
2021
670,000
6,614.389
36,222.389
2021
2022
110,000
1,195.944
37,418333
2022
2023
115,000
1,365306
38,783.639
2023
2024
120,000
1,544.667
40,328306
2024
2025
125,000
1,734.028
42,062.333
2025
2026
130,000
1,933.389
43,995.722
2026
2027
135,000
2,142.750
46,138.472
2027
2028
145,000
2,446.472
48,584.944
2028
2029
150,000
2,680.833
51,265.778
2029
2030
160,000
3,019.556
54,285.333
2030
2031
165,000
3,278.917
57,564.250
2031
Aveiage Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.200 Yeais
OFFICIAL BID FORM
HonoraUle Mayor and City Council
City of Denton, Texas
Honorable Mayor and MemUers of the City Council:
Apri15, 2011
Reference is made to your Preliminaiy Official Statement and Notice of Sale and Bidding Instructions, dated March 24, 2011 of
$10,845,000* CITY OF DENTON, TEXAS GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES
2011, Uoth of which constitute a pait liereof.
For your legally issued Bonds, as described in said Notice of Sale and Biddiug Instructions and Preliminaiy Official Statement, we
will pay you par aud accrued interest fi-om date of issue to date of deliveiy to us, plus a cash premium of $74,830.50 for Bonds
maturing aud Uearing iuterest as follows:
Yrincipal
Interest
Principai
Interest
Principal
[nterest
Maturiry
Amount*
Rate
Maturiry
Amount*
Rate
Maturity
Amount*
Rate
2/15/2012
$4,055,000
%
2/15/2019
$615,000
%
2/15/2025
$125,000
%
2/15/2013
550,000
%
2/15/2020
640,000
°/a
2/15/2026
130,000
%
2/15/2014
570,000
%
2/15/2021
670,000
°/a
2/15/2027
135,000
%
2/15/2015
575,000
%
2/15/2022
110,000
%
2/15/2028
145,000
%
2/15/2016
600,000
%
2/15/2023
115,000
%
2/15/2029
150,000
%
2/15/2017
615,000
%
2/15/2024
120,000
°/u
2/15/2030
160,000
%
2/15/2018
600,000
%
2/192031
165,000
%
Of the principal maturities set foith in the table above, term bonds have been created as indicated iu the following table (which may
iuclude multiple teinl bonds, one term Uond or no term bond if nove is iudicated). For those years wliicli liave Ueen comUined into a
tenu Uond, the piincipal amount shown iu the taUle aUove shall Ue the maudatory siulcing fund redemption amounts in such yeais
except that the amount shown in the year of the term Uond maturity date shall mahtre in such year. The temi bonds created are as
foilows:
Year of
Maturity Date First Mandatory Principal hrterest
FeUruary 15 Redemption Amount Rate
$ %
$ %
$ o~a
Our calculation (which is vot a part of this bid) of the true interest cost fi-om the above is:
TRUE INTEREST COST
The Initial Bonds shal( be registered in the vatne of , which will, upon
payment for the Bonds, Ue cauceled by the Paying Agent/Registrar. The Bonds will then Ue registered in the name of Cede & Co.
(DTCs parhiership nominee), under the Book-Enhy-0iily System.
A Uauk caslues's check or certified check of the Bank, , in the amount of
$216,900.00.00, wliich represents our Good Faith Deposit (is attaclled liereto) or (has Ueen made availaUle to you prior to tlie
opeving of this Uid), and is suUmitted in accordance with the tei7ns as set forth in tlie Preliminaty Official Statement and Nolice of
Sale aud Bidd'uig flish-uctiovs.
* Prelimiuary, subject to change. See "Adjushnent of Principal Amouut aud/or Types of Bids" in tlie Notice of Sale and Biddiug
Ivstructions.
We agree to accept delivery of the Bonds utilizing the Book-Entry-Ouly System tlv-ough DTC and make payment for the fiiitial
Bond in immediately availaUle funds in the Corporate Trust Division, The Bauk of New York Mellon Trust Company, National
Association, not later than 10:00 AM, CDT, on May 10, 2011, or thereafter on the date the Bonds are tendered for delivery, pursuaut
to the terms set forth in the Notice of Sale and Bidding Iustructions. It will Ue the oUligation of the pm•chaser of the Bonds to
complete the DTC EligUility Quesriovnaire.
The imdersigned agrees to complete, execute, and deliver to the City, at least six Uusiness days prior to deliveiy of the Bonds, a
certificate relariug to the "issue price" of the Bonds in the foi7n and to the effect accompanying the Notice of Sale and Biddiug
Tnstructions, with sucll chauges tliereto as may Ue acceptable to the City.
We agree to provicle in writing the initial reoffering prices and othe►• terms, if any, to the Financinl Advisor by tlie close of the
next bnsiiiess day after the 1ward.
Respectfully snUmitted,
Name of Unde~ivriter or Manager
Authorized Representative
Plione Number
Signature
Syndicate MemUers:
ACCEPTANCE CLAUSE
The aUove and foregoing Uid is bereby in all things accepted Uy the City of Denton, Texas, suUject to aud in accordance with the
Notice of Sale and Bidding Inshuctions, this tUe Sth day of April, 2011.
ATTEST:
Mayor
City of Denton, Texas
City Secretaiy
CERTIFICATE OI+ UNDERWRITER
The undersigned hereby certifies as follows wifli respect to flie bid aud purchase of tlie City of Dentou, Texas General Obligation
Refimding and unprovement Bonds, Series 2011 (the "Bonds"):
1. The uudersigned is die duly authorized representative of the purchaser (the "Purchaser") of the Bonds fi•om the City of
Denton, Texas (the °Issuer").
2. All of the Bonds have been offered to members of the puUlic in a bona fide initial offering. For pmposes of this Certificate,
the term "pnUlic" does not include any Uoudhouses, Urokers, dealers, aud similar persons or orgauizations acting in the capaeity
of miderwriters or wliolesalers (iucluding tlie Pm•chaser or members of Nhe selling group or persons that are related to, or
coutrolled Uy, or are actiug on belialf of or as agents for the imdersigned or memUers of the selling group).
3. Each maturity of the Bouds was offered to the public at a price which, on the date of sucli offering, was reasonably expected
Uy the Purchaser to Ue equal to the fair market value of such maturity.
4. OHier thau the obligations set forth in paragraph 5 hereof (flie "Retained Maturiry" or "Retained Maturities"), dle fiist
price/yield at which a substantial amouut (i.e., at least ten (10) percent) of tlte priucipal amouut of each matm-ity of the Bouds
was sold to the public is set forth below.
Principal
Offering
Amount
Year of Price
Mahu•ing*
Maturity (%/Yield)
$ 4,055,000
2012
550,000
2013
570,000
2014
575,000
2015
600,000
2016
615,000
2017
600,000
2018
615,000
2019
640,000
2020
670,000
2021
Priucipal
Offering
Amount
Year of Price
Mahiring*
Maturity (%/Yield)
$ 110,000
2022
115,000
2023
120,000
2024
125,000
2025
130,000
2026
135,000
2027
145,000
2028
150,000
2029
160,000
2030
165,000
2031
5. In the case of the Retained Maturities, the Purchaser reasonably expected ou flie offerivg date to sell a suUstantial amotuit (i.e.,
at least ten (10) percent) of eacli Retained Maturity at the initial offeriug price/yield as set forth below:
Priucipal
Offering
Principal
Offering
Amount
Year of Price
Amount
Year of Price
Maturing*
Maturity (%/Yield)
Mahtruig*
Mahtrity (%/Yield)
$ 4,055,000
2012
$110,000
2022
550,000
2013
115,000
2023
570,000
2014
120,000
2024
575,000
2015
125,000
2025
600,000
2016
130,000
2026
615,000
2017
135,000
2027
600,000
2018
145,000
2028
615,000
2019
150,000
2029
640,000
2020
160,000
2030
670,000
2021
165,000
2031
* Preliminaiy, suUject to change. See "Adjustment of Privcipal Amount and/or Types of Bids" in the Notice of Sale and Biddiug
Instructions.
6. The Purchaser lmdeistands that the statements made herein will be relied upon, by the Issuer in its effort to comply with the
conditions imposed Uy the Intemal Revemie Code of 1986, and Uy Bond Counsel in rendering their opinion that the interest on
tlie Bonds is excludable from the gross income of tlie owners tliereof.
EXECUTED aud DELIVERED this day of 2011.
(Name of Purchaser or Mauager of Purchasing Syndicate)
By:
Title:
` . Ratinga
FirstSouthvvest niooav°s: "Aa?„
e~r0,, y a d Dated Dlarch 24, 2011 Sd:P: ""AA"
(see "Other Information -
NEIi' ISSIIE - Booli-Entrp-Onl) Ratings" herein)
In the opinion of Bond ('otuiaal, intzraat on the Bonds will ba ascludabla from croaa incoma for fadzral incoma tas ptupoaaa tuidzr atahttaa, raeulationa,
publiahed nilniga and coiut deciaiona eiiating on the date thereo£ aubject to the mattera deacribed iuider "Tai Mattera" herein, includ'nig the alternatice
mininuun tai on coiporationa.
THE BONDS Ai"ILL NOT BE DESIGNATED AS "QiTALIFIED TAX-ESEDIPT OBLIGATIONS" FOR FINAN('IAL INSTITiTTIONS
I $10,845,000*
C'ITI OF DENTON, TEIAS
(Denton ('ountp)
VEN{J'ON GENERAL ( )BLIGATI( )N REF'[TNDING AND IDIPR( )VEDIENT B( )NDS, SERIES 2011
Dated Date: April 1, 2011 Due: Februarp 15, as shuwn beluw
PAYDiENT TERDis Intereat on the $10,845,000* Cih of Denton General UbliLation Refiuidnig and Improcement BonJs, Seriea 2011 (the 'BonJs') nill
accnia from april 1, 2011 (tha "Datad Data"), will ba pacabla Fabruaiti li and aueuat li of aach caar, conunancine Fabniarc li, 2012, iuitil mahuih or
prior radamption, and will ba calculatad on the baaia of a>60-dac caar conaiatine of hwa1N a>0-dac montha. Tha dafinitiva Bonda will ba niitiallc
regiatered and delicered on1y to Cede dCo., the nominee of The Depoaitoiy Trtut Company ("DT(„) ptuauant to the Boolo-Entiy-Un1y Syatem deaxibed
hzrain. Banaficial ownzrahip of the Bonda mac ba acquirad in danominationa of $5,000 or intacral nuiltiplaa Hizraof within a mahuih. No phpsical
delicery uf the Bunds will be made tu the beneficial uwners thereuf. Principal o£ premiiun, if any, and intereat on the Bonda nill be payable by the
PavniL, ALentRegiatrar to Cede d Co., nliich nill make diatribution of the amoiuita ao paid to the participating membera of DTC for aubaequent payinent
to the banaficial ownzra of Hia Bonda. Saa "Tha Ublieationa - Book-Entiti-( )ilc Scatam" hzrain. Tha initial Pacine aeant Raeiatrar ia Tha Bank of Naw
Fork Mallon Truat ('ompanc, N. a., Dallaa, Tasaa (aaa "Tha Ublieationa - Pacme aeant'Raeistr-ar").
ALTTHORITI" FoR ISSL? 1Nt'E Tha Bonds ara i55uad piu5uant to the ('on5tihition and eanefal law5 of the Stata of TasaS, (Hia "Stata") nichidine
particularlc Tasaa Govzrnmant ('oda, Chaptzra 1207 and 133 1, as amandad, and ara diract oblieationa of the ('ih of Danton, Tasaa ( Hia "('ih pacabla
from an annual ad calorem tai levieJ, nithin the limita preacribed by lan, on all taiable properh niHiin the Cih, aa procided in the ord'nianx authorizing
the Bonda (the "Bond Ofd'nianx") ( aee "The UbliLationa -Authorih for Iaauance" and "The UbliLationa Seciuih and Soiuoe of Paement").
PiTxposE ProceeJs of the Bonda are eipected to be uaed (il to refiuid certiin outatand'nig obligationa of the Cih deacribed on Schedule I attached
hereto (the "Refiuided UbliLationa") for debt aeivix aacinLa and (ii) for carioiu atreet improcementa and park land aequiaitiona and improcementa, and
(iii) to pac the costs asaociatad with the iaauanca of the Bonda.
DIATiTRITI SC'HEDiTLE*
Principal
Interest Initial Ci JSIP
Principal
Amount
Maturitv Rate Yield Suffii ' 1
Amount
$-1,055,000
2012
$ 110,000
550,000
2013
115,000
570,000
2014
120,000
575,000
2015
125,000
600,000
201G
130,000
615,000
2017
135,000
600,000
10ltl
145,000
615,000
2019
150,000
6-40,000
202 0
160,000
670,000
2021
165,000
('IISIP Prefis: 248866
Interest Initial CUSIP
Maturitv Rate Yield Suffii '
2023
202-4
202 i
20')G
2 02 7
101tl
2029
2030
LV31
(Accrued Interest frum April 1, 2011 tu be added)
(1) ('USIP ia a reLiatered trademark of the Aneriean Baiil.era Asaociation. ('USIP dati herein ia procided by ('USIP Global Seivioea, managed by
StanJard d Poor'a Financial Seivicea LLC on behalf of the Aunerican Baiil.era Aaaociation. Thia dati ia not intended to xeate a databaae and doea not
azrva in anc wac aa a aubatihita for the Ci rSIP Szivicaa. NaiHizr the Cih nor the Fniancial adN iaor ahall ba raaponaibla for the aalaction or coffactriaaa of
the ('i rSIP munbefa aat forth hefain.
REDEDIPTION Tha ('ity ra5erva5 the riehk at it5 option, to radaam Bonds havine 5tatad mahuitia5 on and aftef Fabniarc 15, 2022, ni whola or in part in
principal amoiuita of $5,000 or anc intacral nuiltipla Hizraof, on Fabniarc li, 202 L or anc data thzraaftzr, at the par N alua thzraof plu.s accniad intzraat to
the date of redemption.
SEPARATE ISSIIES Tha Bonds ara baine offefad bc the Citv conciurantlc with the "Citv of Danton ('ertificata5 of Ublieation, Sefia5 2011" (tha
"Certificatea"), iuider a conunon Ufficial Statemenk and auch BonJs and Certificatea are hereniafter aometimea referfed to collecticele aa the
"Ubligationa." The Bonda and Certificatea are aeparate and diatnict aeciuitiea offerniga being iaaued and aold independently eicept for the conunon
O$icial Statamank and, whila Hia Oblieationa ahara czrtain conunon attributas, aach iaaua ia aaparata from the othzr and ahould ba raviawad and analczad
indapandantlc, inchidine the hpa of oblieation baine offzrad, ita tznna for pacmank Hia aaciuih for ita pacmank the riehta of the holdzra, the fadzral, atata
or local tii ocmaequencea of the piuchaae, onmerahip or diapoaition of the Ubligationa and other feahuea.
LEC:Ai iTT Tha Bonda ara offzrad for dalivziti whan, aa and if iaauad and racaivad bc the Initial Ruchaazr of Hia Bonda aubjact to the approvnie
opinion of the Attorney General of Telaa and the opinion of MeCall, Parlduuat d Horton L.L.P., Bond Cotuiael, Dallaa, Telaa ( aee Appendil C, "Fonna of
Bond Coiuiael'a Upiniona").
DELivExY It ia eipeeted that the Bonda nill be acailable for deliceiy tlrough The Depoaitoiy Tniat Company on May 10, 2011.
BIDS DUE TUESDAY, APRIL 5, 2011, AT 11:30 AM, CDT
* Pralimniarc, aubjact to chanea Saa tha Notica of Sala -"_adjuatmant of Principal Anioiuit and or Tcpaa of Bida".
il
`
'
'
l
. 1
~ . . _
Ratings:
~irstSoL~th est
nlnndp's: "A.i2"
e.rr',,,a y q i.izwd
Dated Dlarch 24, 2011
SSiP: „AA„
(see "Other Infnrmatinn -
NE'vV ISSLTE - Boolc-EntrN•-OnlN•
Ratings" herein)
In the opmion of Bond ~'ounsel, mterest o
n the Certificates icill be eschidable from gross income for federal me
ome tas purposes under stahites, regulations,
published rulings mid cuurt decisiuns exishn
g un the dnte thereuf, sublect tu the mntters described mider "Tnx nlntters"
herem, mcluding the nlternnhne mimmum tnx
un curpornhun,.
THE C'ERTIFICaTES NA'ILL NOT
BE DESIGNaTED aS "QLLaLIFIED T-NT-ESENIPT UBLIGaTIUNS"
FUR FINaNCLaL INSTITIITIUNS
$32,1011,000*
&
CITF OF DENTON, TESAS
4.4m
(Denton Counti•)
NJ'ON
CERTIF'ICaTESUFUBLIGaTIUN,SERIES2U11
Dated Date: April 1, 2011
Due: February 15, as shown below
Pai'MEN1' TExntia Interest un the $32,11)(1,~ ~0* ( 'in- uf Dentun ( lerhficnte" uf I~bhgnhun, Senes, 21 111 i the lerhficntes," i i~ill nccrue fronn apnl 1, 21 111 i the
"Dated Date" icill be pm`able Februan` 15 and August 15 of eaeh ~`ear, eommenemg Februan` 15. 21 ~ 11 mitil mahirin` or prior redemption, and icill be ealeulated on
the basis of a;(;,,-dm` ~`ear eonsistma of hceh e;, ~-dm` months The defimtn e~'ertifieates icill be mitialb,` reaistered and deln ered onh` to Cede L- ~'o , the nommee
uf The Depositurj- Trust ~'umpnnj- i'DT("' i pursunnt tu the Huuk-Entry-1 ailh- S~-stem deuribed herem Heneficinl umnership uf the , 'erhficntes, mm- be ncymred m
denonnnations of 5,0(11 1 or mtegral nniltiples thereof icitlnn a mahinn- No phN•sical delivery of the CerGficates will be made to the beneficial owners thereof.
Yrmeipal of premmm, if am`, and mterest on the Certifieates icill be pm`able b~` the Ym`mg Agent'Registrar to Cede L- ~'o ,ichieh icill make distribution of the
mnuunts su pmd tu the pnnccipnhng memberr: uf DT(' fur subseyuent pnj-ment tu the beneficinl uMnerr: uf the , 'erhficntes, See "The I~blignhuns - Huuk-Entrj--1 ~nly
System" herem The nnhnl Ym-mg agent'Registrnr is The Hnnk uf Nei~Iurk nlellun Trust , 'umpnnj-, N a, Dnllns, Texns isee "The I~bhgnhuns - Ym-mg
AaenL'Reaistrar" i
Airrxoiurr FoxIssiraNCE The Certifieates are issued pmsuant to the "onstihition and general laics of the State of Tesas, i the "State" i particularb, Subehapter
of Chapter 271, Tesas Local Go~ emment,'ode i the,'ertifieate of I-~bligation Aet of 1971 as amended, and eonstihite direct obligations of the ~'it~` of Denton, Tesas
i the "Vin-" i, pnj-nble fromi n cumbmnhun uf i i i the le~~- mid cullechun uf n direct mmunl nd ~nlurem tnx, i~ithm the Imnts prescribed bj, Im~, un nll tnxnble propern-
i~ithm the ~'in-, mid ni i n Imnted pledge uf surphis, net re~emies, uf the ~'in-',s Tlhlih S~-stem nut m excess uf $1,~~~~~ ns pro~ ided m the urdinmice nuthurizmg the
,'ertifieates i the "Certifieate I-~rdinanee" i i see "The I-~bhaations -Authont~` for Issuance" i
PuxPOsE Yroceeds fronn the snle uf the , 'erhficntes, i~ill be used fur i n i ncyuisihun uf eyuipment fur, nnd ncyuirmg, cunstructmg, mstnlling mid eyuippmg
additions, estensions, reno~ ations and impro~ ements to, the ~'in`'s icatem orks and seicer s~`stem, ib i aequisition of equipment for, and aequirmg, eonstnicting,
mstalling and equippmg additions, estensions, reno~ ations and mipro~ ements to, the,'in`'s electrie light and poicer s~`stem, i c i aequisition of ~ ehieles and equipment
fur, mid ncyuirmg, cunshuctmg, mstnllmg mid eyuippmg nddihuns, extensiuns, renu~nhuns mid impro~emenh tu, the ~'ity'~ solid i~nste dispusnl sS-stem, idi
renu~ nhuns tu, mid eyuippmg uf, exishng mumcipnl buildmgs, mcludmg,'in- Hnll Enst, mid i e i ncyuisihun uf ~ ehicles, mid eyuipment fur the , 'ih's, inutur puul, mid
also for the purpose of pm`mg all or a portion of the ~'in`'s contraehial obligations for professional ser~ ices, mchiding engmeers, architeets, attorne~`s, map makers,
auditors, and finaneial ad«sors, in comieetion icith said projects and said Certificates of I-~bligation
bUTL?RITP SC'HEDL?LE*
Principal
Interest
CUSIP Principal
Interest
Amount
Mahiritc Rate
Yield Suffis ' 1Amount
Maturitc Rate
$1,525,000
2012
$ 1,215,000
2022
2,195,000
2013
1,275,000
2023
2,295,000
2014
1,335,000
2024
2,400,000
2015
1,400,000
2025
2,515,000
2016
1,470,000
2026
1,090,000
2017
1,540,000
2027
1,140,000
2018
1,615,000
2028
1,190,000
2019
1,695,000
2029
1,255,000
2020
1,775,000
2030
1,320,000
2021
1,865,000
2031
(Accrued Interest from April 1, 2011 to be added)
C'LTSIP Prefis: 248866
CUSIP
Yield Suffis' li 1 i ~'T1SIY is, n registered trndemnrk uf the Anericnn Hnnkers a~socinhun ~'T1SIY dntn herem is pno~ ided by ~'T1SIY ~,lubnl Ser~ices, mnnnged by Stnndnrd 4
Your's Finmicinl Ser~ices, LL,' un behnlf uf the Anericmi Hmil.ers a~socinhun This, dntn is nut mtended tu crente n dntnbnse mid dues not ser~e in miy i~ny ns, n
substihite for the,'L1SIF' Ser~ iees Neither the,'in nor Financial Adh isor shall be responsible for the selection or eorreehiess of the ~'L1SIF' mmibers set forth herem
REnEnIPrxON The 1'ity reser~es the nght, nt ih uphun, tu redeem ~'erhficntes hn~mg stnted mnhinhes un nnd nfter Febninn- li, 21 C2, m i~hule ur m pnrt m
prmeipal amounts of $5,1 1 1 1 or am` mtegral multiple thereof, on Februan` 15, 21 n 1, or am` date thereafter, at the par ~ alue thereof phis acerued mterest to the date of
redemption
SEPaxarE IssirES The Certificates are bemg offered b~` the,'in` eonemrenth` icith the ",'in` of Denton General I-~bligation Refiuiding and hnpro~ ement Bonds,
Series 21 111" i the "Bonds" i, and such ~'ertifieates and Bonds are heremafter sometmies referred to eolleetn eb,` as the ",-~bligations " The ~'ertifieates and Bonds are
sepnrnte nnd distmct secunhes uffermgs bemg issued nnd suld mdependently except fur the cunnnun I~$icinl Stntement, nnd, i~hile the I~bhgnhuns shnre certnm
cunnnun nthibutes, ench issue is sepnrnte fromi the uther mid shuuld be re~ iei~ed mid minlyzed independenth-, mcluding the n-pe uf ublignhun bemg uffered, ih terms
for pa«nent, the securin` for its pa«nenk the rights of the holders, the federal, state or local tas consequenees of the purehase, oi«iership or disposition of the
I-~bligations and other feahires
LEr_aLTT1' The ~'erhficntes nre uYfered fur dehn ery i~hen, ns nnd if issued nnd recen ed bj, the Imhnl Yurchnser uf the ~'erhficnte, ~ublect tu the nppno~ mg
opimon of the Attorne~` General of Tesas and the opimon of Me,'all, Yarkhurst L- Horton L LP , Bond ~'omisel, Dallas, Tesas i see AppendLZ "Forms of Bond
i luunsel's I ~pnnuns" i
DELiN'Exr It is espected that the,'ertifieates icill be a~ ailable for deln en` through The Depositon` Trust ('ompam` on Mm` 1, l, 21 111
BIDS DUE TUESDAY, APRIL 5, 2011, AT 11:00 AM, CDT
* Yrelnmm,iry, ~ublect tu chnnge See the Nuhce uf Snle -"adjushnent uf Yrmcipnl Anuunt nndor TS-pes, uf Hid,"
This Official Statement, which includes the cover page, Schedule and the .41)1,endices hereto, does not constihne an offer to sell or the solicitation '017
offer to buy in onY jurisdiction to arrn person to whom it is unulaifrl to make such offer, solicitation, or sale.
V o dealer, broker, salesperson, or other person has been outhoried to give information or to make on), represents on other than those contained in this
Official Statement; and, ffgiven or made, such other fnfor ~~~oN or represents ors must not be relied upon.
For pinyoses of compliance with Rule 15c2-12 of the ' :.aur s 'Exchange Commission (the "Rule"), this document constitutes on Official statement of
the City with respect to the Obligations that has be v the City as of its date except for the omission of no more than the information
permitted by the Rule.
The information set forth herein has been obtained from the Cihv and other sou rc es r. lieved to be reliable, but such information is not guaranteed as to
accuracy or completeness and is not to be construed as the represents on, promise, or guarantee of the Financial.4dvisor. This Official Statement
contains, in part, estimates and matters of opinion which are not intended as s 0 of fact, and no represents on is made as to the correctness of
such estimates and opinions, or that they will be realied. ~4mv information assions of opinion herein contained are subject to change without
notice, and neither the delivery of this Officio/ Statement nor amp sale made herein u. r shall, under onv circumstances, create amY implication that there
has been no change in the affairs of the Cihv or other matters described herein sung the date hereof See "Continuing Disclosure oflnformation"for a
description of the Cihv's undertaking to provide certain information on a continuing basis.
Neither the City nor its Financial .4dvisor make a rn representation as to the accuracy, completeness, or adequacy of the information supplied by The
Depository TrurstCompam~ for use fn this Offcial Statement.
The cover page for each series of Obligations contains certain information for general reference only and is not intended as a summary of the respective
offering. Investors should read the entire O fciol Statement; including all schedules and appendices hereto, to obtain information essential to making an
informed investment decision.
The agreements of the City and others related to the Obligations are contained solely in the contracts described herein. s -either this Official Statement nor
am, other statement made in connection with the offer or sale of the Obligations is to be construed as constituting an agreement with the purchaser of the
Obligations. LVI ESTORS SHOE- D RE1D THE ENTIRE OFFIC7.1L ST4TE_A1EXT, Ls-CL I -DIV T :1LL SCHEDITES. VT) :4PPE.VDICES :4 TT4 CHED
HERETO, TOOBT4I.s-Ls-FORA L1TIOs-ESSEXTL1LTO1L1ILs'( T . s-LVFOR')EDLVIEST_l1EXTDECISIOV.
This Off coal . ~rn ut contains "Fonrard-Look ng" statements within them of Section 21E of the Securities Exchange.4ct of 1934, as amended.
Such s involve known and unknown risks, uncertanh_s, r factors which may cause the actual results, performance, and
achrei 's to be differentfiom fiutre results, performance, and achievements eayressed or implied by such f wword-looking statements. Investors are
cO W n 'he actual results could differ materially from those setforth in e forward-looking statements.
The Oblrgaions are exempt from regisfrohon with the Securities and Exchange Commission and consequently have not been registered therewith. The
regfstaton, qualification, or exemption of the Obligations in accordance with applicable securities law provisions of the jurisdiction in which the
Obligations have been registered, quol fed or exempted should not be regarded as a recommendation thereof.
TABLE OF CONTENTS
OFFICIAL STATEMENT SUnInI.ARY 6
CITY OFFICIALS, STAFF AND CONSULTANTS 8
ELECTED OFFICIALS 8
SELECTED ADMINISTRATIVE STAFF 8
CONSULTANTS AND ADVISORS 8
INVESTMENTS 32
TABLE 14- CURRENT INVESTMENTS 33
TAX MATTERS 34
CONTINUING DISCLOSURE OF INFORMATION 36
INTRODUCT ION 9
THE OBLIGATIONS 9
TAX INFORMATION 16
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL
OBLIGATION DEBT 21
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY.... 22
TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT
HISTORY 23
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY......... 23
TABLE 5 - TEN LARGEST TAXPAYERS 23
TABLE 6 - ESTIMATED OVERLAPPING TAX DEBT 24
DEBT INFORMATION
23
TABLE 7 - GENERAL OBLIGATION DEBT
SERVICE REQUIREMENTS
23
TABLE 8 - INTEREST AND SINKING FUND BUDGET
PROJECTION
26
TABLE 9 - COMPUTATION OF SELF-SUPPORTING DEBT......
26
TABLE 10 - AUTHORIZED BUT UNISSUED GENERAL OBLIG
ATION
REFUNDING AND IMPROVEMENT BONDS
26
TABLE 11 - OTHER OBLIGATIONS
27
FINANCIAL INFORMATION 29
TABLE 12 - CHANGES IN NET ASSETS 29
TABLE 12A - GENERAL FUND REVENUES AND EXPENDITURE
HISTORY 30
TABLE 13 - 1\~1UNICIPAL SALES TAX HISTORY 31
OTHER INFORMATION
37
RATINGS
37
LITIGATION
37
REGISTRATION AND QUALIFICATION OF OBLIGATIONS
FOR SALE
37
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC
FUNDS IN TEXAS
37
LEGAL OPINIONS AND NO-LITIGATION CERTIFICATE
38
AUTHENTICITY OF FINANCIAL DATA AND OTHER
INFORMATION
38
FINANCIAL ADVISOR
38
INITIAL PURCHASER OF THE BONDS
38
INITIAL PURCHASER OF THE CERTIFICATES
38
CERTIFICATION OF THE OFFICIAL STATEMENT
39
FORWARD-LOOKING STATEMENTS DISCLAIMER
39
MISCELLANEOUS
39
SCHEDULE OF REFUNDED OBLIGATIONS Schedule I
APPENDICES
GENERAL INFORMATION REGARDING THE CITY A
EXCERPTS FROM THE ANNUAL FINANCIAL REPORT B
FORMS OF BOND COUNSEL'S OPINIONS C
The cover page hefeo£ this page, the appendices included herein and
any addenda, supplement of amendment hereto, afe part of the Official
Statement.
OFFICIAL STATEMENT SUMMARY
This summary is subject in all respects to the more complete information and definitions contained or incorporated in this
Official Statement. The offering of the Bonds and Certificates to potential investors is made only by means of this entire Official
Statement. No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire
Official Statement.
THE CITY The Citv of Denton (the "City") is a political subdivision and municipal corporation of the
State, located in Denton Countv, Texas. The City covers approximately 101.15 square miles
(see "Introduction - Description of the City").
THE BONDS The $10,845,000* Citv of Denton General Obligation Refunding and Improvement Bonds,
Series 2011 are to mature on Febiuarv 15 in the years 2012 through 2031 (see "The
Obligations - Description of the Obligations").
THE CERTIFICATES The $32,100,000* Citv of Denton Certificates of Obligation, Series 2011 are to mature on
February 15 in the years 2012 through 2031 (see "The Obligations - Description of the
Obligations").
PAYMENT OF INTEREST Interest on the Bonds and Certificates accrues from April 1, 2011, and is payable February 15,
2012, and each August 15 and February 15 thereafter until maturity or prior redemption (see
"The Obligations - Description of the Obligations" and "The Obligations - Optional
Redemption"
AUTHORITY FOR ISSUANCE.......... The Bonds are issued pursuant to the Constitution and general laws of the State, including
particularly Texas Government Code, Chapters 1207 and 1331, and an ordinance passed by
the Citv Council of the City (see "The Obligations - Authority for Issuance"
The Certificates are issued pursuant to the Constitution and general laws of the State,
particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and an
ordinance passed by the City_ Council of the City (see "The Obligations - Authority_ for
Issuance").
SECURITY FOR THE BONDS The Bonds constitute direct and voted obligations of the City, payable from a direct annual ad
valorem tax levied, within the limits prescribed by law, on all taxable property located within
the Citv (see "The Obligations - Security and Source of Pavment").
SECURITY FOR THE
CERTIFICATES The Certificates constitute direct obligations of the City, payable from a combination of (r) a
direct armual ad valorem tax levied, Nvithiri the limits prescribed by law, on all taxable property
within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus net revenues of the
Citv's TJtihty Svstem (see "The Obligations - Security and Source of Payment").
REDEMPTION The City reserves the right, at its option, to redeem Bonds and Certificates, as the case may
be, having stated maturities on and after February 15, 2022, in whole or in part in principal
amounts of $5,000 or any integral multiple thereof, on February 15, 2021, or any date
thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The
Obligations - Optional Redemption").
TA.x EZEnmTION In the opinion of Bond Counsel, the interest on the Bonds and Certificates will be excludable
from gross income for federal income tax purposes under existing law, subject to the matters
described under "Tax Matters" herein, including the alternative minimum tax on corporations.
USE OF PROCEEDS Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of
the Citv_ described on Schedule I attached hereto (the "Refunded Obligations") for debt
service savings and (ii) for various street improvements, and paik land acquisitions and
improvements, and (iii) to pay the costs associated with the issuance of the Bonds.
Proceeds from the sale of the Certificates Nvill be used for (a) acquisition of equipment for,
and acquiring, constructing, installing and equipping additions, extensions, renovations and
improvements to, the City's waterworks and seder system; (b) acquisition of equipment for,
and acquiring, constructing, installing and equipping additions, extensions, renovations and
improvements to, the City's electric light and power system; (c) acquisition of vehicles and
* Preliminary, subject to change.
equipment for, and acquiring, constructing, installing and equipping additions, extensions,
renovations and improvements to, the Citv's solid waste disposal system; (d) renovations to,
and equipping of, existing municipal buildings, including City Hall East; and (e) acquisition
of vehicles and equipment for the City's motor pool, and also for the purpose of paying all or
a portion of the City's contractual obligations for professional services, including engineers,
architects, attornevs, map makers, auditors, and financial advisors, in comiection Nvith said
projects and said Certificates of Obligation.
WXTINCS The Obligations and the presently outstanding general obligation debt of the Citv are rated
Aa2 by Moody s Investors Service, Inc. (Moody s) and "AA by Standard & Poor 's Rating
Services, a Standard & Poor's Financial Services LLC business ("S&P").
BOOB-ENTRY-ONLY SYSTEM...... The definitive Obligations Nvrll be initially registered and delivered only to Cede & Co., the
nominee of DTC pursuant to the Book-Entry-Only Svstem described herein. Beneficial
ownership of the Obligations may be acquired in denominations of $5,000 or integral
multiples thereof within a maturity. No physical delivery of the Obligations will be made to
the beneficial owners thereof. Principal of, premium, if any, and interest on the Obligations
will be payable by the Paying Agent/Registrar to Cede & Co., which will male distribution of
the amounts so paid to the participating members of DTC for subsequent payment to the
beneficial owners of the Obligations (see "The Obligations - Book-Entry-Only System").
PAYMENT RECORD The Citv has never defaulted on the payment of its tax-supported indebtedness.
SELECTED DNANCIAL INFOPAUTION
Net
Ratio Funded
Fiscal Taxable
Tax Debt Per Capita
Tax Debt to
Year Taxable Assessed
Outstanding Funded
Taxable
% of
Ended Estimated Assessed Valuation
at End Tax
Assessed
Total Tax
9/30 Population Valuation (3) Per Capita
of Year 0) Debt
Valuation
Collections
2007 106,8430) $ 5,441,228,909 $50,927
$ 119,266,729 $1,116
2.19%
99.81%
2008 108,9800) 6,089,499,775 55,877
129,439,594 1,188
2.13%
99.51%
2009 111,1600) 6,291,359,112 56,597
122,835,000 1,105
195%
99.40%
2010 113,383('-) 6,327,909,022 55,810
119,862,600 1,057
1.89%
9895%
2011 115,651(') 6,230,117,958 53,870
116,165,650 (6) 1,004 (6)
1.86%(6)
85.52%(-)
(1) Source: City Officials.
(2) Source: US Census.
(3) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District
to the State
Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved
and the Appraisal District updates records.
(4) Source: Denton Central Appraisal District as of July 17, 2
010.
(5) Excludes self-supported general obligation debt.
(6) Projected. Includes a portion of the Bonds and the Certific
ates. Preliminary, subject to change.
(7) Collections for part year only, through January 31, 2011.
For additional information regarding the City, please contact:
Br-y all Langley
David Medanich
Chief Financial Officer
Laura Alexander
Citv of Denton
First Southwest Company
215 E. McKinnev Street or
777 Main Street, Suite 1200
Denton, Texas 76201
Fort Worth, Texas 76102
(940) 349-8224
(817) 332-9710
7
CITY OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
SELECTED ADNHNISTRATIVE STAFF
CONSULTANTS AND ADN ISORS
Term
Cite Council Expires
Mark Burroughs Mav, 2012
M av or
Pete Kamp Mav, 2012
Mavor Pro Tem, At Large Place 5
James Kin- Mav, 2012
Councilmember, At Large Place 6
Charlve He_4ns Mav_ , 2011
Councilmember, District 1
Dalton Gregory Mav, 2011
Councilmember, District 2
Jim Engelbrecht Mav, 2011
Councilmember, District 3
Chris Watts Mav_ , 2011
Councilmember, District 4
Name Position
George C. Campbell
Howard Martin
Jon Fortune
Fred Greene
Bryan Lanaley
Jennifer K. Walters
Anita Burgess
City Manager
Assistant Citv Manager
Assistant Citv Manager
Assistant Citv Manager
Chief Financial Officer
Citv Secretarv
City Attorney
Auditors Weaver, LLP
Dallas, Texas
Bond Counsel McCall, Parkhurst & Horton L.L.P.
Dallas, Texas
Financial Advisor First Southwest Company
Fort Worth, Teas
8
OFFICIAL STATEMENT
RELATING TO
CITY OF DENTON, TEXAS
$10,845,000' $32,100,000'
GENERAL OBLIGATION REFUNDING AND CERTIFICATES OF OBLIGATION, SERIES 2011
IMPROVEMENT BONDS, SERIES 2011
INTRODUCTION
This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of
$10,845,000* City of Denton General Obligation Refunding and Improvement Bonds, Series 2011 (the "Bonds") and
$32,100,000* Citv of Denton Certificates of Obligation, Series 2011 (the "Certificates"). The Bonds and the Certificates
(collectively the "Obligations") are separate and distinct securities offerings being authorized for issuance under separate
ordinances (the "Bond Ordinance" and the "Certificate Ordinance", respectively, and collectively the "Ordinances") to be
adopted by the City Council of the City, but are being offered and sold pursuant to a common Official Statement, and while the
Bonds and Certificates share certain conunon attributes, each issue is separate and apart from the other and should be reviewed
and analyzed independently, including the kind and type of obligation being issued, its terms of payment, the security for its
payment, the rights of the holders, the federal, state or local tax consequences of the purchase, ownership or disposition of the
Obligations and the covenants and agreements made with respect thereto. Capitalized terms used in this Official Statement have
the same meanings assigned to such terms in the Ordinances to be adopted on the date of sale of the Obligations, except as
othenvise indicated herein.
There follows in this Official Statement descriptions of the Obligations and certain information regarding the City and its
finances. All descriptions of documents contained herein are only summaries and are qualified in their entirely by reference to
each such document. Copies of such documents may be obtained from the Citv_ 's Financial Advisor, First Southwest Company,
Dallas, Texas.
DESCRIPTION OF THE CITY The City of Denton, Texas (the "City") is a political subdivision located in Denton County operating
as a home-rule city under the laws of the State of Texas and a charter approved by the voters in 1959. The City operates under the
Council/Manager form of government where the Mav_ or and six Councilmembers are elected for staggered two-year terms. The City
Council formulates operating policy for the City while the City_ Manager is the chief administrative officer. The Citv_ is
approximately 101.15 square miles in area.
REFUNDED OBLIGATIONS
Proceeds from the sale of the Bonds will be used in part to refund certain outstanding obligations of the City described on
Schedule I attached hereto (the "Refunded Obligations"). The principal and interest due on the Refunded Obligations are to be
paid on the scheduled interest payment dates and redemption dates of such Refunded Obligations as shown in Schedule I from
funds to be deposited pursuant to an escrow agreement (the "Escrow Agreement") Nvith respect to the Refunded Obligations
between the Citv and The Bank of New York Mellon Trust Company, N.A. (the "Escrow Agent"). The Bond Ordinance
provides that from certain proceeds of the sale of the Bonds received from the Initial Purchaser of the Bonds, together Nvith other
funds of the City, the City_ will deposit with the Escrow Agent an amount which will be sufficient to accomplish the discharge
and final payment of the Refunded Obligations on their respective redemption dates. Such funds will be held by the Escrow
Agent in a special escrow account (the "Escrow Fund"). Under the Escrow Agreement, the Escrow Fund is irrevocably pledged
to the payment of the principal of and interest on the Refunded Obligations. The Bank of New York Mellon Trust Company,
N.A., in its capacity as the paying agent for the Refunded Obligations, will certify as to the sufficiency of the amounts deposited
to the Escrow Fund to pay, when due, the principal of and interest on the Refunded Obligations. Such amounts in the Escrow
Fund will not be available to pay the Obligations. By the deposit of such amounts with the Escrow Agent pursuant to the Escrow
Agreement, the City will have effected the defeasance of all the Refunded Obligations in accordance with the law. It is the
opinion of Bond Counsel that as a result of such defeasance and in reliance upon the aforementioned certification by the paying
agent for the Refunded Obligations, the Refunded Obligations will be outstanding only for the purpose of receiving payments
from the amounts held in the Escrow Fund by the Escrow Agent, and such Refunded Obligations will not be deemed as being
outstanding obligations of the City payable from taxes or anv other revenues received by the Citv, as the case may be, or for the
purpose of applying any limitation on the issuance of debt. The City has covenanted in the Escrow Agreement to make timely
deposits to the Escrow Fund, from lawfully available funds, of any additional amounts required to pay the principal of and
interest on the Refunded Obligations, if for anv_ reason the cash balance on deposit or scheduled to be on deposit in the Escrow
Fund is insufficient to make such payment.
* Prelirninarv, subject to change. See the Notice of Sale - "Adjustment of Principal Amount and/or Types of Bids".
THE OBLIGATIONS
DESCRIPTION OF TIM OBLIGATIONS The Obligations are dated April 1, 2011 (the "Dated Date"), and mature on February 15
in each of the vears and in the amounts shown on the cover page and page 3 hereof. Interest Nvill accrue from the Dated Date,
Nvill be computed on the basis of a 360-dav year of twelve 30-day months, and will be payable on August 15 and February 15 of
each year, conunencing February 15, 2012, until maturity or prior redemption. The definitive Obligations Nvill be issued only in
fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to
Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entrv-Only Svstem described herein.
No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of, premium, if any, and
interest on the Obligations Nvill be payable by the Paving Agent/Registrar to Cede & Co., which will male distribution of the
amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Obligations. See
"The Obligations - Book-Entry-Only System" herein.
AUTHORITY FOR ISS .LANCE The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas,
particularly Chapters 1207 and 1331, Texas Government Code, as amended, and the Bond Ordinance.
The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Subchapter C of
Chapter 271, Texas Local Govermment Code (the Certificate of Obligation Act of 1971), as amended, and the Certificate Ordinance.
PURPOSE Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of the City described on
Schedule I attached hereto (the "Refunded Obligations") for debt service savings and (ii) for various street improvements, and
park land acquisitions and improvements, and (iii) to pay the costs associated with the issuance of the Bonds.
Proceeds from the sale of the Certificates will be used for (a) acquisition of equipment for, and acquiring, constructing, installing
and equipping additions, extensions, renovations and improvements to, the City's waterworks and sewer system, (b) acquisition
of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to,
the Citv's electric light and poN er system; (c) acquisition of vehicles and equipment for, and acquiring, constructing, installing
and equipping additions, extensions, renovations and improvements to, the City's solid waste disposal system; (d) renovations to,
and equipping of, existing municipal buildings, including City Hall East: and (e) acquisition of vehicles and equipment for the
City's motor pool and also for the purpose of paying all or a portion of the City's contractual obligations for professional services,
including engineers, architects, attorneys, map makers, auditors, and financial advisors, in comiection with said projects and said
Certificates of Obligation.
SECURITY AND SOURCE OF PAYMENT
The Bonds The Bonds constitute direct and voted obligations of the City and the principal thereof and interest thereon are
payable from an amiual ad valorem tax levied bv_ the City, within the limits prescribed by law, upon all taxable property in the
City, as provided in the Bond Ordinance.
The Certificates The Certificates constitute direct obligations of the City, payable from a combination of (i) a direct annual ad
valorem tax levied, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge (not to
exceed $1,000) of surplus net revenues of the City's Utility System (consisting of the electric system and the waterworks and
sewer svstem).
TAX RATE Lrn ITATION All taxable property within the City is subject to the assessment, levy and collection by the City of a
continuing, direct amiual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax
debt, including the Obligations, within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable
to the Citv, and limits its maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The
Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed
Valuation. Administratiy elv, the Attornev General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum
tax rate for all general obligation debt, based on 90% tax collection factor.
OPTIONAL REDEMPTION The Citv reserves the right, at its option, to redeem the Obligations having stated maturities on and
after February 15, 2022 in whole or in part in principal amounts of $5,000 or anv integral multiple thereof, on February 15, 2021
or anv date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds or
Certificates are to be redeemed, the Citv may select the maturities of Bonds or Certificates, as the case may be, to be redeemed.
If less than all the Bonds or Certificates of anv maturity are to be redeemed, the Paving Agent/Registrar (or DTC while the
Bonds or Certificates, as the case may be, are in Book-Entry-Only form) shall determine by lot the Bonds or Certificates, or
portions thereof, within such maturity to be redeemed. If a Bond or Certificate (or any portion of the principal sum thereof) shall
have been called for redemption and notice of such redemption shall have been given, such Bond or Certificate (or the principal
amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue
from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held
by the Paving Agent/Registrar on the redemption date.
10
With respect to any optional redemption of the Bonds or Certificates, as the case may be, unless certain prerequisites to such
redemption required by the respective Ordinance have been met and money sufficient to pay the principal of and premium, if
anv, and interest on the Bonds or Certificates, as the case mav_ be, to be redeemed Nvill have been received by the Paving
Agent/Registrar prior to the giving of such notice of redemption, such notice may state that said redemption Nvill, at the option of
the City, be conditional upon the satisfaction of such prerequisites and receipt of such money by the Paying Agent/Registrar on
or prior to the date fixed for such redemption or upon any prerequisite set forth in such notice of redemption. If a conditional
notice of redemption is given and such prerequisites to the redemption are not fulfilled, such notice will be of no force and effect,
the City Nvill not redeem such Bonds or Certificates, as the case mav be, and the Paying Agent/Registrar Nvill give notice in the
mamier in which the notice of redemption Nvas given, to the effect that the Bonds or Certificates, as the case mav_ be, have not
been redeemed.
NOTICE OF REDEMPTION Not less than 30 days prior to a redemption date for the Obligations, the City shall cause a notice of
redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Obligations to be
redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying
Agent/Registrau at the close of business on the business day_ next preceding the date of mailing such notice. ANY NOTICE SO
MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN WHETHER OR NOT THE
REGISTERED OWNER RECEIVES SUCH NOTICE. IF AN OBLIGATION (OR ANY PORTION OF ITS PRINCIPAL
SUM) SHALL HAVE BEEN DULY CALLED FOR REDEMPTION AND NOTICE OF SUCH REDEMPTION DULY
GIVEN, THEN UPON THE REDEMPTION DATE SUCH OBLIGATION (OR THE PORTION OF ITS PRINCIPAL SUM TO
BE REDEEMED) SHALL BECOME DUE AND PAYABLE, AND, IF MONIES FOR THE PAYMENT OF THE
REDEMPTION PRICE ARE HELD FOR THE PURPOSE OF SUCH PAYMENT BY THE PAYING AGENT/REGISTRAR
AND ALL OTHER CONDITIONS TO REDEMPTION ARE SATISFIED, INTEREST SHALL CEASE TO ACCRUE AND
BE PAYABLE FROM ANT) AFTER THE REDEMPTION DATE ON THE PRINCIPAL AMOUNT REDEEMED.
DEEEAS_aNCE The Ordinances provide that any Obligation and the interest thereon shall be deemed to be paid, retired, and no
longer outstanding (a "Defeased Obligation") within the meaning of such Ordinance when payment of the principal of such
Obligation, plus interest thereon to the due date either (i) shall have been made or caused to be made in accordance Nvith the
terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or iri,&mg available
to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to male such
payment or (2) Govermnent Obligations which mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper arrangements
have been made by the City with the Paying Agent/Registrar for the payment of its services until all Defeased Obligations shall
have become due and payable. At such time as an Obligation shall be deemed to be a Defeased Obligation hereunder, as
aforesaid, such Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the
ad valorem taxes herein levied and pledged as provided in the Ordinance, and such principal and interest shall be payable solely
from such money or Government Obligations.
Any moneys so deposited with the Paying Agent/Registrau may at the written direction of the City also be invested in
Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government
Obligations received by the Paying Agent/Registrar which is not required for the payment of the Obligations and interest
thereon, Nvith respect to which such monev has been so deposited, shall be turned over to the City, or deposited as directed in
writing to the City. The Ordinances provide that "Govermnent Obligations" means (a) direct, noncallable obligations of the
United States of America, including obligations that are unconditionally guaranteed by the United States of America,
(b) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the City Council approves such
defeasance, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its
equivalent, and (c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and that, on the date the City Council approves such defeasance, are rated as to investment quality
by a nationally recognized investment rating firm not less than AAA or its equivalent.
Upon such deposit as described above, such Defeased Obligations shall no longer be regarded to be outstanding obligations
payable from ad valorem taxes levied by the City or from the other revenues pledged to their payment in the Ordinances, but Nvill
be payable only from the funds and Government Obligations deposited in escrow and Nvill not be considered debt of the Citv for
any purpose. After firm banking and financial arrangements for the discharge and final payment or redemption of the
Obligations have been made as described above, all rights of the City to initiate proceedings to call the Obligations for
redemption or take any other action amending the terms of the Obligations are extinguished; provided, however, that the right to
call the Obligations for redemption is not extinguished if the Citv: (i) in the proceedings providing for the firm banking and
financial arrangements, expressly reserves the right to call the Obligations for redemption, and (ii) gives notice of the reservation
of that right to the owners of the Obligations immediately following the making of the firm banl mg and financial arramgements',
(iii) directs that notice of the reservation be included in any redemption notices that it authorizes.
11
BOOB-ENTRY-ONLY SYSTEM This section describes hoar ownership of the Obligations is to be rransferred and hoar the
principal of; prerrrizrnr, if airy, and interest on the Obligations are to be paid to mid accredited by DTC irhile the Obligations are
registered in its nominee name. The information in this section concerning DTC and the Boolr Enrry-Only System has been
provided by DTC for use in disclosz°e doczrnrents such as this Official Statement The City believes the soul -ce
q1' such
information to be reliable, brit takes no responsibility for the acts°acy or completeness thereof:
The City cannot and does not give any assurance that (1) DTC irill diste°ibzrte pal rnents of debt service on the Obligations, or
redemption or other notices, to M 'Participants, (2) M 'Participants or others irill diste°ibzrte debt service pavnrents paid to
DTC or its nominee (as the registered oirnrer of the Obligations), or redemption or other notices, to the Beneficial Owners, or
that they. irill do so on a timely basis, or (3) DTC irill serve and act in the manner described in this O cial Statement. The
currmt rules applicable to DTC are on file frith the Securities and Exchange Commission, and the cra°rent procedures ofDT(' to
be folloired in dealing frith M 'Participants are on file frith DTC.
DTC Nvill act as securities depository for the Obligations. The Obligations Nvill be issued as fully-registered securities registered
in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative
of DTC. One fully-registered security certificate Nvill be issued for each maturity of the Obligations in the aggregate principal
amount thereof and Nvill be deposited Nvith DTC.
DTC, the Nvorld's largest securities depository, is a liunited-purpose trust company organized under the New York Banking Law,
a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for
over 3.5 million issues of U.S. and non-US. equity issues, corporate and municipal debt issues, and money market instruments
(from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade
settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic
computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical
movement of securities certificates. Direct Participants include both U.S. and non-US. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository
Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and
Fred Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated
subsidiaries. Access to the DTC svstem is also available to others such as both U.S. and non-US. securities brokers and dealers,
bank, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules
applicable to its Participants are on file with the Securities and Exchange Commnission. More information about DTC can be
found at «svsv.dtcc.com and «svsv.dtc.or,.
Purchases of Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for
the Obligations on DTC's records. The ownership interest of each actual purchaser of each Obligation ('Beneficial Owner") is
in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their- holdings, from the Direct or Indirect Participant through which the Beneficial
Owners entered into the transaction. Transfers of ownership interest in the Obligations are to be accomplished by entries made
on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Obligations, except in the event that use of the boor.-entry_ system for the Obligations is
discontinued.
To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit
of Obligations Nvith DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change
in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only
the identity of the Direct Participant to whose account such Obligations are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their- holdings on behalf of their customers.
Convevance of notices and other conunumcations by DTC to Direct Participants, by Direct Participants to Indirect Participants,
and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject
to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations may Nvish to
tale certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as
redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of
Obligations may Nvish to ascertain that the nominee holding the Obligations for their benefit has agreed to obtain and transmit
notices to Beneficial Owners. In the alternative, Beneficial Owners mav_ Nvish to provide their names and addresses to the
registrar and request that copies of notices be provided directly to them.
12
Redemption notices shall be sent to DTC. If less than all of the Obligations within a maturity are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. Nvill consent or vote with respect to the Obligations unless authorized by a Direct Participant in
accordance Nvith DTC's procedures. Under its usual procedures, DTC mails an Onulibus Prow to the County as soon as possible
after the record date. The Olmiibus Prow assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Obligations are credited on the record date (identified in a listing attached to the Ormi bus Prox-y).
Pavments on the Obligations will be made to DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt
of funds and corresponding detail information from the City or the Paving Agent/Registrar on payable dates in accordance with
their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as in the case with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such Participant and not of DTC, the Paving Agent/Registrar or the City,
subject to anv statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is the responsibility
of the Citv, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Obligations at any time by giving
reasonable notice to the City and the Paving Agent/Registrar. Under such circumstances, in the event that a successor securities
depository is not obtained, Obligation certificates are required to be printed and delivered.
The Citv may decide to discontinue use of the system of book-entry_ transfers through DTC (or a successor securities depository).
In that event, Obligations will be printed and delivered.
Use of Cet°tain Terrrrs in Other Sections of this Official Staterrrent. In reading this Official Statement it should be understood that
while the Obligations are in the Book-Entry-Only System, references in other sections of this Official Statement to registered
owners should be read to include the person for which the Participant acquires an interest in the Obligations, but (i) all rights of
ownership must be exercised through DTC and the Book-Entry-Only Svstem, and (ii) except as described above, notices that are
to be given to registered owners under the Ordinances will be given only to DTC.
Information concerning DTC and the Book-Entry-Only System has been obtained from DTC and is not guaranteed as to
accuracy or completeness by, and is not to be construed as a representation bv_ the City, the Financial Advisor or the Initial
Purchaser.
Effect of Termination of Book-Entry-Only System In the event that the Book-Entry-Only Sv_ stem is discontinued by DTC or
the use of the Book-Entry-Only Svstem is discontinued by the City, printed Obligations will be issued to the holders and the
Obligations will be subject to transfer, exchange and registration provisions as set forth in the Ordinances and surmnarized under
"The Obligations - Transfer, Exchange and Registration" below.
PAYING AGENT/WGISTRAR The initial Paying Agent/Registrar for the Bonds and the Certificates is The Bank of New York
Mellon Trust Company, N.A., Dallas, Texas. In the Ordinances, the City retains the right to replace the Paving Agent/Registrar.
The Citv_ covenants to maintain and provide a Paving Agent/Registrar at all times until the Bonds and Certificates are duly paid
and anv successor Paving Agent/Registrar shall be a commnercial bank or trust company organized under the laws of the State of
Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paving
Agent/Registrar for the Bonds and Certificates. Upon any change in the Paving Agent/Registrar for the Bonds and Certificates,
the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds and Certificates, as
applicable, by United States mail, first class, postage prepaid, which notice shall also give the address of the riew Paying
Agent/Registrar.
Principal of the Bonds and Certificates is payable to the registered holder appearing on the registration books of the Paving
Agent/Registrar (the "Registered Owner") at the designated corporate trust office of the Paying Agent/Registrar upon surrender
of the Bonds and Certificates for payment. Interest on the Bonds and Certificates is payable to the Register Owners appearing on
the registration books of the Paving Agent/Registrar at the close of business on the Record Date (identified below) and such
interest shall be paid by the Paving Agent/Registrar by check mailed, first class postage prepaid, to the Register Owner or by
such other arrangement, acceptable to the Paving Agent/Registrar, requested by and at the risk and expense of the Registered
Owner. If the date for the payment of the principal of or interest on the Bonds and Certificates shall be a Saturdav, Sundav, a
legal holiday, or a day when banking institutions in the city where the designated corporate office of the Paving Agent/Registrar
is located is authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturdav, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date
shall have the same force and effect as if made on the original date payment Nvas due.
13
TRANSFER, EIClUNGE AND REGISTRATION . . . In the event the Book-Eritiy-()lilV Svstem should be discontinued, printed
Obligations Nvill be delivered to the Registered Owners and thereafter the Obligations may be transferred and exchanged on the
registration books of the Paving Agent/Registrar only upon presentation and surrender of such printed Obligations to the Paving
Agent/Registrar and such transfer or exchange shall be without expense or service charge to the Registered Owner, except for
any tax or other govermnental charges required to be paid with respect to such registration, exchange and transfer. Obligations
may be assigned by the execution of an assignment form on the Obligations or by other instrument of transfer and assignment
acceptable to the Paying Agent/Registrar. New Obligations Nvill be delivered by the Paying Agent/Registrar, in lieu of the
Obligations being transferred or exchanged, at the designated office of the Paving Agent/Registrar, or sent by United States mail,
first class, postage prepaid, to the new Registered Owner or his designee. To the extent possible, new Obligations issued in an
exchange or transfer of Obligations Nvill be delivered to the Registered Owner or assignee of the Registered Owner in not more
than three business days after the receipt of the Obligations to be canceled, and the written instrument of transfer or request for
exchange duly executed by the Registered Owner or his duly authorized agent, in form satisfactory to the Paying
Agent/Registrar. New Obligations registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000
for any one maturity and for a like aggregate principal amount as the Obligations surrendered for exchange or transfer. See "The
Obligations-Book-Entiv-Only System" herein for a description of the system to be utilized initially in regard to ownership and
transferability of the Obligations. Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any
Certificate called for redemption, in whole or in part, within 45 dav_ s of the date fixed for redemption, provided, however, such
limitation of transfer shall not be applicable to an exchange by the Registered Owner of the uncalled balance of a Certificate or
Bond.
RECORD DATE FOR INTEREST PAYMENT The record date ("Record Date") for the interest payable on the Bonds and
Certificates on any interest payment date means the close of business on the last business day_ of the month next preceding such
interest payment date.
In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such
interest payment (a "Special Record Date") Nvill be established by the Paving Agent/Registrar, if and when funds for the payment
of such interest have been received from the Citv. Notice of the Special Record Date and of the scheduled payment date of the
past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each
Registered Owner of a Bond and Certificate appearing on the registration books of the Paying Agent/Registrar at the close of
business on the last business day next preceding the date of mailing of such notice.
AAIENDNIENTS In each Ordinance, the Citv has reserved the right to amend the Ordinance without the consent of any holder
of the respective Obligation for the purpose of amending or supplementing the Ordinance to (i) cure any ambiguity, defect or
omission therein that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for
the benefit of the holders, (iii) add events of default as shall not be inconsistent Niith the provisions of the Ordinance that do not
materially adversely affect the interests of the holders, (iv) qualify the Ordinance under the Trust Indenture Act of 1939, as
amended, or corresponding provisions of federal laws from time to time in effect or (v) make such other provisions in regard to
matters or questions arising under the Ordinance that are not inconsistent with the provisions thereof and which, in the opinion of
Bond Counsel for the Citv, do not materially adversely affect the interests of the holders.
Each Ordinance further provides that the holders of the Bonds or Certificates, as applicable, aggregating in principal amount a
majoritv of the outstanding Bonds or Certificates, as the case may be, shall have the right from time to time to approve any
amendment not described above to the applicable Ordinance if it is deemed necessary or desirable by the City', provided,
however, that without the consent of 100% of the holders in original principal amount of the then outstanding Bonds or
Certificates so affected, no amendment may be made for the purpose of (i) making any change in the maturity of any of the
outstanding Bonds or Certificates; (ii) reducing the rate of interest borne by any of the outstanding Bonds or Certificates; (iii)
reducing the amount of the principal of, or redemption premium, if any, payable on any outstanding Bonds or Certificates, (iv)
modifying the terms of payment of principal or of interest or redemption premium on outstanding Bonds or Certificates, or
imposing any condition with respect to such payment, or (v) changing the minimum percentage of the principal amount of the
Bonds or Certificates necessary for consent to such amendment. Reference is made to the Ordinances for further provisions
relating to the amendment thereof.
REMEDIES Each Ordinance establishes specific events of default with respect to the respective series of Obligations. If the
City defaults in the payment of the principal of or interest on the Bonds or Certificates when due or the City defaults in the
observance or performance of any of the covenants, conditions, or obligations of the City, the failure to perform which
materiallv, adversely affects the rights of the owners thereof, including but not limited to, their prospect or ability to be repaid in
accordance with the respective Ordinance, and the continuation thereof for a period of 60 days after notice of such default is
given by any owner to the City, each Ordinance provides that any registered owner of a respective Obligation is entitled to seek a
writ of mandamus from a court of proper jurisdiction requiring the City to make such payment or observe and perform such
covenants, obligations, or conditions. The issuance of a writ of mandamus may be sought if there is no other available remedy at
law to compel performance of the respective Obligations or Ordinance and the City's obligations are not uncertain or disputed.
The remedv of mandamus is controlled by equitable principles, so rests Nvith the discretion of the court, but may not be
arbitrarily refused. There is no acceleration of maturity of the Obligations in the event of default and, consequently, the remedv
14
of mandamus may have to be relied upon from year to year. The Ordinances do not provide for the appointment of a trustee to
represent the interest of the owners of the respective Obligations upon any failure of the City to perform in accordance with the
terms of the Ordinances, or upon any other condition and accordingly all legal actions to enforce such remedies would have to be
undertaken at the initiative of, and be financed bv, the Registered Owners. The Texas Supreme Court has ruled in Tooke v. City
of Mexia 197 S.W.3d 325 (Tex. 2006) that a waiver of sovereign immunity in a contractual dispute must be provided for by
statute in "clear and unambiguous" language. Because it is unclear whether the Texas legislature has effectively waived the
City's sovereign umnunity from a suit for money damages, owners of Obligations may not be able to bring such a suit against
the City for breach of the Obligations or Ordinance covenants in the absence of City action. Chapter 1371, Texas Govermnent
Code ("Chapter 1371"), which pertains to the issuance of public securities by issuers such as the City, permits the City to waive
sovereign umnunity in the proceedings authorizing its debt, but in comiection with the issuance of the Obligations, the City has
not waived sovereign mmrrunity is not using the authority to do so as provided by Chapter 1371. Even if a judgment against the
Citv could be obtained, it could not be enforced by direct levy and execution against the City's property. Further, the Registered
Owners carmot themselves foreclose on property within the City or sell property within the City to enforce the tax lien on taxable
property to pay the principal of and interest on the Bonds or the Certificates. Furthermore, the City is eligible to seek relief from
its creditors under Chapter 9 of the U.S. Bankruptcy Code ("Chapter 9"). Although Chapter 9 provides for the recognition of a
security interest represented by a specifically pledged source of revenues, the pledge of ad valorem taxes in support of a general
obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an
automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by
creditors or Obligatiorlholders of an entity which has sought protection under Chapter 9. Therefore, should the Citv avail itself
of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Ban ruptcy Court (which
could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code
provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinions
of Bond Counsel will note that all opinions relative to the enforceability of the Obligations are qualified with respect to the
customary rights of debtors relative to their creditors and by general principles of equity which permit the exercise of judicial
discretion.
Initially, the only Registered Owner of the Bonds and Certificates will be The Depository Trust Company. See "The Obligations
- Book-Entrv-Only Svstem" herein for a description of the duties of DTC with regard to ownership of the Bonds and Certificates.
THEREIL L\DERoFTHIS'P.4(3ELEFTBL4NwI\TE\"TIO;\:4LLY
15
TAX INFORMATION
An VALOREM TAZ LANv The appraisal of property Nvithul the City is the responsibility of the Denton Central Appraisal District
(the "Appraisal District"). Excludirg4 agricultural and open-space land, which may be taxed on the basis of productive capacity, the
Appraisal District is required under V.T.C.A., Title I, Tax Code, as amended (the "Property Tax Code") to appraise all property
within the Appraisal District on the basis of 100% of its market value and is prohibited from applying any assessment ratios. hi
deternmurg market value of property, different methods of appraisal may be used, irrcluch g the cost method of appraisal, the income
method of appraisal and the market data comparison method of appraisal, and the method considered most appropriate by the chief
appraiser is to be used. State law further limits the appraised value of a residence homestead for a tax year to an amount that
would not exceed the lesser of (1) the market value of the property for the most recent tax year that the market value Nvas
determined by the appraisal office or (2) the sure of (a) 10% of the property's appraised value in the preceding tax year, plus (b)
the property's appraised value in the preceding tax year, plus (c) the market value of all new improvements to the property. The
value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of sixteen
members appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of
property within the Appraisal District at least every three years. The City may require armual review at its own expense, and is
entitled to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review
Board.
Reference is made to the Property Tax Code, for identification of property subject to taxation, property exempt or which may be
exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and hilitations
applicable to the levy and collection of ad valorem taxes.
Article VIII of the State Constitution ("Article VIII") and State law provide for certain exemptions from property taxes, the valuation
of agricultural and open-space lands at productivity value, and the exemption of certain personal property from ad valorem tax-ation.
Under Section 1-b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant an
exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the
disabled from all ad valorem taxes thereafter levied by the political subdivision. Once authorized, such exemption may be
repealed or decreased or increased in amount (i) by the governing body of the political subdivision or (ii) by a favorable vote of a
majority of the qualified voters at an election called by the governing body of the political subdivision, which election must be
called upon receipt of a petition signed by at least 20% of the number of qualified voters who voted in the preceding election of
the political subdivision. In the case of a decrease, the amount of the exemption may not be reduced to less than $3,000 of the
market value.
The surviving spouse of an individual who qualifies for the foregoing exemption for the residence homestead of a person 65 or
older (but not the disabled) is entitled to an exemption for the same property in an amount equal to that of the exemption for
which the deceased spouse qualified if (i) the deceased spouse died in a vear in which the deceased spouse qualified for the
exemption, (ii) the surviving spouse Nvas at least 55 years of age at the time of the death of the individual's spouse and (iii) the
property Nvas the residence homestead of the surviving spouse when the deceased spouse died and remains the residence
homestead of the surviving spouse.
In addition to any other exemptions provided by the Property Tax Code, the governing body of a political subdivision, at its
option, mav_ grant an exemption of up to 20% of the market value of residence homesteads, Nvith a minimum exemption of
$5,000.
In the case of residence homestead exemptions granted under Section 1-b, Article VIII, ad valorem taxes may continue to be
levied against the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt
if cessation of the levy would impair the obligation of the contract by which the debt was created.
Under Article VIII and State law, the governing body of a county, municipality or junior college district mav_ provide for a freeze
on total amount of ad valorem taxes levied on the residence homestead of a disabled person or persons 65 years of age or older
above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon receipt of a petition signed
by five percent of the registered voters of the county, municipality or junior college district, an election must be held to
determine by majority vote whether to establish such a limitation on taxes paid on residence homesteads of persons 65 years of
age or who are disabled. Upon providing for such exemption, the total amount of taxes imposed on such homestead cannot be
increased except for improvements (other than maintenance, repairs or improvements required to comply Nvith governmental
requirements) and such freeze is transferable to a different residence homestead. Also, a surviving spouse of a tax-payer who
qualifies for the freeze on ad valorem taxes is entitled to the same exemption so long as the property was the residence
homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse
and the spouse Nvas at least 55 years of age at the time of the death of the individual's spouse. Once established such freeze
cannot be repealed or rescinded.
State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or
children of a deceased veteram who died while on active duty in the armed forces; the exemption applies to either real or personal
property Nvith the amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000, dependent upon the
degree of disability or whether the exemption is applicable to a surviving spouse or children; provided, however, that beguming
in the 2009 tax year, a disabled veteran who receives from the United States Department of Veterans Affairs or its successor 100
percent disability compensation due to a service-connected disability and a rating of 100 percent disabled or of individual
unemplovability is entitled to an exemption from taxation of the total appraised value of the veteran's residence homestead.
16
Article VIII provides that eligible owners of both agricultural land (Section 1-d) and open-space land (Section 1-d-1), including
open-space land devoted to farm or ranch purposes or open-space land devoted to timber production, may elect to have such property
appraised for property taxation on the basis of its productive capacity. The same land mav_ not be qualified under both Section 1-d
and 1-d-1.
Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body
of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation.
Article VIII, Section 1-j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as
goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication.
Notwithstanding such exemption, counties, school districts, junior college districts and cities may tax such tangible personal
property provided official action to tax the same was taken before April 1, 1990. Decisions to continue to tax mav_ be reversed in
the future; decisions to exempt freeport property are not subject to reversal.
Article VIII, Section 1-n of the Texas Constitution provides for the exemption from taxation of "goods-in-transit." "Goods-in-
transit" is defined by Section 11.253 of the Property Tax Code, which is effective for tax years 2008 and thereafter, as personal
property acquired or imported into Texas and transported to another location in the State or outside of the State within 175 days
of the date the property Nvas acquired or imported into Texas. The exemption excludes oil, natural gas, petroleum products,
aircraft and special inventory, including motor vehicle, vessel and out-board motor, heavy equipment and manufactured housing
inventory. Section 11.253 permits local govermnental entities, on a local option basis, to take official action by Januarv 1 of the
year preceding a tax year, after holding a public hearing, to tax "goods-in-transit" during the following tax year. A taxpaver may
only receive either the freeport exemption or the "goods-in-transit" exemption for items of personal property.
The Citv or Denton Countv mav create one or more tax increment financing districts ("TIF") within the Citv or Denton Countv,
as applicable, and freeze the taxable values of property in the TIF at the value at the time of its creation. Other overlapping
taxing units levying taxes in the TIF may agree to contribute all or part of future ad valorem taxes levied and collected against
the value of property in the TIF in excess of the "frozen values" to pay or finance the costs of certain public improvements in the
TIF. Taxes levied by the City against the values of real property in the TIF in excess of the "frozen" value are not available for
general city use but are restricted to paying or financing "project costs" within the TIF. The Citv also mav enter into tax
abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain
improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the
improvements until the ex-piration of the agreement. The abatement agreement could last for a period of up to 10 years.
The Citv is also authorized, pursuant to Chapter 380, Texas Local Government Code, as amended ("Chapter 380"), to establish
programs to promote state or local economic development and to stimulate business and commercial activity in the City. In
accordance Nvith a program established pursuant to Chapter 380, the City may make loans or grants of public funds for economic
development purposes, however no obligations secured by ad valorem taxes mav_ be issued for such purposes unless approved by
voters of the Citv.
EFFECTIVE TAI RXTE AND ROLLBACK TAX RXTE Under the current Property Tax Code a governing body of a taxing unit is
required to adopt its annual tax rate per $100 taxable value for the unit before the later of September 30 or the 60th day after the
date the certified appraisal roll is received by the taxing unit, and a failure to adopt a tax rate by such required date Nyill result ill
the tax rate for the taxing unit for the tax year to be the lower of the effective tax rate calculated for that tax vear or the tax rate
adopted by the taxing unit for the preceding tax year. By each September 1 or as soon thereafter as practicable, the City Council
adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for funding of
maintenance and operation expenditures, and (2) a rate for debt service.
Under the Property Tax Code, the City must annually calculate and publicize its "effective tax rate" and "rollback tax rate". The
Citv Council may not adopt a tax rate that exceeds the lower of the effective tax rate or the rollback tax rate until it has held two
public hearings on the proposed increase following notice to the taxpayers and otherwise complied with the Property Tax Code.
If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election be
held to determine whether or not to reduce the tax rate adopted for the current vear to the rollback tax rate.
"Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this vear's total taxable values
(adjusted). "Adjusted" means lost values are not included in the calculation of last vear's taxes and new values are not included
in this vear's taxable values.
"Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levv (adjusted) from this vear's
values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted)
divided by the anticipated tax collection rate.
The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize
an additional one-half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the
rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current vear.
Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the
calculation of the various defined tax rates.
17
PROPERTY ASSESSMENT AND TAI PAYMENT Property within the City is generally assessed as of January 1 of each year.
Business inventory may, at the option of the taxpayer, be assessed as of September 1. Oil and gas reserves are assessed on the
basis of a valuation process which uses an average of the daily price of oil and gas for the prior year. Taxes become due October
1 of the same year, and become delinquent on February 1 of the following year. Taxpayers 65 vears old or older are permitted
by State law to pay taxes on homesteads in four installments with the first due on February_ 1 of each year and the final
installment due on August 1.
PENALTIES AND INTEREST Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows:
Cumulative
Cumulative
Month
Penaltv
Interest
Total
February
6%
1%
7%
March
7
2
9
April
8
3
11
Mav
9
4
13
June
10
5
15
July
12
6
18
After July, penalty remains at 12%, and interest accrues at a rate of one percent (1%) for each month or portion of a month the
tax remains unpaid. A delinquent tax continues to incur the penalty interest as long as the tax remains unpaid, regardless of
whether a judgment for the delinquent tax has been rendered. The purpose of imposing such interest is to compensate the taxing
unit for revenue lost because of the delinquency. In addition, if an account is delinquent in July, an attorney's collection fee of
up to 20% may be added to the total tax penalty and interest charge. Under certain circumstances, taxes which become
delinquent on the homestead of a taxpayer 65 nears old or older incur a penalty of 8% per annum with no additional penalties or
interest assessed. In general, property subject to the Citv's hen may be sold, in whole or in parcels, pursuant to court order to
collect the amounts due. Federal law does not allow for the collection of penalty and interest against an estate in ban-Luptcy.
Federal bankruptcy law provides that an automatic stay of action by creditors and other entities, including govermmental units,
goes into effect with the filing of any petition in ban-Luptcy. The automatic stay prevents govermmental units from foreclosing
on property and prevents hens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in
either case, an order lifting the stay is obtained from the ban-Luptcy court. In many cases post-petition taxes are paid as an
administrative expense of the estate in ban-Luptcy or by order of the ban-Luptcy court.
CITY APPLICATION OF TAI CODE The City grants an exemption to market value of the residence homestead of persons 65
years of age or older of $35,000 and has indicated a desire to increase the Over-65 exemption by an additional $5,000 each year
in 2012-2014 until the exemption amount reaches $50,000. Disabled taxpayers also receive a $10,000 exemption.
The City grants an additional one-half of one percent, or a minimum of $5,000 exemption of the market value of residence
homesteads.
See Table 1 for a listing of the amounts of the exemptions described above.
Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt.
The Citv does not tax nonbusiness personal property.
Denton County began collecting taxes for the City during the fiscal year 2006-07.
The Citv does not allow split payments, and discounts are not allowed.
The Citv does not tax freeport property.
The Citv collects the additional one-half cent sales tax for reduction of ad valorem taxes.
The Citv does tax "goods-in-transit".
The Citv has not adopted the tax freeze for citizens who are disabled or are 65 years of age or older.
The City has adopted a tax abatement policy.
The City participates in one tax increment reinvestment zone, which was created in 2010.
18
TA ABATEMENT POLICY The Citv has adopted a tax abatement policy. In 1990, the City council adopted a resolution
setting guidelines and criteria for granting abatements in reinvestment zones created within the City. These guidelines
specifically note that incentives are limited to companies which create new wealth and do not adversely affect existing
businesses operating within the City. The City Council approved the following tax abatement agreements:
• In 2001, a 100% tax abatement for a term of ten years was granted to Peterbilt Motors on the incremental value relating
to the expansion of their division headquarters. The project was completed and the abatement Nvill expire in 2011.
• In 2003, a 35% tax abatement for a term of five years was granted to Flowers Baling Company on the incremental
value relating to the expansion and renovation of a vacant facility in Denton. The project Nvas completed and the three-
phase project abatement will expire in 2011.
• In 2004, a 35% tax abatement for a term of five years was granted to Fastenal Company for their 200,000 square foot,
$5 million distribution center. The project was delayed but completed in 2008 at an estimated valuation of $15
million. The agreement Nvill terminate in 2013.
• In 2007, a 100% tax abatement for a term of up to seven years was granted to Aldi Foods for their 500,000 square foot
$52 million distribution center. The abatement amount is based on the cost incurred bv_ Aldi to construct a road to their
site. The project was completed in 2009 and the agreement Nvill terminate in 2016.
• In 2010, a 65% tax abatement agreement for a term of five years was granted to Target Corporation for its 400,000
square foot frozen and refrigerated food distribution center. Target is expected to break ground in the Spring of 2011
and plans a 2012 opening of the facility.
CKapTER 380 AGREEMENTS The Citv has also entered into Chapter 380 agreements. Each agreement is based on the
project's contribution in either sales or property tax revenue. The City Council approved the following Chapter 380 agreements:
• In 2001, an agreement was approved for the 450,000 square foot, $50 million Denton Crossing retail center. The
grantee receives one-third of the sales tax generated bv_ the project for a maximum of fifteen years as reimbursement
for public improvement costs related to the project. The project was completed and the Chapter 380 Grant was
initiated in 2005. The agreement will terminate in 2019.
• In 2003, an agreement was approved for Sally Beauty Company for their new international headquarters valued at over
$29 million. The company receives a grant equal to 40% of the property_ tax paid on the new facility and equipment
for a period of ten years. The agreement Nvill terminate in 2014.
• In 2004, an agreement was approved for Teasley Partners for an urban style mixed-use development. The grantee may
receive one-third of the sales tax generated by the project for a maximum of fifteen years as reimbursement for public
improvement costs related to the project. The project has not been completed. Although a new hotel and some
residential units have been completed, no qualifying retail has been constructed.
• In 2004, an agreement was approved for Windjammer Ltd for Unicorn Lake, an urban style mixed-use development.
The grantee will receive one-third of the sales tax generated by the project for a maximum of fifteen vears as
reimbursement for public improvement costs related to the project. Although the project is still under development, the
grantee has satisfied the thresholds established in the agreement. The grant payments were initiated in December
2009. The agreement Nvill terminate in 2023.
• In 2005, an agreement was approved for Granite Properties for the 900,000 square foot business park project. Phase
one, consisting of 397,000 square feet, was completed in 2006. The company received a grant equal to 50% of new
property tax revenue generated at the site. The agreement had a ten year term, however, the contract was terminated in
2010 when Schlumberger purchased a 150,000 square foot building and additional land at the site.
• In 2007, an agreement was approved for Allegiance Hillview for the Ravzor Ranch mixed-use development. The 400
acre project will have over one million square feet of retail and will be built in two phases. The agreement provides a
varying rate of sales tax reimbursement based on public improvement costs, which include the widening of a state
highway that bisects the project. The grantee will receive a maximum of $20 million over a 15 year term for phase one
and a maximum of $42 million over a term of 20 years for phase two. Approximately 360,000 square feet of retail in
phase one has been completed, Nvith Sam's and Wal-Mart opening in Fall 2010.
• In 2008, an agreement was approved for the expansion of Josten's. The grant is based on 75% of the new property tax
revenue generated bv_ the expansion for a term of seven years. The project was completed and the agreement Nvill
terminate in 2015.
19
• In 2010, an agreement was approved for Grand Mesa, contract for Schlumberger, equal to 50% of new property tax
revenue generated for their 150,000 square foot regional maintenance facility. The term of the agreement is seven
years and Nvill terminate in 2017.
ANNEXATION PLANS On May 4, 2010, the Citv amiexed 15 areas of which approximately 3,377 acres Nvere umnediately
aimexed and approximately 4,117 acres Nvere given 5-year non-aimexation agreements. State law allows a property to not be
annexed for up to 45 years through non-annexation agreements. The 45 year period is calculated over three terms, not to exceed
15 years per term. Since the first non-annexation agreement term offered by the City was for only five years, the maximum
possible total non-aimexation period possible will be 35 years. It is estimated that a total of 187 residents were added to the
City's population from the immediate aimexation of the approximately 3,377 acres.
An additional 3 areas, totaling approximately 1,595 acres, were placed in 3-year anmexation plans that were adopted by the City
Council on April 6, 2010. The Citv Council will consider the anmexation of these three areas, concluding in May 2013. It is
estimated that a total of 1,949 residents will be added to the City's population if the three areas are aimexed in their entirety.
However, it is unlikely that the full population projections will be realized upon aimexation since several property owners may
be offered non-annexation agreements. Since none of the property owners in the 3 areas have been offered non-annexation
agreements, it is quite possible that qualifying properties may not be aumexed for up to 45 years.
State law requires the City to prepare a service plan that provides for full municipal services (defined to mean services provided
by the Citv within its full-purpose boundaries, including water and wastewater service otherwise provided to similar areas in the
City but excluding gas and electrical service) to the aimexed areas. The City may provide the services utilizing any of the
methods by which it extends services to other areas of the Citv. The cost to provide services to the areas, as well as any revenues
generated from the areas, will occur inuriediately with regard to some services and in phases over a three to five year period in
regard to other services but only as areas are finally aimexed. While the City has projected a total net aggregate cost of aimexing
all 9,089 acres (costs of services to the aimexed areas minus additional ad valorem taxes, sales taxes and other revenues
generated from the aimexed areas), the financial impact to the City is not material since some of these properties may be armexed
over a 35 year period, and possibly over a 45 year period. If the areas were amiexed within 5 years, the cost would be
approximately $2,014,000. If the areas were annexed within 10 years, the cost would be approximately $2,625,000.
The estimates above make a number of assumptions regarding expenditures and revenues over the next few years. The
overriding assumption for the analysis is that the fundamental development of the described areas will not change. In other
Nvords, the aimexation cost estimate does not assume that any major development will take place in the described areas. This
assumption is being made for the cost estimate since additional developments are merely a matter of speculation at this time.
The use of this assumption, however, should not be interpreted to mean that the described areas are not expected to develop over
time.
20
TABLE I - VALLLATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT
2010.%11 Market Valuation Established by Denton Central Appraisal District $7,025,991,538
Less Exemptions Reductions at 1000 o Market Value:
Residence Homestead Exemptions
$ 85,250,897
Over 65 Exemptions
166,562,941
Disabled Persons Exemptions
2,647,502
Disabled Veterans Exemptions
17,330,691
A,ricultural Land Use Productivitv
292,609,850
Historical Other Exemptions
3,384,132
Freeport Exemptions
134,326,466
Abatement Exemptions
52,651,273
Prorated Exempt Property
3,321,314
Pollution Exemptions
32,472,416
Homestead Cap Adjustment
5,316,098 795,873,580
2010.%11 Taxable Assessed Valuation (as of 7-17-10) S 6,230,117,958
Citv Funded Debt Pavable from Ad Valorem Taxes (1)
General Obligation Bonds (as of2-1-11) $116,915,000
Certificates of Obligation (as of2-1-11) 113,115,000
Tax and Utlity System Bonds (as of 2-1-11) 58,820,000
The Certificates 32,100,000
The Bonds 10,845,000
Funded Debt Pavable from Ad Valorem Taxes S 331,795,000
Less Self-Supporting General Obligation Debt (3)
Solid Waste System General Obligation Debt S 29,722,400 (4)
Drainage System General Obligation Debt 2,750,000
Utility System General Obligation Debt 173,350,000 (5) 205,822,400
Net Tax Supported Debt Payable from Ad Valorem Taxes S 125,972,600
Interest and Sinkin, Fund as of 1-31-11 (unaudited) S 19,459,196
Ratio Total Funded Debt to Taxable Assessed Valuation 5.330o
Ratio Net Funded Debt to Taxable Assessed Valuation 2.020o
2011 Estimated Population - 115,651
Per Capita Taxable Assessed Valuation - $53,870
Per Capita Total Funded Debt - $2,869
Per Capita Net Funded Debt - S 1,089
(1) The above statement of indebtedness does not include $196,705,000 Utility System Revenue Bonds as these bonds are payable solely from
the net revenues of the Utility System (the "System"), as defined in the ordinances authorizing such bonds.
(2) Preliminar , subject to change.
(3) As a matter of policy, the City provides debt service on its general obligation debt issued to fund improvements to its Utility System, Solid
Waste System and Drainage System from surplus revenues of these Systems (see "Table 7 - General Obligation Debt Service
Requirements" and "Table 9 - Computation of Self-Supporting Debt"). This policy is subject to change in the future.
The City's Utility System is comprised of the City's entire existing electric, light and power system and the existing waterworks and sewer
system. The City's Utility System General Obligation Debt has been issued to finance improvements to finance or refinance Utility System
improvements and contractual obligations and is being paid, or is expected to be paid, from Utility System revenues. The City has
$196,705,000 Utility System Revenue Bonds outstanding payable from a pledge of Utilty System revenues.
The City's Solid Waste System General Obligation Debt has been issued to finance or refinance Solid Waste System improvements and is
being paid, or is expected to be paid, from Solid Waste System revenues. The City has no outstanding Solid Waste System Revenue Bonds.
The City's Drainage System General Obligation Debt has been issued to finance or refinance Drainage System improvements and is being
paid, or is expected to be paid, from Drainage System revenues. The City has no outstanding Drainage System Revenue Bonds.
(4) Includes a portion of the Certificates. Preliminar , subject to change.
(5) Includes a portion of the Bonds and Certificates. Preliminary, subject to change.
21
TABLE 2 - TAXABLE ASSESSED VALLTATIONS BY CATEGORY
Taxable Appraised Value for Fiscal Year Ended September 30,
2011
2010
2009
°-o of
°-o of
°-o of
Category
Amount
Total
Amount
Total
Amount
Total
Real, Residential, Single Family-
$3,545,009,743
-50.46°0
$3,475,374,687
48.95oo
$3,397,880,407
48.63oo
Real, Residential, Multi-Famih_
661,530,441
9.42oo
688,298,068
9.70oo
638,906,357
9.14oo
Real, Vacant Lots Tracts
149,930,858
2.13oo
162,282,464
2.29oo
160,766,209
2.30oo
Real, Acreage (Land Only)
352,636,983
5.02oo
356,896,058
5.03oo
330,913,400
4.74oo
Real, Farm and Ranch huproNements
32,148,788
0.46oo
33,242,494
0.47oo
32,526,580
0.47oo
Real, Commercial andhtdustrial
1,381,432,997
19.66oo
1,392,817,179
19.62oo
1,416,914,699
20.28oo
Real, Oil, Gas, and Other I\ineralReseryes
116,459,175
1.66oo
68,616,710
0.97oo
-51,531,540
0.74oo
Real and Tangible Personal, Utilities
66,756,673
0.95oo
79,577,104
1.12oo
84 395,222
1.21°0
Tangible Personal, Commercial and Industrial
651,961,490
9.28oo
749,892,931
10.56oo
778,403,096
11.14oo
Tangible Personal, Other
16,634,472
0.24oo
17,779,752
0.25oo
20,656,852
0.30oo
Real and Special Property, InN entory
-51,489,918
0.73oo
74,454,431
1.05oo
74,539,998
1.07oo
Total Appraised Value Before Exemptions
$ 7,025,991,538
100.00oo
$ 7,099,231,878
100.00oo
$6,987,434,360
100.00oo
Less: Total Exemptions; Reductions
(795,873,580)
(771,322,856)
(696,075,248)
Supplements
-
(2)
- (2)
- (2
)
Taxable Assessed Value
$6,230,117,958
$6,327,909,022
$6,291,359,112
Taxable Apprai
sed Value for
Fiscal Year Ended September 30,
2008
2007
°'0 of
°'0 of
Category
Amount
Total
Amount
Total
Real, Residential, Single Family
$ 3,192,783,727
48.3500
$2,927,902,799
-50.1500
Real, Residential, Multi-Family
-5-52,635,146
8.3700
454,710,640
7.7900
Real, Vacant Lots Tracts
135,800,628
2.0600
131,508,053
2.2500
Real, Acreage (Land Only)
330,570,774
-5.0100
277,588,810
4.7500
Real, Farm and Ranch huproNements
-51,987,396
0.7900
29,732,528
0.5100
Real, Commercial andhtdustrial
1,326,705,553
20.0900
1,085,722,435
18.6000
Real, (-)it, Gas, and Other I\ineralReseryes
46,500,010
0.7000
-57,823,640
0.9900
Real and Tangible Personal, Utilities
68,372,262
1.0400
62,085,822
1.0600
Tangible Personal, Commercial and Industrial
785,231,437
11.8900
737,260,202
12.6300
Tangible Personal, Other
19,919,543
0.3000
23,654,377
0.4100
Real Property, hiNentory
92,889,789
1.4100
-50,263,276
0.8600
Total Appraised Value Before Exemptions
$6,603,396,265
100.0000
$ 5,838,252,582
100.0000
Less: Total Exemptions; Reductions
(671,868,100)
(593,625,675)
Supplements
157,971,610
195,927,794
Taxable Assessed Value
$6,089,499,775
$ 5,441,228,909
(1) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State
Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and
the Appraisal District updates records. For the Fiscal Year ended 2011, the values were reported on July_ 17, 2010 based on
information as of January 1, 2010.
(2) Due to a change in Appraisal District reporting, supplements are included in category amounts.
22
TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY
Net
Ratio Net
Fiscal
Taxable
Tax Debt
Tax Debt
Funded
Year
Taxable
Assessed
Outstanding
to Taxable
Debt
Ended
Estimated
Assessed
Valuation
at End
Assessed
Per
9/30
Population
Valuation (3)
Per Capita
of Year 0)
Valuation
Capita
2007
106,843(l)
$ 5,441,228,909
$50,927
$ 119,266,729
2.19%
$1,116
2008
108,980(1)
6,089,499,775
55,877
129,439,594
2.13%
1,188
2009
111,160«
6,291,359,112
56,597
122,835,000
195%
1,105
2010
113,3830
6,327,909,022
55,810
119,862,600
1.89%
1,057
2011
115,651(')
6,230,117,958
53,870
116,165,650 (6)
1.86%~6>
1,004 ~6>
(1) Source: Citv Officials.
(2) Source: US Census.
(3) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State
Comptroller of Public Accounts. Certified values are subject to change firroughout the year as contested values are resolved
and the Appraisal District updates records.
(4) Source: Denton Central Appraisal District as of July 17, 2010.
(5) Excludes self-supported general obligation debt.
(6) Projected, includes a portion of the Bonds and a portion of the Certificates. Preliminary, subject to change.
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY
Fiscal
Year
Distribution
Ended
Tax
General
Interest and
% Current
% Total
9/30
Rate
Fund
Sinking Fund
Tax Levv (1)
Collections
Collections
2007
$ 0.62652
$ 0.44765
$ 0.17887
$ 34,273,862
9798%
99.81%
2008
0.66652
0.44765
0.21887
40,816,256
98.79%
99.51%
2009
0.66652
0.44765
0.21887
43,086,123
98.47%
99.40%
2010
0.66652
0.44765
0.21887
42,898,414
9895%
9895%
2011
0.68975
0.47088
0.21887
42,972,238
85.52%
85.52%
(1) Tax lev • for the 2011 year is based on the Certified Value. Prior years represent adjusted values that include supplements.
(2) Collections for part year only, tlurough January 31, 2011.
TABLE 5 - TEN LARGEST TAXPAYERS
Name of Taxpayer
Columbia Medical Center of Denton
Paccar- Inc.
Inland Westem Denton Crossing Ltd PS
Cypress Denton Station LTD
GTE Southwest Inc. DBA Verizon
GEL Timberlinl s LLCD
Devon Energy Production Co. LP
Range Texas Production LLC
Denton Education Housing Corp.
SCI Gatewav at Denton Fund 25 LLC
Source: Denton Central Appraisal District.
Nature of Property
Hospital/Professional Building
Diesel Truck Manufacturing
Real Estate Development
Residential Multifamily
Telephone T Jtility
Residential Multifamily
Gas TJtility
Gas T Jtilitv
Residential Multifamily
Commercial Lots/Real, Industrial
2010/11
% of Total
Taxable
Taxable
Assessed
Assessed
Valuation
Valuation
$79,500,789
1.28%
46,352,556
0.74%
45,253,799
0.73%
36,113,213
0.58%
33,371,000
0.54%
26,450,000
0.42%
25,356,550
0.41%
22,097,378
0.35%
21,312,452
0.34%
21,246,903
0.34%
$ 357,054,640
5.73%
23
GENERAL OBLIGATION DEBT LINIITATION No general obligation debt limitation is imposed on the City under current State
law or the City's Home Rule Charter (see "The Obligations - Tax Rate Limitation" for a description of the limitations on ad
valorem tax rates.).
TABLE 6 - ESTIMATED OVERLAPPING TAx DEBT
Expenditures of the various taxing entities within the territory of the City_ are paid out of ad valorem taxes levied by such entities
on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures.
This statement of direct and estimated overlapping ad valorem tax bonds ("Tax Debt") was developed from information
contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating
to the Citv, the City has not independently verified the accuracy or completeness of such information, and no person should rely
upon such information as being accurate or complete. Furthermore, certain entities listed may have issued additional Tax Debt
since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt,
the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt of the City.
2010.'11
Taxable 2010.'11
Assessed Tax
Jurisdiction Value Rate
Total
Estimated
Funded
°'o
Debt
Applicable
$12.972,600 u)
100.000o
610,963,27
64.370o
496,900,000
11.860o
55,188,117
7.900o
53,442,142
0.030o
47,550,303
2.690o
19,735,324
0.060o
30,505,000
2.150o
28,442,339
1.070o
CitN's
Overlapping
Funded Debt
Aa of7-I-I I
S 12,972,600
393,277,223
58,932,340
4,359,861
16,033
1,279,103
11,841
655,858
304,333
Authorized
But Unissued
Debt As Of
2-1-11
Citv of Denton
$ 6,230,117,98
$0.68975
Denton Independent School District
8,610,855,186
1.3000
Denton Countv
52,046,669,565
0.27390
Argyle Independent School District
963,950,674
1.44010
Aubrey Independent School District
502,760,729
1.4000
Krum Independent School District
2,141,115,382
1.48000
Pilot Point Independent School District
447,334,716
1.37000
Ponder Independent School District
899,298,200
1.32490
Sanger Independent School District
655,270,398
1.36000
Total Direct and Overlapping Funded Debt
Ratio of Direct and Overlapping Funded Debt to Taxable Assessed Valuation
Per Capita Overlapping Funded Debt
$ 584,809,191
9.390o
$ 5,157.82
$ 3,994,000 12)
116,749,713
330,713,873
(1) Includes a portion of the Bonds and a portion of the Certificates, less self-supporting debt. Preliminary, subject to change.
(2) Reflects remaining authorization after the issuance of the Bonds.
24
DEBT INFORMATION
of o 0 0 0 0
0 , Q. .O. 01 01 M 01 O
j 01 N M M O
~ a O I M ~ ~ 01 O
~i
01 IO N O 7 N_ 01 N_ 01 M 01 O 01 01 M
~O 01 N l~ r IC 7 N t N 01 t t ~O 01
O r r r N O 7 ~O 01 'n 7 C'! C1 C1 'n lO O
O O 01 O 01 c N 01 01 M 01 c r-i N 'n r-
rl .--I
01 'n 7
O O N 'n C1 M O O M M 'n N r- 01 --i ~O l~ l~ O M
O O C1 O O 01 r M r r 7 01 'n 'n N
'n 7 M M M N O 01 01 l- IO 'n 7 7 M
01 'n 'n 'n M 'n 7 M 01 O IO 01 01 01 01 N 01 O
bA l~ M 'n N
ti
a N M 'n l~ l~ ~ M ~O M O ~O O ~O ~O --i ~ ~ ~ 'n O O
01 01 M O ~--i M 7
p y N N O M N 01 N CO M N O O ~ 7 l- N l~ 01
fy, 01 'n r- r- N O 01 C1 C1 7 ~O r- r- M M 7 7
A. ,--i 01 'n 'n 'n 'n 'n 'n 7 7 7 7 O O O 'n 'n 'n 'n 'n 7
N
' N N 7 1M C1 7 O
O ~ r~r-~~ Vl 7 ~O O ~ ~O M ~O N
y 'n O N Ic 01 O IO IO l~ N r- 01 IO N N M 01
M N O M 01 01 'n 01 7 01 r 'n 01 M 'n IO 7 l- N
N 'n 'n O M O C1 ~O N ~O 01 C-1 0~ l- 7 'n 7 M
V] . r3 v 'n 'n N M 'n O 'n M 01 O ~ 7 O --i t m c
O A N C1 M N C1 r, l~ 7 'n N O O r
01 01 N N
A. rrN-~~ ~O l, 7 r- lO lO lO ~O 'n Cl
M
N M O 'n 01 r O O 01 7 01 IO 7 01 M 01 'n N
l- 01 M O M O r 01 IO M 01 01 'n O 7 M N 01
O O M 7 M N C1 ~O 7 O O~ r r 7 7 C1 M
r
l~ 7 M M N Vl C, 7 ~O 7 l~ N O l~ N M 'n O
N O M N N 'n 01 7 01 l- M ~ M IO l- N 'n 01 l- IO
F ~ l C~ v~ ~ Cl om'' Cl n~ n n O ll~
--i 01 7 M N O l- IO 'n 7 M l~ l~ ~O O 01 l- IO IO N M
M M M M M M N N N N N N --i --i --i --i Vl
O M 7 --i 7 IO O O 01 IO 7 7
l~ --i O Ic 01 M M 01 O 'n O IO 'n 7 01 N
~O O M N O N M N N M ~ m ~ M O 7 N
N Vl O C Ic C, N --i 'n 01 M l~ O M m 01 M 7 M
7 N O 01 01 IO 7 M N N --i N
O
U ' O O O O O O O O O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O O O
N 'n 'n O 'n O O O 'n O 'n 'n 'n O O O 'n 'n 'n 'n O
O N 01 ~ O ~ 01 7 01 'n N l~ M O l~ 7 ~ 01 l- IO O
'n ~ N 7 'n O N M N N M 7 7 'n ~O ~O l~ ~ ~
a N N N N - - - - - - - - - - - - - - N
~ M
' M Vl Vl O Vl O Vl ~ ~ O 01 Vl M M_ 01 ~ M_ M
M M ~O 01 N M 7 Vl m N l- N r- Vl O N 7 7
l~ M 01 ~ ~O 7 N O l~ ~O 'n 'n 7 7 M N N ~ ~
c
O
' O O O O O O O O O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O O O
ray ~ O O O O O O O O O O O O O O O O O O O O O
'n O O 'n O 'n O 'n O O O 'n O 'n O O O 'n 'n
O 'n 'n l~ l- O O 7 l- N N M M 7 'n ~O ~O 7
N M 7 01 M N 7 ~O Vl 01 l- M IO IO IO M 7 M
M --i O N 'n O O O O M 01 M 'n l- M N
M N 7 O 'n O N N l~ 'n 7 C1 O~ N N r 7 C1 n
r- 'n 01 l- O N N IO 7 r- 'n 7 O M r- 'n 01
N M IO 01 l- 7 r O 7 01 IO = 'n N N Ic ~ 01 7
M ~ C1 O N 'nO 7 O - 7 N M
l- C1 'n
O 01 01 r- Ic 'n 7 7 M N N 7
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
CJ a o o vi o 0 o
O Ic o vi vi o o o o o vi N o
O 1= O ~ N ~ N N N N E O N 'n
~ lO O 7 l~ M ~ N ~ ~ 01 O 0~ N M 01 ~ r M C'! 't O~
a r- N 01 01 r- r- r- M M N r- 'n 7 t
--i - - - - - - - - - - - - - N
~ ~ OI ~ N M 7 'n ~O l~ ~ 01 O N M 7 'n ~O l~ ~ 01 O ~
N "O M ~ ~ ~ ~ N N N N N N N N N N M M
O O O O O O O O O O O O O O O O O O O O O
W 01 N N N N N N N N N N N N N N N N N N N N N
N
U
O
U
N
F"r
N
QI
Sti
0
0 ~
~ r0
O ~
O
y„ O
O O
M y
ccz U
cz c
~ U
N N CZ
CC
ct Y Q
O ~ O cyd
O N U ,.Ur
O O Y
U N N ~ O
N ~ ~ N
N U N ~
Vl Ol ~ MMSti
~ ~ U W
- 0 0
~ O O O O
cz cz
cz b°
N N
N M 7t, V
25
TABLE 8 - INTEREST AND SINKING It?ND BUDGET PROJECTION
Tax Supported Debt Service Requirements, Fiscal Year Endina 9.'30.'2011 S 31283.177
Interest and Sinkina Fund Balance as of 9.'30.'10 S 3354.535
Interest and Sinkina Fund Tax Levyy 13.771938
Budaeted Transfers 16.280336
Interest Income 50,000 33,457,809
Estimated Balance, 9.'30.'11 S 1174,632
TABLE 9 - CON]PL?TATION OF SELF-SUPPORTING DEBT
Net Revenue from Solid Waste System, Fiscal Year Ended 9-30-10 S 4,494,600
Less: Solid Waste System Revenue Bond Requirements, 2011 Fiscal Year
Balance Available for Other Purposes S 4.494.600
Solid Waste System General Obligation Bond Requirements, 2011 Fiscal Year 3,645,631
Balance S 848,969
Net Revenue from Drainage System. Fiscal Year Ended 9-30-10 S 2318.533
Less: Drainage System Revenue Bond Requirements, 2011 Fiscal Year
Balance Available for Other Purposes S 2318.533
Drainage System General Obligation Bond Requirements, 2011 Fiscal Year 556,244
Balance S 1,762289
Net Revenue from Utility System (Electric System and Waterworks and Server Svstem), Fiscal Year Ended 9-30-10 S-17241801
Less: Utility Svstem Revenue Bond Requirements, 2011 Fiscal Year 21620,637
Balance Available for Other Purposes S24.621164
Utility Svstem General Obligation Bond Requirements, 2011 Fiscal Year 11,925,189
Balance S12,696,975
TABLE 10 - AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS
Amount
Amount
Date
Amount
Heretofore
Being
Unissued
Purpose
Authorized
Authorized
Issued
Issued
Balance
Transportation
2/5/2005
$ 27,700,000
$ 23,710,100
$ 1,190,000
$ 2,799,900
Parks
2/5/2005
10,700,000
8,470,900
1,035,000
1,194,100
Buildings
2/5/2005
4,000,000
4,000,000
-
-
$ 42,400,000
$ 36,181,000
$ 2,225,000
$ 3,994,000
ANTICIPATED ISSUANCE OF ADDITIONAL GENERAL OBLIGATION DEBT As shown in Table 10 above, after the issuance of the
Bonds, the City will have approximately $3,994,000 of voted but unissued debt remaining to be issued. Current plans call for the
Citv to issue approximately $46 million of general obligation debt, including the voted but unissued debt, in the second quarter
of 2012. This amount also includes approximately $38 million in self-supporting certificates of obligation related to the City's
Solid Waste operation and Utility System.
26
TABLE I I - OTHER OBLIGATIONS
The Citv has entered into capital lease agreements. The following is a schedule of future minimum lease payments under these
capital leases and the present value of the net minimum lease payments as of September 30, 2010:
Year
Annual
Ending
Lease
30-Sep
Payment
2011
$1,153,252
2012
1,104,907
2013
758,964
2014
758,963
2015
58,497
2016-2018
120,958
Total Minimum Lease Pavment $ 3,955,541
Less: Amount Representing Interest 359,412
Present Value of Minimum Future Lease Payments $ 3,596,129
PENSION FUND The City provides pension benetits for all of its full-time employees (except firefighters) through the Texas
Municipal Retirement System ("MRS"), a State-wide administered pension plan. Employees may retire at ages 60 and above
with five or more years of service or with twenty years of service regardless of age, and a member is vested after five vears. The
Citv makes annual contributions to the plan equal to the amounts accrued for pension expense.
In December 2007, the TMRS Board of Trustees approved changes in the actuarial assumptions and funding methodology for all
TMRS plans. These changes resulted in higher required contributions and lower funded ratios, and the changes also caused the
Citv's actuarial accrued liability to increase significantly from 2006 to 2007. As of December 31, 2009, the City's unfunded
actuarial accrued liability Nvas $83,686,078 and the funded ratio Nvas 62.1%. Begimning in 2009, the City of Denton elected to
"phase in" higher contributions to TMRS over a period of eight years in order to recognize the change to a projected unit credit
cost method in the 2007 actuarial valuation. By doing so, the City is contributing less than the actuarially determined Annual
Required Contribution (ARC), and therefore has accrued a total net pension obligation of $4,125,332 as of 9-30-10. In
subsequent years, this net pension obligation will continue to increase until the full actuarially determined ARC is paid by the
City. The phase in period will last eight years from fiscal year 2009 to fiscal year 2016.
For more detailed information concerning the TMRS plan as well as the City's historical unfunded actuarial accrued liability for
calendar vears 2007-2009, see Appendix B, "Excerpts from the City's Comprehensive Annual Financial Report" - Note V.A.,
page 52 and Exhibit X11, page 63.
DRENIEN' S RELIEF AND RETIREMENT FUND The City provides pension benefits for firefighters through the Denton Fnemein's
Relief and Retirement Fund (the "Firemen's Fund"). Firefighters may retire at ages 50 Nvith twenty or more years of service, and
a member is vested after ten vears of credited service. As of December 31, 2009, there were (i) 63 retirees and beneficiaries
receiving benefits and terminated employees entitled to benetits but not yet receiving them, (ii) 92 current employees who were
vested and (iii) 71 employees who were not vested. The City made contributions equal to 14% of member salaries for FY 2008-
09 and 15.41% for FY 2009-10. For 2011, the Citv has increased its contribution rate to 17.17%. As of December 31, 2009 (the
most recent biemnial actuarial valuation), the plan's unfunded actuarial accrued liabilitv Nvas $19,617,547 and the funded ratio
was 70.2%. For more detailed information concerning the Firemen's Fund as well as the Citv's historical unfunded actuarial
accrued liability for calendar years 2005-2009, see Appendix B, "Excerpts from the City's Comprehensive Amlual Financial
Report" - Note V.A., page 52 and Exhibit XII, page 63.
OTHER POST EMPLOYMENT BENEFITS GASB released the Statement of General Accounting Standards No. 45 (°GASB 45"),
Accounting by Employers for Other Post-Employment Benefits ("OPEB"), in Tune 2004. The City implemented GASB 45 for
the fiscal year begimiing October 1, 2007. GASB 45 sets forth standards for the measurement, recognition, and display of post-
employment benefits, other than pensions, such as health and life insurance for current and future retirees. Those subject to this
pronouncement are required to: (i) measure the cost of benefits, and recognize other post-employment benefits expense, on the
accrual basis of accounting over the working lifetime of the employees; (ii) provide information about the actuarial liabilities for
promised benetits associated with past services and whether, or to what extent, the future costs of those benefits have been
funded: and provide information useful in assessing potential demands on the employer's future cash flows. The employer's
contributions to OPEB costs that are less than an actuarially determined annual required contribution Nvill result in a net OPEB
cost, which under GASB 45 will be required to be recorded as a liabilitv in the employer's financial statements.
27
Actuarial valuations have been completed by an outside consulting firm regarding the City's OPEB liability. The reports provide
the Citv Nvith the City's OPEB requirements assuming the City's plan offerings, designs, and cost share approach remain
constant.
October 1, 2009
Julv 1, 2007
Annual Required Contribution
$ 1314.901
$
879280
Contribution Made
$ 370,759
$
69,696
Net OPEB Obligation Obligation - End of Year
$ 2520343
$
L606533
Unfunded Actuarial Accrued Liabilitv
S 10,944,544
$
7,926202
The Citv's GASB 45 liability- Nvas discussed at length Nvith the Audit/Finance Committee and the City Council. At the
conclusion of these discussions, the Citv Council concurred Nvith the staff recommendation to fund the Citv_ 's OPEB costs on a
pay-as-you-go basis. The pay-as-you-go approach has been recommended since 1) this provides the loNvest cost approach, 2) the
ARC is relatively small in comparison to the City's overall budget, and 3) the pay-as-you-go cost is not forecasted to exceed the
ARC in the foreseeable future. See Appendix B, "Excerpts from the City's Comprehensive Annual Financial Report" - Note
V.B., pages 58 and 59.
THEREIL L\DERoFTHIS'P.4(3ELEFTBL4NwI\TE\"TIO;\:4LLY
28
FINANCIAL INFORMATION
TABLE 12 - CLLANGES IN NET ASSETS
Fiscal Year Ended September
30,
ReNenues:
2010
2009
2008
2007
2006
Program ReN enue:
Charges forSernices
$ 14,781,002
$ 14,924,773
$ 13,917,248
$ 13,876,695
$ 13,965,099
Operating Grants and Contributions
3,407,085
2,281,136
3,306,325
2,991,224
3,712,817
Capital Grants and Contributions
15,206,424
3,641,296
7,308,398
5,399,220
5,536,786
General ReN enue:
Property Tax
43,144,645
43,187,433
41,499,791
34,756,356
30,000,847
Sales Tax
20,484,954
20,466,772
21,440,8 39
20,65 3,9 32
20,34 3,413
Other Taxes Fees
19,131,162
17,270,857
17,909,903
16,784,901
17,914,704
Miscellaneous
6,375,678
5,741,097
7,501,310
6,831,875
5,859,560
Total ReN enue
$122,530,950
$ 107,513,364
$112,883,814
$ 101,294,203
$ 97,333,226
Exnendihues:
General Government
$ 29,569,5 35
$ 27,482,1 31
$ 26,408,949
$ 22,145,804
$ 22,165,661
Public Safety
47,998,906
45,368,783
43,426,526
42,161,674
36,626,635
Public works
15,767,926
15,816,065
15,448,473
14,008,867
12,485,281
Parks and Recreation
12,854,336
12,755,037
12,927,020
11,564,247
10,497,241
Interest on Long-Tenn Debt
5,121,329
5,733,268
5,372,868
4,658,128
4,333,428
Total Expenses
$111,312,032
$107,155,284
$103,583,836
$ 94,538,720
$ 86,108,246
Increase in Net Assets before Transfers
$ 11,218,918
$ 358,080
$ 9,299,978
$ 6,755,483
$ 11,224,980
Transfers
482,801
846,119
323,038
(13,475,571)
895,106
Increase (Decrease) in Net Assets
$ 11,701,719
$ 1,204,199
$ 9,623,016
$ (6,720,088)
$ 12,120,086
Net Assets at Beginning of Year
142,309,765
141,105,566
131,482,550
138,202,638
126,082,552
Net Assets at End of Year tip
$154,011,484
$ 142,309,765
$141,105,566
$ 131,482,550
$138,202,638
(1) Unrestricted net assets, the part of the net assets that may be used to meet the City's ongoing obligations, Nvere $46,480,569
as of September 30, 2010 (see Appendix 13, "Excerpts from the Comprehensive Financial Report").
29
TABLE 12A - GENERAL RIND REVENUES AND EXPENDITURE HISTORY
Fiscal Year Ended September 30,
Revenues:
2010
2009
2008
2007
2006
Taxes
$50,049,759
$49,769,861
$49,772,244
$45,842,915
$41,906,626
Licenses and Permits
1,198,552
1,265,733
1,080,80
1,097,323
1,383,169
Franchise Fee
17,457,994
1,669,981
16,197,042
1,197,943
16,499,994
Fines and Forfeitures
4,378,064
4,691,420
4,969,102
4,468,692
4,639,922
Fees for Service
5,989,349
5,888,390
5,657,673
4,439,70
3,661,22
Interest Revenue
237,559
744,122
1,084,097
1,441,299
761,19
Intergovernmental
770,164
718,43
779,18
380,887
541,968
Miscellaneous
317,460
229,599
369,052
529,753
447,200
Total Revenues
$80,398,901
$ 78,977,559
$79,908,948
$ 73,398,382
$69,841,60
Evuenditures:
General Government
$22,037,729
$21,318,437
$18,92,270
$16,142,83
$ 16,304,027
Public Safetv
43,156,478
41,999,464
39,619,707
36,776,64
3,073,613
Public Forks
6,516,276
6,738,327
6,553,570
5,561,166
4,950,734
Parks and Recreation
9,837,073
10,016,114
10,230,800
7,312,078
6,817,078
CapitalOutlav
691,880
809,004
84,273
2,409,001
281,28
Debt Service:
Principal Retirement
185,154
223,106
202,003
41,301
-
Total Expenditures
$82,424,90
$81,104,42
$76,38,623
$68,243,03
$63,426,710
Excess (Deficiency) of Revenues Over Expenditures
$ (2,02 ,689)
$ (2,126,893)
$ 3,523,325
$ 5,155,347
$ 6,414,850
Other Financing Sources (Uses):
Capital Leases
$ -
$ 44,86
$ 69,897
$ 1,108,131
$ -
Transfers In
1,018,218
112,022
-
5,278,998
579,878
Sale of Capital assets
160,49
-
193,37
-
-
Transfers (Out)
(421,200)
(612,32)
(968,914)
(4,038,781)
(1,867,799)
Total Other Financing Sources (Uses)
$ 757,513
$ (455,645)
$ (70,642)
$ 2,348,348
$ (1,287,921)
Net Changes in Fund Balances
$ (1,268,176)
$ (2,582,538)
$ 2,817,683
$ 7,503,695
$ 5,126,929
Fund Balances at Beginning of Year
22,794,955
25,377,493
22,559,810
15,056,115
9,929,186
Fund Balances at End of Year
$21,26,779
$22,794,955
$2,377,493
$22,559,810
$ 15,056,115
30
TABLE 13 - MUNICIPAL SALES TAx HISTORY
The City has adopted the Municipal Sales and TJse Tax Act, V.T.C.A., Tax Code, Chapter 321, which grants the City_ the power to
impose and levy a 1% Local Sales and Use Tax Nvithni the City: the proceeds are credited to the General Fund and are not pledged to
the payment of the Bonds. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts,
State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. In January 1994, the
voters of the City approved the imposition of an additional one-half of one percent of 1%) for property tax reduction. In
September 2003, the voters of the City approved the imposition of an additional one-half of one percent of 1%) for the Denton
County Transportation Authority. The implementation of this tax beganJanuary 2004, and is allocated directly to the Denton County
Transportation Authority.
Fiscal
Year
°,0 of
Ended
Total
Ad Valorem
9 30
Collected (1
Tar Levy
2007
$21,161424
61.7500
2008
21,984,936
53.86°-0
2009
20,950,786
48.63°-0
2010
21,015,173
48.99°-0
2011
7,590,284
17.66°-0
Equivalent of
Ad Valorem
Per
Tax Rate
Capita
$ 0.3889
$ 198
0.3610
202
0.3330
188
0.3321
185
0.1218
66
(1) Source: City of Denton Annual Program of Services. Collections for 2007-2010 have been restated to exclude payments for
economic development incentives which were previously netted from sales tax collections.
(2) Collections tlu-ough January 31, 2011.
The sales tax breakdown for the Citv is as follows:
Property Tax Relief
0.50e
Transportation Authority
Denton Count
0.50¢
y
City Sales &TJse Tax
LOOe
State Sales & TJse Tax
6.25e
Total
8.25e
DNANCIAL POLICIES
Basis of Accounting . . . The accounting policies of the City conform to generally accepted accounting principles of the
Governmental Accounting Standards Board and program standards adopted by the Government Finance Officers Association of the
United States and Canada. The GFOA has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Denton for each of the fiscal years ended September 30, 1983 through September 30, 2009. The City's current report Nvill be
submitted to GFOA to determine its eligibility for another Certificate.
The Citv has also received the GFOA's award for Distinguished Budget Presentation each year since 1988.
The measurement focuses for the Enterprise Funds, Internal Service Funds and Nonexpendable Trust Funds are income
determination and cost of service, respectively. Accordingly, the accrual basis, whereby revenues and expenses are identified in the
accounting period in which they are earned and incurred and net income, is utilized for these funds. The modified accrual basis,
Nhereby revenues are recognized when thev become both measurable and available for use during the year and expenditures are
recognized when the related fund liability is incurred, is used for all other funds.
Budgetary Procedures As prescribed bv_ City Charter the City Manager, and Nvithm the time period required by law, submits to
the City Council a proposed budget for the fiscal year beginning the following October 1. The budget includes proposed
expenditures and revenues required to fund the expenditures. Following Council considerations, amendments and refinements, a
public hearing is ordered and conducted for the purpose of obtaining taxpayer comments. The budget is finally approved and
adopted by passage of an ordinance by the City Council prior to the beginning of the fiscal year. The budget is adopted on a basis
consistent with generally accepted accounting principles. The City_ strives to maintain an unreserved general fund balance of 15-20%
of budgeted expenditures.
31
INVESTMENTS
The City invests its investable funds in investments authorized. by Texas law in accordance Nvith investment policies approved. by the
City Council. Both Texas law and the City's investment policies are subject to change.
LEGAL INA-ESTMENTS Under Texas law, the City is authorized to invest in (1) obligations, including letter of credit, of the
United States or its agencies and instrumentalities, (2) direct obligations of the State of Texas or its agencies and
instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United
States, the underlying security for which is guaranteed bv_ an agency or instrumentality_ of the United States, (4) other
obligations, the principal and interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of
Texas or the United States or their respective agencies and instrumentalities; (5) obligations of states, agencies, counties, cities,
and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not
less than A or its equivalent; (6) bonds issued, assumed or guaranteed by the State of Israel; (7) certificates of deposit and share
certificates meeting the requirements of the Texas Public Funds Investment Act (Chapter 2256, Texas Government Code, as
amended (the "PFIA" that are issued by or through an institution that either has its main office or a branch office in Texas, and
are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or
are secured as to principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by
law for City deposits, or are my ested by the City through a depository- institution that has its main office or a branch office in the
State of Texas and otherwise meet the requirements of the PFIA, (8) fully collateralized repurchase agreements that have a
defined termination date, are fully secured by obligations described in clause (1), and are placed through a primary government
securities dealer or a financial institution doing business in the State of Texas, (9) certain bankers' acceptances with the
remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or
the equivalent by at least one nationally recognized credit rating agency, (10) conunercial paper with a stated maturity of 270
davs or less that is rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or ( b )
one nationally recognized credit rating agency if the paper is fullv secured by an irrevocable letter of credit issued by a U.S. or
state bank, (11) no-load money market mutual funds registered Ny ith and regulated by the Securities and Exchange Commission
that have a dollar weighted average stated maturity of 90 days or less and include in their investment objectives the maintenance
of a stable net asset value of $1 for each share, and (12) no-load mutual funds registered with the Securities and Exchange
Conunission that have an average weighted maturity of less than two years, invest exclusively in obligations described in the this
paragraph, and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not
less than AAA or its equivalent. If specifically authorized in the authorizing document, bond proceeds may be invested in
guaranteed investment contracts that have a defined termination date and are secured by obligations of the United States or its
agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other
than the prohibited obligations described in the next succeeding paragraph.
The City may invest in such obligations directly or through govermment investment pools that invest solely in such obligations
provided that the pools are rated no lower than AAA or AAA-m or an equivalent by at least one nationally recognized rating service.
The Citv may also contract Nyith an investment management firm registered under the Investment Advisers Act of 1940 (15
U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds
or other funds under its control for a term up to two years, but the City retains ultimate responsibility as fiduciary of its assets. In
order to renew or extend such a contract, the City must do so by order, ordinance, or resolution. The City is specifically
prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of
the underlving mortgage-backed security collateral and pays no principal, (2) obligations whose payment represents the principal
stream of cash flow from the underlying mortgage-backed security and bears no interest (3) collateralized mortgage obligations that
have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is
determined by- an index that adjusts opposite to the changes in a market index.
Political subdivisions such as the Citv are authorized to implement securities lending programs if (i) the securities loaned under
the program are 100% collateralized, a loan made under the program allows for termination at anv_ time and a loan made under
the program is either secured by (a) obligations that are described in clauses (1) through (6) of the first paragraph under this
subcaption, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized
investment rating firm not less than "A" or its equivalent, or (c) cash invested in obligations that are described in clauses (1)
through (6) and (10) through (12) of the first paragraph under this subcaption, or an authorized investment pool; (ii) securities
held as collateral under a loan are pledged to the governmental body, held in the name of the governmental body and deposited at
the time the investment is made with the City or a third party designated by the Citv_ ; (iii) a loan made under the program is
placed through either a primar- govermnent securities dealer or a financial institution doing business in the State of Texas; and
(iv) the agreement to lend securities has a term of one vear or less.
INVESTMENT POLICIES Under Texas law, the City is required to invest its funds under written investment policies that primarily
emphasize safety of principal and liquidity: that address investment diversification, yield, maturity, and the quality and capability of
investment management, and that includes a list of authorized investments for City funds, maxanum allowable stated maturity of any
individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups. All City funds must be
invested consistent Nvith a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each
Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of
principal, (3) liquidity, (4) marketability- of each investment, (5) diversification of the portfolio, and (6) yield.
32
Under Texas law, Citv investments must be made "with judgment and care, under prevailing circumstances, that a person of
prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for
investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment
officers of the Citv shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers
jointly prepared and signed the report, (3) the begumulg market value, any additions and changes to market value and the ending
value of each pooled fund group, (4) the book value and market value of each separately listed asset at the begirming and end of the
reporhing period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each
individual investment Nvas acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment
strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council.
AnDiTION_aL PROVISIONS Under Texas law the Citv is additionally required to: (1) annually review its adopted policies and
strategies; (2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment
strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order,
ordinance or resolution, (3) require any investment officers Nvith personal business relationships or relatives Nvith firms reeling to sell
securities to the entity to disclose the relationship and file a statement with the Texas Ethics Conuilission and the City Council; (4)
require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy , (b)
acknowledge that reasonable controls and procedures have been implemented to preclude investment transactions conducted between
the Citv and the business organization that are not authorized by the City's investment policy (except to the extent that this
authorization is dependent on an analysis of the makeup of the City's entire portfolio or requires an interpretation of subjective
investment standards), and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the
management controls on investments and adherence to the City's investment policy; (6) provide specific investment training for the
Treasurer, Chief Financial Officer and investment officers; (7) restrict reverse repurchase agreements to not more than 90 days and
restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (8)
restrict the investment in no-load mutual funds in the aggregate to no more than 15% of the entity's monthly average fund balance,
excluding bond proceeds and reserves and other funds held for debt service; (9) require local government investment pools to conform
to the new disclosure, rating, net asset value, vield calculation, and advisory board requirements; and (10) at least annually review,
revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City.
TABLE 14- CURRENT INVESTMENTS (r)
As of January 31, 2011, the City's available funds were invested as follows:
Market
Value
Book
Market
Description
Percent
Value
Value
U.S. Federal Agency Coupons
51.57%
$ 175,767,497
$ 176,037,568
U.S. Federal Agency Discounts
293%
9,984,749
9,993,820
U.S. Federal Agency Callables
1.47%
4,996,753
5,001,780
U.S. Treasury Securities
7.05%
24,040,839
24,066,912
Pools
8.10%
27,658,000
27,658,000
Certificates of Deposit
28.88%
98,599,000
98,599,000
100.00%
$341,046,838
$ 341,357,080
(1) There are no Cite funds invested in derivative securities (i.e., securities whose rate of return is determined by reference to
some other instrument, index or commodity).
(2) CDs are either fully insured by FDIC insurance or collateralized by federal agency securities at a minimum of 102% of
principal plus accrued interest or secured by Federal Home Loan Bank letters of credit.
33
TAX MATTERS
OPINIONS
The Bonds On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to
the City, Nvill render its opinion that, in accordance Nvith statutes, regulations, published rulings and court decisions ex-isting on
the date thereof ("Existing Law"), (1) interest on the Bonds for federal income tax purposes Nvill be excludable from the "gross
income" of the holders thereof and (2) the Bonds Nvill not be treated as "specified private activity bonds" the interest on which
would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986
(the "Code"). Except as stated above, Bond Counsel to the City Nvill express no opinion as to any other federal, state or local tax
consequences of the purchase, ownership or disposition of the Bonds.
The Certificates On the date of initial delivery of the Certificates, Bond Counsel to the Citv Nvill render its opinion that, in
accordance Nvith Existing Law, (1) interest on the Certificates for federal income tax purposes will be excludable from the "gross
income" of the holders thereof and (2) the Certificates will not be treated as "specified private activity bonds" the interest on
which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Code. Except as stated
above, Bond Counsel to the City will express no opinion as to any other federal, state or local tax consequences of the purchase,
ownership or disposition of the Certificates. See Appendix C - Forms of Bond Counsel's Opinions.
In rendering each of the foregoing opinions, Bond Counsel to the City dill rely upon (a) the Citv's federal tax certificate with
respect to each issue, (b) covenants of the Citv with respect to arbitrage, the application of the proceeds to be received from the
issuamce and sale of the Obligations and certain other matters, and (c), with respect to the Bonds, the certification of the paying
agent for the Refunded Obligations that the amount deposited with the Escrow Agent will be sufficient to pay the principal of
and interest on the Refunded Obligation when due. Failure of the City to comply with these representations or covenants could
cause the interest on the Obligations to become includable in gross income retroactively to the date of issuance of the
Obligations.
Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on the
aforementioned information, representations and covenants. Bond Counsel's opinion is not a guarantee of a result. The Existing
Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the
Department of the Treasury. There can be no assurance that such Existing Law or the interpretation thereof will not be changed
in a marmer which would adversely affect the tax treatment of the purchase, ownership or disposition of the Obligations.
A ruling Nvas not sought from the Internal Revenue Service by the City with respect to the Obligations or the projects being
financed or refinanced therewith. Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law
and the representations of the City that it deems relevant to render such opinion and is not a guarantee of a result. No assurances
can be given as to whether or not the Internal Revenue Service will continence an audit of the Obligations, or as to whether the
Internal Revenue Service would agree with the opinion of Bond Counsel. If an audit is commenced, under current procedures
the Internal Revenue Service is likely to treat the Citv as the taxpayer and the holders of the Obligations may have no right to
participate in such procedure. No additional interest will be paid upon any determination of taxability.
FEDERAL INCOME TAI ACCOUNTING TREATMENT OF ORIGINAL ISSriE DISCOUNT
The initial public offering price to be paid for one or more maturities of the Obligations may be less than the principal amount
thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in
excess of one vear (the "Original Issue Discount Bonds"). In such event, the difference between (i) the "stated redemption price
at maturity" of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount
Bond would constitute original issue discount. The "stated redemption price at maturity" means the sum of all payments to be
made on the Obligations less the arnount of all periodic interest payments. Periodic interest payments are payments which are
made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during
accrual periods which do not exceed one year.
Under existing law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to
exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue
Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a
discussion of certain collateral federal tax consequences, see discussion set forth below.
In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity,
however, the arnount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such
owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue
Discount Bond was held by such initial owner) is includable in gross income.
34
Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity
thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual
ami versarv dates of the date of the Bonds and ratably within each such six-month period) and the accrued amount is added to an
initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by
such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is
equal to (a) the sure of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield
to stated maturitv (determined on the basis of compounding at the close of each accrual period and properly adjusted for the
length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue
Discount Bond.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue
Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules
which differ from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors
with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon
redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and
foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount
Bonds.
COLLATERAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a surmnary of certain collateral federal income tax consequences resulting from the purchase,
ownership or disposition of the Obligations. This discussion is based on existing statutes, regulations, published rulings and
court decisions, all of which are subject to change or modification, retroactively.
The following discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as
financial institutions, property and. casualty insurance companies, life insurance companies, owners of interests in a FASIT,
individual recipients of Social Security or Railroad. Retirement benetits, individuals allowed. an earned. income credit, certain S
corporations with Subchapter C earnings and profits and taxpayers who mav_ be deemed to have incurred or continued
indebtedness to purchase tax-exempt obligations.
THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE
SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE
TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP ANT)
DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE
OBLGATIONS.
Interest on the Obligations Nvill be includable as an adjustment for "adjusted current earnings" to calculate the alternative
minimum tax imposed on corporations by section 55 of the Code.
Interest on the Obligations may be subject to the "branch profits tax" imposed by section 884 of the Code on the effectively-
connected earnings and profits of a foreign corporation doing business in the United States.
Under section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, mav_ be required to disclose interest
received or accrued during each taxable year on their returns of federal income taxation.
Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt
obligation, such as the Obligations, if such obligation Nvas acquired at a "market discount" and if the fixed maturity of such
obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds" to the
extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of
market discount is ignored. A "market discount bond" is one which is acquired by the holder at a purchase price which is less
than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the "revised issue price"
(i.e., the issue price plus accrued original issue discount). The "accrued market discount" is the amount which bears the same
ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days
between the acquisition date and the final maturity date.
STATE, LoC _AL AND FOREIGN TAXES
Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the
Obligations under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax
consequences unique to investors who are not United States persons.
35
CONTINUING DISCLOSURE OF INFORMATION
In each of the Ordinances the Citv has made the following agreement for the benefit of the holders and beneficial owners of the
respective series of Obligations. The City is required to observe each agreement while it remains obligated to advance funds to
pay such Obligations. Under each agreement, the City will be obligated to provide certain updated financial information and
operating data annually, and the timely notice of specified events to the Municipal Securities Rulemal ing Board ("MSR13").
This information Nvill be available free of charge from the MSRB via the Electronic Municipal Market Access ("EMMA")
svstem at «\vyv.enuna.msrb.or,.
ANNUAL REPORTS The City will provide certain updated financial information and operating data to the MSRB annually.
The information to be updated includes all quantitative financial information and operating data with respect to the City of the
general type included in this Official Statement under Tables numbered 1 through 5 and 7 through 14 and in Appendix B. The
City will update and provide this information within six months after the end of each fiscal year ending in or after 2011. The
City will provide the updated information to the MSRB.
The financial information and operating data to be provided may be set forth in full in one or more documents or may be
included by specific reference to any document available to the public on the MSRB's Internet Web site or filed Nvith the United
States Securities and Exchange Commission (the "SEC"), as permitted by SEC Rule 15c2-12 (the "Rule"). The updated
information will include audited financial statements, if the Citv_ conunissions an audit and it is completed by the required time.
If audited financial statements are not available by the required time, the City_ will provide unaudited financial statements bv_ the
required time and audited financial statements when and if such audited financial statements become available. Ann- such
financial statements will be prepared in accordance with the accounting principles described in Appendix B or such other
accounting principles as the City may be required to employ from time to time pursuant to State law or regulation.
The Citv's current fiscal vear end is September 30. Accordingly, it must provide updated information by March 31 in each year,
unless the City changes its fiscal year. If the City changes its fiscal year, it will notify the MSRB of the change.
EVENT NOTICES The City will provide notice to the MSRB of any of the following events Nvith respect to the Obligations, if
such event is material within the meaning of the federal securities laws: (1) non-payment related defaults; (2) modifications to
rights of holders of the Obligations; (3) bond calls; (4) release, substitution, or sale of property securing repayment of the
Obligations; (5) the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or
substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms; and (6) appointment of a successor or additional trustee or the change of name of a trustee.
The Citv will also provide notice to the MSRB of any of the following events with respect to the Obligations without regard to
whether such event is considered material within the meaning of the federal securities laws: (1) principal and interest payment
delinquencies; (2) unscheduled draws on debt service reserves reflecting financial difficulties; (3) unscheduled draws on credit
enhancements reflecting financial difficulties; (4) substitution of credit or liquidity_ providers, or their failure to perform; (5)
adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of
Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the
Obligations, or other events affecting the tax-exempt status of the Obligations; (6) tender offers; (7) defeasances; (8) rating
changes; and (9) bankruptcy, insolvency, receivership or similar event of an obligated person.
The City Nvill provide notice of the aforementioned events to the MSRB in a timely manner (but not in excess of ten business
days after the occurrence of the event). The City will also provide timely notice of anv failure bv_ the City_ to provide amiual
financial information in accordance with its agreement described above under "Annual Reports."
LrnrITATIONS AND AnrENDnrENTS The City has agreed to update information and to provide notices of specified events only
as described above. The City has not agreed to provide other information that mav_ be relevant or material to a complete
presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided,
except as described above. The City makes no representation or warranty concerning such information or concerning its
usefulness to a decision to invest in or sell Obligations at any future date. The City disclaims any contractual or tort liability for
d<unages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made
pursuant to its agreement, although holders of Obligations mav_ seek a writ of mand<unus to compel the City_ to comply with its
agreement.
The Citv mav amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i)
the agreement, as amended, would have permitted an underwriter to purchase or sell Obligations in the offering described herein
in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment,
as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the
outstanding Obligations consent to the amendment or (b) any person unaffiliated with the City (such as nationallv recognized
bond counsel) determines that the amendment Nvill not materially impair the interests of the holders and beneficial owners of the
36
Obligations. The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or
repeals the applicable provisions of the SEC Rule 15c2-12 or a court of final jurisdiction enters judgment that such provisions of
the SEC Rule 15c2-12 are invalid, but only if and to the extent that the provisions of this sentence would not prevent an
underwriter from lawfully purchasing or selling Obligations in the primary offering of the Obligations. If the City so amends the
agreement, it has agreed to include Nvith the next financial information and operating data provided in accordance with its
agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of
the impact of any change in the type of financial information and operating data so provided.
CONIPLLANCE WITH PRIOR UNDERTAKINGS During the last five years, the Citv has complied in all material respects Nvith all
continuing disclosure agreements made by it in accordance with SEC Rule 15c2-12.
OTHER INFORMATION
RATINGS
The Obligations and the presently outstanding tax supported debt of the City are rated "Aa2" by Moody's and "AA" by S&P. An
explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only
the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is
no assurance that such ratings will continue for any given period of time or that they will not be revised downward or Nvithdrawn
entirely bv_ either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant.
Ann such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of
the Obligations.
LITIGATION
It is the opinion of the City Attorney and City Staff that there is no pending, or to their knowledge threatened, litigation or other
proceeding against the City that could have a material adverse financial impact upon the City or its operations.
REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE
The sale of the Obligations has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the
exemption provided thereunder by Section 3(a)(2); and the Obligations have not been qualified under the Securities Act of Texas
in reliance upon various exemptions contained therein; nor have the Bonds or Certificates been qualified under the securities acts
of any jurisdiction. The Citv assumes no responsibility for qualification of the Bonds or Certificates under the securities laws of
any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer
of responsibility for qualification for sale or other disposition of the Obligations shall not be construed as an interpretation of any
kind with regard to the availability of any exemption from securities registration provisions.
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PIiBLIC FITNDS IN TEXAS
The Obligations. Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code) provides
that the Obligations are negotiable instruments, investment securities governed by Chapter 8, Texas Business and Cormlerce
Code, and are legal and authorized investments for insurance companies, fiduciaries, and trustees, and for the sirLi1g funds of
municipalities or other political subdivisions or public agencies of the State of Texas. In addition, various provisions of the
Texas Finance Code provide that, subject to a prudence standard, the Obligations are legal investments for state bank, savings
bank, trust companies with at least $1 million of capital, and savings and loan associations.
The Certificates. Section 271.051, Texas Local Government Code, provides that the Certificates are legal and authorized
investments for bank, savings bank, trust companies, savings and loan associations, insurance companies, fiduciaries, trustees
and guardians, and for the sinking funds of municipalities, school districts, and other political subdivisions or public agencies of
the State of Texas. The Certificates are eligible to secure deposits of any public funds of the State, municipalities, school
districts, and other political subdivisions of the State, and are legal security for those deposits to the extent of their market value.
General Considerations. For political subdivisions in Texas that have adopted investment policies and guidelines in accordance
with the Public Funds Investment Act (Texas Govermnent Code, Chapter 2256), the Obligations may have to be assigned a
rating of at least "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible
investments for sell mg funds and other public funds. The Citv has made no investigation of other laws, rules, regulations, or
investment criteria which might apply to such institutions or entities or which might limit the suitability of the Obligations for
any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Obligations for
such purposes. The City has made no review of laws in other states to determine whether the Obligations are legal investments
for various institutions in those states.
37
LEGAL OPINIONS AND No-LITIGATION CERTIFICATE
The City Nvill furnish a complete transcript of proceedings had incident to the authorization and issuance of each series of the
Obligations, including the unqualified approving legal opinions of the Attorney General of Texas approving the Initial Bond and
Initial Certificate of each series and to the effect that the Obligations are valid and legally binding obligations of the City, and
based upon examination of such transcripts of proceedings, the approving legal opinions of Bond Counsel, to like effect and to
the effect that the interest on the Obligations Nvill be excludable from gross income for federal income tax purposes under Section
103(a) of the Code, subject to the matters described under "Tax Matters" herein. The customary closing papers, including a
certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of
the Bonds and Certificates or which would affect the provision made for their payment or security, or in any manner questioning
the validitv of said Bonds and Certificates will also be furnished. In its capacity as Bond Counsel, McCall, Parkhurst & Horton
L.L.P. has reviewed the information describing the Bonds and Certificates in the Official Statement to verify that such
description conforms to the provisions of the Bond Ordinance and Certificate Ordinance. In connection Nvith the issuance of the
Bonds and Certificates, McCall, Parkhurst & Horton L.L.P. represents only the City. The legal fee to be paid Bond Counsel for
services rendered in connection Nvith the issuance of the Bonds and Certificates is contingent on the sale and delivery of the
Bonds and Certificates. The legal opinion Nvill accompany the Bonds and Certificates deposited Nvith DTC or Nvill be printed on
the Bonds and Certificates in the event of the discontinuance of the Book-Entry-Only Svstem.
The various legal opinions to be delivered concurrently Nvith the delivery of the Obligations express the professional judgment of
the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion the attorney
does not become an insurer or guarantor of the expression of professional judgment, of the transaction opined upon, or of the
future performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of anv_ legal
dispute that may arise from the transaction.
AtTITIENTICITY OF DNANCIAL DATA AND OTHER INFORAUTION
The financial data and other information contained herein have been obtained from Citv records, audited financial statements,
and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained
herein Nvill be realized. All of the summaries of the statutes, documents, and resolutions contained in this Official Statement are
made subject to all of the provisions of such statutes, documents, and resolutions. These summaries do not purport to be
complete statements of such provisions and reference is made to such documents for further information. Reference is made to
original documents in all respects.
DNANCIAL ADVISOR
First Southwest Company is employed as Financial Advisor to the City in comiection with the issuance of the Obligations. The
Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and
delivery of the Obligations. First Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of Bond
Counsel and has not verified and does not assume any responsibility for the information, covenants, and representations
contained in any of the legal documents with respect to the federal income tax status of the Obligations, or the possible impact of
any present, pending, or future actions taken by any legislative or judicial bodies.
The Financial Advisor to the City has provided the following sentence for inclusion in this Official Statement. The Financial
Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the City
and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but
the Financial Advisor does not guarantee the accuracy or completeness of such information.
INITIAL PURCIUSER OF THE BONDS
After requesting competitive bids for the Bonds, the City accepted the bid of (the "Initial
Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on the cover page of the Official Statement at a price
of par plus a cash premium of $74,83050. The Initial Purchaser of the Bonds can give no assurance that any trading market will
be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the
price at which the Bonds are subsequently sold and the initial vield at which the Bonds will be priced and reoffered will be
established by and will be the sole responsibility of the Initial Purchaser of the Bonds.
INITIAL PURCYUSER OF THE CERTIFICATES
After requesting competitive bids for the Certificates, the City accepted the bid of (the
"Initial Purchaser of the Certificates") to purchase the Certificates at the interest rates shown on page 3 of the Official Statement
at a price of par plus a cash premium (if any) of $ . The Initial Purchaser of the Certificates can give no assurance
that any trading market will be developed for the Certificates after their sale by the Citv_ to the Initial Purchaser of the
Certificates. The Citv has no control over the price at which the Certificates are subsequently sold and the initial vield at which
38
the Certificates Nvill be priced and reoffered Nvill be established bv_ and dill be the sole responsibility of the Initial Purchaser of
the Certificates.
The Initial Purchaser of the Bonds and the Initial Purchaser of the Certificates are herein collectively referred to as the "Purchasers".
CERTIFICATION OF THE OFFICIAL STATEMENT
At the time of payment for and delivery of the Obligations, the City Nvill furnish a certificate, executed by a proper City officer,
acting in such officer's official capacity, to the effect that to the best of such officer's knowledge and belief (a) the descriptions
and statements of or pertaining to the Citv contained in the Official Statement, and any addenda, supplement, or amendment
thereto, on the date of the Official Statement, on the date of sale of the Obligations, and the acceptance of the best bid therefor,
and on the date of the deliven_ , Nvere and are true and correct in all material respects; (b) insofar as the Citv and its affairs,
including its financial affairs, are concerned, the Official Statement did not and does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which thev were made, not misleading: (c) insofar as the descriptions and statements, including
financial data, of or pertaining to entities, other than the City, and their activities contained in the Official Statement are
concerned, such statements and data have been obtained from sources which the Citv believes to be reliable and the Citv has no
reason to believe that thev are untrue in any material respect; and (d) there has been no material adverse change in the financial
condition of the Citv since the date of the last audited financial statements of the Citv.
The respective Ordinances authorizing the issuance of the Obligations will approve the form and content of this Official
Statement, and any addenda, supplement, or amendment thereto, and authorize its further use in the reoffering of the Obligations
by the Purchasers.
FORAY ARD-LOOI{ING ST ATENIENTS DISCLAINIER
The statements contained in this Official Statement, and in any other information provided by the City, that are not purely
historical, are forward-looking statements, including statements regarding the City's expectations, hopes, intentions, or strategies
regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements
included in this Official Statement are based on information available to the Citv on the date hereof, and the Citv assumes no
obligation to update any such forward-looking statements. The City's actual results could differ materially from those discussed
in such forward-looking statements.
The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently
subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying
assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and
regulatory_ circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers,
business partners and competitors, and legislative, judicial, and other govermnental authorities and officials. Assumptions
related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market
conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Citv. Ain- of such assumptions could be inaccurate and, therefore, there can be no assurance that the
forward-looking statements included in this Official Statement will prove to be accurate.
MISCELLANEOUS
The Ordinances authorizing the issuance of the Obligations will approve the form and content of this Official Statement, and any
addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Obligations by the Purchasers.
MARK BURROUGHS
Mavor
Citv of Denton, Texas
ATTEST:
JENNIFER K. WALTERS
Citv_ Secretary
Citv of Denton, Texas
39
SCHEDULE OF REFUNDED OBLIGATIONS'
Utility System Revenue Refunding and Improvement Bonds, Series 2001
Principal
Principal
Original Maturity
Interest
Amount
Amount
Dated Date Date
Rate
Outstanding
Refunded
4/15/2001 12/1/2011
5.000%
$ 4,100,000
$ 4,100,000
12/1/2012
5.000%
470,000
470,000
12/1/2013
5.000%
500,000
500,000
12/1/2014
5.000%
520,000
520,000
12/1/2015
5.000%
550,000
550,000
12/1/2016
5.000%
575,000
575,000
12/1/2017
5.125%
570,000
570,000
12/1/2018
5.125%
600,000
600,000
12/1/2019
5.125%
630,000
630,000
12/1/2020
5.400%
665,000
665,000
$ 9,180,000 $ 9,180,000
The 2011 - 2020 maturities will be redeemed prior to original maturity on Tune 10, 2011, at par.
Schedule I
* Prelnllularv, subject to change.
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
LOCATION The City of Denton is located in the northern portion of the Dallas/Fort Worth Consolidated Statistical Area
(CSMA). The City is a part of the Dallas/Fort Worth Metroplex, and is situated at the apex of a triangle based by Dallas (38
miles to the southeast) and Fort Worth (36 miles to the southwest). The Citv_ has excellent access to and from all parts of the
area.
ECONON11C FITTURE The fiscal year 2009-2010 brought exciting news in economic development. Listed below are just a few
of the highlights.
L4JOREIIPLOYER &L\DF S'TRIAL -FIFS
• Aldi Foods completed construction of their 500,000 square feet distribution center. The company also improved
Westcourt Road as part of their project and a condition of their tax abatement. The Denton distribution center employs
approximately 100 and services more than 25 Aldi grocery stores in the North Texas area. The $50 million project
became fully operational February 2010.
• Target Corporation selected Denton for their new, automated 400,000 square foot distribution center. The Denton
facility Nvill serve as a prototype for future Target frozen and refrigerated food distribution centers. The $100 million
project will begin construction in Spring 2011 and will open in 2012 with 115 employees.
• Schlumberger, an oilfield service company, selected Denton as its site for a regional equipment maintenance facility.
The $18 million purchase and renovation project will be completed and in operation in Spring of 2011.
DELTLOP11EVT ATDEVTOA llz_VVICIPALAiRPORT
The arrival of the Denton Municipal Airport's new air traffic control tower in May of 2004 precipitated a reclassification of air
space from Class G to Class D during daily operation hours of 8 a.m. and 8 p.m. and increased our corporate jet traffic.
Denton Municipal Airport recently opened a $1.2 million terminal and completed realignment of a 7,000 foot
taxiway providing a secondary emergency landing surface. The airport control tower operates with radar display
capability inaugurated in October 2010 along with extended hours of operation from 6:00 AM until 10:00 PM seven
(7) days each week. The airport services corporate jet traffic by providing uncongested, Class I) airspace and is a
major domestic and international flight training location. Private business groN th at Denton Airport produced over $5
million in new investment in hangars and office space in 2009. Private industry employment is over 400 workers on-
site at the airport. A $1.2 million taxiway extension project completed early 1112011 has opened over 22 net acres for
new aviation development with direct taxiwav access. An $8 million infrastructure improvement project, 95% funded
through a grant from the Texas Department of Transportation Aviation Division (TxDOT Aviation), Nvill be completed
in the second quarter of 2011 to add 1,000 feet of runway for a total 7,000 foot runway at Denton Airport. In addition
to operating as one of the most active fixed-wing, general aviation airports in the United States, the airport is host to
two major helicopter flight training businesses and services military helicopters through one of two airport fixed base
operators. A Foreign Trade Zone application has been completed to include the Airport, surrounding businesses and
the Universitv of North Texas Discovery Paik research facility in order to stimulate additional airport business
development. The City Council recently adopted a 2010 Airport Business Plan to enhance development of the Airport
as a financially self-sufficient aviation enterprise with specific marketing and economic development incentives for
aviation industry.
RETAIL 1EII,S'
Construction of the mixed-use development known as Unicorn Lake continues. Construction of the Villas of Tuscan
Hills, a 106 lot residential conur unity that overlooks the lake, is currently underli av with luxury homes selling from
$400,000- $700,000. Dogwood Estates, an independent living community, the Brick House Gvm, Cinemark, Pour
House Grill, Washington Federal Savings and Loan, and Towne Center Bank represent some of the businesses that
have located in the development. Recently, Cafe China, Los Toreros, Beth Marie's Ice Cream, Curves and other retail
occupied a new 20,000 square feet retail center. In addition, the development is home to the Hilton Homewood Suites,
Foundation Management Systems, and several new medical offices.
• The Rayzor Ranch Market Place completed the construction of Highway 380. Wal-Mart and Sam's opened in Fall
2010 along with several restaurants and other commercial and retail operations with a total of 360,000 was completed
in 2009-10.
• In addition to over 63,000 square feet of miscellaneous retail, eleven new restaurants opened in Denton in 2009-10,
with a total square feet of 28,581. Thev_ included five traditional restaurants and three Asian, two Mexican and one
Indian cuisine.
A-1
HE. 4LTHC' 4RE L\ I)E\ TO;\
The medical sector continues to grow in Denton Nvith an additional 45,500 square feet of doctors' offices, which includes one
new pharmacy.
OTHER DETTLOPIIEVTS
• Hilton Garden and Sleep Inn, which are valued at $11.4 million, completed construction in 2009-10.
INDIISTRY AND BIISINESS
Major Employers
Approximate
Number of
Employer
Description
Employees
Universitv of North Texas
Hi,her Education
7,949
Denton Independent School District
Education
2,600
Denton State Supported Living Center
Mental Healthcare
1,700
Peterbilt Motors - Headquarters and Plant
Diesel Trucks
1,450
Denton Countv
Countv Government
1,441
Citv of Denton
Citv Government
1,319
Texas Womens Universitv
Higher Education
855
Denton Regional Medical Center
Hospital Healthcare
850
Texas Health Resources Presbyterian Denton
Hospital Healthcare
800
Sally Beauty Co. - International Headquarters
Beauty Supple Distributor
750
Thermadvne Industries -Victor Equipment%Tweco
Welding Equipment
600
Anderson Merchandisers
Distribution
450
Progressive Industries MHMR (Product Fulfillment)
State Government
302
FEMA (Regional HQ & Call Center) (i)
Federal Government
300
James Wood Auto Park
Car Truck Sales Serivce
280
NuconSteel
Steel Manufacturing
200
Senior Care Health and Rehabilitation Center
Retirement Rehabilitation
200
Morrison Milling
Flour Grain Mill
200
United Copper Industries
Copper Wire
196
Denton Rehabilitation and Nursing Center
Retirement Rehabilitation
180
Wells Fargo
Financial Instiution
175
Austin Baker Industries
Automotive Air Conditioning Parts
170
Jostens
Class Rin, Manufacturer
167
Tetra Pack
Aseptic Packaging
165
Safetv Kleen Systems
Chemical Recvclin,
164
Sl t view Livin, Center of Denton
ICE MR Residential Care Facility
150
DeCrane Aerospace Precision Pattern Interiors
Jet Interior Manufacturing
150
DATCU
Financial Instiution
150
The Vintage
Retirement~Nursin, Home
140
Mayhill Hospital
Hospital Healthcare
130
Lake Forest Good Samaritan Village
Retirement Center
130
Denton Good Samaritan Village
Retirement Center
126
General Telemarketing International
Call Center
120
Denton Publishign Company
Newspaper
106
Ben E. Keith Beers
Distribution
103
Mavdav ManufacturingTaihvind Technolo,ies
Aerospace Machined Parts
100
North Texas Hospital
Hospital Healthcare
100
Hulcher Services
Railroad Emer,encv Response
100
Aldi Foods
Distribution Center
100
( I ) Up to 1,100 during a disaster relief event.
Source: Citv of Denton and Denton Chamber of Commerce Economic Development Offices.
A-2
Denton is proud to be home to nearly 41 companies and institutions that employ 100 or more people, several of them
representing corporate, regional and international headquarters.
Well over 100 companies that produce, manufacture, and distribute goods all over the Nvorld call Denton home. More than 4,500
companies choose to do business in Denton. With small, medium, and large businesses operating in a variety of industries,
diversity is strength in Denton. Statistics show most of these workers are skilled and receive their training right here in Denton.
ECONOMIC AND POPUI<ATION GAINS Historical population totals from U.S. Census depict Denton's consistent population
increases commensurate Nvith Denton's steady economic groNvth.
1940 Census- 11,192
1950 Census - 21,345
1960 Census - 26,844
1970 Census - 39,874
1980 Census - 49,079
1990 Census - 66,270
2000 Census - 80,537
2010 Census - 113,383
estimated 2011 Population is 115,651
(1) Citv of Denton Population Estimate.
The City_ 's ascension toward a top economic position in Texas is attributable to the steady influence of govermnental activity that
include the armual expansion of the two state-supported universities, and due to several desirable enviromnental factors. Denton
is located in a rich agricultural, oil and gas production region, is part of the Dallas/Fort Worth Metroplex, has proximity to three
of Texas' largest reservoirs (Lake Texoma is only 40 miles from Denton); a mild climate; and the influential aspects of social,
cultural and educational advantages have prompted professional workers to select Denton as their residence.
ECONOMIC RANKING The following data were taken from the U.S. Census Bureau's 2010 American Community Survey.
% of Population Whose Age is:
0-19
28%
20-34
33%
35-54
23%
55-64
8%
65 and over
8%
Number of Households 36,926
Citv of Denton Median Household Income 47,297
Citv of Denton Household Income
$250,000+
1,001
$100,000-$199,999
5,335
$50,000-$99,999
10,995
$35,000-$49,000
5,463
$25,000-34,999
4,020
Less than or equal to $24,999
10,112
City of Denton Population by Occupation
Agriculture, forestry, fishing and huntmg, and nmmlg
0.9%
Construction
5.9%
Manufacturing
8.2%
Wholesale Trade
2.5%
Retail trade
13.2%
Transportation, warehousing, and utilities
4.7%
Information
2.2%
Finance and insurance, real estate rental and leasing
5.5%
Professional, scientific, and. management, and. administrative and waste management services
8.4%
Educational Services, and health care and social assistance
28.7%
Arts, entertainment, and recreation, and accommodation, and food services
11.1%
Other services, except public administration
4.6%
Public Administration
4.0%
Source: U. S. Census Bureau, 2005-2009 American Communitv Survev, 5 vear estimate.
A-3
ENIPLOYNIENT/LABOR FORCE . . . According to the Teas Workforce Connnrssron, the December 2010 available workforce in
Denton is 64,700.
EDUCATION Denton is home to the University of North Texas, founded in 1890, and Texas Woman's Universitv, founded in
1901. North Central Texas College, established in 1924, built an extension campus just outside Denton's extraterritorial
jurisdiction (ETJ) in adjacent city, Corinth. The two universities and community college have a combined enrollment of more
than 53,438 students and total employment of approximately 8,800 total employees.. With an enrollment of over 36,206, the
University of North Texas exceeds the combined enrollment of Southern Methodist University in Dallas, Texas Christian
Universitv in Fort Worth and Rice University in Houston. Texas Woman's University has an approximate enrollment of 10,932
in Denton Nvith an additional 2,426 students attending in Dallas and Houston.
The University of North Texas (UNT) campus comprises a land area of more than 875 acres that includes Discovery Park,
UNT's 285-acre research park. The University encompasses nine colleges and schools of study and offers Bachelor's degrees in
97 fields, Master's degrees in 101 areas and Doctoral programs in 49 disciplines. UNT maintains a low 20:1 student-faculty
ratio more prevalent among private rather than public institutions. Named one of America's 100 Best College Buys for 14
consecutive vears, UNT is additionally listed among America's 100 Most Wired Colleges.
Texas Woman's University (TWkJ), a major state-supported teaching and research institution, it's the nation's largest public
universitv attended primarily by women, who comprise 90% of attending students. Through its seven schools and colleges,
TWiJ offers 59 programs leading to a Bachelor's degree, 67 Master's degree fields, and Doctoral degrees in 24 specialization
areas. TWU experienced a 7 percent groNvth in enrollment from 2008 to 2009 and was ranked among the nation's top 20
universities Nvith the most diverse student populations by U.S. Neirrs and ff orld Report in 2009. TWU's graduate programs in
occupational therapy and physical therapy Nvere ranked among the nation's best (Z: S. Ueu s and TT'orld Reporrs 2009 Best
G°adzrate Schools). In 2008, TWU's Executive MBA program was ranked largest in the state by the Executive MBA Council,
and in 2009, the American Association of Colleges of Nursing ranked TWU's doctoral nursing program the largest in the
country. The Center for Measuring Univ ersity_ Performance ranked TWT among the top 115 public universities nationwide in
the number of doctoral degrees awarded.
North Central Texas College (NCTC), established in 1924, offers Associate Degrees in a number of fields and core college
requirements for students transferring to UNT and TWU to complete their Bachelor's degrees. The student population of
NCTC's campus in the adjacent city of Corinth is just over 6,300. The administration anticipates the student population to
increase to 12,000 in the next few vears. NCTC serves the citizens of Denton Nvith quality education by offering a broad scope
of educational choices and offers the local business conrinunity_ educational options as Nvell. The competitive need to keep
employees current Nvith modern technology and methodology is easier due to NCTC's customized training which teaches
curriculum developed closely Nvith business management to ensure individual company needs are met. In 2007 the college
collaborated Nvith regional gas drilling production companies experiencing a critical shortage in trained professionals to develop
and launch NCTC's newest Associates Degree program in Gas Energy Production Management.
Denton Independent School District (DISD) encompasses almost 180 square miles and continues to be one of north Texas'
fastest-growing school districts. Over 22,850 students enrolled for the 2009-2010 school year in the district's 34 schools that
include 21 elementary schools (grades K-5), six middle schools (6-8), three high schools (9-12), one advanced technology
complex (11-12), one earl- childhood center, and two alternative schools. A second earl- childhood center Nvill open in August
2010. Voters approved a November 2007 bond package for $282M to fund two new elementary schools, one new middle school,
design plans for a 4t1i comprehensive high school, additional science labs and prep rooms, and safety and security technology
enhancements in all district schools. The district's "student centered" approach supports strong individualized instruction and
smaller school size. DISD offers classes at each school for students who experience learning disabilities or handicaps.
Counselors, speech and language specialists, psychologists and reading and diagnostic consultants are available for all grade
levels. DISD offers a number of advanced placement credit classes and dual high school/college credit classes and its students
routinely place among top recipients in state and national academic, tine arts, career technology, and athletic competitive events.
The district's LaGrone Advanced Technology Complex offers state-of the-art facilities and training in rune advanced disciplines
and serves as a model for the region and surrounding states.
Denton State Supported Living Center (formerly Denton State School) is one of the country's most modern and progressive
educational institutions for mentall--disabled Texas residents. This state-supported facility is located on a 200-acre site paid for
b- Denton citizens. Present facilities include residences that accommnodate 530 residents, more than 20 buildings for physically
handicapped individuals, and a 32 bed acute hospital Nvith supporting facilities such as X-ray, laboratory, dental, and
pharmaceutical. Additional buildings include a modern administration building, an academic building, laundry facility, chapel,
maintenance shop and a warehouse. The school has a staff of 1,700 Nvith an annual budget of over $73M.
A-4
Denton Universities Expand . . . Texas Woman's University (TWIT) has grown dramatically. Student enrollment at the
Universitv's home campus in Denton increased 68% from 2001-2009 to just over 13,330 students. Almost half of TWIT students
(41%) are graduate students. Similar growth at the University's Dallas and Houston satellite nursing campuses necessitated
recent construction projects. A $40M TWIT Institute of Health Sciences-Houston facility opened in August 2006 and a $56M
TWIT Institute of Health Sciences-Dallas facility broke ground in 2009. TWIT leads as a provider of critically needed health care
professionals, boasting the nation's 11t' largest College of Nursing, and largest nursing doctoral program. TWIT is proud of its
diversity: minority students comprise 43% of students. TWIT is one of only 16 U.S. universities, and the only Texas university
selected to participate in the American Democracy_ Project Civic Agency initiative focused on encouraging students to be civic
leaders in their communities.
Universitv of North Texas (UNT) - Among the nation's top 50 schools for Hispanic and African American students, UNT has
the largest residential campus in the North Texas Region and is the largest provider of online credit courses among Texas public
universities. UNT's Discovery Park, a 285-acre, 553,000 square foot facility is home to UNT's Engineering School and Center
for Advanced Research and Technology (CART), one of the nation's premier materials science and engineering research
facilities. CART has been the recipient of almost $16 million in defense funding the past five years and provides researchers
Nvith a unique grouping of microscopes for nanotechnology research and for other critical advancement fields. Bachelor and
Master degree programs in Mechanical and Energy Engineering were added in 2007 to UNT's existing College of Engineering
programs in electrical engineering, materials science, computer science, and engineering technology. A new $33.2M Life
Sciences Building featuring open research laboratories that promote collaborative and interdisciplinary research will complete in
Mav 2010. In 2009 UNT broke ground on two projects: a $60 million Gold LEED Certified Business Leadership Complex,
focused on global economic and business disciplines, and a $78M, 30,000 seat stadium; both due to complete in 2011.
AGRICULTURE Northwestern Denton County is one of the more diversified agricultural areas in Texas. With soil types
ramging from rich black to sandy loam, and good, soft artesian water, it is ideal for diversified farming and livestock. Principal
crops are corn, wheat, oats, hay, grain sorghums and peanuts. Beef cattle, sheep, chickens and turkeys contribute a substantial
and steadv income annuallv to the farmers and ranchers of the County. A very significant concentration of valuable world
champion horse farms east of the City's corporate boundaries provide a prosperous economic resource for the area. Products
significant to the economy are horses, beef, eggs, wheat, grain sorghums, hav, and nursery crops.
TRANSPORTATION Denton is located at the convergence of Interstate 35 East and Interstate 35 West on the north end of the
Dallas/Fort Worth Metroplex, approximately 35 miles from the central business districts of both Dallas and Forth Worth. This
location along the NAFTA super highway provides great access to points north and south, which has led to a number of
distribution warehouse facilities choosing to locate in Denton. Additionally, Denton is located only 20 miles northeast of Dallas-
Fort Worth International Airport (DFW and both Dallas' Love Field Airport and Fort Worth's Meacham International Airport
are in close proximity to Denton. Alliance Airport, located less than 15 miles southwest of Denton on Interstate 35 West
provides access to a unique industrial airport and multuriodal industrial park. Together, Alliance's access to highway, rail and
air transportation offers an excellent opportunity for future industrial growth.
Denton County Transportation Authority's (DCTA) priority project for the future is the construction of a regional passenger rail
line, which connects Carrollton and Denton. The DCTA Rail will meet growing transportation demands in eastern Denton
County. The project will also provide a logical extension of the Dallas Area Rapid Transit (DART) Northwest Corridor line.
Implementation of DCTA rail service on the A-train is targeted for June 2011. In the Summer of 2010, the Denton City Council
approved the Denton Downtown Implementation Plan, which included zoning and development standards that Nvill encourage
transit oriented development in the vicinity of the new rail station enhancing the vibrant music, cultural and retail landscape of
Denton's downtown.
The Kansas Citv Southern Railroad and the Union Pacific Railroad provide daily service to Denton. Full switching is available,
providing direct access to all major markets across the nation. Grevhound/Trailwavs serves Denton through Dallas and
Oklahoma Citv. Motor freight in Denton is included in the Dallas/Fort Worth commercial trade zone and is served bv_ major
freight carriers.
BANKING Three additional branches were constructed in Denton's two mixed-use developments. First United and First State
Bank opened in Ravzor Ranch and Washington Federal opened in Unicorn Lake. There are 26 banks in Denton: Access First
Capital; Baal: of America; JPMorgan Chase; BBTJA Compass Bank-, Wells Fargo Bank-, First Convenience; First State Bank,
Provident Bank-, Point Bank-, First National Bank-, Manlbaril.; Meridian Bank-, State Basilk and Trust; Inwood National Bank,
Synergy; Denton's only locally-owned bank, Northstar Bail Washington Federal Savings; Towne Center Bank-, DATCU Credit
Union; Affiliated Bank-, First United Bahl: & Trust, Legends Bank-, Members' Choice Federal Credit Union; Pegasus Credit
Union; State Farm Bank-, and First United Bank with Denton's first "Banco" branch specializing in serving Denton's Hispanic
community.
A-5
GRowTH INDICES
Citv
State
Fiscal
Building Values (millions)
(1)
Water
SeNver
Electric
Unemployment
Unemployment
Year
Commercial
Residential
Total
Customers
Customers
Customers
Rates (1)
Rates (1)
2006
$ 61
$214
$ 275
28,805
26,951
41186
3.97°-o
4.94°-o
2007
64
219
283
29,783
28,020
43,607
3.84°-o
4.35°-o
2008
131
157
288
29,679
28,019
44375
4.03°-o
4.84°-o
2009
132
131
263
30,288
28,674
45,153
5.96°-o
7.88°-o
2010
82
82
164
30,889
29,105
45357
6.30°-o
8.0000
(1) NeNv Construction Onl-,•, Includes Multi-Famil\. as Conunercial and Duplexes as Residential
(2) Source: Teas Woilforce Conuuission.
MEDICAL Denton has become a regional medical destination serving north Texas and southern Oklahoma. Denton Regional
Medical Center is a 208-bed community hospital that selves the growing population of Denton, Wise, Cooke, and Montague
Counties. The hospital offers a full-spectrum of healthcare including advanced open-heart surgery and neurosurgery- programs.
Denton Regional became the first hospital in Denton County to earn the prestigious Level II Chest Pain Center accreditation by
the international non-profit Society of Chest Pain Centers and is pursuing the Level III Trauma Center designation. Since 2005,
the hospital has opened a new $7 million, 13,500 square-foot day surgery center and a new hospital floor housing a 29-bed,
$19M progressive care unit. Denton Regional's Center for Cancer and Blood Disorders, a comprehensive cancer diagnostic and
treatment center integrating education, nutrition, and rehabilitation services opened in 2008.
Texas Health Presbyterian Hospital of Denton (formerly Denton Community Hospital) celebrated the grand opening of its
272,538 square-foot, 255-bed facility and an 80,000 square-foot medical office building in 2005. The hospital expanded its
Women's Center services in 2006 Nvith the opening of a Level III Neonatal Intensive Care Unit serving Denton and its
surrounding communities.
North Texas Hospital opened a 60,000 square foot specialty hospital featuring eight surgical suites and 16 inpatient beds in 2005.
In 2007, North Texas Hospital became one of only four hospitals in the Dallas-Fort Worth region to offer patients improved
surgical outcomes by utilizing the $1M, state-of-the-art DaVinci robotic surgical suite. Other new hospitals gaining Denton its
reputation as a regional medical destination include Mayhill Hospital, a 40,000 square-foot facility featuring physical
rehabilitation and a behavioral health services hospital that opened in 2005 and Integrity Transitional Hospital, a 38,500 square
foot, $16 million dollar long-term acute care hospital that opened in 2007. Denton's rapid medical groNvth continued in 2008,
adding more than 123,000 square feet of new medical offices and treatment facilities; most notably the new 44,000 square foot,
$20 million Select Medical Rehabilitation Hospital, modeled after the renowned Kessler institute for Rehabilitation.
RECREATION Lake Rav Roberts, located approximately 8 miles northeast of the City's corporate boundary on the Elm Fork
of the Trinitv River, is a major Nvater conservation and flood control facility of more than 799,600 acre-feet of storage that allows
for an abundance of parks and other water and outdoor related recreational facilities. The nine mile Greenbelt
Hike/Bile/Equestrian Trail, located between Lake Ray Roberts and Lake Lewisville, is a cooperative project made possible by
the Army Corps of Engineers and the Cities of Denton and Dallas. Nearbv Lake Lewisville, one of North Texas' largest lakes is
one of Texas' most popular recreation areas. Lake Lewisville has a shoreline of 183 miles located entirely in Denton County.
Lake Lewisville attracts over 3,000,000 visitors to its shores amlually. The upper reaches of the lake are only about 3 miles east
of the Denton Citv Limits, while the dam is 15 miles from downtown Denton. Grapevine Lake, another large body of water
created by the U.S. Arm-,- Corps of Engineers, is located in Denton and Tarrant Counties. The dam is 23 miles from Denton.
Parks and recreational areas abound on the shores of Lake Rav Roberts, Lake Lewisville, and Grapevine Lake. Boating fishing,
hunting, swunining and all water sports are the favorite recreational pastimes, which, because of this area's favorable climate, are
in use the vear round.
The Citv of Denton Parks and Recreation Department and the Denton Independent School District have created a partnership to
produce a signature water recreation attraction. The $12.16 million Waterworks Park opened in 2003 and features four water
slides, a children's play pool, a 600 ft. long continuous flow tubing river, outdoor amphitheater, pavilions, a sand volleyball court
and two indoor pools. The Hula Loop slide was recently added to the Water Park and work is underway to install an Ultra Violet
light sanitizing system to the outdoor pools. Other recently completed CIP projects include the renovation and expansion of the
Senior Center, the addition of new pedestrian trails at Denia Park and Unicorn Lake, the construction of Briercliff Park, and
improvements to the courtyard at City Hall and to the playground at Quakertown Park. Construction has just begun on trails in
Wheeler Ridge Park and bidding is currently taking place to rebuild Owsley Park and to construct Specialist Earnest W. Dallas,
Jr. Veterans Memorial Park. The Parks and Recreation Department is also looking to the future Ni ith the purchase of a 196 acre
paik site that will eventually become the home of athletic fields, walling trails, and a large multi-generational recreation and
fitness center.
A-6
APPENDIX B
EXCERPTS FROM THE
CITY OF DENTON, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 2010
The nlformation contained in this Appendix consists of excerpts from the City of Denton,
Texas Comprehensive Annual Financial Report for the Year Ended September 30, 2010,
and is not intended to be a complete statement of the City's financial condition. Reference is
made to the complete Report for further information.
Financial Advisory Services
Provided By
Preliminary
$10,845,000
City of Denton, Texas
General Obligation Refunding & Improvement Bonds, Series 2011
Issue Summary
Total Issue Sources And Uses
Dated 04/01/20111 Delivered 05/10/2011
Current
Refunding
2001 Utility
Revenue
Issue
New Money
Bonds
Summary
Sources Of Funds
Par Amount of Bonds
$2,22 nnn nn
$8,620 000.00
$10.84 nnn nn
Accrued Interest from 04 012011 to 05 102011
10 1>1.19
33 ( 29.10
4 781 29
Transfers from Prior IP~ne Debt Service Funds
-
^31 nn
231,955 00
Trins(`rs ('mm Prior Tssu2 DSRFunds
-
X72.772 ,1,1
572,772.00
Prcmnmi Bid
15,352.50
59,47x, 1, 1
74,830. 50
Total Sources
$2,2_50,_504.69
$9,_517,834.10
$11,768,338.79
Uses Of Funds
Costs of Issuance
153~^_ >0
59,478.00
74,8,,-' 50
Deposit to Debt Service Fund
10 1> 1)
33,629.10
43 C 1 29
Deposit to Project Construction Fund
2-"7,
-
2.2-- 1111
Deposit to Current Refunding Fund
9,423,552.76
9.423 76
Rounding amount
1,174.24
1,17424
Total Uses
$2,2_50,_504.69
$9,_517,834.10
$11,768,338.79
3/24/2011 1 11:29 AM
First • Company
Public Finance Department
Pagel
Preliminary
$10,845,000
City of Denton, Texas
General Obligation Refunding & Improvement Bonds, Series 2011
Issue Summary
Debt Service Schedule Part 1 of 2
Date Princiaal Couaon Interest Total P+I Fiscal Total
05.'102011
0215.2012
4,055,000.00
4.0000o
352,495.53
4,407,495.53
0815.2012
120,967+50
120,967+50
09.'30.2012
4,528,463.03
0215.2013
3.0000o
120,967+50
670,967+50
0815.2013
112,717+50
112,717+50
09.'30.2013
783,685.00
0215.2014
570,000.00
3.0000o
112,717+50
682,717+50
0814 2014
104,167+50
104,167+50
"Q III 2014
786,885.00
o2 1~ 2015
575,000.00
3.0000o
104,167+50
679,167.50
08152015
95,542.50
95,542.50
09.'30.2015
774,710.00
0215.'2016
600,000.00
3.0000o
95,542.50
695,542.50
08152016
86,542.50
86,542.50
09.'30.2016
782,085.00
0215.'2017
615,000.00
3.0000o
86,542.50
701,542.50
08152017
77,317+50
77,317+50
093,1 2017
778,860.00
0214 2018
~0n nn0 nn
3.25000
77,317+50
677,317+50
081 2018
67,567+50
67,567+50
093,1 2018
744,885.00
021f 2019
615,000.00
3.2500o
67,567+50
682,567+50
0814 2019
57,573.75
57,573.75
00 ;n 2019
-
-
-
-
740,14125
o214 2020
640,000.00
3.6500o
57,573.75
697,573.75
0815 2020
45,893+75
45,893.75
09.'30.2020
743,467+50
0214 2021
670,000.00
4.0000o
45,893.75
715,893.75
0R 'I ~ 2021
32,493.75
32,493.75
o93,1 2,121
748,387+50
02152022
110,000.00
42500o
32,493.75
142,493.75
081f 2022
30,15625
30,15625
093,1 2022
172,650.00
021 ~ 2023
115-100 0n
42500o
30,15625
145,15625
o81~ 2o23
27,712.50
27,712.50
093,1 2023
172,868.75
0215.'2024
120,000.00
4.5000o
27,712.50
147,712.50
08152024
25,012.50
25,012.50
"Q 111 2024
172,725.00
o2 1~ 2,125
125,000.00
4.5000o
25,012.50
150,012.50
0814 21125
22,200.00
22,200.00
09.'30: 2025
172,212.50
0215.'2026
130,000.00
4.7500o
22,200.00
152,200.00
3/24/2011 1 11:29 AM
Preliminary
$10,845,000
City of Denton, Texas
General Obligation Refunding & Improvement B
onds, Series 2011
Issue Summary
Debt Service Schedule
Part 2 of 2
Date Principal
Coupon
Interest
Total P+I
Fiscal Total
08152026
19,112.50
19,112.50
09.'30.'2026
171,312.50
0215.'2027 135,000.00
4.7500o
19,112.50
154,112.50
0815.'2027
15,906.25
15,90625
09.'30.'2027 -
170,018.75
0215.'2028 145.00000
5.0000o
15,90625
160,90625
0815.'2028 -
12,28125
12,28125
09.'30.'2028
173,187+50
0215 2029 150,000.00
5.0000o
12,28125
162,28125
0815 2029
8,53125
8,53125
01) ;0 2029
170,812.50
02152030 160,000.00
52500o
8,53125
168,53125
0815; 2030
4,33125
4,33125
09.'30.'2030
172,862.50
0215 2031 165,000.00
52500o
4,33125
169,33125
00 ;0 2031
169,33125
Total $10,84_5,000.00
$2,284,_5_50._53
$13,129,_5_50._53
Yield Statistics
Accrued Interest from 04, i 12011 to 05 F' 2011
43.78129
Bond Year Dollars
'~5rl 1R0 38
eraQe Life
5 ! ! Years
erage Coupon
4.U5138470o
Net Interest Cost (NIC)
4.05138470o
True Interest Cost (TIC)
3.90120890o
Bond Yield for arbitrage Purposes
3.90120890o
all Inclusive Cost (aIC)
4.06053210o
IRS Form 8038
Net Interest Cost
3.97374370o
weighted average Maturity
5200 Years
3/24/2011 1 11:29 AM
First • Company
Public Finance Department
Preliminary
$2,225,000
City of Denton, Texas
General Obligation
Refunding & I
mprovement Bonds, Series 2011
New Money
Debt Service Schedule
Part 1 of 2
Date
Principal
Coupon
Interest
Total P+I
Fiscal Total
05.'10.'2011
0215.'2012
45,000.00
4.0000o
81,738.13
126,738.13
0815.'2012
45,95625
45,95625
09.30.'2012
172,69438
0215.'2013
80,000.00
3.0000o
45,95625
125,95625
0815.'2013
44,75625
44,75625
09.30.'2013
170,712+50
0215.'2014
85,000.00
3.0000o
44,75625
129,75625
08152014
43,48125
43,481.25
09.30.'2014
173,237+50
0215.'2015
85,000.00
3.0000o
43,48125
128,48125
0815.'2015
42,20625
42,206.25
09.30.'2015
170,687+50
1~ 2016
90,000.00
3.0000o
42,20625
132,20625
--"16
40,85625
40,85625
U9 2016
173,062.50
02 F 2017
90,000.00
3.0000o
40,85625
130,85625
0815.'2017
39,50625
39,50625
09.30.'2017
170,362.50
0215.'2018
95,000.00
32500o
39,50625
134,50625
0815.'2018
37,962.50
37,962.50
09.30.'2018
172,468.75
0215.'2019
95,000.00
32500o
37,962.50
132,962.50
081 -1019
36,418.75
36,418.75
nQ';n '"19
169,38125
W 1~ ,t,20
100,000.00
3.6500o
36,418.75
136,418.75
081 2020
34,593.75
34,593.75
09.30.'2020
171,012.50
02152021
105,000.00
4.0000o
34,593.75
139,593.75
081 -'"21
32,493.75
32,493.75
U9 ?,1 -'i121
172,087.50
02 1~ 2022
110,000.00
42500o
32,493.75
142,493.75
0812022
30,15625
30,15625
09'x/, 2022
172,650.00
t~ m3
115,000.00
42500o
30,15625
145,15625
uB.L -',12 3
27,712.50
27,712.50
0936 2023
172,868.75
0215.'2024
120,000.00
4.5000o
27,712.50
147,712.50
0815.'2024
25,012.50
25,012.50
09.30.'2024
172,725.00
0215.'2025
125,000.00
4.5000o
25,012.50
150,012.50
0815.'2025
22,200.00
22,200.00
09.30.'2025
172,212.50
3/24/2011 1 11:29 AM
First •
Company
Public Finance Depar
tment
Preliminary
$2,225,000
City of Denton, Texas
General Obligation Refunding & I
mprovement Bonds, Series 2011
New Money
Debt Service Schedule
Part 2 of 2
Date Principal
Coupon
Interest
Total P+I
Fiscal Total
0212026 130,000.00
4+7500o
22,200.00
152,200.00
ne'1 6
19,112.50
19,112.50
o9 1 2, 126
171,312.50
021f 2(127 135,000.00
4+7500o
19,112.50
154,112.50
0815.2027
15,906.25
15,906.25
09.'30.2027
170,018.75
0215.'2028 145,000.00
5.0000o
15,906.25
160,906.25
0815.2028
12,281.25
12,281.25
09.'30.2028
173,187+50
0215.'2029 150,000.00
5.0000o
12,281.25
162,281.25
0815.2029
8,531.25
8,531.25
W) ;n'--029
170,812.50
W If 2030 160,000.00
52500o
8,531.25
168,531.25
0815.2030
4,33125
4,33125
0930 2030
172,862.50
X12 I~ 2031 165,000.00
52500o
4,33125
169,33125
ni ;n 2031
169,33125
Total $2,225,000.00
$1,208,688.13
$3,433,688.13
Yield Statistics
Accrued Interest from 04012011 to 0 ~ F, 2011
10,152.19
Bond Year Dollars
$26,154.65
Average Life
11.755 Years
average Coupon
4.62131210o
Net Interest Cost (NICI
4.62131210o
Taste Tnfirc=1 C, ,-t i FT(i
4.51652410o
Bond Yield for arbitrage Purposes
3.90120890o
all Inclusive Cost (aIC)
4.59589860o
IRS Form 8038
Net Interest Cost
4.58249610o
weighted average Maturity
11+755 Years
3/24/2011 1 11:29 AM
First • Company
Finance Public Department
Preliminary
$8,620,000
City of Denton, Texas
General Obligation Refunding & Improvement Bonds, Series 2011
Current Refunding 2001 Utility Revenue Bonds
Debt Service Comparison
Date Total P+I Existing D/S
Net New D/S
Old Net D/S
Savings
09.'30.'2011
130,258.75
96,629.65
130,258.76
33,629.11
09.'30.'2012 4,355,768.65
917,787.50
5,273,556.15
5,379,197.52
105,64137
093"^_013 612,972.50
921,057.50
1,534,030.00
1,638,217.52
104,187.52
093/ 2014 613,647.50
701,957.50
1,315,605.00
1,424,867.52
109,262.52
no 3,12() 15 -14, 22.>0
578,657.50
1,182r, 0nn
1,296,067.52
113,387.52
09 1 2016 60,o22.50
576,742.50
1,185,765.00
1,297,402.52
111,637.52
09 1 2017 6,18,497.50
578,675.00
1,187,172.5,1
1,296,210.02
109,037.52
09.'30.'2018 572,416.25
584,202.50
1,156,618.75
1,267,756.27
111,137.52
0936 2019 570,760.00
549,070.00
1,119,830.00
1,232,642.51
112,812.51
no ;i1 2n2n 572,455.00
548,362.50
1,120,817.50
1,230,416.25
109,598.75
09 1 2,121 576,300.00
551,152.50
1,127,452.50
1,234,107.50
106,655.00
09 1 2022
547,525.00
547,525.00
547,525.00
09.302023
547,706.25
547,706.25
547,706.25
Total $9,69_5,862.40 $7,733,15_5.00
$17,39_5,388.30
$18,_522,37_516
$1,126,986.86
PV Analysis Summary (Net to Net)
Gross PV Debt Service Savings
1,205,420.13
Nat PV Cashfl(-v Saving: ~r 3.65("~d uc)
1,205,420.13
\-m-I Tntli-t 0-lit to Dd,t c~r\ i~ 2 Fund
33,(~'Q tO
Transfers from Prior Issue Debt Serve c2 Fund
(2 3I ~ , n 1
Transfers from Prior Issue DSR Fund
(572,772 , ~u)
Net Present Value Benefit
$434,,'22 23
Net PN' Benefit $9,180,000 Refunded Principal
4.73100
Refunding Bond Information
Refunding Dated Date
4'~ 12n L 1
Refunding Delivery Date
I(' 2UI I
Net D/S Excludes: DSR
3/24/2011 1 11:29 AM
First • Company
Finance Public Department
Preliminary
$8,620,000
City of Denton, Texas
General Obligation Refunding & Improvement Bonds, Series 2011
Current Refunding 2001 Utility Revenue Bonds
Current Refunding Escrow
Date Principal Rate
Receipts
Disbursements
Cash
Balance
0102011 -
06.'012011 231,955.01
06.'10.'2011 9,191,597.75
-
231,955.01
9,191,597.75
-
231,955.01
9,191,597.75
Total $9,423,_5_52.76
$9,423,_5_52.76
$9,423,_5_52.76
Investment Parameters
Investment Model [PN', GIC, or Securities]
GIC
Default investment yield target
Unrestricted
Cost of Investments Purchased with Bond Proceeds
9.423 552.76
Total Cyst of N\ 2- m2nt:
`04-; 76
Target Cost of I lvestments at bond yield
$9.393.483.91
Yield to Receipt
-
Yield for Arbitrage Purposes
3.901208900
3/24/2011 1 11:29 AM
First • Company
Public Finance Department
_g-
Preliminary
$8,620,000
City of Denton, Texas
General Obligation Refunding & Improvement Bonds, Series 2011
Current Refunding 2001 Utility Revenue Bonds
Summary Of Bonds Refunded
of
Maturity
Issue
Purpose
Maturity
Type
Bond
Coupon
Value
Call Date Call Price
Dated 12/01/2006 1 Delivered 12/01/2006
01 Rev Ref & Imp POST 2007 REF
Water
12012011
Serial
Coupon
5.0000o
1,815,000
06 10.'2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Water
12012012
Serial
Coupon
5.0000o
185,000
06 10.'2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Water
12012013
Serial
Coupon
5.0000o
195,000
06 10.'2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Water
12,11 2014
Serial
Coupon
5.0000o
200,000
06.'10 2011
100.00000
O1 Rev Ref & Imp POST 2007 REF
Water
12,11 '^_0I
Serial
Coupon
I ' i 1011
100.00000
01 Rev Ref & Imp POST 2007 REF
Water
12 111 2016
Serial
Coupon
5.oo,
22>
11
100.00000
01 Rev Ref & Imp POST 2007 REF
Water
12,11 2017
Serial
Coupon
5.125''
215,,',','
1,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Water
12,11 2018
Serial
Coupon
5.12 j" ~
230,, i,'0
of ~ 1'' 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Water
12,11 2019
Serial
Coupon
5.1250o
240,000
06.'10 2011
100.00000
01 Rev Ref & Im) POST 2007 REF
Water
12) 1 '^mn
Serial
Coupon
~ 4,
, I, I, I
Ors I 'l 1011
100.00000
Subtotal
$3,775,000
-
-
Dated 12/01/2006 1 Delivered 12/01/2006
01 Rev Ref & Imp POST 2007 REF
Wastewater
12012011
Serial
Coupon
5.0000o
1,230,000
06 10.'2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
12012012
Serial
Coupon
5.0000o
9 ..000
0610 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
12 ,11 2013
Serial
Coupon
5.0000o
105.660
061,1 2011
100.00000
O1 Rev Ref & Imp POST 2007 REF
Wastewater
12,11 2014
Serial
Coupon
5.0000o
11()"""
06 I ' i 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
12,11 201
Serial
Coupon
5.00000
115.,'-)
06 1,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
12,112016
Serial
Coupon
5.0000o
120,000
061! 1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
12012017
Serial
Coupon
5.1250o
110,000
06 10.'2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
12,11 2018
Serial
Coupon
5.1250o
115,000
061,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
13 , I 12019
Serial
Coupon
5.1250o
120,000
061,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Wastewater
12,11 2~ CO
Serial
Coupon
5.4000'o
125,000
0i ~ 1,1 2011
100.00000
Subtotal
$2,245,000
-
Dated 12/01/2006 I Delivered 12/01/2006
01 Rev Ref & Imp POST 2007 REF
Electric
12012011
Serial
Coupon
5.0000o
1,055,000
06 10.'2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12012012
Serial
Coupon
5.0000o
190,000
06 10.'2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12012013
Serial
Coupon
5.0000o
200,000
0610^_011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12012014
Serial
Coupon
5.0000o
210,000
061,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12012015
Serial
Coupon
5.0000'o
220,000
0i~ 1,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12012016
Serial
Coupon
5.0000o
230,000
061,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12012017
Serial
Coupon
5.1250o
245,000
061,1 2011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12,11 2018
Serial
Coupon
5.1250o
255,000
06.'10 2011
100.00000
O1 Rev Ref & Imp POST 2007 REF
Electric
12 11 '^_n I
Serial
Coupon
I2>"„
270 n n
0n I ' i 1011
100.00000
01 Rev Ref & Imp POST 2007 REF
Electric
12 1! 1 2020
Serial
Coupon
5.41!l!° 0
285,1!l!l!
o(' 1") -"Al
100.00000
Subtotal
$3,160,000
Total
$9,180,000
-
3/24/2011 1 11:29 AM
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of April 1,2011 (this "Agreement"), by and between the City-
of Denton, Texas (the "Issuer"), and The Bank of New York Mellon Trust Company, National Association,
Dallas, Texas, a limited purpose national banking association with trust powers (the 'Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its General Obligation
Refunding and Improvement Bonds, Series 2011 (the "Securities"), such Securities to be issued in fully
registered form only as to the payment of principal and interest thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof in
accordance with the "Ordinance" (hereinafter defined); and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with
the payment of the principal of, premium, if any, and interest on said Securities and with respect to the
registration, transfer and exchange thereof by the registered o-,-,-ners thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has
full power and authority to perform and serve as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment.
The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities. As
Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal,
premium (if any), and interest on the Securities as the same become due and payable to the registered owners
thereof, all in accordance with this Agreement and the "Ordinance" (hereinafter defined).
The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the
ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in
the "Ordinance."
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for
the Securities.
Section 1.02. Compensation.
As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay
the Bank the fees and amounts set forth in Schedule A attached hereto for the first year of this Agreement and
thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as
Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior
to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal
Year.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof
(including the reasonable compensation and the expenses and disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as othei-vvise expressly provided or unless the context
otheitivise requires:
"Acceleration Date" on any Security means the date on and after which the principal or any or all
installments of interest, or both, are due and payable on any Security which has become accelerated pursuant
to the terms of the Security-.
"Bank Office" means the principal corporate trust office of the Bank as indicated on the signature
page hereof. The Bank will notifi- the Issuer in writing of any change in location of the Bank Office.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security- is registered in the
Security Register.
"Issuer Request" and "Issuer Ordinance" means awritten request or ordinance signed in the name of
the Issuer by the Mavor of the Issuer delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
"Ordinance" means the ordinance of the governing body ofthe Issuer pursuant to which the Securities
are issued, certified by the City- Secretaiv or any other officer of the Issuer and delivered to the Bank.
"Person" means any individual, corporation, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or political subdivision of a
government.
"Predecessor Securities" of any particular Security- means ever- previous Security evidencing all or
a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this
2
Section 1.02. Compensation.
As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay
the Bank the fees and amounts set forth in Schedule A attached hereto for the first year of this Agreement and
thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as
Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior
to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal
Year.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof
(including the reasonable compensation and the expenses and disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as othei-vvise expressly provided or unless the context
otheitivise requires:
"Acceleration Date" on any Security means the date on and after which the principal or any or all
installments of interest, or both, are due and payable on any Security which has become accelerated pursuant
to the terms of the Security-.
"Bank Office" means the principal corporate trust office of the Bank as indicated on the signature
page hereof. The Bank will notifi- the Issuer in writing of any change in location of the Bank Office.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security- is registered in the
Security Register.
"Issuer Request" and "Issuer Ordinance" means awritten request or ordinance signed in the name of
the Issuer by the Mavor of the Issuer delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
"Ordinance" means the ordinance of the governing body ofthe Issuer pursuant to which the Securities
are issued, certified by the City- Secretaiv or any other officer of the Issuer and delivered to the Bank.
"Person" means any individual, corporation, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or political subdivision of a
government.
"Predecessor Securities" of any particular Security- means ever- previous Security evidencing all or
a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this
2
definition, any mutilated, lost, destroyed, or stolen Security- for which a replacement Security has been
registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Ordinance).
"Record Date" has the meaning assigned to such term in the Ordinance.
"Redemption Date" when used with respect to any Security to be redeemed means the date fixed for
such redemption pursuant to the terms of the Ordinance.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman
of the Board of Directors, the Chairman or Vice-chairman of the Executive Committee of the Board of
Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any
other officer of the Bank customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf ofthe Issuer providing for the
registration and transfer of the Securities.
"Stated Maturity-" means the date specified in the Ordinance the principal of a Security is scheduled
to be due and payable.
Section 2.02. Other Definitions.
The terms "Bank," "Issuer," and "Securities (Security)" have the meanings assigned to them in the
recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions
of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such
purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated
Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank
at the Bank Office.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such
purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by
computing the amount of interest to be paid each Holder and preparing and sending checks by United States
Mail, first class postage prepaid, on each payment date, to the Holders of the Securities (or their Predecessor
Securities) on the respective Record Date, to the address appearing on the Security- Register or by such other
method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense.
Section 3.02. Payment Dates.
The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities on the dates
specified in the Ordinance.
Section 3.03. Reporting Requirements.
To the extent required by the Code or the Treasur- Regulations, the Bank shall report to the Holders
and the Internal Revenue Service the amount of interest paid or the amount treated as interest accrued on the
Bond which is required to be reported by the Holders on their returns of federal income tax.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register - Transfers and Exchanges.
The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and
records (herein sometimes referred to as the "Security Register"), and, if the Bank Office is located outside
the State of Texas, a copy of such books and records shall be kept in the State of Texas, for recording the
names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities
and the payment of the principal of and interest on the Securities to the Holders and containing such other
information as may be reasonably required by the Issuer and subject to such reasonable regulations as the
Issuer and the Bank may prescribe. All transfers, exchanges and replacement of Securities shall be noted in
the Security Register.
Ever- Security- surrendered for transfer or exchange shall be duly endorsed or be accompanied by
a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state
bank or a member of the Financial Industry Regulator- Authority, in form satisfactor- to the Bank, duly
executed by the Holder thereof or his agent duly authorized in writing.
The Bank may request any supporting documentation it feels necessaiv to effect a re-registration,
transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an
exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new
Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after
the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer
or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner
satisfactor- to the Paying Agent/Registrar.
Section 4.02. Security Certificates.
The Issuer shall provide an adequate inventoiv of printed Securities to facilitate transfers of
exchanges thereof. The Bank covenants that the inventor- of printed Securities will be kept in safekeeping
pending their use, and reasonable care will be exercised by the Bank in maintaining such Securities in
safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other political
subdivisions or corporations for which it serves as registrar, or that is maintained for its own securities.
4
Section 4.03. Form of Security Register.
The Bank, as Registrar, will maintain the Security- Register relating to the registration, payment,
transfer and exchange of the Securities in accordance Nvith the Bank's general practices and procedures in
effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form
other than those which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of being
converted into written form Nvithin a reasonable time.
Section 4.04. List of Security Holders.
The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required
fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information
contained in the Security Register at any time the Bank is customarily open for business, provided that
reasonable time is alloNved the Bank to provide an up-to-date listing or to convert the information into written
form.
The Bank will not release or disclose the contents of the Security- Register to any person other than
to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court
order or as otheitivise required by lave. Upon receipt of a court order and prior to the release or disclosure of
the contents of the Security Register, the Bank will notifi- the Issuer so that the Issuer may contest the court
order or such release or disclosure of the contents of the Security- Register.
Section 4.05. Return of Cancelled Securities.
All Securities surrendered to the Bank, at the designated Payment/Transfer Office, for payment,
redemption, transfer, or replacement, shall be promptly cancelled by the Bank. The Bank will provide to the
Issuer, at reasonable intervals determined by the bank, a certificate evidencing the destruction of canceled
Securities.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities.
The Issuer hereby instructs the Bank, subjectto the applicable provisions ofthe Ordinance, to deliver
and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the
same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank, in its discretion, may
execute and deliver a replacement Security- of like form and tenor, and in the same denomination and bearing
a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or
in lieu of and in substitution for such destroyed lost or stolen Security, only after (i) the filing by the Holder
thereof Nvith the Bank of evidence satisfactory- to the Bank of the destruction, loss or theft of such Security-,
and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an
amount satisfactory- to hold the Issuer and the Bank harmless. All expenses and charges associated Nvith such
indemnity and Nvith the preparation, execution and deliver- of a replacement Security shall be borne by the
Holder of the Security mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer.
The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the
Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon
the transferor exchange of any Securities pursuantto Section 4.0 1, and Securities ithas delivered in exchange
for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank.
The Bank undertakes to perform the duties set forth herein and in the Ordinance and agrees to use
reasonable care in the performance thereof.
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness of the
opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or
othertivise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any
of its rights or poNvers, if it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity satisfactory to it against such risks or liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond,
note, security, or other paper or document believed by it to be genuine and to have been signed or presented
by the proper party or parties. Without limiting the generality- of the foregoing statement, the Bank need not
examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an
endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the
Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or
matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document supplied by Issuer.
(e) The Bank is also authorized to transfer funds relating to the closing and initial delivery of
the Securities in the manner disclosed in the closing memorandum as prepared by the Issuer's financial
advisor or other agent. The Bank may act on a facsimile or e-mail transmission of the closing memorandum
acknowledged by the financial advisor or the Issuer as the final closing memorandum. The Bank shall not
be liable for any losses, costs or expenses arising directly or indirectly from the Bank's reliance upon and
compliance with such instruction
(f) The Bank may consult with counsel, and the written advice of such counsel or any opinion
of counsel shall be full and complete authorization and protection with respect to any action taken, suffered,
or omitted by it hereunder in good faith and in reliance thereon.
6
(g) The Bank may exercise any of the powers hereunder and perform any duties hereunder either
directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the
statements of the Issuer, and the Bank assumes no responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security-, or any other
Person for anv amount due on anv Security from its own funds.
Section 5.04. May Hold Securities.
The Bank, in its individual or any other capacity, may become the oN-,mer or pledgee of Securities and
may othertivise deal with the Issuer Nvith the same rights it would have if it were not the Paying
Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank.
The Bank shall deposit any moneys received from the Issuer into a segregated account to be held by
the Bank solely for the benefit of the o-,-,mers of the Securities to be used solely for the payment of the
Securities, Nvith such moneys in the account that exceed the deposit insurance available to the Issuer by the
Federal Deposit Insurance Corporation, to be fully collateralized with securities or obligations that are eligible
under the laws of the State of Texas and to the extent permitted by the laws of the United States of America
to secure and be pledged as collateral for such accounts until the principal and interest on such securities have
been presented for payment and paid to the oN-,mer thereof. Payments made from such account shall be made
by check draNyn on such account unless the oN-,mer of such Securities shall, at its oNyn expense and risk, request
such other medium of payment.
Subject to the Unclaimed Property Law of the State of Texas, any money deposited with the Bank
for the payment of the principal, premium (if any), or interest on any Security- and remaining unclaimed for
three years after the final maturity of the Security- has become due and payable will be paid by the Bank to
the Issuer if the Issuer so elects, and the Holder of such Security shall hereafter look only to the Issuer for
payment thereof, and all liability of the Bank with respect to such monies shall thereupon cease. If the Issuer
does not elect, the Bank is directed to report and dispose of the funds in compliance with Title Six of the
Texas Property Code, as amended.
Section 5.06. Indemnification.
To the extent permitted by lave, the Issuer agrees to indemnifi- the Bank for, and hold it harmless
against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or
in connection with its acceptance or administration of its duties hereunder, including the cost and expense
against any claim or liability- in connection with the exercise or performance of any of its powers or duties
under this Agreement.
Section 5.07. Interpleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand,
7
or controversy over its person as -,yell as funds on deposit, in either a Federal or State District Court located
in the State and Count- where the administrative offices of the Issuer is located, and agree that service of
process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of
this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has
the right to file a Bill of Interpleader in any court of competent jurisdiction Nvithin the State of Texas to
determine the rights of any Person claiming any interest herein.
Section 5.08. Depository Trust Company Services.
It is hereby represented and -,warranted that, in the event the Securities are otherwise qualified and
accepted for "Depositor- Trust Company" services or equivalent Depository trust services by other
organizations, the Bank has the capability and, to the extent within its control, will comply -,with the
"Operational Arrangements," effective August 1, 1987, which establishes requirements for securities to be
eligible for such type depositor- trust services, including, but not limited to, requirements for the timeliness
of payments and funds availability, transfer turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
hereto.
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the parties
Section 6.02. Assignment.
This Agreement may not be assigned by either party Nvithout the prior -,written consent of the other.
Section 6.03. Notices.
Any request, demand, authorization, direction, notice, consent, waiver, or other document provided
or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the
Issuer or the Bank, respectively, at the addresses sho-,-,-n on the signature page of this Agreement.
Section 6.04. Effect of Headings.
hereof.
The Article and Section headings herein are for convenience only and shall not affect the construction
Section 6.05. Successors and Assigns.
All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so
expressed or not.
Any corporation or association into which the Bank may be converted or merged, or -,with which it
may be consolidated, or to which it may sell, lease, or transfer its corporate trust business and assets as a
whole or substantially as awhole, or any corporation or association resulting from any such conversion, sale,
8
merger, consolidation, or transfer to which it is a pait ipso facto, shall be and become successor Paying
Agent/Registrar hereunder and vested with all ofthe powers, rights, obligations, duties, remedies, discretions,
immunities, privileges, and all other matters aswas its predecessor, without the execution or filing of any
instruments or any further act, deed, or conveyance on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
Section 6.06. Severability.
In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement.
This Agreement and the Ordinance constitute the entire agreement between the parties hereto relative
to the Bank acting as Paying Agent/Registrar and if any conflict exists between his Agreement and the
Ordinance, the Ordinance shall govern.
Section 6.09. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same Agreement.
Section 6.10. Termination.
This Agreement will terminate (i) on the date of final payment of the principal of and interest on the
Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written
notice; provided, however, an early termination of this Agreement by either party shall not be effective until
(a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice has been given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early
termination of this Agreement shall not occur at any time which would disrupt, delay or other xvise adversely
affect the payment of the Securities.
The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the
appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying
Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixth- (60) days after
the giving of such notice of resignation.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the
Security Register (or a copy thereof), together with other pertinent books and records relating to the
Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect
9
folloNving the termination of this Agreement.
Texas.
Section 6.11. Governing Law.
This Agreement shall be construed in accordance with and governed by the laws of the State of
[Remainder of page intentionally left blank]
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
THE BANK OF NEW YORK MELLON TRUST COMPANY,
NATIONAL ASSOCIATION
By
Title
2001 Biyan Street, I Ith Floor
Dallas, Texas 75201
CITY OF DENTON, TEXAS
By
Mavor
215 E. McKinney
Denton, Texas 76201
SCHEDULE A
Paying Agent/Registrar Fee Schedule
ESCROW AGREEMENT
relating to
CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS
SERIES 2001
THIS ESCROW AGREEMENT, dated as of May 1, 2011 (herein, together with any amendments
or supplements hereto, called the "Agreement") is entered into by and between the City of Denton, Texas
(herein called the "Issuer") and The Bank of New York Mellon Trust Company, N.A., as escrow agent
(herein, together with any successor in such capacity, called the "Escrow Agent"). The addresses ofthe Issuer
and the Escrow Agent are shoN-,m on Exhibit A attached hereto and made a part hereof.
WITNESSETH:
WHEREAS, the Issuer heretofore issued and there presently remain outstanding the obligations (the
"Refunded Obligations") described in Exhibit B attached hereto and made a part hereof; and
WHEREAS, the Refunded Obligations are scheduled to be payable at such times and in such amounts
as are set forth in Exhibit C attached hereto and made a part hereof; and
WHEREAS, when firm banking arrangements have been made for the payment of principal and
interest to the maturity or redemption dates of the Refunded Obligations, then the Refunded Obligations shall
no longer be regarded as outstanding except for the purpose of receiving payment from the funds provided
for such purpose; and
WHEREAS, Chapter 1207, Texas Government Code ("Chapter 1207"), authorizes the Issuerto issue
refunding bonds and to deposit the proceeds from the sale thereof, and any other available funds or resources,
directly with any paying agent for the Refunded Obligations, or atrust company or commercial bank that does
not act as a depository for the Issuer, and such deposit, if made before such payment dates and in sufficient
amounts, shall constitute the making of firm banking and financial arrangements for the discharge and final
payment of the Refunded Obligations; and
WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow agreement with any
such paying agent for any of the Refunded Obligations, or a trust company or commercial bank that does not
act as a depository for the Issuer, with respect to the safekeeping, investment, administration and disposition
of any such deposit, upon such terms and conditions as the Issuer and such paying agent, trust company or
commercial bank may agree, provided that such deposits may be invested only in obligations described in
Section 1207.062 of Chapter 1207, which obligations may be in book entiy form, and which shall mature
and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the
scheduled payment of principal and interest on the Refunded Obligations when due; and
WHEREAS, the Escrow Agent is the paying agent for the Refunded Obligations and this Agreement
constitutes an escrow agreement of the kind authorized and required by said Chapter 1207; and
WHEREAS, Chapter 1207 makes it the duty of the Escrow Agent to comply with the terms of this
Agreement and timely make available to the place of payment (the "Paying Agent") for the Refunded
Obligations the amounts required to provide for the payment of the principal of and interest on such
obligations when due, and in accordance with their terms, but solely from the funds, in the manner, and to
the extent provided in this Agreement; and
WHEREAS, the City of Denton General Obligation Refunding and Improvement Bonds, Series 2011
(the "Refunding Bonds") have been authorized and will be issued, sold and delivered for the purpose, among
others, of obtaining the funds required to provide for the payment of the principal of the Refunded
Obligations at their respective maturity dates or dates of redemption and the interest thereon to such dates;
and
WHEREAS, the Issuer desires that, concurrently with the deliver- of the Refunding Bonds to the
purchasers thereof, certain proceeds of the Refunding Bonds, together with certain other available funds of
the Issuer, if applicable, shall be deposited to the credit of the Escrow Fund created pursuant to the terms of
this Agreement; and
WHEREAS, the cash balances from time to time on deposit in the Escrow Fund and Escrowed
Securities, if any, which shall mature and the interest thereon shall be payable at such times and in such
amounts so as to provide moneys which together with such cash balances will be sufficient to pay interest
on the Refunded Obligations as it accrues and becomes payable and the principal ofthe Refunded Obligations
on their maturity dates or dates of redemption; and
WHEREAS, to facilitate the payment of the principal of and interest on the Refunded Obligations,
and to facilitate receipt and transfer ofproceeds of Escrowed Securities, particularly those in book entiy form,
the Issuer desires to establish the Escrow Fund at the corporate trust office of the Escrow Agent; and
NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein
contained, the sufficiency of which hereby are acknowledged, and to secure the full and timely payment of
principal of and the interest on the Refunded Obligations, the Issuer and the Escrow Agent mutually
undertake, promise, and agree for themselves and their respective representatives and successors, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. Unless the context clearly indicates otheitivise, the following terms shall
have the meanings assigned to them below when they are used in this Agreement:
"Code" means the Internal Revenue Code of 1986, as amended, or to the extent applicable the Internal
Revenue Code of 1954, together with any other applicable provisions of any successor federal income tax
laves.
"Escrow Fund" means the fund created by this Agreement to be administered by the Escrow Agent
pursuant to the provisions of this Agreement.
"Escrowed Securities" means, subjectto any restrictions setforth many order, ordinance orresolution
of the Issuer authorizing the issuance of the Refunded Obligations, the obligations permitted by Section
1207.062 of Chapter 1207 or cash or other obligations permitted by Section 1207.062 of Chapter 1207
substituted therefor pursuant to Article IV of this Agreement.
Section 1.02. Other Definitions. The terms "Agreement", "Issuer", "Escrow Agent", "Refunded
Obligations" and "Refunding Bonds", when they are used in this Agreement, shall have the meanings
assigned to them in the preamble to this Agreement.
Section 1.03. Interpretations. The titles and headings of the articles and sections of this Agreement
have been inserted for convenience and reference only and are not to be considered a part hereof and shall
not in any way mod ifi- or restrict the terms hereof. This Agreement and all of the terms and provisions hereof
shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of
providing for the refunding of the Refunded Obligations in accordance with applicable lave.
ARTICLE II
DEPOSIT OF FUNDS AND ESCROWED SECURITIES
Section 2.01. Deposits in the EscroNv Fund. Concurrently with the sale and deliver- ofthe Refunding
Bonds the Issuer shall deposit, or cause to be deposited, with the EscroNv Agent, for deposit in the Escrow
Fund, the funds and Escrowed Securities described in Exhibit D attached hereto and made a part hereof, and
the EscroNv Agent shall, upon the receipt thereof, acknowledge such receipt to the Issuer in writing.
ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
Section 3.01. Escrow Fund. The EscroNv Agent has created on its books a special trust fund and
irrevocable escroNv to be known as the City of Denton General Obligation Refunding and Improvement
Bonds, Series 2011 (the "EscroNv Fund"). The EscroNv Agent hereby agrees that upon receipt thereof it will
irrevocably deposit to the credit of the EscroNv Fund the funds and the Escrowed Securities described in
Exhibit D. Such deposit, all proceeds therefrom, and all cash balances from time to time on deposit therein
(a) shall be the property of the EscroNv Fund, (b) shall be applied only in strict conformity Nvith the terms and
conditions of this Agreement, and (c) are hereby irrevocably pledged to the payment of the principal of and
interest on the Refunded Obligations, which payment shall be made by timely transfers of such amounts at
such times as are provided for in Section 3.02 hereof. When the final transfers have been made for the
payment of such principal of and interest on the Refunded Obligations, any balance then remaining in the
EscroNv Fund shall be transferred to the Issuer, and the EscroNv Agent shall thereupon be discharged from any
further duties hereunder.
Section 3.02. Payment of Principal and Interest. The Escrow Agent is hereby irrevocably instructed
to transfer from the cash balances from time to time on deposit in the EscroNv Fund and make available to the
Paying Agent the amounts required to pay the principal of and interest on the Refunded Obligations at their
redemption date and interest thereon to such redemption date.
Section 3.03. Sufficiencv of Escrow Fund. The Issuer represents that the cash balance, and
Escrowed Securities, if any, on deposit from time to time in the EscroNv Fund will be at all times sufficient
to provide moneys for transfer to the Paying Agent at the times and in the amounts required to pay the interest
on the Refunded Obligations as such interest comes due and the principal of the Refunded Obligations as the
Refunded Obligations mature or are subject to redemption, all as more fully set forth in Exhibit E attached
hereto and made a part hereof. If, for any reason, at any time, the cash balances on deposit or scheduled to
be on deposit in the EscroNv Fund shall be insufficient to transfer the amounts required by each Paying Agent
for the Refunded Obligations to make the payments set forth in Section 3.02 hereof, the Issuer shall timely
deposit in the EscroNv Fund, from any funds that are lawfully available therefor, additional funds in the
amounts required to make such payments. Notice of any such insufficiency shall be given as promptly as
practicable as hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any
insufficiency of funds in the Escrow Fund or the Issuer's failure to make additional deposits thereto.
Section 3.04. Trust Fund. The Escrow Agent shall hold at all times the Escrow Fund, any Escrowed
Securities and all other assets of the Escrow Fund, wholly segregated from all other funds and securities on
deposit with the Escrow Agent; it shall never allow Escrowed Securities or any other assets of the Escrow
Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose
of the assets of the Escrow Fund only as set forth herein. Uninvested cash, Escrowed Securities and other
assets of the Escrow Fund shall always be maintained by the Escrow Agent as trust funds for the benefit of
the owners of the Refunded Obligations; and a special account thereof shall at all times be maintained on the
books of the Escrow Agent. The owners of the Refunded Obligations shall be entitled to the same preferred
claim and first lien upon uninvested cash, Escrowed Securities, the proceeds thereof, and all other assets of
the Escrow Fund to which they are entitled as owners of the Refunded Obligations. The amounts received
by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the Issuer, and
the Escrow Agent shall have no right to title with respect thereto except as a constructive trustee and Escrow
Agent under the terms of this Agreement. The amounts received by the Escrow Agent under this Agreement
shall not be subject to warrants, drafts or checks drawn by the Issuer or, except to the extent expressly herein
provided, by the Paying Agent.
Section 3.05. Securitv for Cash Balances. Cash balances from time to time on deposit in the Escrow
Fund shall, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, be
continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the
United States of America, having a market value at least equal to such cash balances.
ARTICLE IV
LIMITATION ON INVESTMENTS
Section 4.01. General Limitations. Except as provided in Sections 3.01, 3.02 and 4.02 hereof, the
Escrow Agent shall not have any power or duty- to invest or reinvest any money held hereunder, or to make
substitutions of Escrowed Securities, or to sell, transfer or otheitivise dispose of Escrowed Securities.
Section 4.02. Substitutions and Investments. At the discretion of the Issuer, the Escrow Agent shall
invest cash balances in the Escrow Fund, make substitutions of Escrowed Securities or redeem Escrowed
Securities and reinvest the proceeds thereof or hold such proceeds as cash, together with other moneys or
securities held in the Escrow Fund provided that the Issuer delivers to the Escrow Agent the folloNving:
(1) an opinion by an independent certified public accountant that after such substitution,
investment or reinvestment the principal amount of the securities in the Escrow Fund (which shall
be noncallable, not pre-payable obligations described in Section 1207.062 of Chapter 1207, subject
to any restrictions setforth in any order, ordinance or resolution ofthe Issuer authorizing the issuance
of the Refunded Obligations), together with the interest thereon and other available moneys in the
Escrow Fund, will be sufficient to pay, without further investment or reinvestment, as the same
become due, the principal of, interest on and premium, if any, on the Refunded Obligations which
have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond counsel to the effect that
(a) such substitution, investment or reinvestment will not cause the Refunded Obligations to be
"arbitrage bonds" within the meaning of Section 103 of the Code or the regulations thereunder in
effect on the date of such substitution or reinvestment, or otheitivise make the interest on the
Refunded Obligations subject to federal income taxation, and (b) such substitution, investment or
reinvestment complies with the Constitution and laws of the State of Texas and with all relevant
documents relating to the issuance of the Refunded Obligations.
The Escrow Agent shall have no responsibility- or liability for loss or othei-vvise Nvith respect to
investments made at the direction of the Issuer.
Section 4.03. Arbitrage. The Issuer hereby covenants and agrees that it shall never request the
Escrow Agent to exercise any power hereunder or permit any part of the money in the Escrow Fund or
proceeds from the sale of Escrowed Securities to be used directly or indirectly to acquire any securities or
obligations if the exercise of such power or the acquisition of such securities or obligations would cause any
Refunding Bonds or Refunded Obligations to be an "arbitrage bond" within the meaning of the Code.
ARTICLE V
APPLICATION OF CASH BALANCES
Section 5.01. In General. Except as provided in Sections 3.01, 3.02 and 4.02 hereof, no withdrawals,
transfers, or investment shall be made of cash balances in the Escrow Fund.
ARTICLE VI
RECORDS AND REPORTS
Section 6.01. Records. The Escrow Agent will keep books of record and account in which complete
and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations and
application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and
such books shall be available for inspection at reasonable hours and under reasonable conditions by the Issuer
and the oN-,ners of the Refunded Obligations.
Section 6.02. Reports. While this Agreement remains in effect, the Escrow Agent annually shall
prepare and send to the Issuer a written report summarizing all transactions relating to the Escrow Fund
during the preceding year, including, without limitation, credits to the Escrow Fund as a result of interest
payments on or maturities of Escrowed Securities and transfers from the Escrow Fund for payments on the
Refunded Obligations or other xvise, together with a detailed statement of all Escrowed Securities and the cash
balance on deposit in the Escrow Fund as of the end of such period.
ARTICLE VII
CONCERNING THE PAYING AGENT AND ESCROW AGENT
Section 7.01. Representations. The Escrow Agent hereby represents that it has all necessaiy power
and authority to enter into this Agreement and undertake the obligations and responsibilities imposed upon
it herein, and that it will carry out all of its obligations hereunder.
Section 7.02. Limitation on Liabilitv.
(a) The liability of the Escrow Agent to transfer funds for the payment of the principal of and
interest on the Refunded Obligations shall be limited to the cash balances and proceeds of Escrowed
Securities from time to time on deposit in the Escrow Fund. Norivithstanding any provision contained herein
to the contrary, neither the Escrow Agent nor the Paying Agent shall have any liability whatsoever for the
insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the Escrowed
Securities to make timely payment thereon, except for the obligation to notify the Issuer as promptly as
practicable of any such occurrence.
(b) The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken
as the statements of the Issuer and shall not be considered as made by, or imposing any obligation or liability
upon, the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing the Refunding
Bonds or the Refunded Obligations and is not responsible for nor bound by any of the provisions thereof
(except as a place of payment and paying agent and/or a Paying Agent/Registrar therefor). In its capacity as
Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this
Agreement.
(c) The Escrow Agent makes no representations as to the value, conditions or sufficiency of the
Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security afforded thereby
or hereby, and the Escrow Agent shall not incur any liability or responsibility- in respect to any of such
matters.
(d) It is the intention of the parties hereto that the Escrow Agent shall never be required to use
or advance its own funds or otheitivise incur personal financial liability- in the performance of any of its duties
or the exercise of any of its rights and powers hereunder.
(e) The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in
good faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred
upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of
judgment; and the Escrow Agent shall not be answerable except for its own action, neglect or default, nor for
any loss unless the same shall have been through its negligence or willful misconduct.
(f) Unless it is specifically otheitivise provided herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the performance or
failure of performance of the Issuer with respect to arrangements or contracts with others, with the Escrow
Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the same in
accordance with this Agreement. If, however, the Escrow Agent is called upon by the terms of this
Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated,
in making such determination, only to exercise reasonable care and diligence, and in event of error in making
such determination the Escrow Agent shall be liable only for its own willful misconduct or its negligence.
In determining the occurrence of any such event or contingency the Escrow Agent may request from the
Issuer or any other person such reasonable additional evidence as the Escrow Agent in its discretion may
deem necessary- to determine any fact relating to the occurrence of such event or contingency, and in this
connection may make inquiries of, and consult with, among others, the Issuer at any time.
Section 7.03. Compensation.
(a) Concurrently with the sale and deliver- of the Refunding Bonds, the Issuer shall pay to the
Escrow Agent, as a fee for performing the services hereunder and for all expenses incurred or to be incurred
by the Escrow Agent in the administration of this Agreement, the amount set forth in Exhibit F, attached
hereto and made a part hereof, the sufficiency of which is hereby acknowledged by the Escrow Agent. In the
event that the Escrow Agent is requested to perform any extraordinary services hereunder, the Issuer hereby
agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the
Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary- services, and
the Escrow Agent hereby agrees to look only to the Issuer for the payment of such fees and reimbursement
of such expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien
against the Escrow Fund for any fees for its services, whether regular or extraordinary, as Escrow Agent, or
in any other capacity, or for reimbursement for any of its expenses.
(b) Upon receipt of the aforesaid specific sums stated in subsection (a) of this Section 7.03 for
Escrow Agent fees, expenses, and services, the Escrow Agent shall acknowledge such receipt to the Issuer
in writing.
(c) The Escrow Agent is the Paying Agent for the Refunded Obligations. The Issuer covenants
to timely pay for all future paying agency services of the of the Paying Agent for the Refunded Obligations
in accordance with the paying agent fee schedule now in effect through the final payment of the Refunded
Obligations, the sufficiency ofwhich is hereby acknowledged by the Paying Agent. Additionally, the Paying
Agent agrees to look only to the Issuer for the payment of such fees and reimbursement of such expenses, and
for the benefit of the registered oN-,mers of the Refunded Obligations, to perform the services as Paying Agent
without regard to the future payment of such fees and expenses. The Paying Agent hereby agrees that in no
event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether
regular or extraordinary, as Paying Agent, or in any other capacity, or for reimbursement for any of its
expenses.
Section 7.04. Successor Escrow Agents.
(a) If at any time the Escrow Agent or its legal successor or successors should become unable,
through operation or law or othertivise, to act as escrow agent hereunder, or if its property and affairs shall
be taken under the control of anv state or federal court or administrative body because of insolvencv or
banks uptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder.
In such event the Issuer, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy.
If no successor Escrow Agent shall have been appointed by the Issuer within 60 days, a successor may be
appointed by the oN-,mers of a majority in principal amount of the Refunded Obligations then outstanding by
an instrument or instruments in writing filed with the Issuer, signed by such ov'mers or by their duly
authorized attorneys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made
pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred,
the oN-,mer of any Refunded Obligation may apply to any court of competent jurisdiction to appoint a
successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper,
prescribe and appoint a successor Escrow Agent.
(b) Any successor Escrow Agent shall be: (i) a corporation, bank or banking association
organized and doing business under the laws of the United States or the State of Texas; (ii) be authorized
under such laws to exercise corporate trust powers; (iii) be authorized under Texas law to act as an escrow
agent; (iv) have its principal office and place of business in the State of Texas; (v) have a combined capital
and surplus of at least $5,000,000; and (vi) be subject to the supervision or examination by Federal or State
authoritv.
(c) Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and the
Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and
deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement,
all the rights, powers and trusts of the Escrow Agent hereunder. Upon the request of any such successor
Escrow Agent, the Issuer shall execute any and all instruments in writing formore fully and certainly vesting
in and confirming to such successor Escrow Agent all such rights, powers and duties.
(d) The Escrow Agent at the time acting hereunder may at any time resign and be discharged
from the trust hereby created by giving not less than sixth- (60) days' written notice to the Issuer and
publishing notice thereof, specifying the date when such resignation will take effect, in a newspaper printed
in the English language and with general circulation in Nevv York, Nevv York, such publication to be made
once at least three (3) weeks prior to the date when the resignation is to take effect. No such resignation shall
take effect unless a successor Escrow Agent shall have been appointed by the owners of the Refunded
Obligations or by the Issuer as herein provided and such successor Escrow Agent shall be a paying agent for
the Refunded Obligations or a trust company or commercial bank that does not act as a depositor- for the
Issuer and shall have accepted such appointment, in which event such resignation shall take effect
immediately upon the appointment and acceptance of a successor Escrow Agent.
(e) Under any circumstances, the Escrow Agent shall pay over to its successor Escrow Agent
proportional parts of the Escrow Agent's fee and, if applicable, its Paying Agent's fee hereunder.
Section 7.05. Notice of Redemption. The Escrow Agent, as Paying Agent for the Refunded
Obligations, is hereby authorized and directed to cause notice ofdefeasance and redemption of the Refunded
Obligations to be given at the time and in the form and manner prescribed in the proceedings that authorized
the issuance of the Refunded Obligations.
Section 7.06. Acknowledgment of Notice of Redemption. The Escrow Agent, by its execution
hereof, as Paying Agent for the Refunded Obligations, acknowledges receipt of written notice of the
redemption of the Refunded Obligations, as required by the proceedings that authorized the issuance of the
Refunded Obligations, and agrees to provide or cause to be provided notice of defeasance and redemption
of such Refunded Obligations as required by the proceedings that authorized the issuance of such Refunded
Obligations.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notice. Any notice, authorization, request, or demand required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered
or certified mail, postage prepaid addressed to the Issuer orthe Escrow Agent atthe address shoN-,n on Exhibit
A attached hereto. The United States Post Office registered or certified mail receipt shoNving deliver- of the
aforesaid shall be conclusive evidence of the date and fact of delivery. Any pait hereto may change the
address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior
notice thereof. Prior written notice of any amendment to this Agreement contemplated pursuant to Section
8.08 and immediate written notice of and,- incidence of a severance pursuant to Section 8.04 shall be sent to
Moody's Investors Service, Attn: Public Finance Rating Desk/Refunded Bonds, 99 Church Street, NewYork,
New York 10007, and Standard & Poor's Corporation, Attn: Municipal Bond Department, 25 Broadway,
New York, New York 10004.
Section 8.02. Termination of Responsibilities. Upon the taking of all the actions as described herein
by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities hereunder to the
issuer, the owners of the Refunded Obligations or to any other person or persons in connection with this
Agreement.
Section 8.03. Bindin4 Agreement. This Agreement shall be binding upon the Issuer and the Escrow
Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the
owners of the Refunded Obligations, the Issuer, the Escrow Agent and their respective successors and legal
representatives.
Section 8.04. Severabilitv. In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality-
or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be
construed as if such invalid or illegal or unenforceable provision had never been contained herein.
Section 8.05. Texas Lavv Governs. This Agreement shall be governed exclusively by the provisions
hereof and by the applicable laws of the State of Texas.
Section 8.06. Time of the Essence. Time shall be of the essence in the performance of obligations
from time to time imposed upon the Escrow Agent by this Agreement.
Section 8.07. Effective date of Agreement. This Agreement shall be effective upon receipt by the
Escrow Agent of the funds described in Exhibit D, together with the specific sums stated in subsection (a)
of Section 7.03 for Escrow Agent fees, expenses, and services.
Section 8.08. Amendments. This Agreement shall not be amended except to cure any ambiguity or
formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in
writing and signed by the parties thereto. No such amendment shall adversely affect the rights of the holders
of the Refunded Obligations.
Section 8.09. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original for all purposes, and all counterparts shall together constitute one and
the same instrument.
(Execution Page Follows)
EXECUTED as of the date first written above.
CITY OF DENTON, TEXAS
Mavor
THE BANK OF NEW YORK MELLON TRUST COMPANY,
NATIONAL ASSOCIATION
Bv:
Title:
INDEX TO EXHIBITS
Exhibit A Addresses of the Issuer and the Escro-,-,- Agent
Exhibit B Schedule of Refunded Obligations
Exhibit C Schedule of Debt Service on Refunded Obligations
Exhibit D EscroN-,- Deposit
Exhibit E EscroN-,- Fund Cash Floe-
Exhibit F Escro-,-,- Agent Fees
EXHIBIT A
ADDRESSES OF THE ISSUER AND THE ESCROW AGENT
ISSUER
City of Denton, Texas
215 E. McKinney
Denton, Texas 76201
Attention: City Manager
ESCROW AGENT
The Bank of New York Mellon Trust Company, N.A.
2001 Biyan Street, I Ith Floor
Dallas, Texas 75201
Attention: Corporate Trust Division
A-1
EXHIBIT B
REFUNDED OBLIGATIONS
City of Denton Utility System Revenue
Refunding and Improvement Bonds
Series 2001
Principal
Principal
Maturity- Date
Amount
Amount
Outstandin4
Refunded
12/01/2011
$4,100,000
$4,100,000
12/01/2012
470,000
470,000
12/01/2013
500,000
500,000
12/01/2014
520,000
520,000
12/01/2015
550,000
550,000
12/01/2016
575,000
575,000
12/01/2017
570,000
570,000
12/01/2018
600,000
600,000
12/01/2019
630,000
630,000
12/01/2020
665,000
665,000
Total $9,180,000 $9,180,000
Called for redemption on June 1, 2011, at par plus accrued interest.
B-1
EXHIBIT C
SCHEDULE OF DEBT SERVICE ON REFUNDED OBLIGATIONS
(See attached)
C-1
EXHIBIT D
ESCROW DEPOSIT
Deposit with Respect to the Refunded Obligations: The sum of $ shall be deposited with the
Escrow Agent on May 2011, and applied to pay the redemption price of the Refunded Obligations on June
1, 2011. $ shall be invested in United States Treasury- Obligations - State and Local Government
Series Nvith a maturity- date of , 2011 (see attached).
D-1
EXHIBIT E
ESCROW FUND CASH FLOW
(See attached)
E-1
EXHIBIT F
ESCROW AGENT FEES
(See attached)
F-1
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM: Jon Fortune
SUBJECT
Consider approval of a resolution amending Resolution No. R2009-015 to establish a standing
committee of the City Council of the City of Denton, Texas to be known as the City Council
Airport Committee to advise and assist the City Council regarding City of Denton Municipal
Airport Matters; alternatively assigning such duties to an existing City Council committee; and
providing for an effective date.
BACKGROUND
This item is closely related to an accompanying work session item that is also included on the
April 5, 2011, City Council agenda. As detailed in the work session item, staff is proposing that
the some duties of the Airport Advisory Board be reassigned to a new City Council Airport
committee. In addition, staff is proposing that the current Airport Advisory Board be re-titled as
the Aviation Safety and Technical Advisory Board and that the charge of the Board be amended.
The purpose of this item is to provide the necessary resolution to create the City Council Airport
committee that is recommended.
As described in the attached resolution, a new City Council standing committee called the
Airport Committee is proposed. The committee is proposed to consist of three (3) City Council
members that will be appointed by the Mayor and City Council. The purpose of the committee
shall be to review, consider, and make recommendations to the City Council on: the Airport
Business Plan and the Airport Master Plan as now written or hereafter amended or enacted; any
Airport infrastructure improvement or other major project impacting the Airport; the acquisition,
review, and consideration of grant funding for the Airport; contracts and leases of Airport
property, including recommending of terms to the City Council; long-term financial planning
and budgetary issues affecting the Airport; issues raised as a result of interface between citizens,
Airport tenants, and other interested parties, and members of the Council subcommittee
regarding Airport related issues; and other Airport matters as may, from time to time, be
assigned by the City Council or requested by the City Manager, or his or her designee. The day-
to-day operations will continue to be managed by the Airport Manager under this governance
stricture.
If the City Council elects to assign the above described duties to an existing Council committee
in lieu of creating a new Airport committee, the agenda item caption will allow this change to be
considered. The resolution, however, has been written to establish the Airport committee as
discussed above.
Agenda Information Sheet
April 5, 2011
Page 2
An Airport Governance Responsibilities Matrix has also been included as Exhibit 1 to clearly
document the duties and responsibilities of each aspect of the proposal.
PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISIONS)
On December 6, 2010, City management discussed potential governance options with the
Airport Advisory Board (AAB). The AAB expressed some concerns regarding the options
presented, but they did not provide a formal recommendation to the City Council.
On December 7, 2010, City management discussed potential governance options with the
Economic Development Partnership Board (EDPB). The EDPB was very supportive of the staff
recommendation, and has recommended that the City Council approve the proposed revisions to
the membership and role of the EDPB.
On December 13, 2010, the AAB held a special called meeting to discuss their potential
response and recommendation to the City Council concerning the governance options that were
presented by staff. As a result of this discussion, the AAB developed a letter that was forwarded
to the City Council on December 14, 2010. In this communication, the AAB recommended that
the City Council either: (1) table the item until more discussion could take place or (2) increase
the size of the Airport Advisory Board from seven to nine members with one additional member
coming from the Economic Development Partnership Board and one member coming from the
Chamber of Commerce.
On December 14, 2010, staff made a presentation to the City Council on the Airport governance
options that were identified. The City Council elected to table the Airport governance
discussion until the February 1, 2011 meeting since only four Council members were in
attendance.
On January 5, 2011, the AAB held a meeting to discuss the Airport governance options that
were presented by staff.
On January 19, 2011, the AAB held a special called meeting to discuss the Airport governance
options. The focus of this meeting was to receive input and consider the views of the Airport
tenants and shareholders.
On January 24, 2011, a three member committee of the AAB met to consider drafting a response
to the City Council on governance issues.
On February 1, 2011, the City Council was scheduled to discuss the Airport governance issue,
but the item was tabled due to inclement weather.
On February 9, 2011, the Airport Advisory Board met to discuss the Airport governance options
that would be presented to the City Council.
Agenda Information Sheet
April 5, 2011
Page 3
On February 15, 2011, the City Council discussed the Airport governance recommendations, but
the issue was ultimately tabled in order for a specific recommendation to be developed
concerning safety and tenant stakeholder relations.
On February 21, 2011, the Airport Advisory Board met to discuss the Airport governance
options that would be presented to the City Council.
On March 1, 2011, the City Council amended the duties and responsibilities of the Economic
Development Partnership Board (EDPB) to include Airport branding and marketing, as well as
the development of incentive policies for the Airport. The City Council also tabled the Airport
Committee and Safety and Stakeholder Relations Committee items.
EXHIBITS
1. Airport Governance Responsibilities Matrix
2. Resolution
Respectfully submitted:
ff
Bryan Langley
Chief Financial Officer
m_
X
w
N
G1
O
Q
GC
G1
U
L
r0
V
L
0
Q
L
Q
a~
oa
O
Q
i
Q
O
Q
N
Q
~
3
E
V
V
V
00
~
a
a,
E
W
Q
-
O
G1
fo
>
m
>
>
>
>
>
~
U
O
O
O
O
U
i
W
a
O
fo
~
~
_
y
fo
u
O
•
~
fo
Q
Q
N
O
L
C
VI
C
C
hA
O
C
C
ro
ro
C
-
in
0
41
Q
•E
C
m
-
C
O
L
E
0
t
v
0
~
N
L
Q
a-+
U
Q
U
O
w
O
t
41
O
O
O
N
41
r6
v
i
E
u
in
E
O
O
in
N
Q
L
4
N
1
-
C:
1
L
0
N
o
E
-
w
~
Q
>
+1
4
O
Q
41
C:
r
C
ro
O
L
O
N
C
ro
C
Q
O
D
L
O
Q
N
Q
41
i
O
o
~
CL
N
Q
N
U
a
4-
Q
fa
hA
-M
~
_
t
N
~
~
1
Q
N
v
L
4-
O
L
L
L
_0
L
VI
VI
1
o
_
Q
L
4-
N
C
.
O
VI
,
N
N
a•+
Y
Q
C
C
Q
0
N
4
C
N
O
L
VI
VI
>
v
VI
CL
L
4-
N
1
7
2
(6
'n
N
(o
E
C
N
c:
E
N
4-
D
V)
E
C
U
VI
O
E
'
E
4
Q
O
Q
(
6
U
U
t
O
E
E
•
C:
{i
D
+
0
C
u
D
p
N
a+
L
4•+
C
O
N
a+
p
(6
(6
M
O
Q
O
`e
p
U
>
C
U
i
(6
L
O
O
Q
N
E
C
(6
(6
dA
C
hA
N
N
O
(6
N
41
Q
C:
N
O
VI
L
C
4-
N
N
E
t
N
Q
U
C
-
M
fu
L
(6
O
C
-
Q
O
(6
4-
O
Q
a•+
Y
N
Y
(6
L
(6
•
I
i
~
C:
C
N
N
-
'
CL
E
2
>
N
(6
V
O
4-
a•+
+
+
O
-
u
O
0
-
O
N
O
C:
N
w
M
u
N
C
a
O
O
C
4
O
in
C
~
E
>
4-
v
i
p
fa
u
Q
Q
a)
Q
~
C
0
>
O
N
C
~
7
C
Q
E
N
O
C
O
O
U
U
w
w
U
E
a
+
U
C
C
E
fa
41
hA
O
Q
4-
Q
C:
C
-
N
C
L
D
0
r6
r6
C:
C
VI
C:
-o
a
CL
-
p
N
t
-
>
U
L
N
O
C
(6
.O
N
N
C
C
O
LD-0
O
(o
Q
L
N
N
O
N
N
O
C
O
0
hA
C
C
N
L-
(6
L-
~
O
E
N
3
~
2
d
W
OC
LL-
CJ
Ll
a
U
Of
OC
Q
~
~
.
a
OC
of
U
sAlegal\our documents\resolutions\I 1\committees reso 03251 Ldoc
RESOLUTION NO. R2011-
A RESOLUTION AMENDING RESOLUTION NO. R2009-015 TO ESTABLISH A
STANDING COMMITTEE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS
TO BE KNOWN AS THE CITY COUNCIL AIRPORT COMMITTEE TO ADVISE AND
ASSIST THE CITY COUNCIL REGARDING CITY OF DENTON MUNICIPAL AIRPORT
MATTERS; ALTERNATIVELY, ASSIGNING SUCH DUTIES TO AN EXISTING CITY
COUNCIL COMMITTEE; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City of Denton deems it to be in the best interest of the City to create a
standing committee of the Denton City Council on matters affecting the City of Denton
Municipal Airport in the public interest of increasing public input and access into matters
involving the Denton Airport and elevating the importance of the Denton Airport to the citizens
of the community; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION 1. That Resolution No. R2009-015 is hereby amended to add Title VIII, as
follows:
TITLE VIII. THE CITY COUNCIL AIRPORT COMMITTEE
A. The City Council hereby establishes a standing committee to be called the
City Council Airport Committee. The Committee shall be composed of
three (3) members of the City Council to be appointed by the Mayor and
approved by the City Council. The City Manager, or his or her designee,
will provide guidance and assistance to the Committee and be responsible
for insuring that records are maintained in accordance with the
requirements of the City Secretary's Office.
B. The Committee members shall serve at the pleasure of the City Council
until successors are duly appointed by the Mayor and approved by the
Denton City Council. The presiding officer of the Committee shall be
chosen annually by the Committee. Members of the Committee must be
current elected City Council members of the City of Denton, Texas.
C. The duties and purpose of the Committee shall be to review, consider and
make recommendations to the City Council on: the Airport Business Plan
and the Airport Master Plan as now written or hereafter amended or
enacted; any airport infrastructure improvement or other major project
impacting the airport; the acquisition, review, and consideration of grant
funding for the airport; contracts and leases of airport property, including
recommending appropriate terms to the City Council; long term financial
planning and budgetary issues affecting the airport; issues raised as a
result of interface between citizens, airport tenants, or other interested
sAlegal\our documents resolutions\I 1\committees reso 03251 l.doc
parties, and members of the Council subcommittee regarding airport
related issues; and other airport matters as may, from time to time, be
assigned by the City Council or requested by the City Manager, or his or
her designee.
SECTION 2. Title VIII. of Resolution No. R2009-015 is renumbered to Title IX.
SECTION 3. All provisions of Resolution No. R2009-015 in conflict herewith are
superceded and repealed.
SECTION 4. This Resolution shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
Page 2
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Finance
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance amending Ordinance No. 97-299 and Section 3-2 of the Code
of Ordinances of the City of Denton by renaming the Airport Advisory Board to the Aviation
Safety and Technical Advisory Board; assigning the duties of the board, and prescribing an
effective date.
BACKGROUND
This item is closely related to an accompanying work session item that is also included on the
April 5, 2011, City Council agenda. As detailed in the work session item, staff is proposing the
creation of a new City Council Airport Committee and the assignment of duties to the Aviation
Safety and Technical Advisory Board. The purpose of this item is to provide the necessary
ordinance to amend Section 3-2 of the Code of Ordinances to 1) rename the Airport Advisory
Board as the Aviation Safety and Technical Advisory Board and 2) to assign duties to the Board.
As described in the attached ordinance, staff is proposing to rename the Airport Advisory Board
to the Aviation Safety and Technical Advisory Board. In addition, the attached ordinance
details the following duties of the board:
• Advising the City Council on matters relating to Airport safety, flight and ground
operations.
• Advising the City Council on any safety and security issue arising from the creation and
development of long-term master plans.
• Facilitating tenant/stakeholder outreach.
The intent of the Board is to explore a wide range of safety and technical issues that may be
encountered in the operation of the Airport. To this end, the Board will be required to meet at
least monthly unless the meeting is cancelled at the direction of the board chair.
An Airport Governance Responsibilities Matrix has also been included as Exhibit 1 to clearly
document the duties and responsibilities of each aspect of the proposal.
PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISIONS)
On December 6, 2010, City management discussed potential governance options with the
Airport Advisory Board (AAB). The AAB expressed some concerns regarding the options
presented, but they did not provide a formal recommendation to the City Council.
Agenda Information Sheet
April 5, 2011
Page 2
On December 7, 2010, City management discussed potential governance options with the
Economic Development Partnership Board (EDPB). The EDPB was very supportive of the staff
recommendation, and has recommended that the City Council approve the proposed revisions to
the membership and role of the EDPB.
On December 13, 2010, the AAB held a special called meeting to discuss their potential
response and recommendation to the City Council concerning the governance options that were
presented by staff. As a result of this discussion, the AAB developed a letter that was forwarded
to the City Council on December 14, 2010. In this communication, the AAB recommended that
the City Council either: (1) table the item until more discussion could take place or (2) increase
the size of the Airport Advisory Board from seven to nine members with one additional member
coming from the Economic Development Partnership Board and one member coming from the
Chamber of Commerce.
On December 14, 2010, staff made a presentation to the City Council on the Airport governance
options that were identified. The City Council elected to table the Airport governance
discussion until the February 1, 2011 meeting since only four Council members were in
attendance.
On January 5, 2011, the AAB held a meeting to discuss the Airport governance options that
were presented by staff.
On January 19, 2011, the AAB held a special called meeting to discuss the Airport governance
options. The focus of this meeting was to receive input and consider the views of the Airport
tenants and shareholders.
On January 24, 2011, a three member committee of the AAB met to consider drafting a response
to the City Council on governance issues.
On February 1, 2011, the City Council was scheduled to discuss the Airport governance issue,
but the item was tabled due to inclement weather.
On February 9, 2011, the Airport Advisory Board met to discuss the Airport governance options
that would be presented to the City Council.
On February 15, 2011, the City Council discussed the Airport governance recommendations, but
the issue was ultimately tabled in order for a specific recommendation to be developed
concerning safety and tenant stakeholder relations.
On February 21, 2011, the Airport Advisory Board met to discuss the Airport governance
options that would be presented to the City Council.
Agenda Information Sheet
April 5, 2011
Page 3
On March 1, 2011, the City Council amended the duties and responsibilities of the Economic
Development Partnership Board (EDPB) to include Airport branding and marketing, as well as
review and development Airport incentive policies. The City Council also tabled the Airport
Committee and Safety and Stakeholder Relations Committee items.
EXHIBITS
1. Airport Governance Responsibilities Matrix
2. Ordinance
Respectfully submitted:
Bryan Langley
Chief Financial Officer
m_
X
w
N
G1
O
Q
GC
G1
U
L
r0
V
L
0
Q
L
Q
a~
oa
O
Q
i
Q
O
Q
N
Q
~
3
E
V
V
V
00
~
a
a,
E
W
Q
-
O
G1
fo
>
m
>
>
>
>
>
~
U
O
O
O
O
U
i
W
a
O
fo
~
~
_
y
fo
u
O
•
~
fo
Q
Q
N
O
L
C
VI
C
C
hA
O
C
C
ro
ro
C
-
in
0
41
Q
•E
C
m
-
C
O
L
E
0
t
v
0
~
N
L
Q
a-+
U
Q
U
O
w
O
t
41
O
O
O
N
41
r6
v
i
E
u
in
E
O
O
in
N
Q
L
4
N
1
-
C:
1
L
0
N
o
E
-
w
~
Q
>
+1
4
O
Q
41
C:
r
C
ro
O
L
O
N
C
ro
C
Q
O
D
L
O
Q
N
Q
41
i
O
o
~
CL
N
Q
N
U
a
4-
Q
fa
hA
-M
~
_
t
N
~
~
1
Q
N
v
L
4-
O
L
L
L
_0
L
VI
VI
1
o
_
Q
L
4-
N
C
.
O
VI
,
N
N
a•+
Y
Q
C
C
Q
0
N
4
C
N
O
L
VI
VI
>
v
VI
CL
L
4-
N
1
7
2
(6
'n
N
(o
E
C
N
c:
E
N
4-
D
V)
E
C
U
VI
O
E
'
E
4
Q
O
Q
(
6
U
U
t
O
E
E
•
C:
{i
D
+
0
C
u
D
p
N
a+
L
4•+
C
O
N
a+
p
(6
(6
M
O
Q
O
`e
p
U
>
C
U
i
(6
L
O
O
Q
N
E
C
(6
(6
dA
C
hA
N
N
O
(6
N
41
Q
C:
N
O
VI
L
C
4-
N
N
E
t
N
Q
U
C
-
M
fu
L
(6
O
C
-
Q
O
(6
4-
O
Q
a•+
Y
N
Y
(6
L
(6
•
I
i
~
C:
C
N
N
-
'
CL
E
2
>
N
(6
V
O
4-
a•+
+
+
O
-
u
O
0
-
O
N
O
C:
N
w
M
u
N
C
a
O
O
C
4
O
in
C
~
E
>
4-
v
i
p
fa
u
Q
Q
a)
Q
~
C
0
>
O
N
C
~
7
C
Q
E
N
O
C
O
O
U
U
w
w
U
E
a
+
U
C
C
E
fa
41
hA
O
Q
4-
Q
C:
C
-
N
C
L
D
0
r6
r6
C:
C
VI
C:
-o
a
CL
-
p
N
t
-
>
U
L
N
O
C
(6
.O
N
N
C
C
O
LD-0
O
(o
Q
L
N
N
O
N
N
O
C
O
0
hA
C
C
N
L-
(6
L-
~
O
E
N
3
~
2
d
W
OC
LL-
CJ
Ll
a
U
Of
OC
Q
~
~
.
a
OC
of
U
s:\legal\our documents\ordinances\11\aviation safety and technical advisory board.doc
ORDINANCE NO.
AN ORDINANCE AMENDING ORDINANCE NO. 97-299 AND SECTION 3-2 OF THE
CODE OF ORDINANCES OF THE CITY OF DENTON BY RENAMING THE AIRPORT
ADVISORY BOARD TO THE AVIATION SAFETY AND TECHNICAL ADVISORY
BOARD; ASSIGNING THE DUTIES OF THE BOARD, AND PRESCRIBING AN
EFFECTIVE DATE.
WHEREAS, the Airport Advisory Board has been in existence for over six decades
providing advice and counsel to the Denton City Council; and
WHEREAS, the Airport Advisory Board has assisted the City of Denton and the
Denton City Council a with myriad of aviation related projects and matters, providing valuable
technical guidance and support; and
WHEREAS, the mission of the Airport Advisory Board has evolved over time with the
growth of the City and changes in the economic climate, as well as changes in the complexity of
policy related decisions; and
WHEREAS, the City Council approved an Airport Business Plan on November 16, 2010
which stressed financial self-sufficiency for the Airport; and
WHEREAS, the City Council determined by Ordinance No. 2011-042 on March 1, 2011
that the Economic Development Partnership Board should assume the responsibilities of Airport
branding and marketing in support of the Denton Airport 2010 business plan; and
WHEREAS, the City Council and the Airport Advisory Board have discussed possible
Airport governance options at length over the past several weeks; and
WHEREAS, the City Council deems it in the best interest of the City to retain and
preserve an advisory board on airport matters in light of the historical and general aviation
knowledge therein contained, but to re-name the board the "Aviation Safety and Technical
Advisory Board" in recognition of the changed conditions noted and including also the interest
of the City Council in having a subcommittee of its body more closely attuned to some of the
policy matters of the airport; and
WHEREAS, the City Council also deems it in the best interest of the City to re-define the
functions of this advisory board in the interest of elevating the importance of Airport matters to
the community and increasing public access and input into matters involving Airport operations
by assigning to the board responsibilities relating to airport safety, flight and ground operations,
any safety and security issues arising from the creation and development of long-term master
plans, and the duty of facilitating tenant/stakeholder outreach; NOW, THEREFORE,
sAlegal\our documents\ordinances\11\aviation safety and technical advisory board.doc
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. That Ordinance No. 97-299, as codified in Section 3-2 "Creation,
composition, and qualifications of airport advisory board" of the Code of Ordinances is hereby
amended to read as follows:
Sec. 3-2 Creation, composition, and qualifications of Aviation Safety and Technical
Advisory Board.
a. The Airport Advisory Board is re-named the Aviation Safety and Technical Advisory
Board whose membership shall continue to consist of seven members who shall meet
the qualifications and residency requirements as provided in Section 2-61 of the Code
of Ordinances.
e. The Aviation Safety and Technical Advisory Board shall serve in an advisory
capacity and shall advise the City Council on matters relating to airport safety, flight
and ground operations, any safety and security issues arising from the creation and
development of long-term master plans, and shall have the duty of facilitating
tenant/stakeholder outreach.
d. The City Manager, or his or her designee, will act as staff liaison to the Aviation
Safety and Technical Advisory Board, and will provide guidance and assistance to the
board and shall be responsible for insuring that records are maintained in accordance
with the requirements of the City Secretary's Office.
e. The board shall meet not less than monthly unless any such meeting is cancelled by
the board Chair after consultation with the City Manager, or his or her designee.
SECTION 2. That the provisions of this ordinance shall govern and control over any
conflicting provisions of Ordinance No. 97-299, Ordinance No. 87-112, Ordinance No. 93-140,
and Chapter 3 of the Code of Ordinances. Any provisions not herein amended shall remain in
full force and effect.
SECTION 3. That this ordinance shall become effective immediately upon its passage
and approval.
PASSED AND APPROVED this the day of , 2011.
MARK A. BURROUGHS, MAYOR
Page 2
s:Alegal\our documents\ordinances\11\aviation safety and technical advisory board.doc
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
Page 3
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Planning and Development
ACM: Fred Greene
SUBJECT - S010-0010 (DCTA A-Train North Communication Tower)
Continue consideration of adopting of an ordinance of the City of Denton, Texas, concerning a
Specific Use Permit for a new self-supporting lattice telecommunications tower on property
located within an Employment Center Industrial (EC-1) zoning district classification and use
designation. The approximately 14.9 acre property is generally located east of Teasley Lane and
south of the Denton County Transportation Authority railroad right-of-way and is more
commonly known as lot 6A, Block B of the Shady Oaks Industrial Park Addition; and providing
for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an
effective date. The Planning and Zoning Commission recommends approval of this request (6-
1).
PROPOSAL
The applicant, Jim Hanlon with HAX Technologies, is requesting a Specific Use Permit (SUP) to
constrict a 180-foot tall self-supporting lattice telecommunications tower in an EC-1 zoning
district. Pursuant to Section 35.12.8.7 of the Denton Development Code (DDC), self-supporting
lattice telecommunications tower located in an EC-1 zoning district in excess of 50-feet is
permitted only by an SUP.
The subject property is proposed to be developed in two (2) phases. The first phase is located in
the southwest corner of the subject property and encompasses approximately 800 square feet. It
will consist of the proposed telecommunications tower and a prefabricated 80 square foot
enclosure, see Exhibit 6. The enclosure will house all the radio and fiber optic equipment
necessary for the train dispatcher to operate the train system. The tower and enclosure will be
surrounded by a chain link fence, similar to the one shown in Exhibit 7. The second phase will
consist of a DCTA Bus Maintenance Facility, which will encompass the remaining property.
The DCTA Bus Maintenance Facility is scheduled to commence constriction in 2015.
BACKGROUND
On March 1, 2011, after hearing presentations and comments from City staff, the public and the
applicant, the City Council closed the public hearing and continued this item to the April 5, 2011
City Council meeting. During their discussion of this item, the Council requested that DCTA
provide information on alternative locations and associated costs.
On Friday, March 18, 2011, staff received an email from DCTA stating that no additional
information will be provided (see Exhibit 10). Nonetheless, DCTA will present the alternatives
they explored and will be prepared to answer questions at the April 5, 2011 meeting.
The subject property is currently being utilized by DCTA as a staging area for the constriction of
the rail line. DCTA began utilizing the property as a staging area in July of 2009. Once the
constriction of the rail line is complete, the property will be restored in preparation for the future
DCTA Bus Maintenance Facility.
The subject property is in close proximity the Southeast Denton Neighborhood to the north. The
applicant presented the proposed telecommunications tower at a regularly scheduled Southeast
Denton Neighborhood Association (SEDNA) meeting held on Monday, December 27, 2010.
There were approximately 13 people in attendance. The main concerns expressed by the
attendees were regarding potential radiation and interference with personal electronic devices
from the tower. According to the applicant, the proposed tower will not emit radiation and it will
not cause any interference with personal electronic devices. Notes from the meeting are
provided in Exhibit 8.
Public notices were sent to residents and property owners within 200 feet of the subject property,
see Exhibit 13. As of this writing, staff has received seven (7) responses to the Notice of Public
Hearing. Two (2) property owners are in favor, three (3) are in opposition, and two (2) are
neutral to the proposed project.
PRIOR ACTION/REVIEW
1. February 23, 2011 Planning and Zoning Commission Public Hearing
2. March 1, 2011 City Council Public Hearing
OPTIONS
1. Approve as submitted
2. Approve subject to conditions
3. Deny
4. Postpone consideration
5. Table item
RECOMMENDATION
The Planning and Zoning Commission recommends approval of this request (6-1).
The Development Review Committee recommends approval of this request based on the criteria
for a Specific Use Permit and the criteria for Specific Use Permits related to telecommunications
facilities, subject to the following conditions:
1. The applicant shall maintain the existing landscaping screening between the subject
property and the neighborhood north of Kerley Street.
EXHIBITS
1. Staff Analysis
2. Location Map
3. Existing Zoning Map
2
4. Future Land Use Map
5. Narrative and Letter From Applicant
6. Proposed Elevations
7. Photo of a Similar Telecommunication Tower and Enclosure
8. Meeting Notes from SEDNA Meeting
9. Proposed Site Plan From Applicant
10. March 18, 2011 DCTA E-mail
11. Letter from DCTA
12. Site Photographs
13. Notification Information
14. February 23, 2011 Planning and Zoning Commission Minutes
15. Responses to Public Notification
16. Draft Ordinance
Prepared by:
K~$ -
Ron Menguita, AICP
Development Review Liaison
Respectfully submitted:
Mark Cunningham, AICP, CPM
Planning and Development Division Director
EXHIBIT 1
STAFF ANALYSIS
P&Z Date: February 23, 2011 TYPE: Specific Use Permit
CC Date: March 1, 2011 PROJECT 510-0010
April 5, 2011
Project Number: 510-0010
Request: Consider making a recommendation to City Council regarding a
Specific Use Permit (SUP) for a telecommunications tower on
property currently located within an Employment Center Industrial
(EC-1) zoning district.
Applicant: Jim Hanlon with Hax Technologies
Property Owner: Denton County Transportation Authority
Location: 1101 Teasley Lane
Size: 14.9 acres
Zoning Designation: Employment Center Industrial (EC-1)
Future Land Use: Employment Center
Case Planner: Ron Menguita
DRC Recommendation: The Development Review Committee recommends approval of
this request based on the criteria for a Specific Use Permit and the
criteria for Specific Use Permits related to telecommunications
facilities, subject to the following conditions:
1. The applicant shall maintain the existing landscaping screening
between the subject property and the neighborhood north of
Kerley Street.
Denton Development
Code Analysis:
The applicant is requesting a Specific Use Permit (SUP) for the constriction of a 180-feet tall
self-supporting lattice telecommunications tower in an Employment Center Industrial (EC-1)
zoning district.
Pursuant to Section 35.12.8.3.A of the DDC, all applications for rezoning or a SUP for a
telecommunications tower, antenna, or other facility to provide a telecommunications service
4
shall inchide a completed supplemental information form provided by the City regarding said
facilities. In addition to any information required for applications for a SUP pursuant to this
chapter, applicants for a SUP for a telecommunications tower or antenna or other such facility
shall submit the following information:
1. A detailed master antenna plan, clearly indicating the location of the proposed tower,
on-site land uses and zoning, adjacent land uses and zoning, and other information
deemed necessarv by the Director.
2. A legal description of the property and leased lama' if applicable.
3. The setback distance bet►veen the proposed tower and the nearest residential unit,
platted residentially zoned properties, and un platted residentially zoned properties.
4. The separation distance from other towers shown on an updated site plan or map.
5. A landscape plan showing specific landscape materials.
6 Method of fencing and finished color and, if applicable, the method of camouflage
and illumination.
The required information was provided as part of the SUP application submitted by the
applicant in the form of a site plan, project narrative or described in the applicant's
response letter.
Pursuant to Section 35.12.8.4.D of the DDC, security fencing shall be installed by a wrought
iron or steel chain link fence with evergreen hedge, or a masonry wall, each not less than 6 ,feet
in height The exterior of equipment buildings and or metal equipment cabinets visible rom
residential areas or public rights-of-wav must have a neutral aggregate finish or be painted to
reflect the color" and character of adjoining structures or blend icith adjacent landscaping and
other surroundings.
The applicant is proposing to provide security fencing in the form of a steel chain link fence
similar to the one utilized in a similar project found in the City of Lewisville, see Exhibit 7.
Pursuant to Section 35.12.8.4.E, all telecommunication towers as well as gitvs and gity anchors
shall be located ij,ithin the buildable area of the lot and not ij,ithin the front, rear, or side vard
building setbacks. Telecommunication towers in excess of l00 feet) in height shall be set back a
minimum of 2, 600 feet from the right-of--wav of all controlled access federal and state roadways
designated as frec~vavs to provide unobstructed flight paths for helicopters.
The proposed self-supporting lattice telecommunications tower located within the buildable
area of the lot. In addition, the proposed telecommunications tower does not exceed 400
feet.
Pursuant to Section 35.12.8.4.G, except as otherwise permitted in this ordinance, no signals,
lights, or illumination of anv kind shall be permitted on or directed toward any toicer unless
required by the FCC, the FAA, or other appropriate public authority.
5
According to the applicant, all signals, lights, or illumination requirements by the FCC, the
FAA, or other appropriate public authority will be met.
Pursuant to Section 35.12.8.5.B, except as provided in Section 35.12.8.7, telecommunications
toll'ers are [lot permitted in any residential zoning district and must be a mininnim of a 3 to 1
distance to height ratio f om a single fal?lily residential use and 1 to 1 distance to height ratio
firom a nndtifamily use.
The closest single-family residential use is over 600 feet away from the proposed
telecommunications tower. There is no multi-family use within proximity of the proposed
telecommunications tower.
Pursuant to Section 35.12.8.5.E. anv nely telecommunications tower in excess of 180 feet in
height must be located a minimum of I mile from any existing tower in excess of 180 feet in
height.
The proposed telecommunications tower does not exceed 180 feet.
Pursuant to Section 35.6.-1, a ~peclf c (Ae permit may be granted if the City Council flndS that
the proposed use conforms, or can be made to conform through the imposition of conditions,
with the following approval criteria.
A. That the use lvoluld be in conformance lvlth all standards icithln the zoning district in lvhlch
the use is proposed to be located, and in conformance with the Denton Plan and federal,
state, or local lain.
The proposed telecommunications tower is permitted within the EC-I zoning district
with an SUP. If the SUP is granted, the proposed telecommunications tower would be
in conformance with the Development Code. The proposed telecommunications tower
is in conformance with the Denton Plan. The following are goals listed in the Denton
Plan:
■ Provide a range of viable transportation alternatives, including transit, bicycling,
and walking.
■ Reduce use of the single-occupied vehicles over time or maximize occupants per
vehicle. Invest in transit planning and transit systems.
The proposed telecommunications tower and enclosure will house all the radio and
fiber optic equipment necessary for the train dispatcher to operate the future DCTA A-
Train system.
B. A specific permit shall be issued only if all of the following conditions have been met:
1. That the specific use icill be compatible icith and not igjurlous to the use and eqj( vl?lent
of other property nor slgnTficantly diminish or impair property values icithln the
immediate vicinity;
6
The proposed telecommunications tower will be compatible with and not injurious
to the use and enjoyment of other properties. The properties immediately to the
west, east and south are zoned EC-I. Existing land uses and proposed land uses
permitted in this zoning district is consistent with the proposed telecommunications
tower.
2. That the establishment of the specific use will not impede the normal and orderly
development and improvement of surrounding vacant property;
The proposed telecommunications tower is within the planned DCTA Bus
Maintenance and Operations Facility. The telecommunications tower is phase one
of a two-phase project. Granting of the SUP will not impede the normal and orderly
development and improvement of surrounding vacant property.
3. That adequate utilities, access roads, drainage and other necessary supporting facilities
have been or will be provided,
The DRC has reviewed the proposed project and determined that adequate utilities,
access roads, drainage and other necessary supporting facilities will be provided.
4. The design, location and arrangement of all driveways and parking spaces provides for
the safe and convenient movement of vehicular and pedestrian traffic without adversely
affecting the general public or adjacent developments;
The design, location and arrangement of all driveways will not adversely affect the
general public or adjacent developments.
5. That adequate nuisance prevention measures have been or will be taken to prevent or
control offensive odor, fames, dust, noise and vibration;
The proposed telecommunications tower will not emit odor, fumes, dust, noise and
vibration.
6 That directional lighting will be provided so as not to disturb or adversely affect
neighboring properties; and
The only exterior lighting will be a fixture over the door to the prefabricated 80
square feet enclosure. The telecommunications tower does not require lighting to
meet FAA requirements.
7. That there 1S Siff,fficient landS'caping and screening to ensure harmony and compatibility
with adjacent property.
Provided with the SUP application submittal is a rendering/exhibit that illustrates
how the proposed telecommunications tower will be screened to the neighborhood to
7
the north with existing landscaping in the form of trees and shrubs. The existing
landscaping will remain until the construction phase two of the planned DCTA Bus
Maintenance and Operations Facility. At the time of construction of this facility
other landscaping and screening as required by the Development Code will be
installed.
C. That adequate capacity of iif°astrnctnre can and will be provided to and through the subject
property.
The DRC has reviewed the proposed project and determined that adequate capacity of
infrastructure can and will be provided to and through the subject property.
D. That the Special Use is compatible with and hill not have an adverse impact on the
surrounding area. When evaluating the effect of the proposed use on the surrounding area,
the following factors shall be considered in relation to the target use of the zone:
1. Similarity in scale, bulk, and coverage.
The scale, bulk, and coverage of the prefabricated 80 square feet enclosure are
similar to the surrounding structures.
2. Generation of traffic and effects on surrounding streets. Increases in pedestrian, bicvcle,
and mass transit use are considered benef cial regardless of capacity of facilities.
The proposed telecommunications tower will result in minimal traffic demand.
3. Architectural compatibility with the impact area.
The architecture of the prefabricated 80 square feet enclosure is similar to the
surrounding structures.
4. Air quality, inchiding the generation of deist, odors, or other environmental pollutants.
The proposed telecommunications tower will not emit odor, fumes, dust, noise and
vibration.
5. Generation of noise, light, and glare.
No additional noise, light, and glare will be generated by the radio tower.
6 The development of adjacent properties as envisioned in The Denton Plan.
The proposed telecommunications tower is in conformance with the Denton Plan.
8
7. Other factors found to be relevant to satisfy the requirements of this Chapter.
The lattice work - segmented design of this tower includes safety features. The
tower is segmented into twenty (20) sections. During potential high winds the
segmented design will keep large sections from toppling. Additionally the tower is
designed to collapse onto itself, thus eliminating the potential of falling onto another
property.
Findings of Fact
1. The request is for an ,SUP for a telecommunications tower an property currently located
within an Entployinent Center Industrial (EC I) Zoning district. The approximately 14.9-
acre property is located east of Teaslev Lane and south of the DCTA railroad right-of-
wav.
2. A Pre-application Conference (PACIO-0120 for the subject project was submitted on
November 8, 2010.
3. The subject property is located within an area designated "Employment Centers" by the
Denton Plan.
4. The criteria for approval of a Specific (Ae Permit per Section 35.6 4 and the additional
criteria required far telecommunication tolvers per Section 35.12.8 have been met.
5. No other plan is subject to the proposed project.
6 The subject property is currently undeveloped The property is currently being utilized as
a DCTA staging area.
7. Adjacent uses consist of industrial to the south, west and east. Residential uses are
located to the north across the DCTA railroad right-of--wav.
8. Adjacent zoning to the south, west and east is Employment Center Industrial (EC I).
Neighborhood Residential 4 (NR-=1) is located to the north across the DCTA railroad
right-qf--wav.
9. There are no presences of Environmentally Sensitive Areas (E,SAs) or FEMA foodplain
within the suNect property.
10. The subject project will consist of a 180 foot tall self-supporting lattice
telecommunications tower and a prefabricated 80 square feet enclosure. The proposed
telecommunications tower and enclosure are located in the southwest corner of the
subject property and encompasses approximately 800 square feet. The subject project
will be accessed of
of Teaslev Lane. Electric power for the telecommunications tower
and enclosure will be provided through an underground service to the site. The DRC has
9
reviewed and determined that all other utilities exist to support the proposed
telecommunications toirer.
11. No infrastructure or utility demand is anticipated for the first phase. The second phase
will demand water, wastewater, storm water, transportation, police, fire and EM,S
services.
DEVELOPMENT REVIEW COMMITTEE
Based upon the information provided by the applicant and a recent site visit, the Development
Review Committee finds that with the recommended conditions the request IS CONSISTENT
with the surrounding land uses and general character of the area, IS CONSISTENT with the
Denton Plan, and IS CONSISTENT with the Denton Development Code.
CONDITIONS OF APPROVAL
Based upon the findings-of-fact, the Development Review Committee recommends approval of
this request based on the criteria for a Specific Use Permit and the criteria for Specific Use
Permits related to telecommunications facilities, subject to the following conditions:
1. The applicant shall maintain the existing landscaping screening between the subject
property and the neighborhood north of Kerley Street.
GENERAL NOTES
XOTE: Approval of this request shall not constitute a ii-aiver or variance from any applicable development
requirement unless specifically noted in the conditions of approval and consistent with the Denton
Development Code.
XOTE: All written comments made in the application and subsequent submissions of information made during the
application review process, which are on file with the Cio) of Denton, shall be considered to be binding
upon the applicant, provided such comments are not at variance with the Denton Plan, Denton
Development Code or other development regulations in effect at the time of development.
Surrounding Zoning Designations and Current Land Use Activity:
Northwest:
NR-4
Residential Neighborhood
North:
NR-4
Residential Neighborhood
Northeast:
NR-4
Residential Neighborhood
West:
East:
EC-1
EC-1
Industrial Use
Industrial Use
Southwest:
South:
Southeast:
EC-1
EC-1
EC-1
Industrial Use
Industrial Use
Industrial Use
Source: City of'Denton Geographical11#6nnation System and site visit by City staff
10
Comprehensive Plan:
A. Consistency with Goals, Objectives and Strategies:
The subject property is located within an area designated "Employment Center" by the Denton
Plan. Staff finds that the proposed telecommunications tower is consistent with the Denton Plan.
According to the Denton Plan, "Employment centers are intended to provide locations for a
variety of workplaces, including limited light manufacturing uses, research and development
activities, corporate facilities, offices, and institutions. Employment centers are also intended to
accommodate secondary uses that complement or support the primary workplace uses, such as
hotels, restaurants, convenience shopping, and child-care. Adequate public facilities shall be a
criterion by which zoning is granted."
Additionally, employment centers are intended to:
■ Encourage the development of office and business workplaces in close proximity to housing,
civic, and recreational uses;
■ Promote excellence in the design and constriction of buildings, outdoor spaces,
transportation facilities, and streetscapes;
■ Direct the development of workplaces consistent with the availability of public facilities and
services; and,
■ Continue the vitality and quality of life in adjacent neighborhoods.
B. Land Use Analysis:
The proposed tower is compatible with the surrounding land use. No impact is anticipated.
Nearest Fire and EMS Station
Name of Station
Approximate Distance From Subject Property
Central Fire Station - Station
41 (332 E. Hickory Street)
Fire Station 41 serves that area and is approximately 1.74
miles from the proposed telecommunications tower.
Source: Cite ofDeritoi GIS, Fire Department, alid ElAIS
This proposed telecommunications tower has been reviewed for compliance with the 2006
International Fire Code and City Ordinance 2009-098, Section 29-2 Amendments to the Fire
Code. The applicant is responsible for compliance with all applicable portions of the Fire Code
and City Ordinances even in the absence of review comments. Further review comments will be
provided upon receipt of more detailed constriction plans submitted as part of a building permit.
A building permit is required for constriction of the proposed telecommunications tower.
11
Water and Wastewater Demand and Capacity:
A. Estimated Demand and Service Provider:
There are currently no water or wastewater demands associated with the proposed
telecommunications tower. Further review of water or wastewater demands will be conducted
upon receipt of more detailed constriction plans submitted as part of the second phase. The
DCTA Bus Maintenance Facility is scheduled to commence constriction in 2015.
B. Available Capacity:
In the event that there are future demands, there is adequate capacity in the City's water
distribution and wastewater collection systems.
C. CIP Planned Improvements:
There are no planned public improvements for the water and sanitary sewer facilities serving the
subject site.
Roadways/Transportation Network:
A. Estimated Demand:
The proposed telecommunications tower will result in minimal traffic demand upon project
completion.
B. Available Capacity:
Teasley Lane has the capacity to accommodate this development.
C. Roadway Conditions:
Teasley Lane is an improved surface roadway.
D. CIP Planned Improvements:
There are no planned public improvements for the roadways/transportation network serving the
subject site.
Environmental Conditions:
According to the Water Administration Department, an existing ESA designation was removed
as part of ESA09-0009.
Wells (Public/Private):
No public or private portable water wells are proposed for the site.
12
Airports:
The subject site is not within the boundaries of the Denton Municipal Airport Overlay District.
Electric:
Existing DME facilities are adequate for the proposed telecommunications tower.
Park Facilities:
The proposed telecommunications tower will not result in any increase in park demands.
13
EXHIBIT 2
LOCATION MAP
V RSE
z
w
k
c
l
~
r-k~F
i
`
p~~
w
..1 I T H
Q.
\
PROPOSED
SUBJECT SITE
TOWER
I z
~ z
SHADY OAKS
i
pR\~ .y
II
_4'J I..
~E
D 4NII GLI?NE`S
q<<
DELR TRA
qs
n
IL
z
m
HUHKINS
i
FOX HC,I
i
i
Feet
0 150 300 600
14
EXHIBIT 3
EXISTING ZONING MAP
MORSE
NR-4
r
w
J
SMITH
w
!PROPOSED
TOWER
z
a
z
a
kt'o.
NR-4
NR-4
EC-1
SHADY OAKS
SANTA FE
Y
o
a NR-2
A
9<<
NRMU-12
o
DC-G
C4
S
~
EC-C
HOPKiNS
NR-3
NR-4
0
0
° DEER TRAIL
z
Y
FOX HOLI O1
Feet
0 350 300 600
15
MCDONALD
a SCOSS
w
w
rl~
z
c'
a
m
JBJECT SITE
EXHIBIT 4
FUTURE LAND USE MAP
MORSE
z
I a
:J
Z
5
O
,Exisi PROPOSED
TOWER
(Employment Center
wW
J
Q
Downtown University Core
vv
9S
U~
qs,
Employment Center
SHADY OAKS
d
Z
0
0
Q
m
_mployment Center
JBJECT SITE
SANTA FE A WILDERNESS
O v A
> m
~ ¢ o
o 0
0
Existing Land Use DEER rRA L
z
Y
HOPKINS
FOX HOLLOW
0
Feet
0 150 300 600
16
Existing Land Use
MCDONALD
0 SGOTT
w
/rp".
EXHIBIT 5
NARRATIVE AND LETTER FROM APPLICANT
Project Narrative
Denton County Transportation Authority (DCTA) A-train Passenger
Rail Radio Communication Tower, City of Denton, Texas
City of Denton Project No. S10-0010
DDTA a Coordinated County Transportation Authority created organized, under Chapter 460,
Texas Transportation Code is constructing a 21 mile commuter rail project linking the Cities of
Denton, Highland Village and Lewisville with Dallas Area Rapid Transit's (DART) Green line in
Carrollton providing citizens of Denton County with alternative transportation choice to
downtown Dallas.
Paramount to the completion and subsequent services is the installation and testing of DCTA's
northern radio tower. The tower is required to provide reliable radio communications between
passenger trains and dispatch, for regular communications and emergency communications.
This tower is the second of two towers to provide the required coverage and redundancy for
passenger rail communications.
The planned location of this tower is within the property platted as Lot 6B of the Shady Oaks
Industrial Park, 1102 Teasly Road, Cabinet Y, Page 656, and is currently owned by DCTA and
is the future location of DCTA's Bus Operations and Maintenance Facility which is scheduled for
construction in 2016. At that time the property will be repl'atted all appropriate dedications,
landscaping and irrigation will be installed.
At this time DCTA wishes to erect its radio tower within this tract. This tract was selected as any
location along the rail corridor with sufficient access and space is within or in close proximity to
residential zoning. This narrative is provided to aid in the approval of the requested Special Use
Permit (SUP).
A. That the use would be in conformance with all standards within the zoning district
in which the use is proposed to be located, and in conformance with the Denton
Plan and federal, state, or local law.
The subject property is within an Employment Center - industrial (EC-1) zoning district. A
tower of this type is allowed within this zoning per 38.12.8 of The City of Denton
Development Code. The property immediately surrounding this tract is also zoned EC-1
across Teasley to the north, immediately to the west and south. To the east the property
abuts the DCTA rail Right-of-Way which is a 400-FT. ROW. Parallel to the easterly ROW
line of the DCTA rail is Kerley Street which is part of a residential subdivision zoned R-4.
The proposed location on the subject tract meets the 3:1 distance to height separation
requirement of 35.12,8.5.8. Structural drawings were prepared and sealed by an Engineer
registered in the State of Texas, as required by State Law.
This radio tower is in conformance with the Denton Plan, addressing transportation goals
including transit. As well as land use, it appears this area is within the land use chapter 3 in
which the Denton Plan discusses, the North Texas Research Park Employment Center; it
appears based on the boundary this Lot is within this strategic employment center area. As
part of the DCTA overall plan for this it will provide an employment center for transit uses.
B. A specific use permit shall be issued only if all the of the following conditions
have been met.
Project No. 510-0010 1
17
Project Narrative
Denton County Transportation Authority (DCTA) A-train Passenger
Rail Radio Communication Tower, City of Denton, Texas
City of Denton Project No. S10-0010
1. That the specific use will be compatible with and not injurious to the use
and enjoyment of other property nor significantly diminish or impair
property values within the immediate vicinity.
The lattice tower and communications bungalow is compatible with the surrounding
properties. The property immediately west of the tower site is zoned EC-1 and the
existing structure is consist of a parking lot with an 8,000 SF
office/commercial/manufacturing building improvement. Across Teasly to the north the
property is also zoned EC-1 and consists of a series of buildings housing the Texas Work
Force Commission. Just east of the TWFC is t drainage easement then a property used
for construction material and finally Peerless Manufacturing. All these properties and
uses are compatible with the radio tower installation and will not be damaged by such an
installation.
2. That the establishment of the specific use will not impede the normal and
orderly development and improvement of surrounding vacant property;
As described this radio tower installation is within the DCTA planned Sus Maintenance
and Operations Facility. The tower location has been coordinated with the development
of this site to assure that all required access and infrastructure required for the
development is not impacted by the tower. As described above the surrounding
properties are developed for Employment, commercial and industrial uses.
3. That adequate utilities, access roads, drainage and other necessary
supporting facilities have been or will be provided,
The installation of the tower will not require any additional access roads or other
supporting facilities except for power, which will be coordinated with Denton Municipal
Electric.
4. The design, location and arrangement of all driveways and parking spaces
provides for safe and convenient movement of vehicular and pedestrian
traffic without adversely affecting the general public or adjacent
developments;
The location of drives and other infrastructure will be deferred until 2015 when OCTA
expects to construct the bus faciflty.
5. That adequate nuisance prevention measures have been or will be taken to
prevent or control offensive odor, fumes, dust, noise and vibration;
The radio tower will emit no odors, fumes or other environmental concerns.
6. That directional lighting will be provided so as to not disturb or adversely
affect neighboring properties; and
Project No. S10-0410
18
Project Narrative
Denton County Transportation Authority (CCTA) A-train Passenger
Rail Radio Communication Tower, City of Denton, Texas
City of Denton Project No. S10-0010
The only exterior lighting will be a fixture over the door to the communications bungalow.
The tower is not of sufficient height to require strobes or other lighting on the tower to
meet FAA requirements.
7. That there is sufficient landscaping and screening to ensure harmony and
compatibility with adjacent property.
The installation of the tower will not affect existing landscaping. As shown the
surrounding properties are all commercial uses and consist of concrete, asphalt or
gravel parkinglyards with commercial type structures, consisting of metal, wood or CMU
wall construction. Attached to this resubmital is a photo of the property taken from Kerley
Street within the residential property to the east of the subject tract. This photo has both
the proposed bus maintenance facility and the tower superimposed into the photo. From
Kerley and the neighborhood the tower compound is screened with existing vegetation
and trees. At the time of the construction of the bus facility other screening and
landscaping as required by ordinance will be installed.
C. That adequate capacity of infrastructure can and will be provided to and through
the subject property.
The existing infrastructure, street, water, sewer and electrical is sufficient for the tower
installation.
D. That the Special Use is compatible with and will not have an adverse impact on
the surrounding area. When evaluating the effect of the proposed use on the
surrounding area, the fallowing actors shall be considered in relation to the target
use of the zone:
1. Similarity in scale, bulk and coverage.
The lattice tower and communications bungalow encompasses a small portion of the
tract. The bungalow is a typical prefabricated railroad bungalow. The tower is a
lattice type tower, triangular at the base and narrowing as it rises. The scale, bulk
and coverage are similar to the surrounding structures.
2. Generation of traffic and effects on surrounding streets. Increases in
pedestrian, bicycle and mass transit use are considered beneficial
regardless of capacity of facilities.
No new or additional traffic will be generated by the installation of the radio
communications tower. The existing facilities, Teasly has the capacity to handle
regular maintenance vehicles that would access the tower compound.
3. Architectural compatibility with the impact area.
As discussed earlier the surrounding architecture is that of a combination of metal,
wood and masonry warehouse, manufacturing and industrial facilities. The metal
bungalow generally fits into the surrounding architecture.
Project No. Slo-0010
19
Project Narrative
Denton County Transportation Authority (DCTA) A-train Passenger
Rail Radio Communication Tower, City of Denton, Texas
City of Denton Project No. S10-0010
4. Air quality, including the generation of dust, odors, or other environmental
pollutants.
The radio tower and bungalow will generate no noise, dust, odors or other
environmental pollutants.
5. Generation of noise, light and glare.
No additional noise or light glare will be generated by the radio tower.
6. The development of adjacent properties as envisioned in the Denton Plan.
Meets the goals of the Denton Plan including Chapter 3, Land Use and Chapter 7,
Transportation. This tower is important to the A-train project, which is a key
alternative transportation mode for the City of Denton and Denton County.
Additionally this property is intended to be developed into DCTA Bus Operations and
Maintenance Facility. This will provide a new location for bus operations and
maintenance. As DCTA and the service area changes and grows, this facility is
expandable and meets employment center goals.
7. Other factors found to be relevant to satisfy the requirements of this
Chapter.
Other key information includes:
J The lattice work, segmented design of this tower includes certain safety features,
including the segmented design. The tower for both ease of erection, but also for
safety is segmented into twenty (2€7)-FT sections. During potential high winds
the segmental design will keep large sections from toppling. Additionally the
design for structural failure is for the tower to collapse onto itself, toppling is
limited. Should a cross member fail the tower will collapse onto itself, thus
eliminating the possibility of falling onto another property.
✓ The tower is below FFA height requirements for strobes or flashing lights
✓ The only lighting will be a fixture over the bungalow doorway. There will be no
pole lighting for this phase, limiting the potential for light glare of spill over.
• As discussed earlier in this narrative landscaping and camouflage for this
compound will be initially by the existing trees. We have attached a photo of the
site from the residential neighborhood and superimposed the tower as well as the
future bus facility to provide an idea of the view from the residential
neighborhood.
✓ The compound itself will be screened from TeasBey when the bus facility is
constructed and irrigation system installed to assure landscaping survives.
Project No. 510-0010
20
January 24, 2011
City of Denton
Planning and Development Department
211 N. Elm Street
Denton, TX 76201
Attn: Ran Mengu to
Subject: DCTAA-train North Communication Tower Special Use Permit (SUP)
RE: Project No. S10-0010
Dear Mr Menguita'
Pursuant to tare re-sulrinittai of Project S10-0010, please find attached documentation that should satisfy
the committee's questions and concerns. As discussed In Our meeting an Friday, January 21, 2011, we
would like to make the February g, 2011 Planning and Zoning meeting. Any and all efforts in support of
making this date would be greatly appreciated. Attached you will find:
1. Re-submittal Checklist
2. Updated project Narrative addressing all requirements of 35 13.5 and 35.6.4
1 Updated Overall Site Plan
4. Updated Site Plan
5. Responses to all staff comments Dated 1-6-11
6. Photo of site from Kerley Street with rendering of tower and future bus facility to show existing
screening of tower site from residential neighborhood.
Some key items from the narrative are as follows:
1. The tower is designed to collapse onto itself should structural damage occur, therefore minimizing
the potential far collapse Onto surrounding properties.
2. The bus maintenance facility "Phase 11" is currently schedule for 20'15, at this time additional
landscaping, including irrigation will be installed. Also as part of "Phase 11" bus drives, pas icing,
fire lane striping and other work shown on the site plan will occur. At this time only the tower,
communication bungalow and security fencing for' the tower will be installed.
3. The tower allowed by code as this property is currently zoned "rC-I" as well as all surrounding
property. The closest residential is across the DCTA rail right-of-way over 700 feet fr'orn the
tower's location.
4. Base on our understanding of the Denton Plan, the tower and proposed bus maintenance facility
fit into the vision of the Denton Plan.
We trust that the above and the information attached with this transmittal will expedite your review of this
request. We are available to assist you to ensure making the next P & 2 meeting should you require.
Please do not hesitate to contact me or Tim Schmidt (214-215-0176).
Regards-
8216 Northertst Parkti,n} Suite 100 Nartli Richland HiIIs,'I exas 76191 f': 817-514-0755 i : 917-514-0794
21
EXHIBIT 6
PROPOSED ELEVATIONS
x~
C K nJ~ 82 ~g tt" f Z F
kr S
~Sa ~ a~ v~ ~ eP Kra O~ t I
E
I r ~ ~ Kn
o~~ ILI_ ra ~ O ~ 1
d r ~ ,
.s a n -c
Y£ II#L
a v
'E1 4 y g_
it i E~ g'1 ~3
4
r ~ I
C7
..J
F
m a }
w-scu
. wry - ~
.vvirp
n~
22
NG
T Inc.
EXTERIOR VIEW OF D WALL.
1'HtS DRAWING IS SOLE PNUPERTY OP PTMw AND 15 PR07ECTYD
UNUGk ALL APPLICABLE -YTHDIAT LAWS. THIS UESTGN IS
PRONRie",- IN PTA,W AND IS PROVIDED ON A C09FINENTIAL
6AS15 PUN USE R€LAiEV T. ITNYA'S D.SINESS. THIS DRAWING
NAY NOT BE I Lp"'DUCEU AND ME OENIBN MAY HUT ISE
bll ILPCAT SO WITHOUT THE WFL TEN P€RNISSIUN OF PPWt. WE
RESERVE ME RIGHT TH M-IFY THIS GESV,P. THIS BR-NL IS
LLV,NEO SUBJECT 10 RETURN ON TED-,
74 K 14
ALUMINUM HOUSE
23
12
FF- r; Fx- -z-
HWn
J
J
z
w
.J
4
Lij
C7
W
x
W
C7'
.
E:4
24
PTT- In e.
EXTERIOR VIEW OF B WALL
THIS DRAWING IS SOLE PROPERTY a PTbAW AMP IS PROTECTED
UNDER All APPLICABLE WIYRICHT LAWS. IRIS DESIGN IS
PROPft1ETARY TO PTW ANP IS PRw3NED ON A CONE.LNT1AL
BASS FOR USE RELATED TO PFMI BUSINESS, TNIB ER-9
MAY NOT BE REPRODUCED AND THE DEG{ON MAY NOT BE
OUPLOATLp WITHOUT THE WRITTEN PERMM51DN DP PTMW. WE
BESERV€ THE III TO MODIFY WE UESICH. - DNAWINS IS
WANED SUBSECT TO RETURN ON OE3,IAND.
10 X 14
ALUMINUM HOUSE
25
w
s
~ 4~am~QO~ o
o o~ r
a ~ ~~x x
~ Q
_ s~>w
J
J
C.G
L!_J
x
Li!
~El
0
26
EXHIBIT 7
PHOTO OF A SIMILAR TELECOMMUNICATION TOWER AND ENCLOSURE
r
} T+'F rG ~ R ;niY Yom.
Photo of a similar telecommunication tower and enclosure located in the City of Lewisville.
27
EXHIBIT 8
MEETING NOTES FROM SEDNA MEETING
DCTA
Southeast Denton Neighborhood Association Meeting Notes
December 27, 2010
DCTA presented information about the radio tower that is to be erected at the new bus maintenance
facility location at the southern end of the Southeast Denton neighborhood. There were 13 people in
attendance at the regularly scheduled SEDNA meeting.
Tim Schmidt presented the information and distributed handouts showing the location of the tower and
a photo image of what the tower will look like once installed. Tim noted the tower would be used for
rail communications on the A-train, and another similar tower would be located at the southern end of
the rail line in Lewisville.
The following questions related to the radio tower were asked along with the responses provided:
Q: How tall is the tower?
R: 180 feet
Q: There will be two towers?
R: Yes, one in Denton and one in Lewisville.
Q: What kind of a permit is being sought from the City of Denton?
R: A special use permit.
Q: When will the matter go before the Planning and Zoning Commission?
R: January 19, 2011
Q: Sometimes there are overlapping frequencies with radio. Who would be the overlapping frequency
for this radio tower?
A: This would be a very narrow band frequency that is reserved for use by railroad agencies. There
would be no overlapping frequencies with other radio operations.
Q: Will the radio waves cause satellite television interference?
R: No
Q: Do you know where there are other towers located in Denton and have those towers caused any
disruption to residents?
R: The location and type of towers in Denton are unknown.
Q: Was there a reason DCTA chose to erect a stand-alone tower for its use rather than share an existing
tower somewhere else in Denton?
R: The tower must be located near the rail line, and there are no other known towers in a location that
could serve the A-train.
Q: Are there any health hazards from radio radiation?
28
R: No. This is a simple whip antenna and does not radiate any strong signals such as those transmitted
from a microwave or other system.
Q: Who is the contact person if there are more questions about the tower?
R: Tim Schmidt can be contacted. Tim provided his business card to Ms. Carolyn Phillips, SEDNA
president.
Questions related to A-train or buses and responses were as follows:
Q: When will trains start running?
R: Revenue service is scheduled to begin in June 2011.
Q: Is DCTA still planning to build the bus maintenance facility down on Kerley?
R: Yes, however, moving forward on the facility has been delayed because of funding issues. The plan
currently is to build the facility in 2012.
Q: How does DCTA determine where the bus stops on the UNT routes it runs?
R: The answer to this was unknown. However, the gentleman was advised that if he provides his
contact information, a response will be provided to him. He provided his email address and the
question was forwarded on to DCTA staff.
Q: When the train starts to run, will people be able to get to DART trains?
R: Yes. Passengers will be able to transfer to the DART light rail system at the Trinity Mills station.
Q: Where can a person buy a ticket for the DART train?
R: Passengers will be able to purchase one ticket before getting on the A-train that will allow then to
ride on both the A-train and DART light rail.
DCTA
Southeast Denton Neighborhood Association Meeting Notes
December 27, 2010
Page 2
29
EXHIBIT 9
PROPOSED SITE PLAN
,
L s
NVld 315 a - a
t
f
I
I
~ / I 1= I it !I i
~I
~I
i
~I I
W
~i
a
Y~~111
I
I ,I
f~ I III
l , I
-
j
I
-15~x3'al]m W .m51-
l-33 3NOZ
30
31
EXHIBIT 10
MARCH 18, 2011 DCTA EMAIL
Menguita, Ron P.
From:
Tom LeBeau [tmlebeau @dcta.net]
Sent:
Friday, March 18, 2011 10:53 AM
To:
Menguita, Ron P.
Cc:
Greene, Fred G.; Cunningham, Mark A.; Lockley, Brian K.; Russell, Charles F.; Arora, PS;
Nelson, Mark A.; Jim Witt; 'Schmidt, Tim'; Loiselle, EmilyA.; Greg Hackbarth, Mickey Tomlin,
Muncie, Nona E.; Boykin, Katia D; Scott Perry (csperry@herzogcompanies.com); Jim Hanlon;
Campbell, George C.; Fortune, Jon E.; Martin, Howard, Dee Leggett
Subject:
RE: 1101-0414 Install radio antenna tower for the DCTA ''A'' Trainproject
Importance: High
Ron,
Regards,
Thomas M. LeBeau
Vice President - Rail Development/Capital Projects
Denton County Transportation Authority
1660 South Stemmons, Suite 250
Lewisville, Texas 75067
E-mail: tmlebeau@dcta.net
972-221-4600 - General
817-456-4972 - Mobile
972-316-6426 - Fax
From: Menguita, Ron P. [maiIto:Ron.Menguita@cityofdenton.com]
Sent: Friday, March 18, 20118:57 AM
To: 'Jim Hanlon'
Cc: Greene, Fred G.; Cunningham, Mark A.; Lockley, Brian K.; Russell, Charles F.; Arora, PS; Nelson, Mark A.; Jim Witt;
Tom LeBeau; 'Schmidt, Tim'; Loiselle, EmilyA.; Greg Hackbarth; Mickey Tomlin; Muncie, Nona E.; Boykin, Katia D
Subject: RE: 1101-0414 Install radio antenna tower for the DCTA "A" Trainproject
32
Jim„ good morning. Per DCTA's request, we will proceed with the subject SUP at the scheduled 4/5/11 City Council
meeting. In preparation of the meeting, I will need the information that was requested by the City Council from the
previous meeting asap. Thank you in advance. RONM
From: Cunningham, Mark A.
Sent: Thursday, March 17, 20119:02 AM
To: 'Schmidt, Tim'; Jim Witt
Cc: Loiselle, EmilyA.; Greg Hackbarth; Mickey Tomlin; Muncie, Nona E.; Boykin, Katia D; Lockley, Brian K.; Nelson, Mark
A.; Tom Le Beau; Menguita, Ron P.;'Jim Hanlon'
Subject: RE: 1101-0414 Install radio antenna tower for the DCTA "A" Trainproject
Good Morning Gentlemen:
Please see my responses below in red font.
From: Schmidt, Tim [mailto:TJSchmidt@lan-inc.com]
Sent: Wednesday, March 16, 20114:34 PM
To: Menguita, Ron P.; 'Jim Hanlon'
Cc: Loiselle, EmilyA.; Greg Hackbarth; Mickey Tomlin; Muncie, Nona E.; Boykin, Katia D; Cunningham, Mark A.; Lockley,
Brian K.; Nelson, Mark A.; Tom Le Beau; Jim Witt
Subject: RE: 1101-0414 Install radio antenna tower for the DCTA "A" Trainproject
Ron:
Please help me understand, We went through the entire SU P process and satisfied staff as well as the P & Z
Commissioners. As we have stated again and again train communications is a requirement. We have elected to pursue
the placement of a 50' monopole since it was allowed by code within the EC-I zoning of which the future O & M facility
property is zoned. The location of this monopole is exactly where we initially proposed the lattice tower, but then
relocated to meet the 3:1 height requirement. Several issues with all these requests.
1. This is not a telecommunications tower, but simply a radio tower to provide required passenger rail
communications. I understand that this is the only code the City has to go by but it is geared toward
telecommunications, is it possible to get a ruling on the application of this particular ordinance and it's
applicability to this type of antenna/tower? Per Section 35.12.3.1 of the Denton Development Code (DDC) the
subject structure is a Telecommunications Tower. The DDC defines Telecommunications Tower as: "A self-
supporting or guyed structure more than 20 feet (6 meters) in height, bvift primariiy to support one or more
telecommunications antennas." l herefore, we must treat it as such.
2. Due to TSA/Homeland Security providing hedge or other screening would have an impact on our ability to
obtain FRA approval. Screening or hiding such a facility from view of public ROW where police or others cannot
see if vandalism or other criminal activities are taking place is neither advisable or warranted. This and the other
towers/antennas within the corridor provide vital communications with passenger trains, thus making screening
a potential risk to those communications. As previously stated by Ron, pursuant to Section 35.12.5.4.D of the
DDC, if a chain-link fence is proposed, an evergreen hedge is required. Staff has no authority to disregard this
requirement. However a variance from this requirement may be applied for via the City's Zoning Board of
Adjustment (ZBA). In seeking a variance, the burden of proof is on you to demonstrate hardship, along with all
the other criteria in the DDC for granting a variance. An alternative is to provide a different type of screening in
lieu of the proposed chain-link fence.
3. It is not a matter of coverage, the distance from the rail is again advantageous, train operators would also be
able to see if there are intruders or un-wanted activities at the tower. Also its proximity to the rail corridor
33
limits the length of additional fiber, and minimizes the amount of splicing and handholes. This eliminates
additional locations where system failures can take place, again a risk to communications.
4. Lastly we are still hopeful that the April 5`f' Council meeting will prove more fruitful. However, we must pursue
other options should it not. Therefore it is imperative that we (DCTA and the City) come to some resolution.
We understand the City has a duty to protect its citizens and its infrastructure, however as stated in item one
above the application of a telecommunications tower ordinance to this specific tower/antenna, which is needed
for passenger rail communications only, seems onerous and inappropriate. The City's Planning Division will
proceed with the subject SU P at the scheduled 4/5/11 City Council meeting. However, it will be DCTA's
responsibility to present the information that was requested by the City Council from the previous meeting.
DCTA and our Contractor simply wish to move forward. These continual requirements jeopardize the DCTA revenue
service and our ability to complete the project in a timely manner. Please help us to move this forward.
Thanks
Timothy J. Schmidt
Senior Associate, Operations Manager
Lockwood, Andrews & Newnam, Inc.
A LEO A DALY COMPANY
8350 North Central Expressway, Suite 1400 • Dallas, TX 75206-1631
T 214.522.8778 x 4771 D214.765.8771 C214.215.0176
www.lan-inc.com • TJSchmidt6Van-inc.com
From: Menguita, Ron P. fmailto:Ron.Menguita@cityofdenton.coml
Sent: Monday, March 14, 201112:42 PM
To: 'Jim Hanlon'
Cc: Schmidt, Tim; Loiselle, EmilyA.; Greg Hackbarth; Mickey Tomlin; Muncie, Nona E.; Boykin, Katia D; Cunningham, Mark
A.; Lockley, Brian K.; Nelson, Mark A.
Subject: RE: 1101-0414 Install radio antenna tower for the DCTA "A" Trainproject
Jim, good afternoon. Please see my comments below in red. Thanks. RONM
From: Jim Hanlon fmailto:ihanlon@herzogtechnologies.coml
Sent: Monday, March 14, 20119:59 AM
To: Menguita, Ron P.
Cc: Schmidt, Tim; Loiselle, EmilyA.; Greg Hackbarth; Mickey Tomlin; Muncie, Nona E.; Boykin, Katia D
Subject: RE: 1101-0414 Install radio antenna tower for the DCTA "A" Trainproject
Ron,
Additional responses/comments below
P4: Why is fencing required? Typically, we do not install fencing around these type of sites as the antenna poles are non
climbable. If fencing is truly required, is an 8' chain link with Constantine wire at the top acceptable? We would prefer
to not install fence slats as they pose a security risk (intruders can enter the site and remain hidden behind the slats).
Pursuant to Section 35.12.8.4.D, if a chain-link fence is proposed please note a evergreen hedge is required.
P6: Two factors to consider for "optimal operation"
34
1. There is a fiber optic trunk line that parallels the DCTA track from end to end. It operates as the main
thoroughfare for all DCTA communications, train control, and stations systems information. The original design
called for the communications enclosure to be as close to the trunk line as possible to eliminate the need for a
secondary fiber optic line (and possibility of a secondary line cut/failure). It sounds possible that the tower can
be set back further. The 3:1 height rule was the only reason we proposed the installing the communications
enclosure further away from the track and fiber optic trunk line.
2. With the reduction in height, the antenna needs to be closer to the track to allow for greater radio range and
coverage. Again, the 3:1 height rule was the driving factor for pushing the tower away from the track. Now at
50', we need to be as close to the track as possible. Keep in mind that the proposed location does meet the 3:1
rule requirements. Please note, the 3:1 is the "minimal" setback requirement. flow+far back from the track can
the tower be located and still provide 'adequate" radio range and coverage?
Let me know if you need any additional information.
Thanks,
Jim Hanlon
From: Menguita, Ron P. fmaiIto: Ron. Menguita@cityofdenton.coml
Sent: Friday, March 11, 201112:34 PM
To: Jim Hanlon
Cc: Schmidt, Tim; Loiselle, EmilyA.; Greg Hackbarth; Mickey Tomlin; Muncie, Nona E.; Boykin, Katia D
Subject: RE: 1101-0414 Install radio antenna tower for the DCTA "A" Trainproject
Jim, please see my comments below in blue regarding P4 and P6. RONM
From: Jim Hanlon f mailto:jhanlont?a herzogtechnologies.com)
Sent: Friday, March 11, 201110:59 AM
To: Menguita, Ron P.
Cc: Schmidt, Tim; Loiselle, EmilyA.; Greg Hackbarth; Mickey Tomlin
Subject: RE: 1101-0414 Install radio antenna tower for the DCTA "A" Trainproject
Ron,
Please see comments in red below
Thanks,
Jim Hanlon
From: Menguita, Ron P. [maiIto: Ron. Menguita2cityofdenton.com]
Sent: Friday, March 11, 20118:51 AM
To: Jim Hanlon
Cc: Schmidt, Tim; Loiselle, EmilyA.
Subject: 1101-0414 Install radio antenna tower for the DCTA "A" Train project
Jim, FYI below are the Planning comments I entered this week. Please let me know if you have any questions. RONM
P1: Pursuant to Section 35.12.8.7, Telecommunications Use Chart, a Monopole Tower up to 85 feet is permitted by
right in the EC-1 zoning district. Understood.
35
P2: It is staff's understanding that the proposed tower is a Monopole, Tower (a self-supporting telecommunications
tower which consists of a single vertical pole fixed into the ground and/or attached to a foundation). Correct
P3: Pursuant to Section 35.12.8.5.B. except as provided in Section 35.12.8.7, telecommunications towers are not
permitted in any residential zoning district and must be a minimum of a 3 to 1 distance to height ratio from a single
family residential use and 1 to 1 distance to height ratio from a multifamily use. Antenna pole is 50' in height. Proposed
location is more than 150' away from any residential property line therefore meeting the 3 to 1 requirement.
P4: Pursuant to Section 35.12.8.4.D, security fencing shall be installed by a wrought iron or steel chain link fence with
evergreen hedge, or a masonry wall, each not less than 6 feet (1.8 meters) in height. The exterior of equipment buildings
and/or metal equipment cabinets visible from residential areas or public rights-of-way must have a neutral aggregate
finish or be painted to reflect the color and character of adjoining structures or blend with adjacent landscaping and
other surroundings. No fencing to be provided. Location will be similar to every highway road crossing location that is
being installed within Denton city limits. Security fencing is required.
Provide documentation verify that the subject provision has been met.
P5: Pursuant to Section 35.12.8.4.E, all telecommunication towers as well as guys and guy anchors shall be located
within the buildable area of the lot and not within the front, rear, or sideyard building setbacks. This is not a
telecommunications tower. Per previously submitted drawings, no guys or guy anchors to be used.
Provide a site plan verify that the subject tower is located within the buildable area of the lot and not within the front,
rear, or sideyard building setbacks. See attached site drawings.
P6: Provide documentation clarifying the reason justifying the proposed location closer to the DCTA rail rights-of-way.
Previous location was determined based on 180' tower height and 3/1 distance requirements. With new antenna height
at 50', we are allowed to move the location closer to the track, which is it's optimal operating location. I need more
information than a statement. I need to be able to explain "optimal operation." Can optimal operation occur elsewhere
on the property? Please advise.
JC
EXHIBIT II
LETTER FROM DCTA
Denton OountyTransportation Authowity
1660 S. Stemmons, Suite 250 4 LewisvillejX 75067
972-221-4600 4 fax 972-221-46014 dcta.net
March 16, 2011
Michael Leavitt
City Manager
City of Highland Village
1000 Highland Village Road
Highland Village, Texas 75077
Claude King
City Manager
City of Lewisville
151 W. Church Street
Lewisville, Texas 75067
George Campbell
City Manager
City of Denton
215 E. McKinney
Denton, TX 76201
Dear C"tty 4unagers
Recently the Denton City Council tabled our request for an SLIP for a communications
tower until its April 5, 2011 meeting. The DCTA Board of Directors has determined that
we will not operate the A-train system without an acceptable redundant communication
system in place.
If you have any further questions or comments please do not hesitate to contact me.
Res t y,
Jim Witt,
CEO
37
EXHIBIT 12
SITE PHOTOGRAPHS
11 - 11 I
Vie-, of proposed location looking southeast. Vie)v from proposed location looking northeast.
Vie)v toiv acds proposed location looking southiv est. View tmv aids proposed location looking southeast.
i
VieN-,- of neighborhood north of subject property-. Vie- of neighborhood north of subject property-.
38
EXHIBIT 13
NOTIFICATION INFORMATION
500 FOOT
J
NOTIFICATION BOUNDARY:LU
LU
SMITH
U
LL
UBJcT SITE
i
z
z
G
SHADY OAKS
I
-
200 FOOT
NOTIFICATION BOUNDARY
l
Vo
v~
SANTA FE
WILDERNESS
p
O
C]
M
0
00 0
'
1
Z DEER TRAIL:
:
z
.
w
HOPKINS
FOX HOLLOW
Public Notification Date: Januaii- 27, 2011
200 ft. Legal Notices sent via certified mail: 30
500 ft. Certified Notices sent via regular mail: 74
Number of responses to 200' Legal Notice
• In Opposition: 3
• In Favor: 2
• Neutral: 2
a 15D 300
■ Feet
600
39
EXHIBIT 14
PLANNING AND ZONING COMMISSION MINUTES
DRAFT
PLANNING AND ZONING
MINUTES
February 23, 2011
DRAFT
After determining that a quorum was present, the Planning and Zoning Commission convened in
a Work Session on Wednesday, January 5, 2011 in the Council Chamber at City Hall, 215 E.
McKinney Street, Denton, Texas.
PRESENT: Chairman Walter Eagleton, Commissioners: Jay Thomas, Brian Bentley, Thom
Reece, Jean Schaake, John Ryan and Patrice Lyke.
ABSENT: None.
STAFF: Fred Greene, Mark Cunningham, Jerry Drake, Chuck Russell, Jennifer Coles,
Cindy Jackson, Ron Menguita, P.S. Arora, and Johnna Matthews.
WORK SESSION
Chairman Eagleton convened the Work Session at 5:10 p.m.
1. Clarification of agenda items listed in the Regular Session agenda for this meeting, and
discussion of issues not briefed in the written backup materials.
Bentley questioned Menguita on the item for the communication tower. The staff report
indicates that the location of the nearest residence is 600 ft from the tower; however, there are
letters in opposition received from property owners within the 200 ft notice boundary. Menguita
stated the location of the actual tower is over 600 ft from a residence, the property notifications
are sent from 200 ft from the property line.
REGULAR MEETING
After completing the Work Session, the Planning and Zoning Commission will convened a
Regular Meeting of the Planning and Zoning Commission of the City of Denton, Texas which
was be held on Wednesday, February 23, 2011 and began at 6:35 p.m. in the City Council
Chambers at City Hall, 215 E. McKinney at which time the following items will be considered:
Chairman Eagleton convened the regular meeting at 6:35 p.m.
5. PUBLIC HEARINGS:
A. Hold a public hearing and consider making a recommendation to Citv Council regarding a
Specific Use Permit (SUP) for a telecommunications tower on property located within an
Employment Center Industrial (EC-1) zoning district. The approximately 14.9-acre property
is located east of Teasley Lane and south of the DCTA railroad right-of-way. (S 10-0010,
DCTA A-Train North Communication Tower, Ron Menguita)
40
Menguita presented this item. The request is to consider making a recommendation to City
Council regarding a Specific Use Permit for a telecommunications tower. The applicant is
requesting a Specific Use Permit to construct a 180-foot tall self-supporting lattice
telecommunications tower. Pursuant to Section 35.12.8.7 of the Denton Development Code
(DDC), self-supporting lattice telecommunications tower located in an EC-1 zoning district in
excess of 50-feet is permitted only by an SUP. The subject site is within the Employment Center
future land use designation.
Menguita provided site photos and elevations of the proposed tower. A photo of a similar tower
to the proposed that has already been constructed in Lewisville was also provided. This site will
be completed in two phases. The first phase is the tower; the second phase will be a bus
maintenance facility for DCTA estimated to be constructed sometime in 2015. There were 30
notices sent via certified mail for this item. Three responses were received in opposition, two
responses were received in favor and one response was neutral to the request. The applicant met
with the South East Denton Neighborhood Association (SEDNA) at their regular December
meeting and comments and responses received from that meeting are included in the backup for
this item. The Development Review Committee recommends approval of this request based on
the criteria for a Specific Use Permit and the criteria for Specific Use Permits related to
telecommunications facilities, subject to the following conditions:
1. The applicant shall maintain the existing landscaping screening between the subject
property and the neighborhood north of Kerley Street.
Bentley questioned if there was a guarantee that the location of the tower would not move within
the site. Menguita stated that the location is a part of the ordinance that will be taken forward to
City Council, that will lock in the location of the tower. The applicant was present to speak.
Tim Schmidt, Consultant/Representative for DCTA
Schmidt stated that the north tower is an integral part of the testing and operations of the A-
Train. This will be a sister tower to the one located in Lewisville that will provide redundant
coverage in case of operational issues.
The following spoke in opposition:
Willie Sellers, 930 Scott Drive
Lilli Clark, 1009 Kerley Street
William Clark, 1109 Kerley Street
Samuel Marshall, 1319 Kerley Street
No one spoke in favor of the request.
In response to the opposition Menguita stated that notification was sent in accordance with the
Texas Local Government Code. The notifications were post marked by the deadline set forth by
41
that Code and the delay of delivery could have been due to the weather conditions. Menguita
stated in regard to the hazard issues mentioned in the opposition, the Denton Development Code
( DDC) identifies hazards as noise and vibration and the proposed tower does not exceed those
maximum's outlined in the DDC. Drake stated for clarification that radiation or emissions from
radio broadcasts are regulated by the Federal Communication Commission (FCC). The FCC
preempts the City and staff must trust that the FCC is regulating the health and safety concerns.
Schaake questioned if the SEDNA meeting was well publicized. Menguita stated it was a
regular meeting of SEDNA, but he was unaware of how it was publicized. Schaake stated that in
the information provided from the meeting with SEDNA it was noted that this is a whip antenna
and it does not transmit waves like radio. Schaake questioned if DCTA has looked at other sites.
Schmidt returned for questions. Schmidt stated that yes, other locations were reviewed, DCTA
would have preferred to have the tower closer to the rail right-of-way. The location was chosen
because of the set back requirements set out by the DDC for a 3 to 1 height and distance ratio.
Schaake questioned the distance to a residence. Schmidt stated it was over 600 ft. Schaake
questioned the distance from a residence for the Lewisville tower. Schmidt stated that the
Lewisville tower is in an industrial area. There were additional discussions about why other
locations would not work.
Bentley thanked the concerned citizens who came forward to speak. Eagleton questioned the
notification area mentioned in the Work Session. Thomas made a motion to make a
recommendation to City Council to approve this Specific Use Permit, with a second by Ryan.
On roll call vote: Chairman Walter Eagleton "aye", Commissioner Brian Bentley "aye",
Commissioner Jay Thomas "aye", Commissioner Patrice Lyke "aye", Commissioner Thom
Reece "aye", and Commissioner John Ryan "aye". Commissioner Jean Schaake "nay".
Motion approved (6-1)
42
EXHIBIT 15
RESPONSES TO PUBLIC NOTIFICATION
NOTICE OF PUBLIC HEARING
S10-0010
The Planning and Zoning Commission of the City of Denton will hold a public hearing on Wednesday,
February 9, 2011 and consider making a recommendation to City Council regarding a Specific Use
Permit (SUP) for a telecommunications tower on property currently located within an Employment
Center Industrial (EC-1) zoning district. The approximately 14.9-acre property is located east of Teasley
Lane and south of the DCTA railroad right-of-way.
The public hearing will start at 6:30 p.m. in the City Council Chambers of City Hall located at 215 E.
McKinney Street, Denton, Texas. Because you own property within two hundred (200) feet of the
subject property, the Planning and Zoning Commission would like to hear how you feel about this
request and invites you to attend the public hearing. In order for your opinion to be taken into account,
return this form with your comments prior to the date of the public hearing. (This in no way prohibits
you from attending and participating in the public hearing.) You may fax it to the number located at the
.bottom or mail i#_toAh-e -address below or drnp it off in7person:
Planning and Development Department
221 N. Elm ST
Denton, Texas 76201
Attn: Ron Menguita, Project Manager
These forms are used to calculate the percentage of landowners that support and oppose the
request. The Commission is informed of the percent of responses in support and in opposition.
In favor of request
Reasons for pposition:
Please circle one:
Neutral to request Opposed to request
Signature: % ti'A,~o r. rs.
Printed Name: S/y rq Z O~ /C'~ 0
Mailing Address:
City, State Zip: Z v
Telephone Number: ~i{~ Sg~ OZ 91
Physical Address of Property within 200 feet: ! 3 ~Qa ni
CITY OF DENTON, TEMS CITY HALL WEST • DENTON, TEXAS 76201 • 940.349.8541 • (F) 940.349.77o7
43
NOTICE OF PUBLIC HEARING
S10-0010
The Planning and Zoning Commission of the City of Denton will hold a public hearing on Wednesday,
February 9, 2011 and consider making a recommendation to City Council regarding a Specific Use
Permit (SUP) for a telecommunications tower on property currently located within an Employment
Center Industrial (EC-1) zoning district. The approximately 14.9-acre property is located east of Teasley
Lane and south of the DCTA railroad right-of-way.
The public hearing will start at 6:30 p.m. in the City Council Chambers of City Hall located at 215 E.
McKinney Street, Denton, Texas. Because you own property within two hundred (200) feet of the
subject property, the Planning and Zoning Commission would like to hear how you feel about this
request and invites you to attend the public hearing. In order for your opinion to be taken into account,
return this form with your comments prior to the date of the public hearing. (This in no way prohibits
you from attending and participating in the public hearing.) You may fax it to the number located at the
bottc-m cr mail it to the address below or drop it off in-person:
Planning and Development Department
221 N. Elm ST
Denton, Texas 76201
Attn: Ron Menguita, Project Manager
These forms are used to calculate the percentage of landowners that support and oppose the
request. The Commission is informed of the percent of responses in support and in opposition.
Please circle one.
/ In favor of request Neutral to request Opposed to request
Reasons for Opposi_
Signature:
i~~Gi/i r
Printed Name:
Mailing Address:
City, State Zip:
Telephone Number:
Physical Address of Property within 200 feet:
CITY OF DENTON, TEXAS CITY HALL WEST • DENTON, TEXAS 76201 940.349.8541 • (F) 940.349.7707
44
2011.02-0818:43 X. 9403497707 P 1(i
NOTICE OF PUBLIC HARING
S10-0010
The Planning and Zoning Commission of the City of Denton will hold public hearing on Wednesday,
February 9, 2011 and consider making a recommendation to City ouncil regarding a Specific Use
Permit (SUP) for a telecommunications tower on property current[ located within an Employment
Center Industrial (EC-1) zoning district. The approximately 14.9-acre pfoperty is located east of Teasley
Lane and south of the DCTA railroad right-of-way.
The public hearing will start at 6:30 p.m. in the City Council Chambers of City Hall located at 215 E.
McKinney Street, Denton, Texas. Because you own property within two hundred (200) feet of the
subject property, the Planning and Zoning Commission would like to hear how you feet about this
request and invites you to attend the public hearing. In order for your opinion to be taken into account,
return this form with your comments prior to the date of the public hearing. (This in no way prohibits
you from attending and participating in the public hearing-) You may fax it to the number located at the
bottom or mail it to the address below or drop it off in-person-
Planning and Development Department
221 N. Elm 5T
Denton, Texas 76201
Attn: Ron Menguita, Project Manager
These forms are used to calculate the percentage of landowners that support and oppose the
request. The Commission is informed of the percent of responses in support and in opposition.
Please circle one:
In favor of request Neutral to request Opposed to request-
Reasons for Opposition:
Signature: ,t • -
Printed Name: fi „ K
Mailing Address: ►tt8'1 .,wtt cri
City, State Zip: ii~ta. . t _1 "7u a a u--
Telephone Number- '~`t0- `15 S J tAFk:
Physical Address of Property within 200 feet: _11 CJ- __%r5 n-.1y
CITY OF MWTON, TEUS rrTY HAIL WEST - DENTON. TEXAS 7620111 94o-349-8541 • (F) 94p-349.7707
45
FEE-68-2011 04:04 PM 946 627 9629 P.61
NOTICE OF Pu6LIC HEARING
310.0010
The Planning and Zoning Commission of the City of Denton will hold a public hearing on Wednesday,
February 9, 2011 and consider making a recommendation to City Council regarding a Specific Use
Permit (SUP) for a telecommunications tower on property currently located within an Employment
Center Industrial (EC-1) zoning district. The approximately 14.9-acre property is located east of Teasley
Lane and south of the OCTA railroad right-of-way.
The public hearing will start at 6:30 p.m. in the City Council Chambers of City Hall located at 215 E.
McKinney Street, Denton, Texas. Because you own property within two hundred (2oo) feet of the
subject property, the Planning and Zoning Commission would tike to hear how you feet about this
request and invites you to attend the public hearing. In order for your opinion to be taken into account,
return this form with your comments prior to the date of the public hearing. (This in no way prohibits
you from attending and participating in the pubfic /rearing.) You may fax it to the number located at the
- - bottomsrr maitAlo_the. addws below pr drop_It off in-person;
Planning and Development Department
221 N. Elm ST
Denton, Texas 76201
Attn: Ron Mengulta, Project Manager
These forms are used to calculate the percentage of landowners that support and oppose the
request. The Commission is informed of the percent of responses in support and in opposition.
Please circle one:
In favor of request Neutral to request Opposed to Inquest
Reasons for Opposition:
.6"r W. op
v as -r- = lvy tic
Signature:
printed Name:
Mailing Address: mb%
City. State Zip:
Telephone Number: 4► Vr e - S b 6 f ua It-,
Physical Address of Property within 200 feet: V7 r cy, -rt..sa L11 A
CfTY OF DEIVTONf, TEXAS CITY HALL WEST • DENTON. TEXAS 76MI • 840.349-854' (F) 940.349.7707
ZfAY P47 Nolk'e
46
NOTICE OF PUBLIC HEARING
S10-0010 - -i 1 P~~:3~ „CVU
The Planning and Zoning Commission of the City of Denton will hold a public hearing on Wednesday,
February 9, 2011 and consider making a recommendation to City Council regarding a Specific Use
Permit (SUP) for a telecommunications tower on property currently located within an Employment
Center Industrial (EC-1) zoning district. The approximately 14.9-acre property is located east of Teasley
Lane and south of the DCTA railroad right-of-way.
The public hearing will start at 6:30 p.m. in the City Council Chambers of City Hall located at 215 E.
McKinney Street, Denton, Texas. Because you own property within two hundred (200) feet of the
subject property, the Planning and Zoning Commission would like to hear how you feel about this
request and invites you to attend the public hearing. In order for your opinion to be taken into account,
return this form with your comments prior to the date of the public hearing. (This in no way prohibits
you from attending and participating in the public hearing.) You may fax it to the number located at the
--..-bottom -ormaiLit to thLe-address below_or-dropit-off. -in-Wson-_ _ _ - -
Planning and Development Department
221 N. Elm ST
Denton, Texas 76201
Attn: Ron Menguita, Project Manager
These forms are used to calculate the percentage of landowners that support and oppose the
request. The Commission is informed of the percent of responses in support and in opposition.
Please circle one:
In favor of request Neutral to request Opposed to request
Reasons for Opposition:
Signature: ,
Printed Name: y✓ //.a m i I sv ~~L r
Mailing Address:
Ir~O
,2 DDS'
City, State Zip: ~ - TX 7Z,
Telephone Number: 97-,le _ 3 F.,1_ - a S /
Physical Address of Property within 200 feet: S 41M e
CITY OF DENTON, TEXAS CITY HALL WEST • DENTON, TEXAS 76201 • 940.349.8541 (F) 940.349.7707
200' P&Z Nance
47
® Z '
1.
-44,
G 24
48
49
FROM :NT DIST INC FAX NO. :94094e9456 Feb. 0e 2011 01:46PM P1
NOTICE OF PUBLIC HEARING
si-0.0090
The Planning and Zoning Commission of the City of Denton will hold a public hearing on Wednesday,
February 9, 2011 and consider making a recommendation to City Council regarding a Specific Use
Permit (SUP) for a telecommunications tower on property currently located within an Employment
Center Industrial (EC-1) zoning.district. The approximately 14.9-acre property is located east of Teasley
Lane and south of the DCTA railroad right-of-way.
The public hearing will start at 6:30 p.m. in the City. Council Chambers of City Hall located at 215 E.
McKinney Street, Denton, Texas- Because you own property within two hundred (200) feet of the
subject property; the Planning and Zoning Commission would like to hear how you feel about this
request and invites you to attend the public hearing- In order for your opinion to betaken into account,
return this form with your comments prior to the date of the public hearing. (This in no way prohibits
you frem'attending and participating in the public headng.) You may fax it to the number located at the
~..~ttorn.or rr~?il it to h .address below or drop it S2{f~=Pelson: ~ - . w _
Planning and Development Department
221 N. Elm ST
Denton, Texas 76201
Attn: Ron Menguita, Project Manager
These forms are used to calculate the percentage of landowners that support and oppose the
request. The Commission is informed of the percent of responses in support and in opposition.
- Please circle one:
In favor of request Neutral to reque Opposed to request
Reasons for Opposition:
Signature:
Printed Name: W FL pin xrti Li L.
Mailing Address: Jio'g FpikilCCV
City, State Zip: R&97Y 2' 77
Telephone Number: 2 r p 3f6,~J
Physical Address of Property within 200 feet: I i:L1 SH is,czy- gs,sgr V. 07a
CfTY OF DENTON, TEUS CITY HALL WEST • DENTON, TEXAS 76201 • 940.,349.8541 - (F) 940.349.7707
200- PAZ N0Q00
50
EXHIBIT 16
DRAFT ORDINANCE
s:VegaNur documents\ordinances111\s10-0010 ordinance,doc
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, GRANTING A SPECIFIC USE
PERMIT FOR A NEW SELF-SUPPORTING LATTICE TELECOMMUNICATIONS TOWER
LOCATED WITHIN AN EMPLOYMENT CENTER INDUSTRIAL (EC-I) ZONING
DISTRICT CLASSIFICATION AND USE DESIGNATION ON 14.9 ACRES OF LAND,
GENERALLY LOCATED EAST OF TEASLEY LANE AND SOUTH OF THE DCTA
RAILROAD RIGHT-OF-WAY, AND MORE COMMONLY KNOWN AS LOT 6A, BLOCK
B, OF THE SHADY OAKS INDUSTRIAL PARK ADDITION; PROVIDING FOR A
PENALTY IN THE MAXIMUM AMOUNT OF $2,000.00 FOR VIOLATIONS THEREOF,
SEVERABILITY AND AN EFFECTIVE DATE. (S10-0010)
WHEREAS, HAX Technologies, has applied for a Specific Use Permit for the
construction of a 180-feet tall self-supporting lattice telecommunications tower on approximately
14.9 acres of land within an Employment Center Industrial (EC-1) zoning classification and use
designation legally described as Lot 6A, Block B of the Shady Oaks Industrial Park Addition and
incorporated herein by reference (hereinafter, the "Property"); and
WHEREAS, on February 23, 2011, the Planning and Zoning Commission concluded a
public hearing as required by law, and recommended approval of the requested Specific Use
Permit; and
WHEREAS, the City Council finds that the request is consistent with the Denton Plan
and the Denton Development Code, specifically finding that the requirements of Subsections
35.6.4 and 35.12.8 of the Denton Development Code are satisfied by the proposal when
conditioned by the Site Plan depicted on Exhibit "A", attached hereto and incorporated herein by
reference; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this ordinance are
incorporated herein by reference as true.
SECTION 2. A Specific Use Permit to allow the construction of a 180 foot tall self-
supporting lattice telecommunications tower on the Property is hereby approved, subject to the
following condition:
1. The applicant shall maintain the existing landscaping screening between the subject
property and the neighborhood north of Kerley Street.
SECTION 3. The Specific Use Permit Site Plan attached hereto and incorporated herein
by reference as Exhibit "A", is hereby approved, as an additional condition of the permit.
SECTION 4. If any provision of this ordinance or the application thereof to any person
or circumstance is held invalid by any court, such invalidity shall not affect the validity of other
provisions or applications, and to this end the provisions of this ordinance are severable.
51
s:Uegaf\our documents\ordinances\l 11s10-0010 ordinance.doc
SECTION 5. Any person violating any provision of this ordinance shall, upon
conviction, be fined a sum not exceeding $2,000.00. Each day that a provision of this ordinance
is violated shall constitute a separate and distinct offense.
SECTION 6. This ordinance shall become effective fourteen (14) days from the date of
its passage, and the City Secretary is hereby directed to cause the caption of this ordinance to be
published twice in the Denton Record-Chronicle, a daily newspaper published in the City of
Denton, Texas, within ten (10) days of the date of its passage.
PASSED AND APPROVED this the day of 12011.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY,
52
sAlegkour documents\ordinanceslll\s10-0010 ordinance.doc
EXHIBIT A
L
Page - I
53
AGENDA INFORMATION SHEET
AGENDA DATE: April 5, 2011
DEPARTMENT: Planning and Development
V/
ACM: Fred Greene'
SUBJECT- A11-0001, Burch Property Annexation
Hold the first of two public hearings to consider the adoption of an ordinance of the City of
Denton, Texas regarding the voluntary annexation and service plan of approximately 1.148 acres
of land located within the City's Extraterritorial Jurisdiction (ETJ) in accordance with Chapter
43 of the Texas Local Government Code. The site is located on the west side of Country Club
Road; just north of the Education Center at Denton; between Ryan Road to the north and Brush
Creek Road to the south. The Planning and Zoning Commission recommends approval of the
request (5-0).
BACKGROUND
On May 4, 2010, the Denton City Council approved the annexation of approximately 307 acres
located within the City's Extraterritorial Jurisdiction (ETJ) and identified as DH-5. At the time
of annexation, the subject property was appraised for ad valorem tax purposes as land for
agricultural use. Texas Local Government Code (Tx.LGC) §43.035 states that a municipality is
prohibited from annexing land appraised for ad valorem tax purposes as land for agriculture use
under Chapter 23 of the Texas Tax Code, unless the municipality offers to make a development
agreement/non-annexation agreement (NAA) with the landowner under Tx LGC §212.172 and
the landowner refuses. As such, the owner of an approximate 220.275 acre property was offered
and returned a NAA (See Exhibit 3 for Development Agreement).
Section 5A of the agreement, governing the subject property, states that if an owner files any
application or plan of development or otherwise commences development of any portion of the
property inconsistent with the Development Plan provided in Section 2, then Sections 1 and 3 of
the Agreement shall thereupon become null and void.
Section 5B of the Agreement states that thereafter any violations, the City may initiate
annexation of the property pursuant to Tx LGC Subchapter C-1, or other such provisions
governing voluntary annexation of land as may then exist. In accordance with the NAA signed
by the property owner, the owners further agree that such annexation by the City shall be deemed
voluntary, and not subject to the requirements and procedures for an annexation plan, as required
by Tx LGC Section 43.052, or successor statute.
Subsequent to entering into the NAA, the subject 1.148 acre property (being a portion of the
aforementioned approximate 220.275- acre property that is subject to the terms and conditions of
the NAA), was developed with a parking lot extension for an existing charter school located
directly to the south of the subject property. This parking lot development constitutes a violation
of the NAA. Therefore, in accordance with Section A and B of the NAA, the agreement is
deemed null and void, and staff is proposing annexation proceedings of the 1.148 acre property.
The subject site will be platted with and become a part of the adjacent school site to the south.
According to the owners of the subject property, they entered into a sixty month surface use
lease to allow the subject 1.148 acre property to be used by the school as additional parking for
passenger vehicles, buses and permitted external buildings. However, the surface use lease was
not presented to the City prior to the annexation. Nonetheless, staff took the lease into account
and is therefore, recommending that the original NAA be revised to exclude the 1.148 acre
subject property and that only this portion of the 220.275-acre parent property be annexed.
ANNEXATION PROCEDURE UNDER TEXAS LOCAL GOVERNMENT CODE FOR
AREAS EXEMPTED FROM MUNICIPAL ANNEXATION PLAN
Tx.LGC §43.061 establishes the standards by which municipalities must abide with regards to
annexation of areas exempted from the municipal annexation plan requirement. The following is
a description of the steps that must be followed during the annexation procedure for areas
exempt from an annexation plan:
1 Provide written notice of intent to property owners, DISD, railroads and public and
private entities, if required;
2 Preparation of the Service Plan;
3 Notice of the hearings is published in the Denton Record-Chronicle and posted on the
city's Internet website Provide;
4 City Council holds two (2) public hearings to be held on or after the 40th day, but before
the 20th day before the date of the institution of proceedings (Ordinance Readings) at
which all interested persons are heard;
5 City Council holds 1st Reading of the Annexation Ordinance;
6 City Council holds 2" d Reading of the Annexation Ordinance and passes the ordinance;
7 Proper post-annexation preclearance and notice is completed.
WRITTEN NOTICE AND INTERNET POSTING REQUIRMENT:
Written Notice Requirement:
Before the 30th day before the date of the first hearing required under Section 43.063, a
municipality shall give written notice of its intent to annex the area to (1) each property owner in
the affected area, as indicated by the appraisal records furnished by the appraisal district for each
county in which the affected area is located: (2) each public entity, as defined by Tx.LGC
§43.053, or private entity that provides services in the area proposed for annexation; and (3) each
railroad company that serves the municipality and is on the municipality's tax roll if the
company's right-of-way is in the area proposed for annexation.
A "public entity" includes a municipality, county, fire protection service provider, including a
volunteer fire department, emergency medical services provider, including a volunteer
Page - 2
emergency medical services provider, or a special district, as that term is defined by Tx LGC
§43.052. Id. at Tx.LGC §43.033(a).
The City must also provide the written notice to all school districts located in an area to be
annexed within the period prescribed for publishing of the first public hearing. The notice must
include any financial impact on the district that may result from the annexation and the city's
proposal to limit the effects of that financial impact. (Id at Tx.LG( 13.905)
Internet Posting Requirement:
In addition to the above written notice requirement, since the City has an internet website, the
City is required to (1) post notice of the hearings on the municipality's internet website and (2)
publish notice of the hearings in a newspaper of general circulation in the municipality and in the
area proposed for annexation.
SERVICE PLAN:
Tx LGC § 43.065 sets forth the requirements relating to scheduling for the provision of
municipal services for areas exempted from a municipal annexation plan. As such, a service
plan was prepared and implemented during the annexation proceedings for DH-5. Staff is
proposing the same service plan for the annexation of the subject 1.148 acre property. The
Service Plan is attached as Exhibit 5.
Prepared by:
~#~aVGAoz
Johnna Matthews
Senior Planner
Respectfully submitted:
Mark Cunningham, AICP
Planning Director
Exhibits:
1. Location Map
2. Map of DH-5
3. Development/Non-Annexation Agreement
4. Legal Description
5. Service Plan
6. Annexation Schedule
Page - 3
EXHIBIT 1
LOCATION MAP
Page - 4
EXHIBIT 2
DH-5
I?E
I
j1
j
I I
I
k
I
I,
Page - 5
EXHIBIT 3
NON-ANNEXATION AGREEMENT
.ft ';=r c ~ 'r1Jr, rl1_ ` n s~ 't3 a rrt a
r~ t~I ,I I Vi;t 1:IS;
L, I I ~ I
Cit1 `.cLIL[I ~
CH API I '12 1 FA,15 jj( c4i, 1, E:I'N'll'IF S''I' [!")1)E'';
J I I _~t,l~::u _ .I:'1cr~1a ~ it r I,•t.!;n.llll S II .,>I I ~ ~ :tl (,{•,",''t f It' 1i',' ;:nrj
arntil, It, Ltd. ("I_J iiei, t. (Iic
!it 1-1 hcrti; ii_ts I thn,lzrclrajt.ctrl a It I.n; tlhs-'Frnpcri.' ,i in L? •nioTi CL-utitr, Ces:~t5,
S utttint~ hill"r.ll„i[I, t II t, N',Ii4
I' ui r l I I'g ut -ti]i fI t _tt',' iinu,. of a t . O ltuid, t.rurC ter
tlI tklW 1~.t liana R.- Stan :'~,htal I_t 'l I', Tali ~i-,
Irt i;t rrta~.ty ~,r.r'.', Itltilr.U t'..~ 1
[ltld t tS J,V`, .tltcr SI - 4h tntc''. ,Lr.Erlr[ h.:1 It LI
t :I,r.t ~l lll,ll c t , t ;I:c_:,,1 ~;t,e~t utr,i
rin, ],td, tlt,~i Ilor r~r',_~r~l
r: S~ntclltl~[r 1' n.t "-eordt'' nrn1 `,notxr_ 1 1 a]
u1x ! k I, nl II ;I [lsll it 1 n'~;i 1 act,. :I 1r,t~r I,I,nr L~r
It 7"t I't
r ..'1S 11,i, Clt" utc t.," Ctl ts. uI_- cl I i loltrrl[ -I inc+tiiute aanne xation ].:'!';.-I e:111'I C~,z for
the , nl ~r l u,,• ''',Illl n,l a , I, ch lnu'1ViILl,t?;'',S +J", r.~tr 1r>;r~ tI[,) tltc l t It :rt',' I:n he Cats c."ataicmlosi~tl
IlU i u'f nt "li I'J' e I':- 1 17[1 1111. '[sI lt.;rll,
PrII} I.]',~5, t'r,c 'Il d 1'r,' 1 °l:,n 1 t] :It lEti ~r.
~I,1~n~~ 1I n ille Itti ;intl. 11s~ 1' si, to ]n:it t_ }:'cti'r}r~ . ,-rccntcr,i.
V, 111 Rl rl 111: I} I11, 1 I, ,',Ilnl;r ;11'lt',3I Iii
appr3tsed s" r a.a tllcr,eri Ir.. pj II a~ bane: r _ .c hurl r hte
11dIT1h11 _ C, Li, 01 i.., ::nU
,
HLHI _'~,S :I F_t. ~~ChrB-.l I I7 it is their it Z. , to develop t Property
';''.'7ITI'!L? c Tt c Lr 1~ s~ inn 411 di it acs a F j5 - :'M-r and a
'c'':-1tic1.~ u;lr'I> 1 '1.1t. Ci t.r:1-',~ for
.t ',sc>1 IJl1it.s.t' t.li:1~' ul 11,_ n:,tt,r.:1I:~Belli' :17 11. ...'itu,_ I 11
al:l ,t :a ~p I El k,n [tc[?', ,.Ita L.; alt 1 '1:-r, tl - 'rluri o .,ppl}' 1cLrl ,ktrar[1t
I' i1h ,t ~''.cnlnl;'~ WI 1,11
l i t and
1
Page - 6
r]F;R; At-, 1111, It to t. ct,rrl f in lnc .el ;,t, c r Pccctrs of
n[,;n
NC)1',, .ll.~ <.F,,f't)LI" I: ia t.t:,II c''!.}tc IIE1Il Iltl 1, 1.111 tItIt, ;III IT (I 't~r_~ it1,
J';I'tlt✓5 hLrC[U ',r40 a4 ~ ri ii„.,,
`.cction t, L~Clal.'lll.ttl; siliti",, fhC 1i , th-, )rttinu,16,_,Il v,1 ti'tc
L at-::.i71t,-trial It~11IT, t,t tlic PrLp_crt~.' X111 ~lLrCr 1",:: .tt; Cx thiL Ppl-~!II' irrl Iha LC nit r,i ti'J
ib 'I~ [S1's', na , Lrc ~l a e t by the
tit-:I;ivl TID [ > > llctil i'I,rrr, TI,. { I.1 IItt atul lit 11) :II i' n1 t'i,c 4" a 1V
of the 1L1t1I ':;t tl't to t,tt, , _;hIl. l t nltiL~[t t:)
""111.-t c-_t,1il
:adIT: r IaIlxh d 1111.:x_ _ }'t'=h:ldrri I LL ]II turnl..- e'Ihnu n: ~ lC a.ated or coi'!Structcd
hirh I , at IF' I- I I ICrt Ir. , r TIT
III,Irp~~~ f:lrh ilt r,>,i- s;!'II, tI ,'rit4t, I ht~:;'„_: "I , I.~1.1 t11 i',:~~~11 , a~>t.rlticrti, ~,I_.,:i~, u5t-s nlnl
! ; "'p t II't i'IJ'.C r ILT it_,: IT -+I ltl1 1t:'I ' 1~ i'ti':;i L!J1 1:l-i tiftl. k; t kill C13 Tt: t. I i (,I It
~cS',an lJ+o.:a n ne L it' c_-~~..tl~, I ,,,ian 1^
.I G'I II,[)'I1cI:t of the Mop,. is.' t]"~IIi 1 11c to [1X11 nrn: titc that th
a}tp!ic at:un t;1 stl~~ls ICI- LI I, II in III IIL'ICtti_: c i'. it[ :ht II S(: 1-t1 t'tc Ind r
-1c11nr,.1, ^.iIt 1Glt I'n t r'u_i .,1 1„ic,il_~ t~I Il} c n[i 1 ~1, ] t pI rv(-t,l The c,ititltititit 1 'II ,.f
-s1 sh',1 r,inr'.~, c11 , 111 t'1TI tj'1,1 1111 TIJ ftl:97f1` 1'1.''tal ~a1 > If tlru:°
! 1 r,~,Gi1N l- I;illel _Yi Cl, - I. >zC It0[I !m.)!:. --II) (Lilt (_..a~2 ~•'DL)( "'I
ante nj~-C1 ,'~ul,~:m[ to n, J'[) 'E ~l1, antt-ndcd_ ir_, tudntc ntlt
rr-[ l,nti:ecl tcv 1'nc r 1 fnrt rctul ji,J~t: u;,i rstanuaril>
-t th
~~`I ~`htc uLii°.~,a~,it oirl ,riur:t rr_~11aYior. cc,n`sl~rcti ~,vitlun tiic [jcn;r~~n
llu:lutn'uc:~a {'~:,de. cticd, tr.~ethcr ~,,Il.h apl?11~:ahla ltrirn C,Tltcrl~i
tr,3it-p„rt:It 11 r, 1111r1u i 1, I)st
T'l,t:I llr;;i ti, ~T:
r '+i, t r,n t_ t,it':'~, 'Rt;ltli C ctltr; l W U., :ir I 1 i'v[' FC U(j
i 1it~,Ti 1) 11 i1 I I I' I-, t I 1111 i t t'ii r1 `i L,t ) I II r i'I l!)~I CIS 1~r 'S IIII, I,
a, it f' l Ir1iG!", J :,icitt local amendments;
2
Page - 7
il;+snw>YtSCUty .r~cstmasr~elVarri~~t ;.uCi+.aarerx ~ M~is'"~urc (Amily lA,m M.275acAol;
i7. Int ;Tn.Ci,1 1,.11 F.w '.T'ftli,il, l i1 ~J l It }',111111 r, ivit$1 Append i-1.
lc+.al -]ncr-ilnlCjolµ
C. I1C l lorll Iatar!t.tl l itc Gnat, 2111IT, I diliorn r,oh I,-,eal arliclt:{1:1cn
, ln'. I~i 1rwnrd Pl t€o},i11 ; t',,:, ~11'lii(G E d1 tirrn t-,it'n I ,?cal
e. PI 1 1 '.-:t:,ot_"1 1'.1:f (j,r-; L'1i tar rtiirll, , v, oli local uni'T'lli3n L:'Its;
ul iatis;ttIT ii l it T tI,tT I1:al Mule, ~NTII t, i,i,n ti.tlh =1 c,11
; tl°:lTlL'itllnt ;
}dc c,t :r1L s.ltt, L'ITa- 1 `cTv(DR P.-open liYYr :mica
91
h, It I it '.tr?r l LL~t_ : i_'~• n ; :,a(i.n~ Folic, 2 111it 1 JiTll'!I v,'it't!
rr~illnul anict~itrncnts;
nrlal; T1rC(:i: i 1tlr, ?~;~i; 11 10-1)
ian~~n~lturl:I
j, N XICT1'tl I'Ilr[C ti11T7!' (_i1 03 tAlti,)ii, 'Ail nC:i
P.'.li Ci fTl 4I I-;`.
k, p,111)W ojl h111u',11~, aIlld Ill] 1,1t,i r 1~lar.ii rtl,„ T7~;nt11u ( -
43 tail lt41 Lt (u11Ca'iucd anc a;apli, (~1e;
~a lr 1 tn, .,t,trl+.l ~1, 1;,;1t1_rI (_:~t1s IT ar11,i
1Y'Y. P 11 11 I' til_lin; )cu,ton Od" 375;
1 (4) Sion rc et:"~.~.t • 1 rT', ; intsim: :1 t„l=lin ll,1 ,.l1a'lrlt; 15 :ol•`thp - ,un,•l:,lrsl:.
'1 A'jit i.;~ 1 t1;' . a r j ri.l ..,.st ..f!(et .:.tn;'.,,' tI~III, .IT1,.1sLi rt111 ;1C1L 1 (i,1-=jI:-,
crrcrotlL n r:,t,11r.'trzn _cm't_1 1 ci 'T, I I I I I_:} of tnr ?6 of .hC L}cnt_ n ''rile of
anct:: , .l • ui1t,. r1 1c.1. 1111 in: hr,Ff,I. I ,.II,l 1 It '}l. I I ,ls 11:._°n,.li 1l,
t:G' cn:_r,[1 lr'!'.L r raid ''1'unlct',a(t't' ('fllcri~} A'f;1'u:~1rl. a r~utl~ct;, ,uxi as;
;LITT11 jT.cii th_ !.';rdC, arrt~rulcd, 7izus uJa;ur~Ll
icsj arts a5 .1tt1cl.iiT'd (I'i1111cs C'ix,~, ?t u'nr_It,:i~~:l, 1311+i
pl;J;us111, tIII[ is IT .jIlI t t' `:11d III] Io ;sIt))I ,
F,u, .r1 tm an 1°.,
1 .".t-phe rlT l;,- Fl ve,d 'PTI ect1l,n, i)rairt J-t A C-
i[[t1 s 111.1}T- _Ll Tt! 1 tllJ i)L1j11.UC1 l atti. _ u':1
ilitOtl,i1 W the I)iI)( , a:, al,ic1;d('ii, (?-Ic: I)el',toll Ut 611ap_ L..r!t_.. rvI,F!tia;ll. as
Lt?i1Ct {ctl, [li[.l d.= ''l]y)p11-_r[1c1o :l '!ry re.l,,irenrst l` "t 1.4'1. l d•
r1:n:n.lca, l~ ~:r1s '~,t~r:[a1 h,•.1,u1 ; 1'11, : ,tnl~-ntl~'ci, alt}~li..al;l„
Allol TIsit Lit J' , StAIJd''~,I it l; 11, 1..'•:;111 (_1?nl".1] `ipll t`71 ~';l`.-1T X111 Lit L7Fid'1 [lli tlll i'.,
s1s m, n,)e,i. xid ahttl,c~jl-,l idriinlm'Liti° - :;t,,.n:l ;1,'s of the I ~drr:1'
Fitt, ~cr;T: 'tI In`lk'CT II'1'.t A I Iit 1lir:l13t11 1r, -1 J1 .t'],dctl; aTlI'
l~`` {)a15 1~,'e[1 L1ItiTl;a; ,t. ilin+ ,ua? In,,.11,_r,iou s1!nri 1riS", a1 lr:,:lttli ii 1n
3d Ir ]},n ,l rhr„ i>tih. !!:?rlan. I3^.cl1 1111 T .'ni xtc, a, ,t+ntIT tit°1i
dl1, t; aJ'p Ir 1hl are ; >I, snl TIT lT'ni.`:1ht1 ITTP,111u1.crtd l7ts it Ie }Baas I ltsI
1-tla, I-hl: 1 1rlral T< s_IIL:C lII '1'c_,1s ':'s'lur [ t, 1c, it;
s}?p',I IIT le _tt :n i t; ls'. r J ir,.c StanI_JFJ6 iTl '.hC ft.ailr.tad 1,,, t. t 111n ts~I
~l e;C d, Gill ~ill i~.`=i 11 U1] I, U" I I I I -I I L I I Cal t,!Lal tt'.y :15 ~+~111cfIUULr~..
Page - 8
SIliir,I1 4, 1-)cIL'Zi111 11 PJ~Iil 10 kL ~~ll I
II➢ I IIIVr;r, s ntr~atirr,~ r,f rhis
1 r_~ I 1(11 `i. llIt ,,~I, I.!2iNI)II, tl lu;IUI, I P l;I=~ _.1
h]rIt I IIl fnr
t ]7GIIII i~,t c'dLmdLil .I. L'&ttV1 . I 1.1
tll? .~ccI: v!; d'.,tL Li :II IIt::CL 1011 '111'J
Kilt >'i lull' Dl ti ]i.' 1 C:t hlC I'I.. I ILISi l
C1 1- l11 C Y(IFLI2-. CI-1 V ~L..' 4 I~j rCL tl'II'~
f}I { lt~/ lr:u',' LI CII rr !11 IL!IIl app l.ic Lltioi) ?r p
,I it_ sl.'i C~ll]l1 L'r:I t 1 -1 'S a:_L~)I?77I~4iS t~7 _
IP, NI- 112 P-II~ILrI r LII uh ;'CriLx It
,.t1LJ)% I[ plal) r;
JI~ '"el'- nicrt HJII, IC:l I-, 'A,all,
It t]Iat nii~Ill ot!i~r.
11 I(tU1 if;l .tt l~If 1,t ' C"Ill nl„CI l;i A, .-'f7111~.
tiL1Cll IIJ:' ~IIti IStL]II ll~.
E,,,Il;tit!.,I. u [ r S11'-ii t1 _ t i'.1 .t II„ I3x
F':,
f l t 'A t1I I IL ,'I '.I, L'.p IY Icl'i t'~I^1S Id !lSi1 hL
lh',l Sl,ll , l'd1 ~i:;}lilt n' In l''. 3"~S I'n 111,Q t+:~
"i
CC!I~ - I: L111,_fll_1~l'L f]C,! ~'a III I'li
_l'il lJfl)11't fIC":fltll711.
-I CY 1ilL'. ,il;'' I"I]I, ,It fl i.+I' ti i I i 1 V1Q L('t U p r7 I I Ir,r ? Ot]L_T111'"2
nrr,Ir, Ir~r:l,sszrlrl:nl ,'1 i„ 1~,I iI t lh_~ PI 1 IIs;i;tCIt1 11 11 1, l t11 11~ Pl,1
0t'~t liI Ct1,11 j;I t]I' Vi ,ind ? l~: 1131 ,'15 1 r_ :r nt lelll tlf Ci `~`.ppl7 1'~'L OIa L' 11:.1] ILI'.G `"Gl 1.
(-H! 1II _,i I: cl tl el I c tIts lr. - " , III I tI..f anl,_ .9it sc~II ;hc hr Ipcl'I, ['ur l]Cult ti) Tc L«c.
iry't {_'011 pI ur r,tIIcr MIL,, 11t~lI~ f pr,i11, t' line, VIII II111l r,r ;1111 nCaatinlr a1"
,rift :I lit Iv :hen FI L t 1 L,....pr. ui I[-I C uL..'oC.InIIt 1.~ dn'Iit x1tIIL)IJ L+f she ert
ItI11'ct alt lI 1, 1n;.11111 tSm C;_ III',T:~ '.LirthCF that ::-.u :-h shj:rll Le
iIr lC4lctj :.~1Llli t:erT 2.I1 L`I nuT ,t ~JiGCt tG t!'-C ] ~l:. ilit IIII-1 t,; 31-d [sri. '~ISIti Icr lI_ t.7511C?. 1II6!I plafl,
i c~Ct I" I t>.. t CEO, ' t'C(S L~Uil ufi t t iYCCL4 l 1i .:111L
t, is `III IC: 1'I'r L 111 L.'. H7 £L11S 'I li :'L~ -
tifLLilk', p1 i, 7 [~i sll: Ei .I~c`s'd7 ~,I1 1 I ICII III il_r r'1 I]IJ;
{x,~vt,el:Ii~ r 13uL, h I1Ll:+. a rl~rtaec ,h.1 t )t I r 1Ci7
J'l;I;nnn ~ t I I t T}I II Iir.~nr
221 i' Im ti;r::ct
Demit III,
5~c1.,7r ~fl`~ I k11 ern C tt 1, to r Vl.l. !ci I I irti~ hC : t~
Teal FrIL,pcri,<ro-I,IdL,
5c t,oli "sral 111', r- tu..aidat) llr,;°.'.L1, I LIJ Ilii ; i':, ill 'ilt Or
L,IIII LIIdrr ,-hall not in,':zil_1:Ltc Ii?,, sat:[[' IetnainIn pl~nvl ion- I, Arch sil . - u!l f'n;Ce
µs7 ; tlect-
occt] ,n 11 I~r Jf11 t. -'r0 'ti .'nt :~l- Ic 1't, iced 7I It l7 1~,z, rlI-r r Il7l- by
it%
pnypxr,e _ I T.. q;l , .rlln-C t,'. Sir, z,r C I'I I111 et a -It°dLr ILA Cni'prIhL
t.IILI UIY
tIIt E - a'CiJ llI Il11: ",ILj -,'lll_Iit-
t
Page - 9
,...:I i nu::,,. - ;t]~ . nr i i~eI,.r ,dseir:: .'.).275 aC.&C
Section 1 a - ai_, -g„e it ~ ,s_. N , , ji uyu !W Luanne in the law regarding annexation shall:
affect the er6rl.rrti~=Lb;kly of this IL~ieeraen.t ci T? a City's ability to annex the pco"ies covered
herein Parsuaut to Section 4,
Section 11, Venue, Wnue for this Agmemunt shall be in Denton County, TL,xas.
Section 12. Execution in NTi tipl~ Copies. Thi Agreement may he seta trat,+,r ckceuted
1 irra .)turd counterparts ~ rl, Prr e:~'tcution, sh,i l cunst t.ite one and saute inzsii ,incril.
5 trtir,jt 13. 7 crot and The initial Iusrn of this Agreement shalt b,,. f r a period
" ti., e } =.'c ars from th. E llc:..., c Date (the "Tenn. The Effective Date of the Agreement
shall 1,c I'll,- -1,11 the r ,:ree n ks r ;eeutud by the City. The Term may he extended upon
mutu~il n i tme°utoftha Pt-ti,.;
5citii,u 14. Sur-. «"al ri C .r,;nai:f€. TIte iii --$cctiona 2, .trail 4 shall .siar:'i',c-
te67~a1n6[rC}tl al itll r1. "1ic'.t:!., tt~;yetlr~r 1r,it1's sttIy Qtt'. i 01 ,~_,_iun5, s'; 1_~ necessary for tli
3111 p1 :rrrIt ~iir, ri tti IC' t 3
The P inn iicrct , have executed this agreernent as of~ 2010.
P,urcl, Furnily Fatter LtJ., Owners
k_ichard',;: ]Burch, Prc~i~9i~ttt
,i rtf 11 c' Hurch, secretaryri f reasurer
THE CITY OF DENT . `w?, TEXAS
L itz' 'vtr~n i4 rr, r)epii,1 (,IF) Wilauer, or
F1r„if'i~3tet3 [?lt!erer,tutive
Page - 10
Ego[ P _liC '~t¢~,o of Fg;g~
~ 9AY LL L1 u;g.SM E~SFaftEg
&@A^Cal 2 2o l
S
y -
lll, oil day OrPt;6,
-
~ Al
t t ~
4
tl'a1 I 1J kd1tiP
20P t-
Nora t1~lc !l lli. M is
r~.. WY Cs1GMi~~I DAY F. A'F`I.Po<[~ kV { I
. 111'. 1, I r 4 X A S ~l
Col 11
I'
Page - 11
EXHIBIT 4
LEGAL DESCRIPTION
1.148 Acres of`Land
FIELD NOTES to all that certAin tract of land situated in the J. Withers Survey Abstract Nurnber 1343,
Denton County, Texas and being part of the called 255 acre First tract described in the deed from. Don B.
Mcelurken et a1 to V. 1] Burch recorded in Volume 239, .PaI c 191 of the Deed Records of Denton County,
Texas; the subject tract being more particularly described a4 „Il ,.4 w
BEGINNING for the Southeast corner of the tract being de a;ribed herein at the Northeast corner of the
called 5.165 acre tract described in the decd f3cm M. C. Burch et ux to R,clzani Lee Burch re~:r}rded in
\ fume 1573, Page 134 r}f the beat Pngicit P(:,orris of Denton. County, Ic:,as; the .:cT- er 1~eing
South 89 Degrees 11 Minutes 13 Sec:unds Last a disuuice of 0.6 feet from a L'2 inch i uzi noel found and
also being on the Wt ,,t ri.-,lit-cat'-way litre of" F, M, 1830 and in the Corporate Limits of the Citv ci Denton as
described in Annexation tk-din, occ Number 2001-090;
THENCE South 89 Degrees I I Minutes 13 Seconds West along the City of Denton Corporate Limits with
the North line of the said 5.165 acre tract a distanol of 500.00 feet to a 60D nail found at the N;crtln,, "t
comer thereof and a salient comer of the City of Denton Corporate Limits;
11.11\C'L North 00 Degrees 48 Minutes 47 Seconds West departing the City of Denton Corporate limits
across the said 255 acre first tract a distance of 100.00 feet to a three inch steel fence corner post for the
Nor[lt,,,,Qst corner of the herein described tract;
THENCE North 89 Degrees I I Minutes 13 Seconds Fast across the 255 acre First tract, { feet Worth of
and parallel with the North line of the 5.165 acre tract, a di,~tance of 500.05 fict t ri 1 `2 nt lh iron rod with
a yellow plastic cap stamped "COLEMAN PLS 4001 sc: uii ~hc West right- of- . av line of l JM. 1830-1
THENCE South 00 Degrees 47 1 11nutc~ i a9 ~ccc.)nds East with thc. Lust line of the 255 acre First Tract and
the West right-of-way line of F. N1. 1 a L~istatrce of 100.00 feet to the PLACE OF BEGINNING and
enclosing 1. 148 acres of land..
IT
Page - 12
EXHIBIT 5
SERVICE PLAN
CITY OF DENTON SERVICE PLAN
Burch Property Annexation
A11-0001
AREA ANNEXED
The area to be annexed encompasses approximately 1.148 acres and is bounded on the south and
east by current city limits. It is located on the west side of Country Club Road, between Ryan
Road and Brush Creels Road. The area is located within the City of Denton's Extraterritorial
Jurisdiction (ETJ), Division 1. The proposed annexation includes one owner. A general
description of the area is attached.
INTRODUCTION
This service plan has been prepared in accordance with the Texas Local Government Code,
Section 43.056(b)-(o) (Vernon 2008, as amended). Municipal facilities and services to the
annexed areas described above will be provided or made available on behalf of the City of
Denton in accordance with the following plan. The City of Denton shall provide the annexed
tract the levels of service, infrastructure, and infrastructure maintenance that are comparable to
the levels of service, infrastructure, and infrastructure maintenance available in other parts of the
City of Denton, with similar topography, land use, and population density.
AD VALOREM (PROPERTY OWNER) TAX SERVICES
Police Protection
Police protection from the City of Denton Police Department shall be provided to
the area annexed at a level consistent with current methods and procedures
presently provided to similar areas on the effective date of the ordinance. Some
of these services include:
Normal patrols and responses;
Handling of complaints and incident reports;
Special units, such as traffic enforcement, investigations and special
weapons; and
Coordination with other public safety support agencies.
As development commences in the area, sufficient police protection, including
personnel and equipment will be provided to furnish these areas with the level of
police services consistent with the characteristics of topography, land utilization
and population density of the areas.
Upon ultimate development, police protection will be provided at a level
consistent with other similarly situated areas within the city limits
Page - 13
Fire Protection
The Denton Fire Department (DFD) will provide emergency and fire prevention
services to the annexation area. These services include:
Fire suppression and rescue;
Pre-hospital medical services including triage, treatment and transport by
Advanced Life Support (ALS) fire engines, tricks and ambulances;
Hazardous materials response and mitigation;
Emergency prevention and public education efforts;
Technical rescue response; and
Constriction Plan Review and required inspections.
Fire protection from the City of Denton shall be provided to the area annexed at a
level consistent with current methods and procedures presently provided to
similar areas of the City of Denton on the effective date of the ordinance.
As development commences in the area, sufficient fire protection, including
personnel and equipment will be provided to furnish the area with the level of
services consistent with the characteristics of topography, land utilization and
population density of the area. It is anticipated that fire stations planned to serve
areas currently within the City of Denton will be sufficient to serve the area being
considered for annexation.
Upon ultimate development, fire protection will be provided at a level consistent
with other similarly situated areas within the city limits.
Emergency Medical Service
The Denton Fire Department (DFD) will provide the following emergency and
safety services to the annexation area. These services include:
Emergency medical dispatch and pre-arrival First Aid instructions;
Pre-hospital emergency Advanced Life Support (ALS) response; and
transport;
Medical rescue services.
Emergency Medical Services (EMS) from the City of Denton shall be provided to
the area annexed at a level consistent with current methods and procedures
presently provided to similar areas of the City of Denton on the effective date of
the ordinance.
As development commences in the area, sufficient EMS, including personnel and
equipment will be provided to furnish the area with the level of services
consistent with the characteristics of topography, land utilization and population
density of the areas.
Page - 14
Upon ultimate development, EMS will be provided at a level consistent with other
similarly situated areas within the city limits.
Solid Waste
Solid Waste and Recycling Collection Services will be provided to the newly
annexed property immediately upon the effective date of the annexation at a level
consistent with current methods and procedures presently provided to similar
areas within the city. Private solid waste collection service providers operating in
the affected area immediately prior to annexation and currently providing
customers with service may continue to provide their existing service for up to 2
years in accordance with Texas Local Government Code.
Wastewater Facilities
The proposed annexation area is within the City of Denton Sewer Service Area as
defined by Certificate of Convenience and Necessity (CCN) Number 20072 as
issued by the Texas Commission on Environmental Quality (TCEQ).
As development commences in the area, sanitary sewer mains will be extended in
accordance with the provisions of the City's codes, ordinances and regulations.
City participation in the costs of these extensions shall be in accordance with
applicable City ordinances and regulations. Capacity shall be provided consistent
with the characteristics of topography, land utilization, and population density of
the areas.
Sanitary sewer mains and lift stations installed or improved to City standards
within the annexed area which are located within dedicated easement, rights-of-
way, or any other acceptable location approved by the City Engineer, shall be
maintained by the City on the effective date of this ordinance.
Operation and maintenance of wastewater facilities in the annexed area that are
within the service area of another water utility will be the responsibility of that
utility. Operation and maintenance of private wastewater facilities in the annexed
area will be the responsibility of the owner.
Water Facilities
The proposed annexation area is within the City of Denton Water Service Area as
defined by Certificate of Convenience and Necessity (CCN) Number 10195 as
issued by the Texas Commission on Environmental Quality (TCEQ).
Connections to existing City of Denton water distribution mains for water service
will be provided in accordance with existing City ordinances and policies. Upon
connection to existing distribution mains, water service will be provided at rates
established by city ordinance.
Page - 15
As new development occurs within the area, water distribution mains will be
extended in accordance with Denton's Codes, ordinances and utility service
policies. City participation in the costs of these extensions shall be in accordance
with Denton's codes and ordinances. Water service capacity shall be provided
consistent with the characteristics of topography, land use and population density
of the area.
Operation and maintenance of water facilities in the annexed area that are within
the service area of another water utility will be the responsibility of that utility.
Existing developments, businesses or homes that are on individual water wells or
private water systems will be allowed to continue to remain on these systems until
a request for water service is made to the City. These requests for service will be
handled in accordance with the applicable utility service line extension and
connection policies currently in place at the time the request for service is
received.
Roads and Streets
Emergency street maintenance shall be provided within the annexation area on the
effective date of the applicable ordinance of acceptance. Routine maintenance
will be provided within the annexation area and will be scheduled as part of the
City's annual program and in accordance with the current policies and procedures
defined by the ordinance and/or as established by the City Council.
Any constriction or reconstruction will be considered within the annexation area
on a City wide basis and within the context of the City's CIP and/or yearly fiscal
budgetary allotments by the City Council.
Roadway signage and associated posts will be replaced in priority of importance
starting with regulatory signs, then warning signs, then informational signs and in
conformance with fiscal allotments by the City Council. If a sign remains, it will
be reviewed and placed on the City's inventory listing for routine replacement.
All exiting signs will be reviewed for applicability and based upon an engineering
study. New signs will be installed when necessary and based upon an engineering
study.
Routine maintenance of road/street markings will be placed on a priority listing
and scheduled within the yearly budgetary allotments by the City Council.
Parks, Playgrounds, Swimming Pools
Residents within the area annexed may utilize all existing park and recreation
facilities, on the effective date of this ordinance. Fees for such usage shall be in
accordance with current fees established by ordinance.
As development commences in the area, additional park and recreation facilities
shall be constricted based on park policies defined in the Park Master Plan and as
specified in the Park Dedication and Development Ordinance. The general
Page - 16
planned locations and classifications of parks will ultimately serve residents from
the current City limits and residents from areas being considered for annexation.
Publicly Owned Facilities
Any publicly owned facility, building, or service located within the annexed area,
and not otherwise owned or maintained by another governmental entity, shall be
maintained by the City of Denton on the effective date of the annexation
ordinance.
Other Services
Other services that may be provided by the City of Denton, such as municipal and
general administration will be made available on the effective date of the
annexation. The City of Denton shall provide level of services, infrastructure, and
infrastructure maintenance that is comparable to the level of services,
infrastructure, and infrastructure maintenance available in other parts of the City
of Denton with topography, land use, and population density similar to those
reasonably contemplated or projected in the area.
III. UNIFORM LEVEL OF SERVICES IS NOT REQUIRED
Nothing in this plan shall require the City of Denton to provide a uniform level of full municipal
services to the annexed area, if different characteristics of topography, land use, and population
density are considered a sufficient basis for providing different levels of service.
IV. TERM
This service plan shall be valid for a term of ten (10) years. Renewal of the service plan shall be
at the discretion of City Council.
V. AMENDMENTS
The service plan may be amended if the City Council determines at a public hearing that changed
conditions or subsequent occurrences make this service plan unworkable or obsolete. The City
Council may amend the service plan to conform to the changed conditions or subsequent
occurrences pursuant to Texas Local Government Code, Section 43.056.
Page - 17
EXHIBIT 1
Proposed Annexation Area
A11-0001
Page - 18
EXHIBIT 6
ANNEXATION SCHEDULE
A11-0001
Burch Property Annexation Schedule
Action
Dare
Notice of Intent to ?•nnex
3/4/11
Service Plan
3/15/11
Planning and Zoning Commission Meeting
3/23111
f" Public Hearing
4/5/11
2nd Fubk Hear ng
41/19/11
1- Reading
5/113/11
2`Reading
6/7%11
Page - 19